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    Holly Johnson

    Holly Johnson

    Holly Johnson is the founder of Club Thrifty, a personal finance and travel resource geared to families who want to…

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  • Updated: April 14, 2023
  • 7 Min Read
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Our expert reviewers review our articles and recommend changes to ensure we are upholding our high standards for accuracy and professionalism.

Our expert reviewers hold advanced degrees and certifications and have years of experience with personal finances, retirement planning and investments.

Anyone who drives will likely know that insurance is a necessary part of the experience. In fact, at least some amount of coverage is a requirement in most states. But finding the right type and amount of car insurance is something that may not be as easy as you think.

While following state mandated guidelines may be one way to give yourself a starting point, it may not always be the very best way to go about getting yourself the coverage that you really need, because when push comes to shove, you could come up short if you get into an accident and need to file a claim.

While most people carry their car insurance card somewhere in their wallet or glove box, how much do you really know about the coverage that you pay for each month? By getting a primer on what you’re actually covered for – and what you may be paying for that you don’t need, and vice versa – it could make a big difference the next time you go out looking for a new policy.

Car Insurance 101

In its most basic sense, most auto insurance policies are divided into a couple of basic types of coverages. These include:

Liability Insurance

Most states require that drivers carry at least a minimum amount of liability coverage. This is the coverage that will pay the cost of damages that you do to others – either people or objects – with your vehicle. It is important to understand that liability coverage does not cover your own injuries, or injuries to other people who are covered under your auto insurance policy.

Typically, liability insurance is stated as a series of three numbers. For example, your policy may show it as: 50 / 200 / 25. What that means is that you have the following coverage:

  • The first number means that you have $50,000 (in this particular example) in coverage for each person who is injured in the accident. (Remember, this coverage does not include injuries to you or others who are included on your policy)
  • The second number refers to the total amount that the policy covers, in thousands, for each accident. In this example, the total amount of coverage would be $200,000.
  • The third number refers to the amount of property damage that would be covered, in thousands. In this particular example, the amount of property damage covered would be $25,000.

Collision and Comprehensive Coverage

In addition to liability coverage, auto insurance policies can also cover for collision and comprehensive damage. This refers to the coverage for damage to your vehicle if it hits – or is hit by – another vehicle or object. This coverage will also cover damage from events such as theft, vandalism, floods, fire, and other related disasters.

While many drivers who own older and less valuable vehicles may not carry this type of coverage (or they may carry very low levels of this coverage), collision and comprehensive coverage does make sense for those who own newer vehicles, as the cost to repair and / or to replace these vehicles can be quite high.

Personal Injury Protection

Personal Injury Protection, or PIP, is oftentimes also referred to as no-fault insurance. Like liability coverage, this can also be required coverage in some states. This type of auto insurance covers medical expenses – and sometimes lost wages – if you have been hurt in an accident. In some cases, the policy might also cover passengers in the vehicle, as well as pedestrians.

Uninsured Motorist

Having uninsured motorist coverage can help to cover both you and your vehicle passengers if you are involved in an accident that is caused by a driver who does not have insurance. This type of coverage can also cover hit and run accidents.

How Auto Insurance Policies Are Priced

When obtaining auto coverage, there are many factors that go into the potential price of a policy. First, these will include the above criteria. The type of coverage that you choose, as well as the amounts of coverage that you decide on, will have a big impact on the price that you are quoted.

The following criteria will affect auto insurance prices you are quoted:

Age

The age of the driver / insured can play a big part in the price of the premium that you are quoted. This is especially the case if the driver is a young male – as statistically these are the riskiest drivers to insure for auto insurers.

For this reason, rates for a 20 year old male driver will usually be much higher than they are for a 40 year old female.

Driving Record

The driving record of the vehicle owner will also be a key determinant in how much you are quoted. Your driving record reflects any moving violations such as tickets or DUIs that you’ve had in the past, as well as any accidents that have been reported.

This also shows the auto insurer how much of a risk you may be to insure. More violations and / or accidents on your record can mean more risk to the insurance company, and in turn, this can mean a higher premium for your personal policy.

Claims History

Past claims history is another big criteria that the adjusters will take into account. This is another way to show how risky of a driver you have been in the past.

If you have little or no past claims history, then it is likely that you will not be seen as a high risk to the insurance company, and you will likely be rewarded with lower rates that someone who has recently filed one or more claims.

If, however, you have filed many claims, then it is likely that you will be quoted higher auto insurance rates going forward.

Vehicle

In addition to the driver, the vehicle that you are insuring will also have a bearing on the amount of premiums that you pay. For example, if you drive an older model vehicle or a vehicle that is not very costly to repair or to replace, or even if you needRV insurance, then you likely will not be quoted very high rates.

However,if your vehicle is a newer model that would be expensive to repair or replace, then your car insurance quotes will likely be much higher.

Owning a vehicle that that has the capacity (or temptation depending on the driver) to move faster on the roads will also be quoted higher rates in most cases. Example: a bright red sports car will typically be more expensive to insure than a grey minivan.

Finally having a vehicle that is not manufactured domestically will tend to have slightly higher rates because the parts to repair these vehicles tend to run more than parts manufactured inside the United States.

Vehicle Usage

The amount and how you use your vehicle also plays a major role in the overall cost of your premiums.

First, the insurer will want to know whether you use the vehicle for business or personal use. You can expect to pay higher rates if you are using the vehicle for transporting business people around on a regular basis, versus simply driving the vehicle to and from work by yourself.

