Black Knight reported slimmer profits and slowing organic growth in the second quarter, largely due to weaker mortgage volume from clients as well as near-term effects from the proposed merger deal with Intercontinental Exchange (ICE).
The company’s profit dropped 61% quarter over quarter to $55.3 million in Q2 2023. Profit rose 32% from $40.3 million in Q1 2023.
“Our second quarter results reflect a weaker than expected mortgage market coupled with the near-term effects of the proposed merger with ICE. Revenue declined 4% on an organic basis driven by lower origination volumes as well as indirect effects of the mortgage market on our originations software business,” Black Knight CEO Joe Nackashi said in a statement.
Black Knight’s revenue in the second quarter reached $368.2 million, declining 7% from the same period in 2022.
“High interest rates following the rapid rise since early 2022 continue to cause operational challenges for Black Knight’s clients and prospects,” the company noted in its 8K filing.
Heightened focus on expenses by clients and prospects, as well as the proposed ICE transaction, has elongated the sales cycles in the short term; market conditions continue to result in elevated originator consolidation, bankruptcies and associated attrition, according to its filing with the Securities and Exchange Commission (SEC).
Software solutions represented 87.9% of the revenues in the first quarter, with an operating margin of 41.4%, down from 45.6% in the same period of 2022.
“Our origination software solutions revenues decreased $15.6 million, or 13%, as revenues from new clients were more than offset by a decrease of $8.3 million in license fees and the effect of lower origination volumes and attrition,” according to the company’s 10 Q filing with the SEC.
The remaining revenue came from data and analytics, a segment with an operating margin of 15.2% from April to June, compared to 24.9% in the previous year.
Development on ICE-Black Knight merger
With ICE’s proposed acquisition of Black Knight under review by the Federal Trade Commission (FTC), the two companies and the FTC are expecting a preliminary injunction hearing scheduled for August 14 – August 18.
Black Knight, ICE and the FTC asked for a delay as the planned sale of Optimal Blue in July requires time for the FTC staff to analyze the implications of the divestiture and discuss a potential resolution of the pending matter.
ICE and Black Knight also announced an agreement to sell loan origination system Empower to a subsidiary of Canada’s Constellation Software in March to quell FTC’s antitrust concerns.
Following ICE and Black Knight’s announcement of an agreement to sell Optimal Blue, Keefe, Bruyette & Woods (KBW) noted that the divestiture of Black Knight’s Optimal Blue leaves the FTC with a weak case as it remedies the remaining horizontal overlap cited in the FTC’s complaint.
KBW had floated the possibility of the FTC settling on the ICE-BK merger deal before the August 14 trial, allowing the deal to close Q3 2023.
“As this case continues to evolve, it is not possible to reasonably estimate the probability that the parties will ultimately reach settlement or that the FTC will ultimately prevail on its claims. Should the parties not reach a settlement, we intend to vigorously defend against the claims of the FTC,” Black Knight’s 10 Q filing said.
Due to the transaction with ICE, Black Knight has suspended the practice of providing forward-looking guidance.
For some buyers, it may make sense to buy a home now and refinance it to a lower rate in the future.
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While inflation is cooling, interest rates remain high, which puts a damper on Americans’ plans to buy a home or refinance their existing mortgages. The natural question many homeowners are asking themselves in this economic climate: Should I buy a home now at high rates and refinance later, or should I wait for rates to fall? We posed the question to several real estate and mortgage professionals and educators, and their answers may surprise you.
If you’re considering buying a new home or refinancing your current one it helps to know what rate you may qualify for. Find out here now!
When buyers should buy now and refinance later
Robert Johnson, a professor at Heider College of Business at Creighton University, points out that purchase price and mortgage rate are the two primary financial factors potential homebuyers consider when buying a home, but there’s a critical distinction between the two.
“What many fail to understand is that only one—mortgage rate—can be renegotiated,” says Johnson. “Once a home is purchased, you can’t renegotiate the purchase price. What this means, in my opinion, is that if you find a home you believe is priced attractively, I would be more apt to pull the trigger than if mortgage rates are attractive and home prices seem high. In financial terms, you have optionality for the remainder of your mortgage to renegotiate terms. You don’t have that option with a purchase price.”
As the saying goes, “Marry the home, but date the rate.”
Additionally, you may experience other unique benefits if you buy a home in the current climate. “Buyers who are in the market while interest rates are high may have certain advantages that they otherwise wouldn’t, such as less competition and more negotiating power,” states Afifa Saburi, senior researcher at Veterans United Home Loans. “While they still have the option to refinance, potentially more than once throughout their 15- or 30-year mortgage term, they also have the opportunity to build equity and wealth.”
As with many financial questions, the answer may not be cut and dried, as it will depend on your financial situation and forces outside your control. For example, it’s hard to consider mortgage rates in a financial decision when it’s unclear which direction they will move.
Regarding whether to buy now and refinance later or adopt a wait-and-see approach to , economist Peter C. Earle from the American Institute for Economic Research says it’s hard to predict. “Typically, the rule of thumb is that one wouldn’t finance unless the new mortgage rate to lock in is at least 0.75% to 1% lower than the established rate,” says Earle.
“The Fed has jawboned exhaustively about their intention to keep rates at present levels once their hiking campaign is over, but if the U.S. enters a recession, it’s not at all clear that they won’t drop rates. That’s been their playbook since the Greenspan era,” said Earle, referring to Alan Greenspan, the former chairman of the Federal Reserve of the United States.
Not sure what purchase rate you would qualify for? Explore your rates and options here now to learn more.
When buyers should wait until rates drop back down
No matter when you buy a home, the decision should be based on sound financials, namely, whether you can afford the payments and how long you plan on staying in the home long-term.
