Generative artificial intelligence holds a wealth of potential — and risk — for the mortgage industry, but despite the challenges, the developing technology is finding its place within company workflows.
Some of the greatest potential for adoption lies in marketing uses.
“Imagine if you Googled a topic, and then clicked through several links, and then summarized what you found in those links. Imagine if a machine could do that for you in 30 seconds,” said Adam O’Daniel, chief marketing officer at Guild Mortgage.
“It’s not delivering me any data that I couldn’t have probably found through Google search. It just saved me the time and in sorting through it and compiling the data.”
Across business segments, AI is demonstrating value as a tool that drives efficiency and even fuels inspiration among marketing professionals, even though widespread apprehension remains. Although mortgage and real estate companies have the same concerns around risks as others, their marketing teams and loan officers are testing the waters to varying degrees and learning to tailor AI for their specific needs.
“It’s a starting point for many, and it has been helpful if you’re, for instance, having a creative block,” said Whitney Blessington, chief marketing officer at Churchill Mortgage. “We call it like someone to brainstorm with, even though it’s not a person.”
Generative AI benefits also result from its ability to conduct quick research. “It can help you come up with good topics,” O’Daniel said.
A useful but still-developing technology opportunity Mortgage companies, more than other types of companies, appear open to exploring how artificial intelligence might help their marketing efforts.
While some forms of AI are already used in the underwriting context, especially for tasks related to data extraction and processing, concerns about enforcement of possible noncompliance leave some lenders wary about applying the technology in a customer-facing capacity. Marketing tasks, though, offer the opportunity to see how AI can improve efficiency within the appropriate guardrails.
In 2024 research released by Arizent, 64% of mortgage industry professionals said they would be open to utilizing artificial intelligence for a majority of their marketing and promotional tasks in a hypothetical scenario where regulations did not exist. Interest in the mortgage industry far exceeded the percentage of similar responses in six other financial sectors, none of which surpassed 50%.
At the same time, 55% within home lending said they would use it for most tasks associated with research and fact checking.
Its use in advertising, though, still presents some risk of bias in outreach, according to recent guidelines issued by the U.S. Department of Housing and Urban Development.
But despite the industry’s enthusiasm, the “A” in AI doesn’t stand for accuracy, and human marketing professionals will need to remain a fixture, mortgage leaders say. Even when used for research purposes, users have found themselves running into factually incorrect responses.
“You can’t count on it blindly,” Blessington said. “You still have to do your homework.”
“I think the biggest thing is, today, it really helps someone streamline their workflows,” she added, comparing it to an intern who might conduct low-level administrative work, such as writing metadata descriptions or alternative text for images.
“It helps you go from ideation to planning to actual content,” said O’Daniel. However, when generative AI “writes” any of its own content itself, it fails to perform to the standards the industry might want, he said.
“It may use terminology that is more appropriate for a bank and not an independent mortgage lender, and so you have to adjust the terminology. Some of the more finer nuances of the business — it doesn’t fully deliver.”
Current use scenarios and risks Use of artificial intelligence, particularly generative AI like ChatGPT or Microsoft Copilot, is still in its nascent stage within the mortgage industry; but with expectations of rapid expansion, it stands to change how future work can be done.
Entering AI waters may seem daunting, but the technology also offers customization that can facilitate ease of use, according to Ginger Bell, who regularly conducts seminars on artificial intelligence for real estate professionals. Bell is a co-host of the podcast AI Clubhouse and founder of housing industry video platform Edumarketing.com.
A loan officer or lender can customize their generative AI to home in on situations or guidelines it commonly addresses. “You can actually just type a scenario, and it reads the guidelines,” Bell said, while cautioning verification is still necessary.
“You can also ask it to cite exactly where it’s pulling that information from, and a lot of it is just training it to be able to ask the questions correctly, telling it what you want in terms of the response and then how you want that response to look.”
Bell commonly sees ChatGPT being used to assist in composing emails and social media posts, and some mortgage professionals also employ it to write video marketing scripts. Users can tailor a gen AI tool by feeding it their previously written transcripts, articles or other work, eventually training it to sound more like their own voice, she said.
But oversight and enhancements need to remain top of mind as well, said Jason Perkins, co-founder and president of Bonzo, a provider of communication engagement software and a mortgage customer-relationship management system.
“I look at AI-generated content as a frame of your business, not the be-all,” he said. “Personalization is what drives conversations.”
Generative AI can also quickly build marketing campaigns through a series of prompts — a set of instructions or steps to create messages with given parameters that might address a specific topic or target a borrowing segment. The prompts can also ensure that necessary disclosures and licensing information are included.
“A lot of companies need to realize this is a big compliance opportunity to make sure that your loan officers are providing their information in a compliant way,” Bell said.
However, while businesses have the capability to personalize their prompts and content via an open source generative AI platform, a number of companies are instead turning to enterprise versions that protect proprietary information and maintain compliance. Certain accounting firms go as far as requiring employees to use personalized generative AI under enterprise editions that remain closed sources, according to Bell.
“There’s a lot of folks who use what’s available to consumers on ChatGPT and other platforms like that, and certainly, it’s a great tool, but we’re trying to be very thoughtful about how to use those platforms,” O’Daniel said.
“You use a public platform — the data that I upload to the model stays with that model to fuel future learnings, which is amazing; but we might want to share information from a product guide or some other company program that we don’t want to be out of our control,” Guild’s marketing leader added.
When using a public platform “be aware as far as not putting any nonpublic information in there because it is open source,” Bell advised. In addition to potential noncompliance, it opens up businesses to cybersecurity risk.
Reliance on public artificial intelligence platforms without proper vetting of the content they produce also carries risk of potential copyright infringement, according to Perkins.
“They’re just aggregating data off of the internet,” he said. “Businesses and companies are going to put fences around their data,” meaning companies need to be aware of how loan officers and staff use AI-generated content in social posts or advertising.
Future potential and customer trust While marketing content crafted from AI has primarily appeared in written form, artificial intelligence is taking hold in other creative outlets. “Now there’s so many new technologies that are being built around this,” Bell said.
Advanced generative AI tools that alter photographs already exist, alongside emerging businesses that produce original imagery and videos based on an individual’s likeness and voice from a single recording.
However, while AI-generated imagery video represents one of the next growth phases for automation, it also brings with it a potential for misuse by fraudsters and a conundrum for businesses of all types who want to use technology to their advantage without eroding relationships with clients.
“I think there’s a number of questions around how that affects your brand,” O’Daniel said.
“It can go both ways. There are people who would appreciate more frequent informational updates from their lender and from their loan officer. So if the technology can help us deliver more frequent helpful information, that can build trust; but if the customer feels as if they’ve been misled and that this avatar is not really their loan officer, that can destroy trust. So I think we have to be very cautious.”
Once upon a time, people had to fit their schedules around the limited “bankers’ hours” of bank branches. Today, it’s easy to take care of almost all of your banking needs without ever stepping inside a physical branch. As long as you have your smartphone and a wifi connection, you’re good to go.
The rise of mobile banking has boosted convenience without sacrificing the features you come to expect with a bank account. It’s no wonder that one recent survey found that 78% of respondents use their bank’s mobile app weekly and 62% said they couldn’t live without it. Read on to learn more about what’s available in the world of mobile banking — and what’s ahead.
Key Features of Mobile Banking Apps
Mobile banking apps offer tools that are increasingly becoming more personalized and sophisticated. While nearly every major bank allows customers to do some business on their website and/or through their mobile app, the exact mobile banking features will vary depending on the bank.
Here are a few of the most common mobile banking app features:
• Account opening and closing
• Bill pay, including instant payments
• Mobile check deposit
• ATM and branch locator
• Low balance notifications
• Transaction history
• Budgeting and planning tools
• Direct deposit
Check your bank or credit union’s app or website to see what mobile banking features are available to you.
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How Mobile Banking Simplifies Your Finances
Mobile banking can truly makes it much easier to monitor your checking account and other account balances so that you can keep your budget on track. You can quickly transfer money from your checking to your savings account to meet your financial goals, for example, or potentially automate that process so that a portion of your paycheck is funneled to your savings. You can also set up recurring payments to make sure bills are automatically handled on time.
As mentioned above, some mobile banking platforms include budgeting tools you can use to plan your spending and saving. Some also include the ability to save money in vaults, or subaccounts, that earmark funds for specific goals, such as vacations, holiday spending, or emergency funds.
Many banks have mobile banking account alerts that will notify you if your balance drops below a certain threshold. (This can help you avoid pricey overdraft fees.) You can generally customize these alerts, both by setting the amount that triggers the alert as well as indicating how you want to be notified.
You can also typically access options for sending money quickly to others, whether through an integrated payment platform or possibly via a wire transfer that is initiated on your phone.
There are, of course, both mobile banking pros and cons, but most people find that the benefits of using mobile banking apps outweigh any potential negatives.
Mobile Banking & Security
One of the biggest questions that many people have about mobile banking is whether mobile banking is safe.
It’s reassuring to know that most major banks and financial institutions follow state-of-the-art encryption, security, and fraud protection best practices, such as SSL (secure sockets layer) encryption and two-factor authentication (2FA). Additionally, many banks have a no-fault policy that says that you won’t be held liable for unauthorized transactions.
Also worth noting: Not all of the ways your account could be vulnerable are under the bank’s control. For example, hackers and scammers can be relentless when trying to gain access to checking and savings accounts. It’s smart to acquaint yourself with their latest ruses and follow best practices, like having a strong password that you don’t use for other sites as well as enabling 2FA.
Innovation & the Future of Mobile Banking
Mobile banking continues to evolve and innovate. Over the past decade, many people have adopted mobile wallets that allow them to store and access banking and credit card information instead of carrying around a physical card. You also are probably familiar with new forms of biometric authentication that are gaining ground, such as using facial or voice recognition to unlock your mobile account.
Cardless ATM withdrawals, which involve using your phone at a terminal vs. a card, is another new direction, and a growing number of banks are incorporating the latest AI and chatbot technologies to offer more personalized customer service while clients use their app.
Recommended: How Long Does It Take for a Mobile Deposit to Clear?
The Takeaway
Mobile banking provides convenience and security for bank users. It can simplify and speed up such banking tasks as depositing checks, bill payments, checking account balances, and receiving account alerts. The features of a mobile banking app will vary somewhat depending on the financial institution, so check with your bank or credit union to see what mobile banking features are available to you.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
What are the key features of mobile banking apps?
Most mobile banking apps have a core set of features, such as account management, bill pay, account alerts, and mobile check deposits. Some banks may offer additional features, such as dashboards that track your earnings, spending, and savings, as well as vault bank accounts, which allow users to bucket their money into subaccounts.
How does mobile banking make saving easier?
Mobile banking makes saving easier in a number of different ways. You’re able to have more insight into your finances just by glancing at your smartphone. You can also set up automatic transfers from checking to savings on payday and often track your spending via the app’s dashboard. Establishing low balance alerts can also help you avoid pricey overdraft fees, which is another way to save money.
What security measures are in place with mobile banking?
Most major banks use industry-standard security best practices involving encryption, continuous authentication, and other features. It’s also wise to follow such security measures as not reusing your password, regularly monitoring your account, and setting up 2FA on your account.
How does mobile banking offer clarity about financial data?