Also, you will be asked how many miles, on average, you drive. Those who drive more miles per year will typically pay more for their insurance than those who drive less. This is because the odds of getting into an accident are higher for those who are in their vehicles and on the road more often.

Where the Vehicle is Kept

Where you keep your vehicle is another key factor in the price of your auto insurance. The insurer will want to know if you keep your vehicle in a garage or driveway, or parked on the street at night.

Those who park safely in a garage at night will generally pay less for coverage than others since vehicles are safer from theft and vandalism, as well as from the elements. Your geographic location can also make a difference. Those who live in areas that get poor winter weather may have to pay more for auto coverage than those who drive on roads that are primarily dry and warm year-round.

Insurance Score

A person’s “insurance score” is a new factor has come into play with insurers over the past several years. This score takes into account your credit score, past claims history, and other related factors, that rank how responsible you are.

The higher your credit score, for example, and the lower your past claims history, the better your insurance score will typically be, thus the lower your auto insurance quotes are likely to be.

Policy Deductible

There are several types of insurance policies – including auto insurance – that require the policy holder to pay a policy deductible.

With deductibles, you are required to pay a certain amount of money out of pocket towards the repairs on your vehicle before the policy will pay for the remainder of the charges. In most cases, deductibles will range from between $250 to $1,000. Usually, the lower the deductible that you choose, the higher your premium will be – and vice versa.

If persons A and B have the same exact coverage, except that, person A has a $250 deductible and person B has a $500 deductible, person B will have lower premiums each month. If you have a good emergency fund in place, you can handle a higher deductible and save yourself money on premiums.

The Company

In addition to all of the factors above, the auto insurance company can have a lot to do with the price that you are quoted.

Auto insurance companies are provided with letter ratings from A to F – similar to a school report card – from ratings agencies such as A.M. Best, Standard & Poor’s, Moody’s, and Fitch.

It is usually best to stick with companies that have ratings of A or better. You should always review the financial stability and claims paying reputation of the insurer prior to deciding on where to purchase your auto policy. The company that offers the lowest quote may not always be the best company to go with.

Where to Look for the Best Quotes Now

When looking for quotes, it is best to work with a company that has access to more than just one insurer. This way, you will be able to compare several policies – along with the many features and benefits – as well as a wide variety of unbiased premium quotes.

If you’re ready to begin shopping for car insurance quotes, we can help you to find all of the important information that you’re looking for – and we can do so quickly, easily, and conveniently – directly from your home computer, and without the need to meet in person with an agent. In order to get the process started, all you have to do is just simply use the form on this page.

When shopping for insurance, whether it be auto, health, life or even burial insurance, it can sometimes seem overwhelming. There’s a lot of information out there – and it’s hard to determine where you’ll truly get the very best deal. Use the form on this page to help you to narrow down your options and to find the plan that fits your needs, along with the premium that fits your budget.

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About the Author

Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. He was a financial planner for 16+ years having founded, Alliance Wealth Management, a SEC Registered Investment Advisory firm, before selling it to focus on his passion – educating the masses on the importance of financial freedom through this blog, his podcast, and YouTube channel.

Jeff holds a Bachelors in Science in Finance and minor in Accounting from Southern Illinois University – Carbondale. In addition to his CFP® designation, he also earned the marks of AAMS® – Accredited Asset Management Specialist – and CRPC® – Chartered Retirement Planning Counselor.

While a practicing financial advisor, Jeff was named to Investopedia’s distinguished list of Top 100 advisors (as high as #6) multiple times and CNBC’s Digital Advisory Council.

Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.

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Apache is functioning normally

Today we’re embarking on a unique journey – diving into the intriguing world of superstitions. One superstition, in particular, has caught our eye: the belief that an itchy left palm indicates a lottery of jackpot win on the horizon. Now, that’s quite a claim! So, get ready as we unravel this cultural phenomenon’s truth, fact by fact, itch by itch.

A World Rich with Superstitions

Superstitions, by definition, are beliefs or practices resulting from ignorance, fear of the unknown, trust in magic, or chance. Throughout history, they’ve guided people’s actions, especially when it comes to attracting wealth or good fortune. Superstitions and signs of good luck are as varied and colorful as human cultures themselves. Here are a few widely recognized ones from around the world:

1. Ringing in the New Year: In many cultures, the New Year is seen as a fresh start, and various superstitions and traditions are associated with ensuring good luck for the coming year. In Spain, for instance, people eat 12 grapes at midnight, each grape representing good luck for one month of the coming year. In the southern United States, eating black-eyed peas on New Year’s Day is considered to bring prosperity.

2. Knocking on Wood: This is a common superstition in Western cultures used to ward off bad luck after making a favorable prediction or boast, or when one mentions good fortune that one has had so far. The idea is that by knocking on wood, you’re seeking protection from the “evil spirits” that might hear and ruin your good luck. It’s believed that this superstition may have come from ancient pagan traditions where certain trees or groves were thought to be the homes of benign spirits or gods.

3. Carrying a Rabbit’s Foot: This is another common symbol of good luck in many Western cultures, especially in North America. It’s thought to originate from African-American folk magic known as “Hoodoo”. It’s typically the left hind foot of a rabbit that is considered lucky, and even more so if the rabbit was killed in a cemetery under a full moon.

4. Four-Leaf Clovers: These are considered to be a sign of good luck in Irish tradition. Each leaf in the clover symbolizes something: the first for faith, the second for hope, the third for love, and the fourth for luck. Finding a four-leaf clover is considered particularly lucky because they are rare.