Brian Wittman, owner and CEO of SILT Real Estate and Investments, cautions: “I don’t believe in the philosophy that buying now and refinancing later is the best course of action. We’re still not sure of the direction of the housing market, including both property values and interest rates. The problem with this particular philosophy is that buying now and hoping that interest rates go down to make your payment better is bad financial planning. If you can’t really afford the payment now, you’ll be overpaying while you wait and hope for interest rates to drop.”
For existing homeowners, the decision to buy now and refinance later, or wait until mortgage rates fall, may come down to your existing home’s mortgage rate. “In general, I’d suggest not selling or refinancing your home if the rates are higher than your existing mortgage, especially if you want to purchase a new house,” advises Michael Gifford, CEO and co-founder at Splitero.
Check your mortgage refinancing rates here to learn more.
The bottom line
If you’ve decided to take out a mortgage now, but have concerns about locking yourself into a high rate, consider getting a mortgage with a float-down option. This feature allows you to lock in your interest rate while also allowing you to take advantage of a lower rate within a specific period.
Not sure whether to buy a home now and refinance it later, or wait for mortgage rates to drop? It may help to know there are other alternatives worth considering. One option is to make improvements to your home using funds from a home equity loan or home equity line of credit (HELOC). Tapping into your home equity to upgrade your property may increase its value.
HSBC Bank USA on Tuesday disclosed that it is facing an investigation from the U.S. Department of Housing and Urban Development (HUD) for alleged redlining practices.
The federal investigation is based on a complaint filed by the non-profit organization National Community Reinvestment Coalition (NCRC).
According to filings with the Securities and Exchange Commission (SEC), HUD is investigating whether “HSBC Bank USA violated the U.S. Fair Lending Act by engaging in discriminatory lending practices in majority Black and Hispanic neighborhoods in six U.S. metropolitan areas from 2018 through 2021.”
The NCRC complaint includes six metropolitan areas: New York (NY), Seattle (WA), Orange County (CA), Los Angles (CA), Oakland (CA) and the Bay Area (CA).
A spokesperson for HUD said the agency “Does not comment on investigations or potential complaints.” HSBC did not reply to a request for comments.
A representative for NCRC said in a statement that when “NCRC or our members find evidence of redlining or any other form of lending discrimination, we take prompt action.”
“We are always concerned by data that suggests unfair treatment of disenfranchised communities and individuals, and always glad to help ensure the appropriate authorities have an opportunity to review the facts and pursue any remedies they deem appropriate.”
Per the mortgage tech platform Modex, HSBC originated about $2 billion in mortgages in the last 12 months. Purchases and conventional loans were more than 77% of the total. California and New York are the main markets for the bank.
That was the second time HSBC was questioned about its mortgage lending practices by federal agencies.
In 2016, the bank ended up paying a $601 million settlement to a series of federal agencies and nearly every state over charges that it engaged in mortgage origination, servicing and foreclosure abuses.
In a separate but related settlement, HSBC paid $131 million to the Federal Reserve. According to the Fed, the penalty considers the circumstances of HSBC’s “unsafe and unsound practices and foreclosure activities.”
U.S. regulators are active in investigating redlining cases.
In June, the U.S. Department of Justice (DOJ) announced a $3 million redlining settlement with ESSA Bank & Trust. It followed a $31 million settlement with City National Bank in January. In 2022, settlements were made with Trident Mortgage Co., Warren Buffet’s Berkshire Hathaway subsidiary; and Lakeland Bank.
Citing prepayment speeds at multi-year lows, Spector noted those volumes continued to drive the organic growth of the company’s servicing portfolio, which ended the quarter at more than $576 billion in unpaid principal balance. Inflationary market blamed for quarterly performance Spector blamed the various inflation-induced dynamics for the lowered gains from last year: “With mortgage … [Read more…]
ANALYSIS: If your home loan has come to the end of its fixed term and you’re facing refixing from a rate about 2.5% to one more like 6.7%, it might sting a bit.
But spare a thought for those borrowers who are now facing much higher rates.
Here are some of the ways that people are facing interest rates near double-digits, in some cases.
Low-equity borrowers
If you bought a house recently using a small deposit, and its value has either fallen or not moved, you face a double blow.
In this situation, borrowers usually do not qualify for banks’ “special” home loan rates, and they are also often charged a low-equity fee or premium on top.
How that works depends on which bank you are with – some charge an upfront, one-off fee. Others apply a margin to the interest rate.
The extent of that depends on how small your deposit is. Someone with a 10% deposit could face an extra 75 basis points being applied to their home loan rate. At the moment, that would mean a standard interest rate of 7.39% for two years, plus 75 basis points of margin, taking them to a total rate of 8.14%.
Between January 2020 and October 2021, when the official cash rate started to lift, there was about $15 billion in home loan lending done via more than 31,000 loans to people with equity of less than 20%.
When house prices are rising quickly, buyers often plan to have their properties revalued in the future to have the margin removed and allow them to access better rates. But when the market turns, as it has since 2021, that strategy becomes less possible.
Mortgage adviser Hamish Patel, of Mortgages Online, said he had dealt with a few clients in that position.
He said, when the banks were competing hard for business, some had offered low-deposit borrowers their special rates, plus the margin. But then when they came to refix, the bank’s appetite to offer the special was gone and they had to settle for a standard rate.
He had one client who bought a townhouse in Auckland for $1.05 million. But when it was revalued recently, its value had dropped to $950,000. She had a loan of $900,000.
STUFF
Susan Edmunds speaks with four mortgage advisers what how best to prepare yourself financially when buying a home.