Mobile banking lets you check your account balances, allowing you to get a better picture of your overall financial health, anytime and anywhere. Many mobile banking apps also allow you to track your spending and will alert you of upcoming payments that are due, which can also offer greater control and clarity.
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.
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.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
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.
Social Media Compliance, Client Retention; Freddie/Fannie Changes; Square Footage Stats
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Social Media Compliance, Client Retention; Freddie/Fannie Changes; Square Footage Stats
By: Rob Chrisman
Mon, Jul 8 2024, 11:48 AM
During a recent password audit, it was found that a blonde was using the following password: “MickeyMinniePlutoHueyLouieDeweyDonaldGoofySacramento”. When asked why such a long password, she said she was told that it had to be at least 8 characters long and include at least one capital. What’s today? It’s “change every password you have” day. Money is the focus of a lot of evil activity on the internet (look at credit union Patelco), but what about useful, constructive monetary activities? Location, location, location. What new home buyers get for their money varies by region. The median price and square footage of new single-family homes sold in 2023, according to the Census Bureau, was $760,700 and 2,430 square feet in the Northeast, $396,300 and 2,172 square feet in the Midwest, $388,800 and 2,335 square feet in the South, and $536,200 and 2,170 square feet in the West. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with Candor’s Mark Hinshaw on expectation versus reality when it comes to AI in the mortgage industry.)
Lender and Broker Software, Services, and Products
With high interest rates keeping more people in their homes, new revenue opportunities will come from places that don’t fit the typical servicer playbook. ICE has identified four key areas where technology can help set servicers up for success in today’s low-movement housing market. Explore how you can retain customers, capitalize on your existing portfolio, and streamline your back office in ICE’s complimentary new white paper, Technology helps servicers find opportunities in unusual places.
ActiveComply is excited to be part of the Mortgage Bankers Association’s RegTech Demo Day event on Thursday, July 11th at 12:00pm ET. Register to see the latest technologies, services, and insights from leading technology providers in the industry. This session is specifically for compliance professionals, legal counsel, and risk officers, among others. See high-level overviews of vendor technology that may provide value to your organization and help you succeed in an increasingly complex and competitive environment. See how ActiveComply identifies other language advertising as part of your LEP initiatives, consumer complaints on social media, & brand reputation concerns current events and political movements (just in time for an election year). Don’t miss these power-hour sessions designed to help decision-makers clarify the rapidly changing mortgage tech ecosystem. This event, normally priced at $399.00, is free to MBA members. Register today!
Winning Agent Business: The lender’s guide to building a strong referral network updated for 2024. The new rules mandated by the NAR settlement go into effect August 17th. That means agents are more incentivized than ever to show their clients value—and they’re actively looking to partner with top-tier lenders in their market. Want to take advantage and grow your referral business? Maxwell just updated its Winning Agent Business eBook with new tips straight from agents to help you better network to create a strong funnel of referral leads. Download your free copy to learn qualities agents value in their lending partners, networking dos and don’ts, ways to become a go-to lender, and more.
Agency News and Updates
Freddie Mac published the company’s annual Sustainability Report, which provides details about the company’s 2023 sustainability strategy, activities and performance. The report also includes the company’s Sustainability Accounting Standards Board (SASB) Index and Metrics for the years 2021-2023, as well as a Taskforce on Climate-Related Financial Disclosures (TCFD) Index.
Many families are looking into properties with ADUs for multi-generational living to offset rising housing expenses. Others are seeking a balance between caregiving for aging parents and providing a space for privacy and independence. Whatever the reason, ADUs have been on the rise. Many borrowers are looking to purchase or refinance homes with these units or build one on their existing property. Approximately one quarter of borrowers and homeowners that show interest in ADUs are caregivers or anticipate being a caregiver. Learn more about the benefits Freddie Mac offers for financing ADUs.
In recognition of National Homeownership Month, Freddie Mac is encouraging borrowers to benefit from CreditSmart® Homebuyer U, a free course within Freddie Mac’s CreditSmart ® suite of educational resources. It’s designed to empower them with skills and knowledge.
Freddie Mac updated Stable Monthly Income FAQ for Employed Income Calculation with a new question (Q5) concerning calculating the income average for fluctuating hourly earnings and/or additional employed earnings (e.g., bonus, overtime, tips) if there is an occurrence that prevented the borrower from working and/or earning full income for a period of time.
Freddie Mac Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-9 announces updates pertaining to rental income requirements to provide additional flexibility. Shared amenities requirements for residential projects. Aligning the Guide with treatment of documentation provided, but was not required, in Freddie Mac’s quality control review.
Fannie Mae is continuing its work with Freddie Mac to create standardized subordinate documents, publishing documents for Ohio, New Jersey, and Pennsylvania. Learn about efforts to expand access to down payment assistance.
Fannie Mae issued a Request for Proposal (RFP) to evaluate qualified interested industry participants for potential inclusion in its Title Acceptance pilot and other suppliers that have viable solutions to reduce borrowers’ closing costs. Vendors can respond to the RFP in ProcureOne. The RFP market interest period closes on July 26, 2024.
Fannie Mae posted the June Appraiser Quality Monitoring (AQM) list to Fannie Mae Connect™. The monthly list will also be available on the AQM page through July 30, 2024, when Fannie Mae Connect will be required for viewing.
FHFA published updated aggregate statistics from the National Mortgage Database (NMDB®) and launched the NMDB Aggregate Statistics Dashboard, a new data visualization tool for the NMDB Outstanding Residential Mortgage Statistics. The release describes outstanding residential mortgage debt at the end of the first quarter of 2024. FHFA Releases Data Visualization Dashboard for NMDB Outstanding Residential Mortgage Statistics has been posted.
Capital Markets
There was plenty of economic data released over last week’s holiday-shortened week. The U.S. economy is based on jobs and housing, and last week it was jobs’ turn to be center stage. The focus was on employment stats for June which saw nonfarm payrolls increase by 206k in June. Despite the increase, the previous two months were revised down by a combined 111k which brought the average increase over the second quarter to 176k per month. The unemployment rate rose from 3.96 percent to 4.05, the first time above 4 percent since January 2022. Labor force participation also increased slightly.
As the labor market continues to become more balanced the upwards pressure on wages has eased and average hourly earnings were down 0.2 percentage points on a year-over-year basis to 3.9 percent. The other major data out last week was the Institute of Supply Management indices which both came in below economists’ expectations. The Personal Consumption Expenditure deflator eased to 2.6 percent over the last twelve months in May as well. Sustained easing of inflation as well as a looser job market bode well for a potential rate cut in September. Following last week’s data, the odds of a cut in September are nearly three-in-four.
This week’s economic calendar includes some Treasury auctions of notable duration (3-year, 10-year, 30-year), May Wholesale Inventories, CPI and PPI, as well as preliminary July University of Michigan Consumer Sentiment. The only data point on today’s calendar is May Consumer Credit, due out this afternoon. We begin the 5-day work week with Agency MBS prices little changed from Friday, the 10-year yielding 4.29 after closing Friday at 4.27 percent, and the 2-year at 4.62.
Jobs
Seeking growth capital, equity, debt, or strategic alternatives? An IMB consultant with 34 years of executive management experience in the mortgage space is available to support your efforts! E-mail industry veteran Steve Landes for more information on helping you grow your business.
Top Producing Loan Officer Alex Rayner Partners with Service First Mortgage to Launch Haymaker Home Loan! Alex Rayner has partnered with Service First Mortgage to launch Haymaker Home Loans, a company dedicated to supporting top producers. “This collaboration provides access to cutting-edge technology, products and services, ensuring loan officers thrive in a competitive industry,” Rayner said. Earning an MBA from the University of Houston, Alex is dedicated to providing exceptional service. His industry acumen and skill with client relations set him apart. For loan officers looking to start their own mortgage company, Rayner advises exploring options with Service First Mortgage. “Starting a mortgage company from scratch is a daunting task,” Rayner said. “By partnering with Service First Mortgage, you gain immediate access to essential resources, advanced technology, and a support team. This allows you to focus on what you do best, e.g., originating loans and serving clients, without the overhead and operational challenges of building a company from the ground up.” Inquiries should be directed to James Wallace!
“ACC Mortgage is coming off its 2nd best month in its 25-year history. 2024 is shaping up to be our best year ever! How many mortgage companies can claim that? Are you planning for your next 25 years? ACC is seeking four (4) well-qualified Account Executives or a team that is looking for support, pricing, culture and stability. ACC makes Non-QM easy. Recent articles discuss ACC’s vision. For example, ACC’s Senko talks non-QM outlook! Send a resume for confidential interview.“
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tough housing market but one that’s not impossible to navigate, experts say.
There are still many ways to maximize a budget if you’re a buyer or ensure you earn top dollar and trim your costs if you’re a seller. Strategies include knowing what fees might be negotiable, what home features to invest in, what kind of lender to look for, what types of mortgages are available and what tax benefits there are to selling and buying another home, experts say.
Can I still get a 3% mortgage rate?
Yes, if a seller has a so-called assumable mortgage at a lower rate, you can take it over.
Best mortgage lenders
About 12 million, or 23% of, active mortgages are assumable, according to data and technology firm Intercontinental Exchange. Of those, 7.2 million, or 14%, are assumable at interest rates below 4%, which can save buyers thousands of dollars and generate more bids for sellers. Current loan rates hover around 6-7%.
Arizona, Georgia, Colorado, Florida, Illinois and Texas, you can check assumable listings site Roam, which launched last September.
Real estate agent commissions. If you’re a seller and don’t want to negotiate your own agent’s commissions, ListWise will connect you with agents willing to work under an incentive-based commission, instead of the current flat percentage structure. Basically, agents agree with you on a minimum price they think they can get for your home. If the sale price exceeds that, agents get paid 0.75% of the final price plus the incentive pay of 20% of each dollar over the agreed price. This approach “focuses attention on what is most important, getting the highest price for your home,” said founder Nic Johnson.
State and local government recording fees, usually paid for by either the buyer or seller
comparison shop lenders, experts say.
“Get estimates and see the variance,” said Darren Tooley, senior loan officer at Cornerstone Financial Services. “That gives you some knowledge and basis to say, ‘I’ve got quotes from other lenders and will you work with me?’”
What kind of lender should I hire?
Find a lender who “has a variety of loan products and can coach you to maximize financing with credit improvement, cheaper PMI (private mortgage insurance) options depending on your down payment, paying points or temporary buy downs,” Tooley said.
PMI can be required to buy if your down payment’s less than 20% of the purchase price, and points are a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate and monthly payments.
Temporary buy downs are prepaid interest that gets you a lower interest rate for a short period. “It’s been a way to help bridge the period (before rates fall),” he said. “People can afford a loan at 5-6% even if it’s a year or two and (then, they) refinance.”
Best mortgage lenders of June 2024
What are tax benefits of selling and buying a home?
If you sell your primary residence, you can exclude from federal income tax up to $250,000 of the profit as an individual or $500,000 as a couple filing jointly. That applies if you lived there for at least two of the last five years and haven’t sold another home in the last two years, the IRS said.
State tax rules vary, so you need to check local laws, said Mike Zovistoski, partner at professional services firm UHY.
Since home prices have appreciated so much over the last five years, many people selling could probably use this exclusion, he said. If you’re thinking about downsizing, you could sell your house, buy a smaller less expensive home in cash and pocket any difference without paying tax on it.