5. Lucky Number Seven: In many cultures, the number seven is considered lucky. It’s a significant number in various religions and cultures. There are seven days in a week, seven continents, seven colors in a rainbow, and seven notes on a musical scale, which all contribute to the positive connotations of the number.

6. Horseshoes: In many cultures, horseshoes are considered symbols of good luck due to their association with horses, which were often seen as symbols of speed, power, and protection. The luck of the horseshoe is thought to work best when it’s hung in a U shape so it can “collect” good luck.

7. Money Plant: In the Hindu religion, the Money Plant (Epipremnum aureum, also known as Golden Pothos, Devil’s Ivy, or Silver Vine) holds a special place. This vining plant, common as an indoor houseplant worldwide, is considered a symbol of good luck and prosperity.

The association of the Money Plant with wealth comes from a popular belief rooted in Vastu Shastra – the traditional system of architecture in India, akin to Chinese Feng Shui. According to Vastu, certain plants promote positive energy in the environment, and the Money Plant is one of them.

The superstition around the Money Plant is connected to Goddess Lakshmi, the Hindu deity of wealth, fortune, and prosperity. It’s believed that nurturing a Money Plant at home can attract the blessings of Goddess Lakshmi and pave the way for a prosperous life. To this end, some people even practice a ritual of wrapping the plant’s creeper around a coin and placing it in the pot, symbolizing the growth of wealth.

However, like all superstitions, it’s important to remember that these beliefs aren’t scientifically validated. The positive impact of keeping houseplants, including the Money Plant, can be more accurately attributed to their air-purifying properties and the psychological benefits of being around greenery. The superstition involving the Money Plant and Goddess Lakshmi provides an interesting insight into the cultural practices tied to prosperity in the Hindu tradition.

Origins of the Itchy Left Palm Superstition

The old wives’ tale regarding an itchy left palm is steeped in history and varies from culture to culture. The belief in this particular itch’s predictive power seems to have originated in Europe, especially in the British Isles.

There, it was believed that if a person rubbed their itchy left palm on wood, it would assure the arrival of money. The superstition was later carried across the Atlantic and became fairly well-known in the United States, too.

Why the left hand specifically? In many cultures, the left side is considered to be less lucky or even negative. In Christianity, for instance, the left hand is often associated with betrayal – consider the seating arrangement at the Last Supper, where Judas Iscariot is often depicted sitting to Christ’s left.

The left-hand itching belief is also tied to the distinction between giving (associated with the right hand) and receiving (associated with the left hand). This can be found in many cultures globally, where the right hand is traditionally used for giving or paying out money, while the left hand receives it. So, an itching left palm would signify money coming in, while right hand itching could suggest money going out.

Cultural Differences

So, what does it mean when your left hand itches? In many cultures, an itchy left palm implies unexpected money coming your way. How did this superstition begin? Some believe it traces back to Saxo Grammaticus, a Danish historian who mentioned ‘itching palms’ in relation to greed. For others, it’s an old wives’ tale passed down generations. But does the superstition differ for men and women? Not typically. The interpretation of the left palm itching is usually consistent across genders.

Now, I bet you’re thinking, “What about the right hand itching?” Interestingly, in some cultures, an itchy right palm signifies that money is going out, hinting at potential bad luck. Don’t worry, though – it’s just a superstition!

Differences Between Men and Women

The superstition about an itching left hand indicating incoming wealth or financial windfall doesn’t specify any gender differences. The belief is generally applied to all individuals, regardless of their gender.

However, the way this superstition is interpreted or applied may vary depending on cultural norms or societal roles. For example, in some societies where women are traditionally homemakers and males are seen as the primary earners, an itchy left hand in a man might be more likely to be associated with an increase in salary or a profitable business deal. Meanwhile, for a female, it could be linked to her husband’s earnings or seen as an indicator of good luck around the home.

On a medical level, certain conditions causing itchy palms like hand eczema or psoriasis do not discriminate between men and women. However, it is noteworthy to mention that autoimmune diseases (including psoriasis) are generally more common in women than men, which might indirectly affect the prevalence of symptoms like itchy palms.

Medical Reasons for Itchy Palms

There can be a multitude of reasons why your palms may itch, and while we’d love it to be a sign of an impending windfall, it’s more often related to skin conditions or underlying health issues. Here are a few possible causes:

Dry skin: Dry skin, or xerosis, can make your palms itchy. This condition can result from environmental factors like cold, dry weather, or overwashing your hands.

Eczema: Eczema, or atopic dermatitis, is a condition that causes your skin to become itchy, red, and dry. Dyshidrotic eczema specifically affects hands and feet and could lead to an itchy palm.

Psoriasis: This is a chronic autoimmune condition that can cause a buildup of skin cells and form scaly patches on your skin. Palm psoriasis can make your palms itchy and want to scratch them.

Allergic reaction: Contact dermatitis is a skin reaction that happens when you touch a substance that irritates your skin or causes an allergic reaction, such as certain types of metals, soap, or plants.

Diabetes: In some cases, diabetes can lead to itchy skin, including the palms, due to poor blood circulation or yeast infections that are common in people with diabetes.

Liver disease: Itchy skin can be a symptom of liver disease. The itchiness is likely due to your liver’s inability to filter toxins from your body efficiently.

If your itchy palms persist or cause concern, it’s always best to seek medical advice.

Other Non-Medical Reasons for Itchy Palms

Outside of medical causes, people often attribute itchy palms to various superstitions and beliefs. Here are a few:

Astrology: Some people believe that itchy palms can be related to the movement of the planets or a particular person’s horoscope.