That left her with limited options, he said. People with 10% or 15% equity could change to a different bank because the loan-to-value rules allowed banks to refinance clients dollar-for-dollar without it counting towards the total low-deposit lending they were allowed to do. But when someone’s equity dropped to 5%, it was virtually impossible, he said.
“Theoretically, ANZ will do 95% but the low-equity fees are large so it makes no sense to do it.”
ANZ’s website notes that when someone has less than 10% equity, the low-equity premium applied is equal to 2% of the loan amount.
“There are people who kind of a year ago thought they might be paying 6% to 6.5% when they refixed – not up near 8% with a margin. That’s surprising.”
He said it was also tricky for those borrowers because shorter-term rates were more expensive than longer fixes, but many were reluctant to lock themselves in.
Another home loan adviser, Susan Templeton, agreed buyers who purchased houses at the peak of the market would be stuck with a low-equity margin longer than anticipated.
“First, ask your mortgage adviser for a desktop valuation to get a fix on where you stand. If that doesn’t fly, you can pay for a registered valuation and hope for the best. It’s worth having a conversation about your timing and current market trends. If you have the means, consider paying down your mortgage or upgrading your home to raise the value, or changing banks. Each option has potential consequences.”
She said borrowers should talk to a mortgage adviser who understood their financial position and goals.
Second-tier lenders
Glen McLeod, from Edge Mortgages, said he was also seeing people running into trouble with second-tier, non-bank lenders.
He said they were often used by buyers whose businesses were affected by Covid and did not have the financial history to get a traditional home loan.
“Fast forward to where we are now and sadly interest rates have increased and with the second-tier providers if they were on a fixed rate at the time they are coming off with interest rates being in the late 9%, early 10% range. This is indeed causing financial stress particularly if they are on principal and interest based lending.
“We have a number of cases been able to refinance the client back to the mainstream however there are cases where it is not possible. This is due to either the value of the property reducing or income to service not working because of the increase in the serviceability rates with the mainstream banks.
“In these cases what we’ve had to do is apply back to the existing provider to see if we can get an interest only payment regime put in place. This is to give a small reduction and payments over the next 12 to 24 months.”
If you live in a typical American household, 66% of which own a pet, you know the many benefits of being a pet parent. Pets provide companionship, reduce stress and even improve your health. Pet owners, especially those with dogs, are more likely to get outside and take a stroll through the park. So what could be the down side?
Although the benefits outweigh the costs, pets are expensive. It’s important to take a close look at the financial side of pet ownership before you add a new member to the family. Even if you’ve considered the adoption fee and supplies, the ongoing costs of food, grooming, and routine vet bills add up.
If you’re financially savvy, you may have looked into ways to save on pet food or perform at-home pet pedicures, but veterinary visits can add up. Scheduling routine physicals and keeping up to date on vaccines is the best preventative measure against future health conditions that may be costly to treat. Emergency medical care can leave even the most prepared pet owner in a mountain of debt. Or in the worst cases, economic euthanasia—a heartbreaking decision for any family.
Most people agree that the unconditional love of a pet is worth any amount of money. Still, preparing for the true cost of pet ownership can help you plan your budget. Pets become a part of the family, and making sure you can afford one can help you avoid tough decisions down the road. Fortunately, if you plan ahead, you can maintain the health of your pet and your finances.
Cost of Owning a Dog
Based on the average life span of 12 years, the lifetime cost of owning a dog can range from $20,000 to over $55,000. Studies show about half of all pet owners underestimate the cost of raising a pet. Before purchasing a dog, it’s important to understand both the initial cost of bringing a dog into your home and the ongoing annual expenses of raising a dog.
Note: Expenses and costs are possible ranges
One-Time Expenses
Aside from emergency care, most major expenses occur in the first year. New pet owners can expect to shell out nearly $400 for the bare necessities alone. Depending on the specific breed and size of dog, these costs could range well over $2,000. Below is a look at some initial costs you can expect to incur.
Adoption fee/cost: $0 to $700—can be higher depending on breed
Food and water bowls: $10 to $100
Spaying or neutering: $200 to $800
Initial medical exam and vaccines: $70 to $300
Collar, tags, and leash: $25 to $60
Bed and crate: $35 to $250
Carrying crate: $60 to $150
Microchipping: $20
Total one-time expenses: $420 to $2,180
In some cases, puppies can be more expensive than healthy adult dogs, since they need more shots and veterinary procedures. They may also require obedience training due to their boundless energy and tendency to chew on household items.
Annual Expenses
How much do dogs cost per year? According to the ASPCA, the average pet owner spends nearly $1,400 annually on their furry pal. However, other sources put this number much higher.
Below is a look at some of the expenses you can expect to incur every year you have a dog. If you have multiple dogs, these costs will be a lot more.
Food: $200 to $700
Vaccines and routine care: $200 to $500
Heartworm and flea prevention: $175 to $200
Vitamins: $58
License: $15
Treats and chew toys: $100 to $300
Grooming supplies: $25 to $75
Total average cost of owning a dog per year: $773 to $1,848
In addition to the basics, such as food and veterinary care, other routine and unexpected expenses will arise. You’ll also need to consider pet-related costs that come along with life events, such as travel and moving. For instance, many apartments charge a pet deposit. You also may need to pay additional cleaning fees.
Professional grooming: $200 to $400
Training: $100 to $400 per hour
Boarding and travel fees: $25/day
Accessories: $0 to $500
Pet health insurance: $225 to $516 annually
While raising your dog is a significant investment, most pet owners feel it’s money well spent. After all, you get paid back with unconditional love and affection.