Also, if you itemize, you can deduct mortgage interest you paid during the tax year on the first $750,000 of your mortgage debt. If you’re married filing separately, the limit drops to $375,000, the IRS said.
What are the types of mortgages?
The main types of mortgages are:
Conventional loans, typically used by those with good credit
Government-backed loans, best for those with lower credit scores and smaller down payments
Jumbo loans, usually for those with good credit who want to buy expensive homes
Fixed-rate loans which have fixed interest rates and steady monthly payments
Adjustable-rate loans which have interest rates that periodically move in line with changes in a specific benchmark
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Understand how much extra income you could get from a side hustle like DoorDash and get a budgeting and investing basics refresh.
This Week in Your Money: How much extra money can you really make from side hustles? What are budgeting and early investment strategies for young professionals? Hosts Sean Pyles and Sara Rathner discuss the realities of gig economy jobs with Tommy Tindall, a NerdWallet writer who tried working for DoorDash to see what kind of income it would give him. He shares tips and tricks on the ease of starting with DoorDash, the practical challenges involved, and how your location and lifestyle can impact your earnings.
Today’s Money Question: Host Elizabeth Ayoola joins Sean and Sara to help answer a listener question from a recent college graduate about early investment strategies. They discuss how young professionals can apply the 50/30/20 rule to their finances, the importance of setting clear savings goals, and how to start investing at a young age. They discuss the benefits of starting investments early, the differences between active and passive investing options, and the importance of automating investments to build wealth over time.
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Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
Have you ever gotten a food delivery or a ride in an Uber and wondered whether these gigs are really worth the effort as a side hustle? Well, this episode will deliver some answers.
Sara Rathner:
Cute. Welcome to NerdWallet’s Smart Money Podcast. I’m Sara Rathner.
Sean Pyles:
And I’m Sean Pyles. This episode, Sara and I are joined by our co-host, Elizabeth Ayoola, to answer a listener’s question about money goals, especially when you’re early on in your financial journey. How do you get a grip on your finances and set yourself up for long-term success?
Sara Rathner:
But first, we’re turning to side hustles. This month on Smart Money, we’re running a special series about how you can increase your income, whether you want more money to invest or you’re working on building up your savings, or you really just want some extra cash to spend on whatever junk appears in your social media feeds.
Sean Pyles:
And we are not here to judge you for whatever you spend your money on, but watch any social media influencer or read any article about ways to increase your income and inevitably someone mentions taking up a part-time job in the gig economy like Uber, DoorDash, Airbnb, take your pick. And I’ve always been pretty skeptical that these gigs will net you meaningful amounts of cash, especially considering all the time and effort involved.
Sara Rathner:
Absolutely. If you’re going to put miles on your car or let strangers sleep in your rental property, it needs to be worth it. And we don’t have access to a vacation house for the purposes of this podcast, but we do have a Nerd on staff at NerdWallet who actually did DoorDash for a couple of days to get a feel for whether these jobs live up to the hype. Tommy Tindall is here to share his insights with us. Tommy, welcome back to Smart Money.
Tommy Tindall:
Hey there. Thanks for having me.
Sean Pyles:
So Tommy, you recently made a really fun video for NerdWallet’s YouTube channel where you test drove DoorDash for a few days. What were your hopes and expectations going into this journalistic exercise?
Tommy Tindall:
Yeah, so I study and write quite a bit about side hustles and for this one, I really wanted to go the extra mile, get it, and test it out myself, try to make the advice a little more valuable, right? Give it a true test. And delivery driving is super popular and seemingly accessible, at least that’s what I thought, was my hypothesis, I should say, an easy way to make side money. So I really wanted to answer a couple questions that I think people have about a gig like this, and one is just how easy is it to get started? Can you really sign up on your phone, get a red bag in the mail and start driving? And spoiler alert, yes, that’s what I did. You can. And also can you make real money?
Sean Pyles:
Okay, so what were the main things that you were tracking as you weighed whether this side hustle was worth it?
Tommy Tindall:
I wanted to keep it easy, so I was just keeping a close eye on the time I spent driving while delivering, the miles I drove, and of course how much I earned and really wanted to get to what’s the real pay when you factor in the cost of driving.
Sara Rathner:
So talk with us a little bit about the experience of doing this. Was it fun? Was it boring? Did you get chased by any wild animals? Did you use this as an opportunity to catch up on episodes of Smart Money?
Tommy Tindall:
Well, I wanted it to be fun, but it was kind of hectic. I mean, I remember there were a couple moments of zen where I was just cruising, windows down, just looking outside thinking this is the life. But as soon as I started thinking that way, ding, ding, I’d get another delivery. And I think hustle is a real good term for this because it was kind of a grind. And what really got me, which I thought was interesting, was the constant interaction with my phone. It was draining. I was using maps to navigate, to take orders, and it was just a lot of interaction with the phone while driving.
At one point I, quick story had a 16-mile delivery, which was good pay. It was like $18 of base pay, which was really good. So I took it, but I was so distracted kind of trying to figure out where I was going, that I went the wrong way on 95 and was screaming, pounding the wheel, as you can imagine, and just like, efficiency. That’s what I was going for. Also, keep in mind, I was filming this experience for the video and that totally added to my stress. So maybe more practice without trying to film myself, I could be a little more efficient, get a little more time to enjoy solitude and catch up on my favorite podcasts like this one. But yeah, it was hectic.
Sean Pyles:
Yeah. But you can’t forget that this is a job, right? It’s going to have stressful, difficult moments like any job.
Tommy Tindall:
I was reminded of that quickly, that this is a job and I kind of felt the stress. When I would get a delivery, I wanted to make sure the food was hot and get there quickly, know where I was going. So I had that sense of, hey, you’re on the clock, you’re working.
Sara Rathner:
That distracted driving element is also pretty terrifying.
Sean Pyles:
Tommy Tindall:
Yeah. Now when I see people on the road, I’m wondering are they delivering right now? So before I yell “get off your phone,” I’m wondering that.
Sara Rathner:
Sean Pyles:
Sara Rathner:
They might be.
Sean Pyles:
Either way, get off your phone.
Tommy Tindall:
Sara Rathner:
Tommy Tindall:
Sara Rathner:
I know. So Tommy, you mentioned this in your video, you live in a smaller town, a more remote area. How does that affect your ability to make money from DoorDash or any other app-based job like this?
Tommy Tindall:
I mean, it matters a lot because it’s how busy it’s going to be around you. So location matters. It’s where you live, which towns you have access to with a short drive that may be more populated. So I live, it’s a smaller, more rural but kind of suburban town outside of Baltimore. And what I did before I started was I would watch the DoorDash app, the map section of the app and just kind of see where the hotspots were.
And of course areas closer to Baltimore where it’s more densely populated, more restaurants within close proximity of each other, they were regularly busy during the peak times and they were shaded in pink on the maps. That’s how you know you can go out. When the map is like pink or red, you can Dash on a whim. When it’s gray, which it was sometimes in my town, you have to wait or schedule a Dash for later. But luckily where I live during the busier lunch hour, the option to Dash now was available during the weekday when I tried this. So I was able to stay closer to home, which I think was more realistic, because if I did this, I don’t think I’d want to drive that far. I’d want to stay closer to home, so.
Sean Pyles:
You don’t want to have to commute for your side gig.
Tommy Tindall:
Exactly. You want to get out there and do it maybe on the lunch hour during work, which I was thinking, which we’ll talk about. Probably kind of hard to do because I did find myself going from one end of my town to another because it’s not that populated, so it cost me some time.
Sean Pyles:
Well, that also makes me think about wear and tear on your vehicle and other related expenses like gas. Was that a worry of yours as you were doing the side hustle?
Tommy Tindall:
Yeah, this was a big worry for me because I am somebody who loves cars and I can be a little obsessive about keeping our vehicles maintained. So just all the stop and go driving, it was just kind of giving me a nervous tick. That was on my mind the whole time. I think I kind of make that clear in the video a little bit, and I should also mention that I drive a full size Ram pickup truck, which I thought would be fun to test for this, but not the ideal gig economy vehicle. It’s inefficient, hard to maneuver.
Sean Pyles:
Yeah, lots of storage space, but maybe more than you need for a Starbucks run or something like that.
Tommy Tindall:
Oh, yeah. And the maneuverability. I think at one point I pulled off a busy road into the wrong driveway and I had to sort of Austin Powers my way out. You remember that 20 point turn he had to do in the first movie and all while the customer, the next house over was watching me. So when I finally got over there, we had a little laugh about it and I think she did tip me. I don’t know if she tipped me after the fact or not, which you can do in the app.
Sean Pyles:
You were providing some entertainment along with the delivery?
Tommy Tindall:
Oh, yeah. When I did get to interact with customers like that, I made it kind of fun. I’d be like, “Yeah, you don’t see people driving a truck very often, do you?” But yeah, I was a little anxious about my own vehicle and the wear and tear.
Sean Pyles:
Okay, so Tommy, after three days of Dashing, tell us how much time you spent driving, how far you drove, and how much you earned.
Tommy Tindall:
All right, well here are the stats. I went on three Dashes for this test and drove about six and a half hours on deliveries altogether. I put 90 miles on my personal vehicle, which was my big dump truck as I mentioned. Earned a total of $86, but factor in the 17 MPG that I was getting. And gas was I think around $3.60 a gallon when I was doing this. So less than $19 in fuel costs. True earnings are more like $67 or $10.31 cents an hour. So I mean, not a lot of money.
Sean Pyles:
So I’m going to wager that’s less than you’re making at NerdWallet on an hourly basis.
Tommy Tindall:
Yeah, yeah, yeah. Not giving up the main hustle.
Sean Pyles:
Yeah. Do you think this was worth it?
Tommy Tindall:
So yes and no, and I’ll start by saying I’m glad gigs like this exist because I was really blown away by the accessibility of this gig. I mean, I was signed up and through the background check in literal minutes, and if you, the listener, meets the basic qualifications, I mean you can probably start working and start earning, and I like that. It’s not like saying side hustle options, go be an influencer and wait a couple years to build a following before you make your first dollar. I mean, you sign up and you can make money, which I think is great. And flexibility of course is the selling point of a delivery driving job like this. But at the expense of what? I felt like I was really hustling. I didn’t make a lot of money and thinking back, I mean this would be a real grind for me to do on the side.
It’s really about where I’m in my life. I mean, I have a main job, I have a family, I have young kids in school and sports, a home that continues to break that I have to maintain, I serve in my church and I really covet kind of that little free time that I have left. So I guess all that to say, not quitting my day job. And I think doing this made me more grateful of my main hustle and reminded me that I think there’s merit in what’s become kind of an older way of thinking where you find a good company, work hard, build your skills, grow your confidence, gain expertise, and hopefully increase your salary over time. So whether it’s worth it I think depends on personal situation, because you do make money.
Sara Rathner:
So who do you think a side hustle like this is good for?
Tommy Tindall:
People who do have some extra time or need extra cash and can take advantage of the flexibility to work whenever, because again, that is the selling point of a job like this. Also people who can work the system to their advantage. And you see a lot of YouTube videos of people sort of gaming this and chasing something called peak pay, which is an incentive where you can add plus one, two, three, or more dollars to a delivery if it’s really busy. So the competitive types, which is not me, admittedly, but I do wonder if I would’ve tried this at a different time in my life, like back in college or in my first years working a job when I lived in Washington, DC, had it been available.