Energy and Chakras: In certain spiritual practices, itchy palms might suggest that you’re coming into contact with certain energies, or experiencing a blockage or overactivity in your hand chakras.

Psychic Phenomena: Some people believe that itchy palms could be a sign of a psychic phenomenon. They might think that their left palm itches when someone is thinking of them or when something significant is about to happen in their lives.

Spiritual Communication: In certain belief systems, physical symptoms like itching are interpreted as messages from the spiritual realm. An itchy palm could be taken as a sign or message from a spirit guide.

It’s important to note that while these beliefs are held by some, they’re not supported by scientific evidence. They offer a window into the fascinating ways that different cultures interpret and ascribe meaning to everyday physical experiences.

Itchy Palm Lottery Win Stories

When it comes to left hand itching and lottery winners, the tales are as intriguing as they are varied. Let’s delve into a few of these stories.

Mary Shammas

A popular tale when it comes to the itchy left palm superstition and lottery wins involves Mary Shammas, a Brooklyn grandmother who credited her left hand’s itch for her good fortune.

In 2010, Mary Shammas was riding on a Brooklyn bus when her left palm began to itch. Remembering the old superstition her mother had told her about – that the left hand itching meaning, it that money is on its way – she decided to act upon it. She immediately asked her daughter to purchase a lottery ticket using family members’ birthdays as the numbers.

The result? A whopping $64 million New York Lottery jackpot – one of the biggest in the state’s history at the time.

This tale has undoubtedly added fuel to the fire of the left hand itching superstition. However, while the story is truly remarkable and memorable, it’s important to take it in context. Mary’s win was more about chance and the decision to purchase a lottery ticket than the itch itself.  It’s a classic example of “post hoc, ergo propter hoc” reasoning – Latin for “after this, therefore because of this.” This logical fallacy assumes that because one event happened after another, then the first must be the cause of the second. The itching of Mary’s left palm occurred before the lottery win, but it did not cause the win.

So, while Mary’s story is indeed an entertaining tale of an itchy left palm leading to lottery luck, it doesn’t offer empirical evidence to support the superstition. Just like other similar anecdotes, it serves to highlight how we, as humans, love to find patterns and establish cause-effect relationships, even when they’re a product of random chance.

Donald Pittman

from North Carolina, claimed his left palm itch was the reason behind his purchase of a $5 lottery ticket that won him a staggering $200,000 in 2016. Pittman stated that whenever his left hand itches, money’s coming. And this time, it did.

But can we establish a direct connection between his itchy palm and the win? The fact is, it was Pittman’s decision to buy a lottery ticket that led to his win, not the itching per se. There’s no scientific proof linking physical symptoms to a future event. So, while it’s an exciting narrative, it seems more about chance and coincidence than causation.

Melissa Ede

Melissa Ede, a taxi driver from Hull, England, scooped a £4m lottery win in 2017. She shared that she often experienced itchy hands before something ‘big’ happened, making a link between the itch and her major win.

It’s possible that Ede’s claim might be based on the Baader-Meinhof phenomenon, where one stumbles upon some obscure piece of information—often an unfamiliar word or name—and soon afterwards encounters the same subject again, often repeatedly. Any small itch before a ‘big’ event may stand out more in her memory due to this phenomenon, leading her to make a connection where none exists.

In all these cases, the common thread is that these individuals chose to attribute their good fortune to an itchy hand, but this is a matter of personal belief rather than empirical fact. There’s no denying these are fun, entertaining stories, but they shouldn’t be taken as evidence of a left hand itch being a legitimate sign of lottery luck. Instead, they serve as fascinating examples of how humans seek patterns and causality, even in the face of pure chance.

Coincidence or Causation?

It’s easy to see a correlation where one might not exist. In the cases of Pittman and our Reddit friend, it seems more like a coincidence than causation. As humans, we’re prone to remember instances that confirm our beliefs (like getting lottery winnings when our hand itched) and forget the ones that don’t (all the times our hand itched, and we didn’t win). This is a cognitive bias known as the “confirmation bias.”

Also see: Money traps people often fall for

The Mathematical Reality of Lotteries

Playing the lottery can be a fun pastime, but it’s critical to understand the mathematics behind it. Here are some key points to consider:

Odds of Winning: The odds of winning a major lottery such as the Powerball or Mega Millions are incredibly slim. For instance, the chances of winning the Powerball grand prize are approximately 1 in 292.2 million. That means you’re about 20 times more likely to be struck by lightning in your lifetime than to win the Powerball.

Expected Value: The expected value of a lottery ticket, which is the average amount of money you would win if you played the lottery an infinite number of times, is usually negative. This means that in the long run, you’re expected to lose money.

Probability Theory: The lottery is a game of independent events. This means that each draw is independent of the previous one. So the idea of a “due number” that has to come up soon because it hasn’t been drawn recently is a misconception.

Law of Large Numbers: While in the short run, outcomes might deviate from the expected result; in the long run, the outcomes will converge to the expected result. In the case of a lottery, the more you play, the more likely you are to lose.

The lottery, despite the dreams it evokes, is a game of chance with highly unlikely odds. If you play, play responsibly, and never view it as a means to fix financial troubles or secure a stable future. Remember, an itching palm – left or right – doesn’t change the statistical reality of your lottery number being drawn.

Superstition and Reality: Finding the Balance

Superstitions like the itchy left palm can add some fun to our routines, but it’s vital not to let these beliefs guide our financial decisions. The thrill of buying a lottery ticket with the hope of winning big can be a rush, but it shouldn’t overshadow the need to save money and live frugally.