Cost of Owning a Cat
Cats may be less expensive to own than dogs, but even these lower-maintenance creatures can put a dent in your bank account. For one reason, cats tend to live longer than dogs—they have a life span of about 15 years. Additionally, 44% of cat owners have more than one cat, compared to just 35% of dog owners. The average lifetime cost of owning a cat can range from $12,000 to $26,000.
The biggest factor affecting the life span and total expenses of a cat is whether it lives indoors or outdoors. An outdoor cat has a much shorter life span—only five years on average—and is at greater risk of injury from other animals, traffic, and diseases. If you plan to let your cat outdoors, lower your financial risk by vaccinating against diseases and purchasing pet insurance to cover potential injuries.
You also want to ensure it’s not illegal to let your cat roam outside in your area. If your beloved cat ends up at animal control, you’ll have to pay a fee to get it back.
One-Time Expenses
As with dogs, the initial expenses of cat ownership are the highest. You can expect to pay up to $1,000 when buying a cat.
Adoption fee/cost: $0 to $300—can be higher depending on breed
Food and water bowls: $5 to $30
Spaying or neutering: $145 to $200
Initial medical exam: $130 to $175
Collar or leash: $10 to $20
Litter box: $10 to $50
Cat bed: $20 to $100
Carrying crate: $35 to $70
Microchipping: $20
Total one-time expenses: $355 to $965
Annual Expenses
Of course, cats aren’t always predictable. You may have a certain cat food in mind—one that fits your budget—but that doesn’t mean your cat will like it. Cats can also be particular about the type of litter they use. Still, the following ranges give you an idea of what to expect in the years ahead.
Food: $200 to $500
Medical care and vaccines: $200 to $550
Flea and tick prevention: $140 to $200
Treats: $35 to $100
Litter: $150 to $200
Toys and scratching post: $20 to $100
License: $15
Grooming supplies: $28
Total annual cost to own a cat: $788 to $1,693
Cats have a penchant for knocking things off tables, and they don’t differentiate between empty toilet paper rolls and expensive vases. Additionally, they have sharp claws, and if you don’t give them someplace to scratch, they may turn your furniture into a shredding post. This is all to say you may want to set aside money for miscellaneous expenses.
Here are some other extras you may want to consider:
Pet health insurance: $175 to $350 per year
Accessories: $0 to $300
Pet sitting or boarding: $25/day
Ways to Save Money on Your Furry Pet
Pet costs can quickly get out of hand if you’re not careful. Fortunately, you can do several things to save money on care for your pets.
Spay or Neuter
Unless you’re a breeder, having your pet spayed or neutered should be one of your top priorities. Not only can this step help you save money in the long run, but it can also prevent unwanted litters of puppies or kittens.
Set a Budget
Setting a budget for your pet expenses can help you avoid spending too much on unnecessary purchases. Start by tracking how much you spend per month on pet care expenses. Use this information to set your budget for these costs.
Buy in Bulk
You can save a significant amount of money throughout the year by purchasing your pet food and treats in bulk. With proper storage, many types of pet food have a shelf life of up to 18 months.
Preventive Care
The best way to keep your pet’s medical expenses down is to invest in preventive care. Scheduling regular checkups, including dental care, and ensuring your pet is up to date on all necessary shots, including heartworm and vaccines against fleas and ticks, can avoid costly medical charges later.
Groom at Home
Instead of paying anywhere from $200 to $400 for professional grooming services, you can groom your pet at home. Once you purchase the original supplies, which can cost around $50, you can groom your pet at home for significantly less money.
Cash-Back Rewards and Loyalty Programs
Consider purchasing your pet supplies using a cash-back rewards credit card. This step can help you save money by earning cash back on your everyday purchases.
Should You Buy Pet Insurance to Cover Pet Costs?
One step that can make the cost of pet ownership more affordable is pet insurance. The right insurance plan can help cover some of your pet’s medical expenses. This, in turn, can reduce your out-of-pocket expenses.
Pet insurance can also give you peace of mind knowing that if your pet requires unexpected medical care, some costs may be covered. It’s important to realize not all pet insurance policies are alike. Be sure to carefully read the benefits and exclusions for each policy to ensure you select the one that’s right for your situation.
Prepare for the Unexpected
Emergency Vet Expenses
When you bring home your new fur baby, the last thing you want to think about is a tragedy or major illness hitting them, but it’s important to be prepared. Even if you establish healthy habits such as regular exercise, you should plan ahead for unexpected veterinary bills.
Once you become a pet parent, you may find that you’ll do anything for your canine or feline companion, even risking your credit to save their lives. While many pet owners feel that their pet’s well-being is worth the necessary sacrifices, setting aside money for a rainy day can help deflect some of the costs of an emergency procedure or unexpected illness.
Pet Insurance
Putting money aside for unexpected pet expenses is a good idea, but it’s difficult to save enough to cover a major medical bill—especially if you’re paying off existing debt at the same time. A diagnostic procedure alone can cost up to $2,000. And common medical conditions, such as orthopedic surgery or removing a foreign body can cost $7,000. If your pet has a chronic condition requiring regular follow-up visits or medications, your pet could rack up tens of thousands of dollars in medical expenses.
Rather than set yourself up to be forced to decide between your financial health and your pet’s health, plan for the worst by taking out pet insurance. With ongoing expenses adding up, it’s tempting to cut corners by skipping pet insurance, but the peace of mind it will give you is invaluable.
Tips for Budgeting for a Pet
Advance planning, such as signing up for health insurance or contributing to a savings account with your pet in mind, can help keep you out of financial water. But there are other ways to make pet ownership affordable and keep costs down.
Consider whether you’re willing to cut back in other areas
Being a responsible pet owner requires sacrifices of your time and sometimes, your finances. You may need to reconsider your morning latte once you’re splurging on treats for your new best friend.