Sean Pyles:
Well, Tommy Tindall, thanks so much for talking with us.
Tommy Tindall:
Absolutely. Thanks for having me.
Sean Pyles:
So listener, you just heard Tommy describe an interesting way that he earned some money. Ahead of this month’s series about increasing your income, we have our new Nerdy question of the month for July, which is: what is the most creative thing that you’ve done to earn more money? Maybe you negotiated a significant raise or you’re one of those job hoppers that has a new gig every couple of years. Tell us what is the most interesting thing that you’ve done to increase your income?
Sara Rathner:
I mean, I’ve rented out my basement for a commercial shoot, so there’s that.
Sean Pyles:
Okay. Interesting.
Sara Rathner:
Made 1,400 bucks and bought new storm doors. What a day. Anyway, if you’ve done something like that or something else, call or text us on the Nerd Hotline at (901) 730-6373. That’s (901) 730-NERD, or email us at [email protected]. We might just share your story on a future episode. Maybe inspire some of our other listeners to take up an interesting side hustle.
Sean Pyles:
And while you’re at it, send us your money questions, too. It is our job as Nerds to answer whatever your money question is. So send it our way on the Nerd Hotline, (901) 730-6373 or email it to us at [email protected]. Well now let’s get into this episode’s money question segment after a quick break. Stay with us. We’re back and answering your money questions to help you make smarter financial decisions. This episode’s question comes from Adrian, who left us a voicemail. Here it is.
I’m a recent college graduate. I graduated college in June of 2023 and I am six months into my new corporate world job. I’m trying to save 25% of my income per month and I’m trying to start investing. I don’t really know what my savings goals should be. I’m down for some high risk investments, but I don’t know, I’m trying to just learn the basics of investing, how to plan for life. What would you do if you were in my shoes, if you could go back in time and be 23 and not have kids or a mortgage or anything?
Sara Rathner:
To help us answer Adrian’s question on this episode of the podcast, Sean and I are joined by our co-host, Elizabeth Ayoola. Hey Elizabeth.
Elizabethy Ayoola:
Hey, my favorite dynamic duo.
Sean Pyles:
I love getting a question from a listener who is so young because even though they’re only 10 years younger than me, it does feel like a lifetime ago that I was 23 and making these financial decisions for the very first time. One thing that I find really interesting about Adrian’s question is that while they are so early in their financial journey, their questions really can apply to anyone, because as I’m sure we all know well, plenty of people in their 30s and 40s and beyond are still trying to figure out their budgets and their financial goals. So with that in mind, I think that our listener and all listeners really could benefit from a little bit of budgeting 101. So Elizabeth, where do you think they should start?
Elizabethy Ayoola:
Basically, I think they need to start with a budget. That’s going to tell you how to slice and dice your money. You should probably maybe start with the 50/30/20 budget, which we are advocates for at NerdWallet, or it might be the 60/30/10 budget depending on your cost of living and where you are. Now, for those who don’t know what the 50/30/20 budget is, 50% go to your needs, 30% to your wants and 20% to debt, paying down debt and also saving money. I do think it’s important to know, however, these numbers are not set in stone. It really just depends on your finances and you can adjust the numbers to fit where you are in your financial life right now. I myself currently save above that 20 bucket, but luckily I don’t have that much debt, so that’s why I’m able to save more money and save more than the 20.
Sean Pyles:
Yeah. And our listener wants to save 25% of their income, which is really ambitious, especially for someone who is so young. I think when I was 23, I was saving maybe 2% of my budget, and it wasn’t even intentionally, it was just by chance, because that’s what I had left over at the end of the month.
Elizabethy Ayoola:
You were doing great, Sean, because let me tell you, I was saving 0% of my budget at 20 something. So that is ambitious. I think it’s possible, but it just again depends on where your finances are.
Sara Rathner:
I like an ambitious savings goal, especially when you’re young. Some of the best advice I was given by a CFP that I used to work with was save as aggressively as you can for as long as you can because life only gets more complicated and more expensive. So if aggressive for you is 3%, that’s great. If aggressive for you is 25%, that’s great, and if you have to change it up from month to month, that’s fine too.
Elizabethy Ayoola:
So our listener is dedicated to being a hardcore saver, and I love that for you, listener. So Sean, I know you’re also big on saving and you have some tricks for effectively saving money. What do you think?
Sean Pyles:
So I would start by encouraging Adrian to have something to save for. Again, I’m thinking a lot about myself in my early 20s, I didn’t really have any sort of short, medium, or long-term goals or priorities of any sort because I was just focusing on paying my rent and having fun. So I understand how it can be hard to understand what your priorities might be, and this is where I think something that’s very woo woo but effective can come into play. And that is a visualization exercise. Now, if you’re rolling your eyes, just bear with me because I swear it can be super helpful. So when you are 23, 33, 43, think about where you see yourself in the future in five years, in one year, in 20 years. So maybe that means do you want to move to a new city in the next year? Do you want to buy a house in five years? Do you want to retire in 40 years? Imagine where you will be at these different points in your life and think about how you can save money to get there.
Elizabethy Ayoola:
I would not even say that’s woo woo, Sean. I mean, so I definitely started doing that in my late 20s and honestly, the life I have today was a lot of the woo woo stuff. So it worked for me.
Sean Pyles:
The manifesting is real.
Elizabethy Ayoola:
It’s a real thing.
Sara Rathner:
And if you’re not really into the whole idea of manifesting as a term, that’s fine too. You could also think about it in terms of just naming your goals. Instead of just being like, I’m going to save 25% of my salary. For what? So say what the “what” is. So maybe online savings accounts like high yield savings accounts, you could actually name the account. So you could have, this is the account because I need to replace my car, or this is the account because I need to buy a new computer. Or this is the account that I’m saving up for a down payment on a home for. And then beginning to say, okay, I’m going to put this amount of money in this month for this goal and this goal. Makes it so much easier to stay organized and there’s some science behind it, making it so that you actually are more successful in terms of reaching your savings goals by just naming the goal. So if you don’t want to do the woo woo thing, you could do the practical thing and just put some names on stuff.
Sean Pyles:
Yeah. And what you’re talking about there is really the marriage of the woo woo and the super practical and tactical, where you can start with knowing what you want and then getting the accounts that can help you save the money for that. So for a lot of people, that’s going to mean starting out with an emergency fund, building up over time three to six months of the needs budget that you have. That’s like rent and medicine and groceries, things like that. And then building out the other savings buckets for things like a vacation fund, a house fund, a wedding fund. I have 10 savings accounts across all of the banks that I partner with. And they are all specifically allocated for my different goals. I know 10 is kind of a ridiculous amount, but it works for me.
And what makes it easy is that I automate my deposits into these accounts. So I don’t even have to think about it. One of my accounts is only getting $40 a month, and that’s enough for me to save, to build on that goal over time. But I don’t have to be worried about, oh, okay, am I going to have enough for when I need a new rug for my house eventually. I just know it’s already going in the background.
Sara Rathner:
Yeah, I love this. It’s that concept of reverse budgeting where you automate transfers into your various accounts for different goals every month.
Sean Pyles:
And whenever we talk about savings accounts, it can be easy for we Nerds who are steep in this to maybe even take for granted the fact that high yield savings accounts are such an amazing thing for people to have. People can be getting even around 5% back for what they have sitting in their savings. And if you think about some average returns from the stock market some years are around 7%, and that can be much riskier than just having a savings account. I really do recommend people shop around, look at some of our roundups on NerdWallet and see what sort of high yield savings account might help you meet your goals, because you’ll be getting a much greater return on your money than you would get from a traditional brick and mortar bank.
Sara Rathner:
So our listener, Adrian, is a spring chicken in the world of finance and in the world of investing, which they also mention, having a long time horizon can be one of your best assets. And if you’re in your 30s and listening to this, you still have a long time horizon. So don’t think it’s all over if you didn’t invest in your 30s. Now let’s talk about investing at a younger age. Elizabeth, what are your thoughts there?
Elizabethy Ayoola:
Oh my gosh. I totally get the feeling of being overwhelmed and not understanding where to start. But it’s really important I think, not to let that paralyze you and to just start as soon as you can. And the first step in doing that is creating a strategy. And what the strategy is going to do is it’s going to tell you what your goals are and how much you need to save to achieve them and by what timeline. Now, it doesn’t have to be over complicated because I think that’s where people get tripped up, especially because there’s so many retirement and saving calculators online to help with this. And yes, I’m going to shamelessly plug NerdWallet. We have lots of those, go check them out. But yeah, knowing what age that you want to retire and how much you need will help guide your investing strategy. It’s also going to help you decide what to invest in, the best vehicles to use, and how much to put in each. What do you think, Sara, about time horizons in that sense?
Sara Rathner:
Oh, it’s probably one of the best things you have working for you because the way compound interest works mathematically is the longer of a time horizon you have, the less you can save per month or per year and still come out with a higher amount of money in the end versus waiting an extra 10 years, an extra 15 years, then you have to invest so much more per month just to catch up and still end up with less money overall.
Sean Pyles:
And I would recommend Adrian or anyone else who’s getting started in investing or just taking it seriously for the first time, is to get a lay of the land and understand all of the different investment accounts that are out there. Because there are all these different ones, like a 401k and a Roth and a Roth IRA that people have probably heard about, but really understanding what they are and when one is more beneficial than another for your circumstances can help you make the most of your investments. And something to think about too, since Adrian is so young, is that your younger years are often the best time to take advantage of an IRA because you are getting taxed at a lower rate when you’re earning less money than you will be taxed at later on in your career. So really use these early years to your advantage.
Elizabethy Ayoola:
Yeah, I’m with you Sean. You guys also should decide for those people listening whether you want to do active or passive investing. If you are like me and you ain’t got time for that, and when I say that, I mean checking the stock market every day, then you may want to consider passive investing and some passive investing options include ETFs or robo-advisors and kind of securities like that. But yeah, once you do all those things, the most fun part is automating your investments and knowing that you’re probably growing both while you’re sleeping.
Sean Pyles:
Yeah, I think for a lot of people, sometimes the best strategy to start can be the strategy of “I want my money to make me more money.” And that’s where I started out in my mid 20s when I first started taking investing seriously. I didn’t want to spend a lot of time actively managing investments. And guess what? Actively managed investments often perform worse than passively managed investments. So passive is probably going to be the easiest thing for most people to do. And I just set up an account with a robo-advisor that was trusted and well-reviewed on nerdwallet.com, and I just have automated deposits and it makes it super simple. I’ve been doing it for years and I’m already receiving literal and metaphorical dividends from that.
Elizabethy Ayoola:
Also, you want to think about fees when you’re looking at things like that and what has low fees and performance and other things, but don’t let that stop or overwhelm you as well. Just check out some resources on how to pick an ETF also.