The world of superstitions is a fascinating one, offering a glimpse into human psychology and the patterns we try to find in life’s unpredictability. The belief that an itchy left palm means money is coming is just one such example. But remember, whether it’s the itchy right hand indicating potential loss or an itchy left palm suggesting impending wealth, these are just superstitions, not fact.

Financial responsibility remains key, regardless of whether your palm itches or not. So, the next time your left hand itches, before rushing to buy a lottery ticket, remember this article and maybe just reach for some good ol’ moisturizer for that dry skin instead.

What’s your experience with this superstition? Do you have a money superstition of your own? Let’s continue the conversation about the enthralling world of superstitions and financial responsibility in the comments.

Source: pennypinchinmom.com

Apache is functioning normally

“What’s the safest possible thing that I can do with my money?” wonders Afroblanco over at Ask Metafilter:

I take bearishness to an extreme. Having witnessed the 2000 tech crash, I have no faith in the stock market or the US economy. I keep all of my money (USD) in a savings account. However, with the recent financial turmoil, I have a few questions:

  1. Is it conceivable for the FDIC to fail?
  2. If so, is there a place where I can put my money that will be safer than a savings account?
  3. What’s the safest, most risk-free way for me to save money and not get killed by inflation and the tanking US dollar?
  4. If there is a safe way for me to save money and not be punished by inflation and the depreciating dollar, is there a way that I can do this without having to stress out and micromanage my finances? I don’t want to be checking the finance page and making adjustments every day.

Even though I follow finance news, I’ve never done any investing or money management other than socking money away in my savings account. I’m a n00b, I admit it.

Afroblanco is willing to forego potential market gains so long as he does not lose money. He is risk-averse. He’s not alone. A rocky economy makes many people nervous. You can assess your risk tolerance with one of several online tools:

If your risk tolerance is low, then the stock market may not be right for you. You should consider less volatile investments until you’ve researched the market’s historical performance. In response to Afroblanco’s question, AskMetafilter member Pastabagel wrote:

The best thing you can do with your money is invest it in yourself of your children, if you have any. Go to school, get new training, start a business, etc. After that, the next best thing to do with it is to eliminate your debt (excluding mortgage). Typically people have formulae for determining how much savings you should spend to pay down debt, but I think you’d be a happier person if you just eliminated all credit card debt, car payments, etc. you have outstanding.

Barring those things, here’s the basic story:

Your money in a savings account is insured up to $100,000, but earns little interest and may actually result in your losing money to inflation. Certificates of Deposit pay more, but you can’t touch your money for the duration of the CD.

Bonds are safe, but you have to know which ones to buy, what to watch for, etc. And bonds fluctuate in price.

The rule-of-thumb is that the more interest, or yield, something offers, the more risk is involved. Interest is essentially what is exchanged for you risking your money. Also, low-risk equals low-reward. But you sound like you want something extremely safe, so I’m not going to preach to you about the S&P 500’s long-term performance.

Gold and commodities are not so good, because while a two-year chart looks great now, a two-year chart two years from now might look like a nightmare. Gold lost $100/ounce since Monday — about 10%. Did anybody call that? So not exactly a rock solid investment.

You want safe, here is safe:

What you really want is some kind of short-term bond mutual fund (the “short-term” refers to the kind of bonds it holds). Mutual funds are great because you can put in and take out your money whenever you want, unlike bonds and CDs. I would recommend VFSTX from Vanguard. It has a decent yield (which is sort of like interest) and also can appreciate in value. This particular fund has had one down year in the last 24 years, and that year it was only down 0.08%.

In the alternative, you can get a fund that invests in inflation-protected treasuries (TIPS), like VIPSX from Vanguard.

These two funds are very much buy-and-forget. You talk about the economic turmoil, VFSTX fluctuated less than 1% from October to January (when the shit really hit the fan) and VIPSX fluctuated by no more than about 4%. They are very very safe, but won’t appreciate much, but it sounds like that would be okay for you. Keep in mind that these funds also pay you interest along the way, which is typically reinvested, so the charts you see on Yahoo!, which track price only, don’t show you the full story.

When you pick a mutual fund, however, you need to be very careful because different fund companies fund often charge expenses, loads and fees, which are basically ways for the fund company to take your money out of your investment. Vanguard has built its entire company and every one of the hundreds of funds they manage on the principle of no-load, and rock-bottom expense ratios. All of the money I cannot afford to lose for the rest of my life I keep there. This is not a slick Wall Street operation — Vanguard will collapse when the world ends, not a moment sooner.

The people who started and who ran that company are very old-school personalities — they personally live frugally, invest very conservatively, and their business model is based on lifetime relationships with their investors, not on clever financial wizardry. You don’t see Vanguard people on TV as much as Warren Buffet because these people aren’t the type to have publicists. This is the place where your crusty great-grandfather who grew up in the Depression would keep his money. Slow and temperate. They also offer very low-cost financial advisory services, which you might need if/when you ever get married, have kids, etc and don’t feel like trying to figure out how to buy life insurance.

On a psychological note, though, I would encourage you to read The Millionaire Next Door. The book is not really about personal finance, though it does discuss it a little. What the book will do is reset your social attitudes about money and wealth, and how wealth is accumulated.

These recommendations are appropriate for somebody who is very conservative and risk-averse. If you’re more worried about losing money than eager to gain it, then consider these tips. Via e-mail, Pastabagel suggested that those with slightly more risk tolerance should consider a total-market index fund (such as VTSMX) as part of an IRA.