It takes a village
Pet sitting or boarding can cost you $15 to $60 a day, but asking for help from friends and neighbors can save you money, even if you offer to pay for their time.
Search out low-cost clinics for routine pet care
Animal welfare organizations often offer low-cost vaccinations, spaying, and neutering, saving you money both now and in the long run by helping prevent costly medical conditions. Check with your local humane society or local pet rescue groups to get more information.
Avoid Pet Debt
Prevention can be the most effective tool for avoiding surprise pet costs. Regular exams help detect problems earlier making them less expensive and more likely to have a positive outcome. For example, spaying/neutering your pets reduces their risk of certain cancers.
If you can’t afford an expensive but necessary medical procedure, you may be able to get financial assistance from veterinary medical colleges or non-profit organizations. The American Veterinary Medical Association has a list of organizations that offer aid to pet owners with financial needs. This list is by no means comprehensive, so if you don’t find an option there, keep looking.
Credit Cards for Pet Owners
While you don’t want to rely on credit cards alone to cover the cost of owning a pet, choosing the right card can help you earn cash back and rewards points on pet-related purchases you’re already making. Some even offer 0% financing, which is useful for transferring a hefty vet bill from an existing card to a new one. Depending on whether you plan to use the card for pet purchases alone or everyday spending will help you determine which card is best for you.
If you’re considering bringing a furry friend home, make sure your credit is in good standing first. A credit card that rewards pet purchases can make it more affordable to own a pet. You’ll want to check your credit scores to know where your credit stands before you apply, so you can reduce the risk of a rejected application and come up with a plan to work your way toward better credit if necessary.
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Can you pay a loan with a credit card? Yes, paying a loan with a credit card is sometimes possible. Yet, whether or not you can do so depends on factors such as the lender’s policies or the type of loan you want to pay off.
Are you looking for a creative way to pay off your loans? If you hope to get extra travel points while reducing your monthly payments, you might wonder, “Can you pay a loan with a credit card?”
This post will delve into the types of loans you can pay off with a credit card and the pros and cons of making these payments.
In This Piece:
Can I Pay a Loan with My Credit Card?
Whether or not you can pay a loan with a credit card depends on various factors, including the lender’s policies and the type of loan you wish to pay off.
While some lenders may allow credit card payments, others may not accept them. Understanding the terms and conditions of your loan agreement before attempting to pay it off with a credit card is crucial.
Which Loans and Debts Can I Pay with a Credit Card?
You can use credit cards to pay off different loan types, providing flexibility and potential benefits. Here are some common types of loans you can typically pay with a credit card:
Personal loans: These unsecured loans can often be paid with a credit card, allowing you to consolidate debt or manage your monthly payments conveniently.
Medical Bills: Many healthcare providers accept credit card payments for medical expenses, allowing you to pay off medical bills over time.
Small Business Loans: If you have a small business loan, check with your lender to see if credit card payments are accepted. This option can offer cash flow management advantages for entrepreneurs.
Balance Transfers: While not a specific loan, balance transfers are a preferred method. They allow you to move existing credit card debt to a new card with a lower interest rate, potentially saving you money in the long run.
Pros and Cons of Paying Loans with Credit Card
Using a credit card to pay off loans has its own advantages and disadvantages. Let’s explore both sides to help you make an informed decision.
Pros
Convenience and flexibility: Paying a loan with a credit card provides convenience and flexibility, allowing you to manage your debt from a single source. It simplifies your monthly payments and can help you stay organized.
Rewards and cash back opportunities: Some credit cards offer rewards programs or incentives, allowing you to earn points or money back on your loan payments. This can be beneficial if you use your credit card responsibly and take advantage of these perks.
Potential for consolidation: If you have multiple loans or high-interest debts, paying them off with a credit card can consolidate your debt into a single monthly payment. This simplifies your financial obligations and may allow you to save on interest charges.
Cons
Higher interest rates and fees: Credit cards typically have higher interest rates than other loan types. If you cannot completely pay off the credit card balance each month, you may incur significant interest charges, which can offset any rewards or benefits.
Impact on credit score: Utilizing a large portion of your available credit can impact your credit score negatively. Additionally, applying for new credit cards to pay off loans may result in hard inquiries on your credit report, potentially lowering your score.
Limited acceptance and more restrictions: Not all lenders accept credit card payments, and some may impose restrictions or fees for using this method. It’s essential to confirm with your lender before attempting to pay off a loan with a credit card.
Then, is it a good idea to pay a loan with a credit card? It depends on your unique circumstances. It can be advantageous in certain situations, such as consolidating high-interest debts or taking advantage of rewards programs.
However, it’s crucial to consider the interest rates, fees, and potential impact on your credit score. Assessing your financial goals and consulting with an advisor can help determine if this approach aligns with your financial well-being.
How to Pay a Loan with a Credit Card
If you’ve decided to pay off a loan with a credit card, follow these steps:
Review loan terms: Confirm that your lender accepts credit card payments and inquire about any associated fees or restrictions.
Assess your credit card’s terms: Check the interest rate, credit limit, and any balance transfer options on your credit card. Ensure that the card’s terms align with your financial goals.
Calculate feasibility: Determine if paying off the loan with a credit card is financially feasible based on the interest rates, fees, and your ability to repay the credit card balance promptly.
Contact your lender: Inform your lender of your intention to pay the loan with a credit card and follow their instructions for making the payment.
Make payments promptly: Pay your credit card bill on time to avoid additional interest charges and late fees.
FAQs
Many questions come up regarding paying loans with a credit card, but there are four common questions people always seek answers for. Let us take a look.
Can You Pay a Mortgage with a Credit Card?