Sara Rathner:
Yeah, I will also add that whenever I hear somebody in their early 20s say that they are, “Down for some high risk investments,” I think somebody’s been talking to their friends about crypto and I don’t know. I mean, for all I know Adrian just means, oh, I really want to dabble in a more stock forward portfolio. Sure. Honestly, you’re probably talking about crypto, aren’t you? Before you dabble in speculative investments, things like cryptocurrency, things like, I don’t know, precious metals and real estate and all sorts of stuff like that, you want to set aside a solid foundation. Just the things that we’ve been talking about, automating transfers of money into retirement accounts, either through your employer or on your own, diversifying those investments. And then, only then, if you have money left over, then you can dabble a little bit, sprinkle a little spice onto your investments, maybe 10% of your portfolio at the most into the higher risk, like crazy stuff. But set a good foundation first. Don’t put all of your money into speculative investments and then wonder why you don’t have any money left because you probably won’t.
Sean Pyles:
And I will just quickly add for the sake of our compliance department, that we are not financial or investment advisors. If you want specific individualized investment advice, speak with a financial advisor, hopefully a fiduciary financial advisor. Okay. Now, I know we’ve been kind of talking around this question for this conversation, but I would love to hear what you two would have done differently if you could go back to when you were 23 and maybe improve your finances, knowing all that you know now?
Elizabethy Ayoola:
That’s a deep, deep, deep sigh. So honestly speaking, the first thing I thought is like, oh my God, I would’ve stopped partying and buying alcohol and save more money. But then I remembered that I was living in Nigeria earning like $400 a month, which was seen as a good salary. So I barely had any money to live, quite frankly. And I think that’s a reminder that sometimes you just ain’t got really barely enough money to save and you just need to earn more. But I definitely would have educated myself more on personal finance and I would’ve at least stashed away something into an investing account. So that’s what I would’ve done. But then again, if I started investing too early, I might be in Turks and Caicos right now instead of chatting to you all. So I guess it worked out how it was supposed to.
Sean Pyles:
I’m glad you’re here with us, but also I would be happy for you if you were traveling the world instead of doing this. Sara, what about you?
Sara Rathner:
So I think a lot of people in their early 20s are, there’s just a lot of fear and uncertainty at that point in your life, and I definitely felt that at that time where there are all these big life milestones that are coming up for you eventually and you just don’t know when they’re going to happen. And so I was so worried about whether or not I’d be able to get to that point. But you’re 23.
Knowing how fast the next 10 to 20 years will go for you, just savor it because everything else is going to pile on really, really fast. And the way you spend your weekends is going to look really different. Do take a couple of steps to improve your position in life later on and use that gift of time. But then, yeah, you should have the wants budget, you should go travel with your friends, go out with your friends. Once you all get partnered up, you’re not going to see your friends as often, so enjoy it.
Sean Pyles:
Well, as someone who definitely enjoyed themselves a lot in their early 20s, I don’t regret any of it, really, shockingly, but it did come at the expense of my financial health in some senses. I really didn’t invest until my mid 20s. I barely had a budget until around the same time. So I would go back and encourage myself to be a little bit more balanced in the having fun and the forward planning aspect of life. But you’ve got to learn your lessons as you learn them. And that’s where I was at the time.
And one thing I think is important to realize and think about as you are trying to map out what having an adult financial life looks like is that the beginning of this financial journey is always going to be the hardest because you simply don’t know what you don’t know. There’s so much to learn. When you’re 23, you’re paying rent on your own for the first time. You’re figuring out how to make meals for yourself for the first time and building these good habits does take time. So don’t feel like you have to do everything all at once, but do make that concerted goodwill effort to try to better your relationship with money and use it to build the life that you want. Well, Elizabeth, thanks so much for coming on and talking with us.
Elizabethy Ayoola:
Thanks for having me.
Sara Rathner:
And that’s all we have for this episode. Remember, we’re here for you, whatever life phase you’re in, and we want to hear your real world questions because we’re here to make you smarter about your money decisions. So turn to the Nerds and call or text us your questions at (901) 730-6373. That’s (901) 730-NERD. You could also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode.
Sean Pyles:
And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts and iHeartRadio, to automatically download new episodes. This episode was produced by me. Tess Vigeland helped with editing. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help. And here’s our brief disclaimer again. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sara Rathner:
And with that said, until next time, turn to Nerds.
The impact of higher mortgage costs is now biting hard. Three million UK households face the prospect of having to renew their mortgage within the next two years as their fixed-rate periods come to an end. While nearly two-thirds of all borrowers have already remortgaged at more expensive rates, a large number are still waiting to do the same.
The Bank of England’s recent financial stability report highlighted how vulnerable household budgets are to increased mortgage costs. Many are still on fixed rates below 3% for mortgages they borrowed before the interest rates started to rise in December 2021. According to the bank, around 400,000 of these households will experience very large increases in their monthly payments, of 50% or more.
This is because the mortgage rates now being offered are above 5% for two-year fixed-rate deals, and around 6% for house buyers with lower deposits. For a household with a mortgage debt of around £200,000, the UK average, a mortgage rate rise from 2% to 5% increases the monthly repayment costs by about £500.
Financial markets expect a base rate cut by the Bank of England on August 1 2024. William Barton
Mortgage prices are directly linked to the Bank of England’s base rate. They have reached these high levels due to soaring increases in the base rate, as the UK’s central bank sought to reduce inflation to the desired level of 2%.
The good news is that as inflation has now eased from its peak of over 11% in October 2022 back to 2% in May 2024, rates cuts are probable soon. Financial markets expect the first cut by the Bank of England, possibly of 0.25 percentage points, on August 1 2024.
The bad news is that mortgage rates still probably won’t drop to the ultra-low levels of below 2% seen between 2009 and 2021. Historically, mortgage rates had never been below 4% before that period, at least since banking records began in 1853. Experts stress that the new normal for mortgage rates in the medium-to-long term will be between 3.5% and 4.5%. Households have almost no option but get used to these higher costs.
Furthermore, the process of central bank rate cuts is slow. Current market expectations are that the bank rate will ease to an annual average of around 3.5% in 2026. High-street banks charge slightly higher rates for mortgages, compared with the base rate, to cover their operational costs. Hence, there is still a couple of years to go to reach the predicted mortgage rates of 3.5-4.5%.
How are households coping?
In recent years, households have been under pressure due to soaring living costs with inflation high. And while the rate of inflation has been decreasing recently, this does not mean prices are going down. They are still increasing, just at a slower rate.
For some people, robust wage growth and low unemployment levels have helped them cope with the cost of living crisis. But the Bank of England’s latest financial stability report highlights that low-income households suffer most from the effects of increased living costs and mortgage rates.
The bank’s recent survey found that 34% of UK households talked about interest rises putting pressure on their finances. Many cope either by dipping into their savings or putting less aside then they normally would. So, the bank expects many people’s savings to run down in the coming years, making a lot of households less financially resilient.
According to the survey, many households whose monthly mortgage repayment had risen said they were spending less, taking up additional work, or looking for cheaper properties.
How people are making savings:
Bank of England/NMG household survey data
Those without the comfort of a savings buffer may have fallen into arrears. Others have had their homes repossessed. Both arrears and repossessions rates have been steadily increasing, albeit still lower than during the global financial crisis of 2007-08. Mortgage repossessions by lenders have risen in England and Wales to the highest levels since 2019.
Households also have to borrow for much longer to be able to cope with rising costs. The proportion of first-time buyers with mortgages lasting for 36 to 40 years has increased to almost 20%, compared with only 6% prior to December 2021. These borrowers will have to make repayments well into retirement, given the average age for first-time buyers is now around 34.
Share of mortgages with 36- to 40-year terms in the UK
If someone is worried about their mortgage payments and the prospect of renewing at a higher rate, there are a number of options they may consider to reduce the burden. Taking advice from an independent mortgage adviser can help, as they often have access to better deals.
A mortgage can be extended, or switched to interest-only, to lower the monthly costs. However, these options mean it will take longer to repay the mortgage.
Making sure the mortgage is not based on higher standard variable rates (SVRs) is also important. This is the rate borrowers are automatically moved onto if they do not remortgage when their fixed rate ends.
If someone has bought a home using the government’s Help to Buy loan scheme, they should keep this loan as the rates are more competitive.
Finally, there is always the possibility of talking to the current mortgage lender, as banks are usually willing to help borrowers who are facing repayment problems.
Did you know that there were 2.5 million estimated people living in the newly independent nation of the United States in July 1776? Per the Census Bureau, that figure has now risen to around 335 million. 56 individuals of those 2.5 million people were signers of the Declaration of Independence, with John Hancock, a merchant by trade, being the first signer. Benjamin Franklin, who represented Pennsylvania, was the oldest signer at age 70; Edward Rutledge of South Carolina was the youngest signer at age 26. Speaking of numbers, if you like them, although the FHFA and the CFPB would like you to believe that they are part of the fabric of the United States, they aren’t. But the FHFA and the CFPB Release Updated Data from the National Survey of Mortgage Originations for Public Use. Hey, I only know what I read in the newspapers. But there is some interesting real-time information out there, and if you want to see who’s paying what in violations, here you go. (Today’s podcast is found here and this week’s is sponsored by Bundle, the attorney-prepared legal documents company that is dedicated to the real estate, mortgage, and title industries. Fuel your operations and execution of documents from deeds to subordinations to assignments, and everything you need for any order, in one bundled price; receive 20 percent off using the code “Chrisman” at checkout. Hear an interview with Atlas Real Estate’s Tony Julianelle on the recent single family rental market transformation and why individuals in the mortgage industry should care about property management.)
Lender and Broker Services, Products, and Software
“Leadership is crucial for organizational success and culture. Recognizing the differences between strong and weak leadership will directly impact your team’s success. Inspired by ‘Good to Great’ by Jim Collins, this upcoming webinar features Laura J. Brandao (Equity Prime Mortgage), Keith Canter (First Community Mortgage), and Richard Grieser (Truv) sharing insights from their many years of mortgage leadership experience. You’ll leave this July 10th session with strategies to effect change in your organization, attract and maintain the right talent, understand team needs to advance shared goals, maintain a disciplined yet happy culture, and leverage technology as an accelerator. Come join us!”
Rocket Pro TPO offers Home Equity Loans powered with AVM (Automated Valuation Model), providing faster and more cost-effective appraisals. With AVM, valuations are delivered in seconds, nearly five days faster than traditional methods, saving clients time and money. Interested? Price a loan today.
Lenders across the country are still looking for ways to cut costs without sacrificing revenue. Start off easy by collecting fees upfront. Fee Chaser by LenderLogix makes it as easy as clicking a button… literally. Book a 15-minute demo and get started in a few weeks.
PlainsCapital Bank National Warehouse Lending, a subsidiary of Hilltop Holdings (NYSE:HTH), offers funding for multiple mortgage products and programs with little to no additional requirements: FNMA HomeStyle, FHA 203K Full, Limited, and USDA Rural Housing renovation loans. Mortgage Revenue Bond and DPA loans with extended dwell times. Sub Limits for lower FICO scores, manufactured homes, renovation, construction and other unique mortgage products and programs. With over 30 years’ experience and a well-capitalized diversified financial holding company we provide our customers with confidence to meet their loan funding needs. If you are interested in learning more about PlainsCapital Bank National Warehouse Lending please contact Deric Barnett, (469)955-6786.
Agency, Lender, and Investor Changes
FHA posted to its Single Family Housing Draft ML proposing changes that would update FHA’s Defect Taxonomy to include fraud or material misrepresentation involving a Third-Party Originator (TPO) as a Tier 1 severity defect. FHA’s Defect Taxonomy is its quality assurance framework for all Title II loan reviews. It provides a consistent methodology for identifying defects at the loan level, useful data, feedback through structured categorization of defects, and balance between FHA’s risk management and quality assurance business processes. Interested stakeholders are encouraged to thoroughly review the Draft ML and provide feedback through June 24, 2024.