Pastabagel also notes — correctly — that it’s difficult to answer a question like, “How should I invest?” The answer depends more on psychology than finance. “The only answer,” he writes, “is to take as much risk as you can stand before you start losing sleep over it.”

Source: getrichslowly.org

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Construction, Rental DSCR, Warehouse Products; Agency News; MBS and Rate Sheet Pricing; Retail Profitability Study

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Construction, Rental DSCR, Warehouse Products; Agency News; MBS and Rate Sheet Pricing; Retail Profitability Study

By:
Rob Chrisman

21 Secs ago

Some things are fortuitous. For example, if Sting hadn’t been in Montserrat windsurfing when Dire Straits was recording “Money for Nothing,” would we have ever heard the iconic “I want my MTV” 38 years ago? Some things don’t go so smoothly, like insurance in places like California and Florida. Farmers Insurance is the latest home insurer to pull out of Florida’s market, labeling the move as a business decision that was “necessary to effectively manage risk exposure,” per the company’s statement provided to Fortune. Shortly after, AAA announced it’d reduce its presence in Florida. And some things are neither fortuitous nor bad, but just are. Occasionally I am asked about branch models, especially as companies, realizing that summer is passing with no huge uptick in sales and no great reduction in interest rates, are once again examining overhead and what kind of branch makes the most sense. I turned to STRATMOR Partner Jim Cameron who reminded me of an article he had penned, taking an in-depth look at the pros and cons of expense management branches. (Today’s podcast can be found here and sponsored by ReadyPrice, offering the industry’s most powerful universal delivery portal that gives brokers the edge they need. Shop, lock and deliver with multiple lenders, all in one place, for free! Hear an interview with Chris Whalen in a wide-ranging capital markets discussion on how MBS pricing is determined and how that ultimately flows onto lenders’ rate sheets.)

Lender and Broker Products, Services, and Software

While some inexplicably seek out a terrible time, like the hundreds who visited Death Valley for the 128-degree heat, most would give those conditions a hard pass. SimpleNexus, an nCino company, prides itself on creating a home financing experience that all borrowers love, with its award-winning point-of-sale technology enabling consumers to manage their mortgage application from anywhere. Not only does the digital mortgage solution allow borrowers to apply for loans quickly and easily, but it also keeps them up to speed on loan status, prompts them to take action when needed, and loops their agents in on loan progress. To explore how SimpleNexus can elevate your borrower experience, schedule a demo today.

We are pleased to announce the latest addition to our team at First Horizon Mortgage Warehouse Lending, as we continue to expand our presence in the mortgage industry. Please join us in warmly welcoming Chris Karnes as our newest Relationship Manager! With an impressive background in the mortgage industry Chris Karnes brings over 25 years of industry experience and expertise to our organization. For over 40 years, First Horizon has consistently offered committed warehouse lines and a suite of sub-limits to qualified borrowers. We are growing and ready for the opportunity to support your business. To learn more about our services and how First Horizon Warehouse Lending can assist you please reach out to Chris (214)-693-3203 [email protected] or our National Sales and Business Development Manager Scott Walker (901)-517-0320 [email protected].

With natural disasters on the rise, homeowners may experience unexpected hardship and financial challenges. That’s why it’s time to rethink how you assist distressed homeowners. Black Knight data shows that most borrowers in forbearance during disaster events ultimately return to performing status. And what’s more – a multi-year analysis revealed that many borrowers embrace assistance options when they’re offered to them via self-service technology. This encouraging data indicates that access to the right technology may help more borrowers stay in their homes during periods of financial hardship. Read more in Black Knight’s complimentary case study, “Helping Homeowners in Times of Financial Hardship.”

Loan officers, if there was an easy button for creating incredible video marketing content on social media, would you press it? Now you can thanks to Video Catalyst by SocialCoach. Say goodbye to the days of wondering what to say, what equipment you’ll need, and how you’ll edit. With Video Catalyst, we’ve made it easy to create compliant, scroll-stopping, professional-grade videos in record time. Here’s how: We write four fresh, relevant (and compliant) scripts for you every month, you simply read the scripts while recording the video from your smartphone, and then send it back to us for professional editing, which includes the addition of music, dynamic captions, gifs, and emojis. We then post it to your account for seamless sharing. That’s it. You press record, we do the rest. Want to see how Video Catalyst can unlock the power of video marketing for your business? Book a demo today.

Leveraging technology to improve the daily lives of mortgage professionals and homebuyers is core to Cloudvirga’s mission, so when FHFA announced the inaugural Velocity Tech Sprint, they seized the opportunity. For this event, FHFA assembled some of the best and brightest from across the industry to develop solutions for lenders to reduce costs and delivery times, while being more inclusive and transparent. Cloudvirga had members on two award-winning teams. These winners helped develop Cloudvirga’s Horizon platform which offers an innovative approach that creates a 5-star user experience across the lending process for both borrowers and loan officers. The result: underwriter-ready loan files in less than 30 minutes, shaving days off the process. Generate more loans, more referrals, more repeat business, and retain your top talent. Cloudvirga’s technology even reduces the touch time by 70 percent between LOs and borrowers. See it for yourself. Schedule a demo to learn more.