In most cases, paying your mortgage with a credit card is impossible. Mortgage lenders typically require payments through bank transfers, checks, or online bill payment methods. However, you may be able to indirectly use a credit card by utilizing balance transfer checks or money transfer services to pay off a mortgage. Before considering this option, assessing the fees, interest rates, and credit card terms is essential.
Can You Pay Off a Car Loan with a Credit Card?
Car loan lenders generally do not accept credit card payments directly. Like mortgage payments, you can typically make car loan payments through bank transfers or other approved payment methods. However, you may be able to use a credit card to indirectly pay off a car loan by employing balance transfer checks or money transfer services. Evaluate the feasibility and costs associated with this approach before proceeding.
Can You Pay a Student Loan with a Credit Card?
Paying student loans with a credit card is usually not possible. Most student loan servicers do not accept credit card payments because they have high transaction fees. However, you can explore alternative options such as balance transfers or personal loans to pay off student loans. It’s crucial to evaluate the interest rates, fees, and terms of these options before proceeding.
Can I Use a Credit Card to Pay Off Payday Loans?
While it’s possible to use a credit card to pay off a payday loan, it’s generally not advisable. Payday loans can come with high interest rates, and adding credit card interest can lead to significant debt.
Exploring other alternatives for paying off payday loans is recommended, such as negotiating a repayment plan with the lender or seeking assistance from credit counseling organizations.
In conclusion, paying off a loan with a credit card can be a viable option depending on your specific circumstances. It offers convenience, flexibility, and potential rewards or debt consolidation benefits. However, it’s essential to consider the higher interest rates, fees, and potential impact on your credit score.
Assess your financial situation by consulting with professionals if needed, and ensure that your credit card terms align with your goals. To find the right credit card and loans, visit our credit cards and personal loans. Empower yourself to take control of your credit and achieve your financial well-being.
An eviction notice is a written statement informing you the landlord believes you’re in violation of the rental agreement. Depending on why you’re being evicted, the type of notice you receive and the state you live in, you may need to vacate the property by a certain time. But if you have an eviction notice in your past, you might be worried about getting approved for a new rental situation.
Find out below what happens if you get evicted, including whether you can or should fight the notice and whether you can get a new rental. As with any situation involving your credit and money, being prepared with knowledge can often make a huge difference in the outcome.
How Does Being Evicted Affect Your Credit?
Evictions aren’t included on your credit report, and neither are certain types of public records such as eviction judgments. However, that doesn’t mean an eviction leaves your credit squeaky clean or that potential future landlords won’t know about your eviction history.
First, collection accounts or debts leading up to your eviction do appear on your credit report. If you fell behind on rent and tried to right the situation with a personal loan that you also fell behind on, for example, that could hurt your credit. And if the landlord turned uncollected rents over to a collection agency at any point, that can also negatively impact your score.
An outstanding debt (such a collections account) on your credit report can significantly impact your overall credit score. In fact, your payment history accounts for up to 35% of your credit score. So, just one missed payment, including one missed rent payment, can drop your credit score.
Second, judgments related to evictions are a matter of public record. Future landlords might not see them on your credit report, but they can easily find them by searching court records. Many landlords use tenant-screening services that provide rental backgrounds on prospective tenants, and court records related to evictions are typically included.
If you’re having trouble making your monthly rent payments, consider setting up a budget to track your spending. This step may help you avoid a potential eviction.
Does an Eviction Go on Your Credit Report?
No, landlords can’t report evictions to the credit bureaus because these agencies don’t collect this type of information. However, this doesn’t mean future landlords can’t find out about the eviction. Court judgments, including evictions, are public records. This means landlords can still find out if you have an eviction in your past.
While searching public records can be a cumbersome process, many landlords use tenant screening services to conduct background checks on potential tenants. This service makes it easier for landlords to learn about past evictions. So, even though an eviction won’t directly impact your credit, it can affect your ability to rent in the future.
Legitimate Reasons for Eviction
Specific landlord rights vary from state to state, but there are several reasons a landlord may have the right to evict you, including:
Failure to pay rent: If you fail to pay rent within the grace period, your landlord can start the eviction process. The judge will likely give you a set number of days to make the payment. If you still fail to pay, you may be forced to leave the rental property.
Lease violation: When you rent an apartment, you must abide by the terms of the lease. If you fail to do so, the landlord can evict you. For example, if your lease says no pets yet you have pets on the property, the landlord can break the lease and require you to move.
Illegal activity: If you’re doing something illegal on the rental property, such as using drugs or committing domestic violence, a landlord has the right to evict you.
Property damage: If you willfully damage the property or make renovations without the landlord’s permission, this could be grounds for eviction. It’s important to understand the terms of your lease before signing it.
End of lease: When you sign a lease, it should cover a set term, such as 1 year or month-to-month. Unless you sign a new lease or your lease automatically extends the terms of the previous lease, you must move at the end of the term. If you have a month-to-month lease, your landlord must give you a 30-day notice to move. If you fail to move out of the property at the end of the lease or within the 30-day notice period, your landlord can take steps to evict you.
Illegitimate Reasons for Eviction
Landlords can’t evict tenants without cause. Once a lease is signed, both landlords and tenants are bound to its terms. It’s illegal for landlords to discriminate against their tenants and evict them based on their color, race, gender or national origin.
Additionally, landlords can’t evict tenants as retaliation. For example, your landlord can’t evict you because you complain about property conditions or request repairs.
Can You Dispute an Eviction?
Yes, you can dispute an eviction. A legal eviction requires a judgment from the courts. Before a judgment is rendered, there must first be a court hearing.
You have the right to attend this court hearing, hire an attorney and present your evidence to the court. It’s important to be present at this hearing because the judge can make a final decision without your input.