FHA published Mortgagee Letter (ML) 2024-12 implementing the provisions of the final rule, Revision of Investing Lenders and Investing Mortgagees Requirements and Expansion of Government-Sponsored Enterprises Definition, announced April 23, 2024, in FHA INFO 2024-21. The final rule revised and clarified requirements for investing lenders and mortgagees to gain or maintain status as an FHA-approved lender or mortgagee, separately defines Government-Sponsored Enterprises (GSE), including the Federal Home Loan Banks (FHLB), from other governmental entities and aligned general FHA approval standards with current industry business practices.
Ginnie Mae announced a term-sheet for its proposed Home Equity Conversion Mortgage (HECM) Mortgage-Backed Securities (HMBS) 2.0 program, initiating a comment period ending July 31st. The proposed program aims to enhance liquidity access for HMBS Issuers by allowing the re-pooling of active and non-active buyouts into new custom, single-Issuer pools. The new HMBS 2.0 program, described in more depth in our blog Ginnie Mae Announces New Pool Type to Improve HECM MBS Liquidity, seeks to address liquidity constraints in the reverse mortgage sector by providing a new capital markets execution for older vintage HECMs.
Ginnie Mae mortgage-backed securities (MBS) portfolio outstanding grew to $2.59 trillion in May, including $36.9 billion of total MBS issuance, leading to $14.3 billion of net growth. May’s new MBS issuance supports the financing of more than 116,000 households, including more than 58,000 first-time homebuyers. Approximately 74 percent of the May MBS issuance reflects new mortgages that support home purchases because refinance activity remained low due to higher interest rates. More information is available in Ginnie Mae’s Press Release.
USDA Rural Development posted a bulletin on June 21 announcing an interest rate increase for SFH programs.
Don’t limit your borrower’s buying potential if they require a loan amount beyond conventional limits. Loan Stream Mortgage Jumbo ONE loan programs empower you to give your clients more options all while helping you close more loans. With four Jumbo ONE programs available for Purchase, Cash-Out, and Rate & Term Refinance.
Citi Correspondent Lending updated Trailing Outstanding Document requirements. Changes include updated timelines for submission of missing documents and remediation of deficient documents, additional impacts when missing/deficient document issues are not resolved in a timely manner, and reporting changes. View the complete Outstanding Document Updates Announcement, which provides effective dates and outlines details for all of the changes.
Sellers in Carrington’s Non-Delegated Correspondent channel are now able to select who they want to generate the closing docs during loan submission. The cost for Carrington to generate the closing docs is a low $350.
Newrez approved correspondent clients, don’t forget that loans containing an ACE + PDR appraisal method must submit a PDF report that uses the Uniform Property Dataset report (UPD) and includes the required certifications, floor plan and photographs to Freddie Mac using the Beyond ACE application programming interface (bACE API). Details are available in Newrez Bulletin 2024-040.
Eliminate mortgage headaches for your borrowers with Kind Lending’s Written VOE (Verification of Employment) program. This non-QM product uses a written VOE for qualification purposes versus traditional documentation such as W2s and paystubs.
National residential lender PrimeLending, a PlainsCapital Company, now offers a new home equity loan product giving homeowners the ability to convert home equity into cash. With a PrimeLending home equity loan, homeowners can access a portion of their home’s value without having to sell it. Simply put, homeowners can borrow money using their home equity as collateral and repay the loan at a fixed-rate over a 30-year term. Homeowners receive the cash as a lump sum upfront to use however they choose, such as consolidating debt, making home improvements, or covering tuition, medical or unplanned expenses.
Capital Markets
Fed Chair Powell knows Halloween is nearly four months away. The head of the Fed refrained from spooking markets yesterday at the European Central Bank’s annual forum, citing progress on inflation, which helped to bolster bets that the Fed will be able to cut rates this year. He added that the risks between price pressures and the labor market are coming into better balance, though predictably declined to foretell of a September reduction. In the wake of President Biden’s poor debate performance last week, many investors are preparing for higher-for-longer interest rates from the increased likelihood of a second Trump term and additional inflation-stoking tariffs. Conversely, Chicago Fed President Goolsbee said yesterday that the Fed should prepare for rate cuts.
The Job Openings and Labor Turnover Survey (JOLTS) is conducted by the Bureau of Labor Statistics of the U.S. Department of Labor. Looking for signs that the labor market is softening? May’s JOLTS report showed a labor market that in many ways looks like its pre-pandemic self. The number of job openings per unemployed worker remained unchanged, back at its 2019 average. Job openings unexpectedly rebounded in May from the three-year low hit in April, increasing to 8.140 million from 7.919 million in April, interrupting a downward trend. Fed Chair Powell yesterday described the job market as cooling off appropriately.
Due to the Independence Holiday tomorrow, some usual economic releases and supply are moved up to today’s calendar. The calendar kicked off with mortgage applications decreasing 2.6 percent from one week earlier, according to data from MBA’s Weekly Applications Survey. Keep in mind that we have had three straight weeks of gains, including during the prior holiday-adjusted week.
Markets have also received Challenger job cuts for June: 48,786 cuts, down 24 percent from the 63,816 cuts announced one month prior but 20 percent higher than the 40,709 cuts announced in the same month in 2023. We’ve had ADP employment for June (150k private-sector jobs were created, the lowest gain in five months but still a gain), and jobless claims (238k, as expected; continuing claims 1.858 million). Other releases today include the May trade deficit, Final S&P Global services PMI for June, ISM services PMI for June, factory orders for May, and Treasury releasing details of the mini-Refunding consisting of $58 billion new 3-year notes and $39 billion and $22 billion reopened 10-year notes and 30-year bonds.
The latest Fed Minutes (from the June 11-12 Federal Open Market Committee meeting) will be released today and should give us some further hints of the Fed’s thinking, though Fed messaging has been clear that inflation remains too high, and patience is needed to allow more time for the current rate target to bring it back down. Futures settlement close is at 1:00pm ET with SIFMA recommending a 2:00pm ET close for cash bonds.
Looming after tomorrow’s 4th of July Holiday is the June nonfarm payrolls report on Friday, where estimates anticipate the economy added nearly 200k jobs throughout the month, while they anticipate the unemployment rate will remain near historic lows at 4 percent. We begin the day before the holiday with Agency MBS prices a few 32nds better from Tuesday’s close, the 10-year yielding 4.41 after closing yesterday at 4.44 percent, and the 2-year is yielding 4.75.
Jobs
“After 50 remarkable years in mortgage lending, Planet Home Lending Senior Vice President, Correspondent Lending Jim Loving is retiring. Jim is an industry icon who’s built a remarkable culture focused on partnership since he joined Planet in 2014. Jim’s legacy at Planet and in the industry is a lasting one. From inventing Best-Efforts Delivery to building Planet Home Lending into a top-tier correspondent lender, he’s been a mentor and partner to many in our industry. As Jim moves on to the next chapter, our experienced Regional Managers will continue to serve as expert guides, helping you navigate today’s market challenges. We hope you’ll join us as Planet extends its deepest gratitude to Jim for his exceptional contributions.”
“Loan officers! Discover the radius advantage. Are you navigating a market that’s forgotten the value of loyalty? At radius financial group, we’re rewriting the script with our MLO Partnership-Proposition (MPP). We understand the industry’s pulse and the need for a genuine partnership—not just a platform to process loans. As lenders focus on consumers, we concentrate on you, the heartbeat of our business. You’re not just a number here; you’re the face of our brand, co-branded for success. We’re committed to investing in you, providing a stable home where your talents are nurtured and your book of business flourishes. For confidential inquires please contact Carla Herrera (781-742-6500).”
Retirements… Can our biz survive losing 123 years of experience in one fell swoop? Of course it can. How ‘bout 32-year vet Max Cocetti retiring after 19 years with MGIC? Or 41-year vet Donna Miller retiring from Truist? And after only 50 years in the biz, as noted above short-timer Jim Loving is calling it a career leaving his 10-year post as SVP of Correspondent Lending at Planet Home, with hopefully more Corvettes in his future. We wish them all the best!
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LOS ANGELES — The average rate on a 30-year mortgage rose this week, pushing up borrowing costs on a home loan for the first time since late May.
The rate rose to 6.95% from 6.86% last week, mortgage buyer Freddie Mac said Wednesday. A year ago, the rate averaged 6.81%.
The uptick follows a four-week pullback in the average rate, which has mostly hovered around 7% this year.
When rates rise they can add hundreds of dollars a month in costs for borrowers. The elevated mortgage rates have been a major drag on home sales, which remain in a slump dating back to 2022.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing the average rate to 6.25% from 6.16% last week. A year ago, it averaged 6.24%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The yield, which topped 4.7% in late April, has been generally declining since then on hopes that inflation is slowing enough to get the Fed to lower its main interest rate from the highest level in more than two decades.
Fed officials have said that inflation has moved closer to the Fed’s target level of 2% in recent months and signaled that they expect to cut the central bank’s benchmark rate once this year.
But until the Fed begins lowering its short-term rate, long-term mortgage rates are unlikely to budge from where they are now.
Most economists think the Fed’s first rate cut will occur in September, with potentially another cut by year’s end. But mortgage rates could begin easing in coming weeks, if bond yields move lower in anticipation of a Fed rate cut, said Lisa Sturtevant, chief economist at Bright MLS.
“While today’s report is not what homebuyers were hoping for, we may actually start to see rates fall sooner than expected,” she said.
Mortgage rates fell to historic lows during the pandemic, setting off a homebuying frenzy that sent home prices soaring. Between 2019 and 2023, the median national sales price of previously occupied U.S. homes jumped more than 43%. And despite declining sales this year, home prices hit an all-time high in May of $419,300.
High home loan borrowing costs and record-high home prices discouraged many would-be homebuyers this spring, traditionally the busiest period of the year for the housing market.
Sales of previously occupied U.S. homes fell in May for the third month in a row, and indications are that June saw a pullback as well.
Most economists’ projections call for the average rate on a 30-year home loan to remain above 6% this year. That’s still double what the average rate was just three years ago.
“We are still expecting rates to moderately decrease in the second half of the year and given additional inventory, price growth should temper, boding well for interested homebuyers,” said Sam Khater, Freddie Mac’s chief economist.
The typical cost of residential solar panels in Florida, before the federal solar tax credit, was $33,673 in the second half of 2023. This is lower than the national average of $34,122. The average system size is 14.3 kWs, compared to the national average of 11.6 kWs.
Florida’s primarily humid subtropical climate requires a lot of energy for air conditioning. Installing larger systems makes sense in a state that has one-to-one net metering, which allows customers to offset more of their energy bills with solar. The state’s net metering policies and abundant year-round sunshine have fueled strong adoption of residential solar. Florida has few state tax rebates and solar incentives compared to other states, but customers there may still qualify for the federal tax credit
N.C. Clean Energy Technology Center at N.C. State University. Programs. Accessed Jun 28, 2024.
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Solar costs in Florida at a glance
Typical cost of home solar system before federal solar tax credit
Typical cost of home solar system after federal solar tax credit
Median cost per watt
Average system size
Source: EnergySage, a solar and home energy product comparison marketplace founded in 2012. Data is from the second half of 2023.