Using the right data to drive your decisions? Curinos is please and privileged to welcome industry veteran Rob Chrisman to our (F)insights podcast series. Join us as Rob lends his forward-looking and consistently thought-provoking insights into today’s highly challenging mortgage market. One key element separating winners from losers, according to Rob, is data-driven decision making: having the foresight and courage to rely on data to make the tough calls. Along with Curinos’ Rich Martin, director of real estate lending solutions, Rob covers the pressing issues of the day, including inventory, housing affordability, mortgage availability, home equity and what may be ahead for rates and volumes. You’ll even learn the derivation of the word “mortgage” It’s a lively and informative discussion you won’t want to miss! Tune in now.

“With over 35 years of experience in mortgage banking, Richey May knows the industry from every angle. Many of our team members are credentialed industry experts who dedicate much time to building up other industry experts. From this expertise, Richey May has created a wealth of services and products to help lenders stay ahead: audit and tax services, cybersecurity solutions designed to protect company assets and sensitive borrower information, intelligent automation tools for streamlined operations…you name it! Whether you’re leveraging our innovative platforms or having us work as your extended team for outsourced internal audit or accounting services, get ready to tackle challenges faster with some serious firepower on your side. Everything you need! Contact our experts today!”

Broker and Correspondent Loan Programs

Thinking about boosting volume with construction loans? Think outsourcing. Homebuilder confidence is slowly improving, with sales of newly built single-family homes rising 4.1 percent in April, according to the NAHB’s latest numbers. If that’s piquing your interest in launching a construction loan program or scaling your existing offerings, CFSI Loan Management can provide the foundation you need to excel. “We’ve seen it time and time again,” says CFSI CEO Brian Mingham. “Outsourcing the trickiest aspects of construction lending, like budgeting, inspections, funding draws and disbursements, can reduce costs and unleash new business opportunities.” Imagine having all the complexities seamlessly handled by a team of seasoned experts, so you close more deals. CFSI has helped hundreds of lenders do exactly that for the past 10 years. To find out how they can help you, contact Brian Mingham (855-344-3052).

Grow that pipeline with LoanStream’s Summer Specials on Non-QM and Government. Includes Price Improvements on FHA, VA, Select Government loans. Plus, Specials for Non-QM includes Full Doc, Alt Doc and DSCR. Here for a limited time so don’t wait, contact your Account Executive for full details as restrictions apply, or visit here. Plus, MaxONE DPA programs are now available in Massachusetts! Finance up to 100 percent CLTV with 600 Min FICO. Contact your AE to learn more or visit here.

“Exciting Updates and Special Offers for LendingOne TPO Mortgage Brokers. Between July 24th and August 31st, LendingOne brokers can receive 50bps Bonus YSP on qualified new applications submitted for RentalOne DSCR Loans and RentalOne Portfolio DSCR Loans. Also, LendingOne has increased its leverage amounts for our Rental Loan products, giving our brokers more competitive rates and terms for their clients. The LendingOne TPO team can be found in Orlando, Florida on August 2nd-5th at the FAMP 2023 Annual Convention and Tradeshow. If you are attending, let’s schedule a time to meet onsite to discuss these new opportunities for LendingOne TPO brokers. Call us today to learn more: 866-794-0937 or visit our website.”

Agency Changes Impacting Conventional Conforming Loans

Let’s not forget that Freddie and Fannie are under conservatorship, and probably will be for quite some time. The changes that the Federal Housing Finance Authority (FHFA) and other agencies make directly impact their business, as well as other programs.

Six federal regulatory agencies, the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, National Credit Union Administration, and Office of the Comptroller of the Currency requested public comment on a proposed rule designed to ensure the credibility and integrity of models used in real estate valuations. In particular, the proposed rule would implement quality control standards for automated valuation models (AVMs) used by mortgage originators and secondary market issuers in valuing real estate collateral securing mortgage loans.

The FHFA announced that it is seeking to amend the existing Suspended Counterparty Program (SCP) regulation to expand the categories of covered misconduct on which a suspension could be based to include sanctions arising from certain forms of civil enforcement. The FHFA is seeking comment on the proposed rule that would amend the Suspended Counterparty Program (SCP) regulation.

A notice regarding the Single Family Housing Section 504 Home Repair Loans and Grants in Presidentially Declared Disaster Areas Pilot Program was published in the Federal Register on Tuesday, July 18, 2023. The pilot includes multiple program waivers.

Capital Markets

Friday was a slow news day with no economic data and no Fed speak, though investors were lying in wait all week for the most part looking ahead to this week’s batch of economic data and central bank meetings that includes the FOMC meeting on Wednesday, the ECB meeting on Thursday, and the BOJ meeting on Friday.

Glancing at last week, June’s retail sales rose 0.2 percent, less than market expectations for a 0.5 percent increase. After accounting for inflation, sales at food and beverage stores as well as gas stations fell during the month. Sales at food service and drinking places rose below the pace of inflation indicating sales declined there as well. Overall, retail sales in the second quarter have been flat. Building permits declined 3.7 percent in June and housing starts were down 8.0 percent in June. Both permits and housing starts rose overall during the second quarter.

This week the advance estimate of real GDP for the second quarter will be released. Economists are forecasting growth to be 1.7 percent, down from 2.0 percent in the first quarter, but the Atlanta Fed’s GDPNow model shows 2.4 percent as of July 19. A widening trade deficit, slower inventory growth as well as sluggish retail sales may prove to be headwinds to a stronger GDP reading for the quarter.