What Can Happen If an Eviction Is on Your Credit Report?
If you’re legally evicted from your rental, it won’t be on your credit report. However, any unpaid rent balance that you still owe your landlord can end up on your credit report. If this happens, it’s likely to impact your credit score.
It’s important to pay off this balance as quickly as possible. This step can minimize the impact on your credit score. If there’s an incorrect unpaid rent balance on your credit report, you should take steps to remove that information. You can do this by writing to the credit reporting agencies and providing evidence that the information listed on your report is wrong.
What to Do If You Receive an Eviction Notice
Eviction processes vary by state. Eforms, a site that provides sample eviction notices for landlords, summarizes the eviction process for each state. A good first step is to find out exactly what the process in your state is so you know how to respond appropriately to an eviction.
Eviction notices come in two main types: curable and incurable. Curable notices detail how the landlord thinks you broke the lease agreement and how you can fix it. If you cure the issue, the eviction is retracted. Incurable notices don’t have any fix and simply require that you vacate the premises by a certain date.
A common reason for an eviction notice is that the landlord claims the rent hasn’t been paid. In many cases, this would be a curable eviction notice. If you catch up on your rent, the landlord might not move forward with the eviction.
In many cases, if you don’t respond to the eviction notice to cure it or move out, the landlord must go to court to get a judgment against you. This allows law enforcement to require you to move out of the property.
You usually have an option to appear in court and fight the eviction. For example, if you’re withholding rent because the landlord has not fixed something that is his or her responsibility under the lease, you could use that as a defense.
A judge might rule on your side, requiring the landlord to make those repairs before you are required to catch up your rent. But keep in mind that we’re not legal experts—if you find yourself in this situation, we recommend consulting with a lawyer.
What Happens If You Get Evicted?
If you know you’re at fault or the judgment doesn’t go your way, you are likely going to have to move out of the rental property. It’s important to know how the eviction might impact your credit history and chances of getting another rental in this case.
Can You Still Rent an Apartment If You Have Been Evicted?
If you’ve been evicted from a townhouse, apartment or rental home, it may be difficult to qualify for a new rental if a potential landlord checks your rental history. If you have an eviction hampering your ability to find a place to live, you have a few options:
Try to find a private landlord who doesn’t use screening services or check credit history
Look into reporting any rent that you’re paying—it could help your credit score
Try negotiating with a potential landlord by offering a large security deposit or several months of rent up front
Find a cosigner with good credit to live with
Live with friends who already have a home and history of good payments
Try to Make Amends
If you were evicted for unpaid rent, the best way to make amends is to reach out to your former landlord or collection agency and make up those missed payments. Doing so could make finding a new place easier, especially if you get proof in writing that you made good on the old debts.
How to Avoid Eviction in the First Place
Abiding by your rental agreement is the most important thing you can do to avoid being evicted. Your agreement is a legally binding contract, so understanding everything expected of you—from maintenance of the property to noise restrictions and timely rent payment—is critical, as is knowing the tenant laws in your state.
If you have problems, talk to your landlord as soon as possible. Things happen, but landlords often appreciate knowing you want to do the right thing, and communication is essential. Also keep in mind that finding new tenants is a hassle most landlords would rather avoid. They can often be willing to work with you, but you have to take the first step.
Keep an Eye on Your Credit
Even if you do everything you’re supposed to do, when you live in someone else’s property, keep in mind that you might have to move unexpectedly. A landlord could potentially sell their property, or you could decide that the landlord isn’t someone you want to rent from anymore, for example. Keeping an eye on your credit regularly helps you improve your score, which can help you secure a new rental property as needed.
Check out Credit.com’s Credit Report Card. It gives you the everything you need to know about all the factors that make up your credit score, so you know exactly what areas you need to work on to improve your score.
It might sound a little bittersweet, but former homeowners are now authorized to purchase the properties they lost to foreclosure at fair market value, instead of having to pay back the entire amount owed on the old mortgage.
This new rule applies to real estate owned (REO) properties held by Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency (FHFA) announced the news today in a press release, with director Met Watt referring to it as a “targeted, but important policy change” intended to reduce the number of vacant homes and stabilize property values.
In other words, a larger pool of potential buyers should lead to fewer empty homes, which in turn should boost home prices and aid the ongoing housing recovery.
Previously, borrowers who lost their homes to foreclosure couldn’t repurchase them at their current value. Instead, they were forced to pay off the associated mortgage balances if they wanted the properties, something I doubt anyone actually did.
The old rule also applied to anyone who attempted to buy a foreclosed property on behalf of the previous homeowner.
Going forward, previous homeowners (or third-parties who purchase on their behalf) will be able to scoop up their old properties at their present value, as determined by Fannie and Freddie.
This policy change is limited to properties held by the pair as of November 25th, 2014.
For the record, the fair-market value policy already applied to purchasers of REO properties who did not originally own the homes.
If a former homeowner wishes to purchase their old property (or have someone buy it for them), it must be used as a principal residence. Simply put, you can’t buy your old home and rent it out.
The FHFA also noted that some property exclusions may apply and will be dealt with on a case-by-case basis.
At the moment, Fannie and Freddie hold about 121,000 REO properties in their collective inventory. It’s unclear how many former owners want to move back in.
If you’ve lost your home and want it back, you might be able to reacquire it more easily, though it should be noted that home prices have surged in recent years. So you’ll probably still pay more than you originally did, but I suppose it’s better than nothing.
However, you’ll need to be able to qualify for a mortgage again (assuming you can’t pay with cash), which can be difficult after experiencing a foreclosure.