Costs and trends in Florida
Solar has been having a moment in Florida, part of a general upward trend in interest and installations.
“Florida is ranked third nationally in solar growth, and it is continuing to grow in popularity,” said Wendy Parker, executive director of the Florida Solar Energy Industries Association (FLASEIA), in an email
. “Most of the state still has net metering, which makes it very favorable to homeowners.”
System sizes are high in Florida compared to other states, at 14.3 kW on average in the second half of 2023. A contributing factor is the falling cost of solar installations, which went from $2.45 per watt in Florida in early 2023 to $2.35 per watt in the second half of 2023.
System size is also often tied to average monthly energy consumption, which is comparatively high at 883kWh per month in Florida.
“In the past year, prices have been trending down, and levelizing some. Certain equipment has come down in price, and extra competition in Florida has driven costs down from some companies. We’ll have to see what the tariffs do, potentially driving prices back up,” says Dan Massaad, CEO of Guardian Home, an energy-efficient home services and solar installation business in Florida.
Florida established statewide renewable energy goals in 2022 but repealed them in May 2024
,. Legislation and incentives may vary with the future priorities of new political administrations.
Tax incentives and rebates in Florida
Net metering. Florida adopted net metering in 2008, as well as guidelines to allow residential solar to interconnect with utility grids. Net metering allows homeowners to sell excess electricity to the local utility.
Property tax breaks. Florida has a property tax incentive for renewable technologies. It ignores the increase in property value due to the installation of solar panels. This savings can add up over time
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Tax credits. Florida doesn’t offer state and local rebates or incentives on rooftop solar panels. However, customers may qualify for the federal tax credit.
Low-cost loans. Some cities offer solar loan programs. For instance, the City of Tallahassee Utilities offered a 5% loan with a 10-year term for solar panel installations, with a maximum loan amount of $20,000
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Related equipment rebates. Providers like the Fort Pierce Utilities Authority also offer flat rebates on solar water heaters. If you intend to include a solar water heater in addition to a solar panel system, check for this type of incentive in your area
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“Florida is a net metering friendly state,” Massaad says. “A lot of the big utility companies give you a true 1-to-1 credit on whatever you overproduce, so it makes a lot of sense for many clients to go solar.”
Energy storage in Florida
Floridians often use the grid as their backup, but interest in battery storage is on the rise.
“In Florida, the battery storage is often for clients who are more concerned with power outages, like with hurricanes, and those clients have some control to either operate a room or a few circuits, or a whole home backup,” Massaad says.
The average cost of battery backup was $16,887 in Florida in June 2024 before the federal tax credit. However, a small battery for key circuits in one part of the house may cost less and can help cool one part of a home during extreme heat or keep important medical equipment running during a power outage.
Frequently asked questions
How should you pick a solar panel installer in Florida?
In addition to installation price, find out how long a solar panel company has been in business and read reviews. “The absolute cheapest company may not be building a sustainable, service business for the client, so do your research and make sure you’re asking questions about longevity,” Massaad says.
What kind of roof makes installing solar panels more complex?
Most roof types can work with standard solar panel mounting, but clay tile roofs are occasionally used in Florida. The solar mounting supplies can break the fragile tiles, so prepare to pay for additional labor to keep the roof tile safe.
Looking for second job ideas to increase your income? You’re not alone. Many people look for side gigs to help pay bills, save for big purchases, or simply have extra spending money. Finding the right second job and making extra income can make a big difference in your financial life. With so many options available,…
Looking for second job ideas to increase your income? You’re not alone. Many people look for side gigs to help pay bills, save for big purchases, or simply have extra spending money.
Finding the right second job and making extra income can make a big difference in your financial life. With so many options available, there’s likely something that fits your skills and schedule. Whether you want a job you can do from home or one that gets you out and about, there’s a side job out there for you.
For me, I was able to find a second job and it completely changed my life. In fact, it’s how I paid off my $40,000 in student loans in just 7 months. Making extra money also helped me to stop living paycheck to paycheck and to save more money!
Best Second Job Ideas
Below are the best second job ideas:
1. Blogger
Blogging used to be my side hustle and it is now my full-time job where I have earned over $5,000,000 over the years.
I started Making Sense of Cents just as a hobby, and it eventually turned into my second job. I didn’t know that blogs could make money or that it could become my full-time job. I didn’t even understand what a blog was or how it worked.
Starting a blog can be a great way to earn extra income. You can write about topics you are passionate about, such as travel, food, or personal finance. The best part is that you have the freedom to work on your blog whenever you have free time.
For me, it was a great second job because I could work on my blog before I went to my day job, during my lunch break, after I got home from work, and on the weekends. You get to make your own schedule, so that is a huge plus!
You can learn more about how to begin in my free How To Start a Blog Course here.
Here’s a quick outline of what you will learn:
Day 1: Reasons you should start a blog
Day 2: How to choose what to blog about
Day 3: How to create your blog (you’ll learn how to start a blog on WordPress)
Day 4: How to make money blogging
Day 5: My tips for making passive income from blogging
Day 6: How to grow your traffic and followers
Day 7: Extra blogging tips to help you be successful
2. Proofreader
Being a proofreader is a great second job idea. It’s perfect if you love reading and have a good eye for catching mistakes. You get to find errors in spelling, grammar, and punctuation.
You can work from home as a proofreader. Many companies and websites offer remote proofreading jobs. Some popular platforms include Upwork, FlexJobs, and Scribendi.
You might proofread books, articles, or even student papers. The work can be flexible, letting you choose when to work. This makes it easy to fit into a busy schedule.
Proofreaders can earn a decent amount of money. Some jobs pay by the hour, while others pay by the project. According to some sources, full-time proofreaders can make around $50,000 per year. Even if you don’t work full-time, you can still make a good side income.
I personally have a proofreader for my blog, and I know many others who have proofreaders for their businesses as well. It’s a very much-needed and in-demand job.
You can learn more at How To Start A Proofreading Business And Make $4,000+ Monthly.
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This free training teaches you how to start a proofreading side hustle (and how to earn $1,000+ per month!), even if you are brand new and don’t have any previous proofreading experience.
3. Take online surveys
Taking online surveys can be a simple way to earn extra money in your spare time. Companies want to know what you think about their products, services, or marketing campaigns.
Many websites offer paid surveys. You can sign up for these sites and start taking surveys right away. Each survey usually takes a few minutes to complete.
You might earn anywhere from $0.50 to $5 per survey, depending on the length and complexity.
The survey companies I recommend signing up for include:
American Consumer Opinion
Survey Junkie
Swagbucks
InboxDollars
Branded Surveys
Prime Opinion
Five Surveys
PrizeRebel
Pinecone Research
Online surveys can be done from anywhere with an internet connection, making it easy to fit around your other commitments. Just remember, while this can add up over time, you will not make a full-time income from just taking surveys.
I have taken many, many surveys over the years, and what I like about them is that you can do them on your own schedule – in the mornings, during your lunch break, before you go to bed – whenever. There is no strict schedule and they are super easy to do.
4. Dog walker or pet sitter
Becoming a dog walker or pet sitter is a great way to make extra money. You can set your own schedule and enjoy spending time with furry friends. Plus, many people need reliable pet care (I have personally found it hard to find a good dog sitter in the past, so I personally know that there is a lot of demand for this second job!), so there are plenty of opportunities.
Using dog walking apps like Rover, you can easily find clients. These platforms connect you with pet owners in your area. Depending on how much time you invest, you could potentially earn between $400 and $1,000 a month.
When I have had dog sitters in the past, I was paying around $100 a day for my two dogs to be watched in the person’s home. So, a 10-day trip earned the person $1,000.
Taking care of animals can also be very rewarding. You get to exercise while walking dogs and enjoy the company of pets. It’s a job that keeps you active and can be a lot of fun if you love animals.
No special skills are needed, but being responsible and loving pets is important. You must be punctual and trustworthy since pet owners rely on you to take care of their animals.
My mother-in-law as well as my sister are both dog walkers and pet sitters and enjoy what they do.
5. Virtual assistant
Being a virtual assistant is a great second job idea. You can help businesses and professionals with tasks like managing emails, scheduling appointments, and handling social media. This role tends to have flexible hours, making it easier to fit into your schedule.
One of my first side jobs was working as a virtual assistant. It was a fun and flexible way to earn extra money. There are many kinds of virtual assistant jobs. The money I made helped me pay off my student loans quickly, stop living paycheck to paycheck, and become my own boss. I think it’s a great way to make money, whether you want a part-time or full-time job.
Starting as a virtual assistant can be easy. Websites like Upwork, FlexJobs, and Indeed have listings for virtual assistant jobs. You just have to set up a profile and start applying. For me, I also let my friends and those in my industry know that I was growing my virtual assistant business, and that helped me find jobs as well.
A virtual assistant’s tasks can include:
Managing social media accounts
Scheduling travel and appointments
Managing email inboxes
Organizing events
Communicating with clients
Ordering supplies
Managing calendars
Handling logistics
Coordinating Zoom calls
Moderating online forums
Running personal errands
Answering customer service questions
Performing data entry
Managing websites
Creating presentations
Sending invoices
Now, one virtual assistant most likely won’t do all of these tasks – it simply depends on what the company or person is looking for.
Learn more at Best Ways To Find Virtual Assistant Jobs.
6. Graphic designer
You can make extra money as a graphic designer, and this can be a good second job idea if you want to work from home. A graphic designer is what you think – they design different kinds of graphics.
One way is to create design templates. These can be for websites, social media, or even printable designs. You can sell these templates online and get paid each time someone buys them.
Another option is freelance work. You can sell services like logo design, branding, or social media graphics, and you can find clients on sites like Upwork or Fiverr.
7. Social media manager
Social media managers handle different social media platforms for businesses.
Your job can include creating content, posting updates, and responding to followers. You might also need to analyze data to see what posts are doing well and which ones are not.
They work for one company or multiple clients. It’s important to have good communication skills and a creative mindset. Some social media managers also do graphic design or video editing for their social media posts.
Being a social media manager can be fun and flexible. You can usually work from home and set your own hours. This control and flexibility make it an excellent job for people looking to earn extra income on their own terms.
For me, I have been a social media manager in the past as a second job. It was great as a flexible side hustle!
8. Online tutor
If you enjoy teaching and have a strong understanding of a subject, you can try finding online tutoring jobs. Online tutoring lets you share your skills and help students from anywhere, and you can tutor kids in math, science, and reading, or even help them prepare for tests like the SAT or ACT.
Platforms like Wyzant and Tutor.com connect you with students looking for help. You create a profile, list your skills, and set your rates. Most tutors charge between $30 and $60 per hour. Teaching English as a second language is also a popular option. Many companies need English tutors to teach students abroad.
Online tutoring is flexible because you can choose your own hours and work from home. This makes it easy to fit around your teaching job or other responsibilities. Some tutors even make up to $1000 a week by dedicating just a few hours each day.
9. Bookkeeper
Becoming a bookkeeper is a great second job, and it can typically be done from home.
Bookkeepers keep track of financial records for businesses. This could include recording transactions, managing payroll, and preparing financial reports.
You don’t need a special certification to become a bookkeeper, making it easier to start.
The best part is that you can do this job from anywhere with just a laptop and some software. This flexibility means you can work from home or even when you’re traveling.
Since bookkeeping services are always in demand, you can find clients easily. This can be a very profitable side hustle. Some bookkeepers even charge $60 an hour or more.
Learn more at How To Find Online Bookkeeping Jobs.
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This free training will teach you what you need to know to become a virtual bookkeeper and make money from home.
10. Freelance writer
Working as a freelance writer is a great way to make extra money.
Freelance writers are self-employed and work for magazines, blogs, websites, companies, and more. A lot of what you read online today is written by a freelance writer.
I have been a freelance writer for many years, and I really enjoy it. I have written for many different websites and companies, and I make good money doing so.
You can write from home, at your own pace, and choose projects that interest you. Many companies need blog posts, articles, web content, and social media posts.
11. Photography
Getting paid to take pictures is a popular second job idea.
What’s great is that there are many ways to get paid for photography, such as:
Stock photos – Stock image websites are popular places for photographers to sell their pictures. These sites let customers buy royalty-free photos for personal or business use. Websites, TV shows, books, social media accounts, and more use stock photos all the time. Some popular stock photo websites are Shutterstock, iStock by Getty Images, Adobe Stock, and Dreamstime.
Portraits and event photos – As a photographer, you can focus on taking portraits and event photos. This area is in high demand, especially for weddings, elopements, birthdays, and corporate events.
Post pictures on Instagram or Facebook – Social media platforms like Instagram are great for sharing your pictures and gaining followers. Many people make a full-time income from their Instagram accounts. They do this through sponsored partnerships with companies, affiliate marketing, and selling their own products.
12. Personal trainer
Becoming a personal trainer is a great second job idea. You can help people get in shape while earning extra money.
You can work at a gym or do private sessions at clients’ homes. Some trainers also provide online coaching, which gives you more flexibility.
Personal trainers sometimes create workout plans tailored to each client’s needs. They might also give advice on nutrition, and this way, they can help clients with both exercise and diet for better results.
Personal training can be done part-time, which makes it a good fit if you have another job. Many people want training in the mornings, evenings, or weekends.
13. Etsy seller
Starting an Etsy shop can be a fun and rewarding second job. If you enjoy crafting or creating handmade items, this might be perfect for you. Etsy is a popular online marketplace where you can sell unique products.
There are many things you can sell on Etsy, such as:
Etsy can be a great way to turn your hobbies into extra income.
You can learn more at How To Sell On Etsy Successfully: A Beginner’s Guide.
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
14. Babysitter
Babysitting is a great way to earn extra money. You can choose your own hours, making it easy to fit it around your main job or school.
Parents always need trustworthy people to watch their kids, and they might need help for an evening out or during the day if they work long hours.
As a babysitter, you can earn around $15 to $25+ per hour, depending on your experience and location. Some families might even pay more if you have special skills, like CPR training or if you are watching multiple children.
You can find babysitting jobs through local community boards, babysitting apps, or word of mouth. Sometimes, friends or family might also need help.
15. Delivery driver
A delivery driver job is one of the most popular side hustle ideas. You don’t need a lot of experience to get started, and all you need is a vehicle and a driver’s license. Many services, like DoorDash, Uber Eats, and Instacart, let you choose your own hours. This flexibility is perfect if you have a busy schedule.
You can deliver different items depending on the service you work for. Some companies focus on food delivery, while others may deliver groceries or packages.
The pay can vary based on where you live and how much you work. Some drivers make around $15 to $25 per hour including tips.
16. Bartender
Bartending is a flexible and fun second job. You can work at bars, restaurants, or special events like weddings.
Some bartender jobs don’t require a lot of experience. You usually have to start as a barback, helping with stocking and cleaning, then learn to make drinks. Then, you may be able to move up and find a part-time job as a bartender.
17. Transcriptionist
Being a transcriptionist can be a great second job. Transcriptionists listen to audio recordings and type out what they hear. It’s a simple job and doesn’t require a lot of training.
You can do this job from home and all you need is a computer and good internet. This makes it a flexible option where you can work on transcriptions during your free time or on weekends.
There are usually some requirements. Many places want you to type fast and accurately. For others, you might need to pass a background check or transcription tests.
You can learn more at 18 Best Online Transcription Jobs For Beginners To Make $2,000 Monthly.
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
18. Rent your extra space
Do you have an extra room, basement, or garage? Renting out your extra space can be a great way to earn some extra cash each month passively.
You can list your spare room on websites like Airbnb or Vrbo if it’s a room or apartment.
If you have a garage or storage space, you can rent it out for storage. Websites like Neighbor allow people to find storage options nearby.
Before you start, check local laws and regulations. Some areas have rules about renting out space, so it’s important to be informed.
19. Handyperson
Being a handyperson can be a great way to make extra money. You can help people fix things around their homes, such as fixing leaky faucets, repairing doors, or assembling furniture.
You don’t need fancy tools for many jobs, just a good set of basic tools.
Many people need small repairs done but don’t have the skills or time. That’s where you come in. You can find clients through local ads, word of mouth, or online platforms like Taskrabbit.
Working as a handyperson has flexibility too and you can choose jobs that fit your schedule.
20. Rideshare driver
Apps like Uber and Lyft allow you to drive people around and get paid for it.
One of the best parts about driving for rideshare apps is the flexibility. You can set your own hours and work whenever you want.
Most rideshare companies have an easy sign-up process. They usually require a background check, a valid driver’s license, and a car that meets their standards. Once approved, you can start accepting rides and earning money.
The earnings vary depending on your location, the time of day, and how many hours you drive. Some drivers make a nice side income by working during peak hours when rates are higher.
21. Restaurant server
Being a restaurant server can be a great way to earn extra money and is popular for evening second jobs. Many restaurants have flexible hours, which is perfect if you need to juggle another job or school.
Servers often get tips, so your income can vary day to day. Some nights are busier and can bring in more money.
22. Clean houses
Cleaning houses is a good way to earn extra money with a second job. You can work on the weekends or after your regular job.
Plus, you can choose your clients and set your own hours.
To get started, all you need are basic cleaning supplies. You can sell your services to friends and family first. Word-of-mouth is powerful, and you might get more clients through recommendations.
23. Write book reviews
If you enjoy reading and sharing your thoughts about books, you can earn money by writing book reviews. Authors and publishers value your honest opinions because they help other readers decide what to read next. Readers also enjoy reading these reviews, making it helpful for everyone involved.
Here are some websites where you can earn money by writing book reviews:
OnlineBookClub.org – They provide free books at first. After your first review, you can earn cash for each review you write, typically between $5 and $60.
Kirkus Media – They look for reviewers for both English and Spanish books, especially for the Kirkus Indie section. Reviews are around 350 words and due two weeks after the book assignment. They cover all genres, with over 10,000 books reviewed annually.
Upwork – Create a profile and set yourself up as a book reviewer. This freelance platform allows you to set your own rates, with book reviewing rates ranging from $15 to $75 per hour.
The US Review of Books – They hire freelance writers for 250- to 300-word reviews that go beyond summary to provide insights into the book. Applicants need to submit a resume, writing samples, and references.
Reedsy Discovery – Review books before they are published and earn through tips from readers, typically ranging from $1 to $5 per review. It’s a way to influence which books gain popularity early on.
Other opportunities – Websites like Booklist (pays $15 per review, focused on short reviews for libraries), BookBrowse, Women’s Review of Books, and Publishers Weekly also pay for book reviews and are actively looking for new reviewers.
You can learn more at 16 Best Ways To Get Paid To Read Books.
24. Mow lawns
Mowing lawns can be a great second job. It’s simple, flexible, and very profitable.
You can start with not a lot of money too. For example, if you already have a lawn mower, you’re ready to go, and you can start by seeing if anyone in your neighborhood needs their lawn mowed.
Pricing your services depends on the size of the lawn and the complexity of the job. Some lawns might be easy and quick, others might take more time. Many people charge between $40 and $50+ per lawn.
Frequently Asked Questions
When looking for second job ideas, it’s important to find something that fits your schedule and goals. Here are answers to some common questions about picking the best side gig and managing two jobs.
What is the best 2nd job to have?
The best second job depends on your interests and skills. Some popular side hustle ideas include blogging, proofreading, taking online surveys, dog walking or pet sitting, and being a virtual assistant. These jobs have flexibility and can often be done from home.
What are some good jobs I can do at night after my day job?
Jobs you can do at night include customer service representative, security guard, bartender, or freelance work like writing and graphic design. These jobs usually have evening shifts or can be done remotely, fitting in well with a daytime schedule.
What are some good second jobs at night from home?
If you want to learn how to make extra income while working full-time, then my favorite way is to find good second jobs that you can work at night from home. This way, you don’t have a commute and it won’t interfere with your day job. Some good evening jobs from home include blogging, taking surveys, proofreading, bookkeeping, writing book reviews, and transcribing.
How can I make an extra $1000 a month?
To make an extra $1000 a month, you may want to try freelance writing, virtual assistant work, or becoming a part-time tutor. These jobs can pay well and offer flexible hours, allowing you to work around your primary job.
How can I make an extra $2000 a month?
Earning an extra $2000 a month may require a higher-paying side gig. Options include freelance web development, consulting, or starting a small business like dropshipping. These jobs can have higher earnings but may require more specialized skills or time investment.
How to get a second job with a 9-5?
You can get a second job with a nine-to-five by looking for evening or weekend positions and looking for jobs with flexible hours such as bartending, retail cashier, or working as a rideshare driver. Online jobs like tutoring or freelancing can also have nice flexibility to work after your main job.
What is the highest paying side hustle?
The highest-paying side hustles can include freelancing in tech fields like software development, graphic design, or consulting. Real estate investment, if you have the money to start investing, can also be very high paying.
Do you get taxed more if you have two jobs?
Having two jobs can put you in a higher tax bracket, meaning you might pay more in taxes. It’s important to understand how this affects your overall earnings. I recommend talking with a tax professional to talk about your tax situation and to make sure that you aren’t overpaying (or underpaying!).
How will my employer know if I have a second job?
Your employer may know if you have a second job if it affects your primary job performance or if you disclose it. Some employers also run social media checks to see if they can learn anything about you that may hurt their business. You may want to check your employment contract if you are worried, as some employers may have clauses about working multiple jobs.
Is having two jobs worth it?
Having two jobs can be worth it if you need extra income for savings, paying off debt, or reaching financial goals. It requires good time management and can be tiring, but many find the financial benefits to be rewarding. For me, I found having more than one job well worth it because it allowed me to pay off my student loan debt quickly, save more money, and pursue my passions.
Second Job Ideas – Summary
I hope you enjoyed this article on the best second job ideas.
As you can see, there are many popular second job ideas that may interest you. From online jobs like blogging, proofreading, and bookkeeping to in-person jobs like personal training, delivery, restaurant jobs, and more, there are many ways to make extra money so that you can reach your goals.
If you need a second job while working full-time, you are not alone. Many people are in your shoes. I recommend finding something that best fits your schedule and is at least somewhat flexible so that you aren’t making yourself too tired.
For me, I have had many side jobs. One thing that has always helped me is to make sure that it would fit with my day job and be flexible – because my day job did come first. Plus, I didn’t want to waste more time than I would need to by commuting back and forth or doing things that weren’t needed.