The timeline to get a mortgage after foreclosure ranges from three to seven years for conventional loans, depending on the circumstances involved. It can be as short as one year via the FHA.
Accessing and purchasing a stock at its initial public offering (IPO) can seem like a VIP invite to a party. In addition to the cache of being “in the know” about potential opportunities, IPOOwing to the excitement that can accompany news of an upcoming initial public stock offering (or IPO), many investors seek ways to learn more about these companies prior to the listing day. Fortunately, there are many resources and services that track upcoming IPOs.
Using these IPO trackers, it’s possible to learn more about the status of various public offerings.
For investors interested in buying IPO stock prior to its actual public offering day, that can be more complicated. If a company launches an IPO, it means that it’s only had private investors, such as angel investors, up to that point but it’s now ready to let other investors purchase shares.
When IPOs Are Offered to People Prior to Listing Day
When people talk about getting IPO stock at IPO prices, they may be talking about two things:
• The IPO offering price. This is a fixed price available to a limited group of people. This may include employees who were offered stock options as part of their compensation package, as well as certain investors who get access to the IPO fixed rate. This may be less than the share price set when the company goes public. All of these sales occur before trading day and can be tricky to navigate.
• The price of new IPO stocks once the company goes public. This is the price that is available to all investors and fluctuates based on market conditions.
Buying IPOs at their offer price can take some navigation, but that does not mean it’s impossible. Typically, offer prices may be offered only to certain brokerages.
One way that buying IPOs at offer prices differs from buying stocks already in the market: Only a certain number of shares are available to each brokerage, and they may be accessible to investors who have the highest account balances or meet other suitability requirements for trading IPO shares.
The trading process is also different: Instead of simply buying the shares, an eligible investor submits an indication of interest (IOI) letter. An investor’s ultimate buy order may be limited due to availability.
In part, this system evolved to protect investors who may be interested in IPO shares because of the headlines about fortunes made overnight. In reality, many investors have lost their fortunes when the IPO has not panned out. 💡 Quick Tip: IPO stocks can get a lot of media hype. But savvy investors know that where there’s buzz there can also be higher-than-warranted valuations. IPO shares might spike or plunge (or both), so investing in IPOs may not be suitable for investors with short time horizons.
How Do You Find Upcoming IPO Stocks Before Listing Day?
Investors who plan to wait until the unlisted stock debuts may find themselves frustrated that there is little prep time before the stock appears on the market.
The secrecy prior to an initial public offering reflects several factors: One is the registration process with the Securities and Exchange Commission (SEC). The company can not publicly sell or trade its stock until the SEC deems the registration statement effective.
Once the company has filed its registration, the company enters what’s known as a “quiet period” where it must adhere to restrictions on what and how much it communicates to the public.
Any “gun jumping” or public communication that nods or hints at an upcoming IPO may violate the Securities Act. But once a company registers with the SEC investors and stock market analysts will keep an eye out for the IPO.
Recommended: What Is the IPO Process? 7 Steps to Going Public
So, beyond combing through the SEC database, how can an investor find new companies going public? There are many resources:
Media Outlets
Media outlets often report on upcoming and rumored IPOs. Reading through market news can be valuable for new and experienced investors alike, allowing them to have an enhanced perspective on how the market is evolving and which companies may be poised to IPO.
Exchanges
Exchanges, such as Nasdaq, also have trackers on upcoming IPOs, although these are IPOs likely to debut within the next several days.
Brokerage News
Brokerages and financial institutions may also report on industry news and trends and may publish IPO tracking.
Vetting Upcoming IPOs
With a range of IPOs taking place in some years, qualified investors will need to vet any potential offering before they decide to add it to their portfolio. If you’re considering investing in a company as it goes public, you’ll want to comb through all of its public documents to see whether its financials look sustainable. Then, ask yourself the following questions:
• Do I understand the business and the potential investment risks?
• Is the IPO underwriter a well respected, major investment firm?
• How are other companies in this space performing?
• Do the financials justify the IPO price and company valuation?
Recommended: How to Value a Stock
The Pros and Cons of Investing in IPOs
Access to IPO investing can be exciting. It can make an investor feel like they’re investing in dynamic companies that may be shaping the way we live and work. But they can also be risky. Some companies that may get a lot of media attention may fail to live up to investor expectations. Other companies may hit bumps in the road as they adjust to being a public company facing investor scrutiny. 💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you set up an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.
Pros of Investing in an IPO
• It can be exciting.
• There’s potential for significant profits.
• It can allow investors to put their money behind a company they may value, believe in, or otherwise want to be a part of in some small way.
Cons of Investing in an IPO
• While there’s potential for reward, there’s also risk potential that the IPO may flop.
• Market fluctuations may require active management and quick decisions when it comes to holding or selling.
• The volatility of investing in an IPO may require portfolio calibration so that other investments are less volatile.
The Takeaway
While it may be possible to find upcoming IPO stock before listing day, these shares are usually available only in certain circumstances to qualified investors. That’s partly owing to the careful regulation of the initial public offering process, but it also helps to protect eager investors from getting caught up in media hype and making a potentially risky investment on the spur of the moment.
Whether you’re curious about exploring IPOs, or interested in traditional stocks and exchange-traded funds (ETFs), you can get started by opening an account on the SoFi Invest® brokerage platform. On SoFi Invest, eligible SoFi members have the opportunity to trade IPO shares, and there are no account minimums for those with an Active Investing account. As with any investment, it’s wise to consider your overall portfolio goals in order to assess whether IPO investing is right for you, given the risks of volatility and loss.
Invest with as little as $5 with a SoFi Active Investing account.
Photo credit: iStock/solidcolours
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Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. IPOs offered through SoFi Securities are not a recommendation and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation.
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