Economists show a consensus view that the anticipated 25 basis points fed funds hike this week will mark the end of the Fed’s tightening cycle, with rate cuts expected to come in March of next year. Fed Chair Powell’s follow up press-conference after Wednesday’s rate decision will be closely watched, as will how 2-year Treasuries react going forward because 10-years are “tied to the hip and mortgages can’t handle another flattener,” per Adam Quinones. Speculation that the Fed may end its tightening after one more hike next week has led to bond yields falling as of late (10-year U.S. Treasury yields have fallen to about 3.8 percent, from this year’s high of 4.1 percent set in early July) following multiple softer-than-expected inflation reports two weeks ago. However, new commodity inflation pressures have come to the fore following a warning from the Russian Ministry of Defense that any ships entering Ukraine ports will be considered potential military targets. This has sent the price of global wheat futures higher by roughly 10 percent.

This week brings the latest central bank decisions from the Fed, ECB and BoJ, respectively on Wednesday, Thursday, and Friday. Treasury will auction $120 billion in fixed coupon supply, while economic data of note include the first look at Q2 GDP on Thursday with June PCE on Friday. Bank regulators are expected to announce new capital requirements on Thursday where risk weightings for mortgage loans in MBS are expected to increase for most from the current 50 percent. Today’s scheduled economic news: Chicago Fed National Activity Index for June, preliminary June S&P Global Markets manufacturing and services PMIs, and a Treasury auction of $42 billion 2-year notes. We begin the week with Agency MBS prices better by .125, the 10-year yielding 3.80 after closing last week at 3.85 percent, and the 2-year’s at 4.82.

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

Source: mortgagenewsdaily.com

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A variety of significant mortgage rates inched upward over the last seven days. The average interest rates for both 15-year fixed and 30-year fixed mortgages both were driven higher. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also climbed.

As inflation surged in 2022, so too did mortgage rates. To rein in price growth, the Federal Reserve began bumping up its federal funds rate — a short term interest rate that determines what banks charge each other to borrow money. By making it more expensive to borrow, the central bank’s goal is to reduce prices by curtailing consumer spending.

After hiking interest rates 10 times since March 2022, the Fed pumped the brakes at its June meeting. The central bank’s federal funds rate will remain at a range of 5.00% to 5.25% for the time being, although the Fed hasn’t ruled out the possibility of further increases if inflation doesn’t continue to moderate. The Fed will decide whether or not to raise rates at its next meeting on July 26.

The most recent Consumer Price Index, a popular gauge of price growth, shows that the Fed’s string of rate hikes is having its intended effect. Annual inflation is now at 3.0% for the 12-month period ended in June, which is the lowest it’s been in more than two years.

The Fed doesn’t set mortgage rates directly, but it does play an influential role. Mortgage rates move around on a daily basis in response to a range of economic factors, including inflation, employment and the broader outlook for the economy. A lower inflation rate is good news for mortgage rates, but the potential for additional hikes from the central bank this year will keep upward pressure on already high rates.

“Mortgage rates will continue to ebb and flow week to week, but ultimately, I think rates will stick to that 6% to 7% range we’re seeing now,” said Jacob Channel, senior economist at loan marketplace LendingTree.

Rather than worrying about mortgage rates, though, homebuyers should focus on what they can control: getting the best rate they can for their financial situation.

To increase your odds at qualifying for the lowest rate available,take the steps necessary to improve your credit score and to save for a down payment. Also, be sure to compare the rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, will show you the total cost of borrowing and help you make an apples-to-apples comparison among lenders.

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 7.19%, which is an increase of 1 basis point from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one — but often a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 6.52%, which is an increase of 1 basis point from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a bigger monthly payment. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. You’ll usually get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 6.25%, a rise of 6 basis points compared to a week ago. You’ll usually get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 ARM in the first five years of the mortgage. But since the rate changes with the market rate, you might end up paying more after that time, as described in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an ARM may be a good option. If not, changes in the market could significantly increase your interest rate.

Mortgage rate trends

Mortgage rates were historically low throughout most of 2020 and 2021 but increased steadily throughout 2022. Now, mortgage rates are well above where they were a year ago. Fewer buyers are willing to jump into the housing market, driving demand down and causing home prices in some regions to ease. But that’s only part of the home affordability equation.

“Interest rates have been much higher in the past and people bought homes and financed homes at those rates,” said Daniel Oney, research director at the Texas Real Estate Research Center at Texas A&M University. “But it’s been hard for people to react to such a rapid increase in just a short amount of time.”

Even though the Fed hit pause on rate hikes in June, mortgage interest rates will continue to fluctuate on a daily basis. That’s because mortgage rates aren’t tied to the federal funds rate in the same way other products are, such as home equity loans and home equity lines of credit, or HELOCs.

As long as inflation continues to trend downward, though, mortgage rates should decline slightly towards the end of 2023. The most recent housing forecast from Fannie Mae calls for the average 30-year fixed mortgage rate to close out the year at around 6.3%.

“Mortgage rates have been volatile for some time now and while they could eventually start trending down over the next six months to a year as inflation growth continues to cool, their path is probably going to be bumpy,” Channel said.

We use data collected by Bankrate to track changes in these daily rates. This table summarizes the average rates offered by lenders across the country:

Current average mortgage interest rates

Loan type Interest rate A week ago Change
30-year fixed rate 7.19% 7.18% +0.01
15-year fixed rate 6.52% 6.51% +0.01
30-year jumbo mortgage rate 7.21% 7.20% +0.01
30-year mortgage refinance rate 7.34% 7.33% +0.01

Rates as of July 24, 2023.

How to find the best mortgage rates

You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. When looking into home mortgage rates, think about your goals and current financial situation.

Things that affect the mortgage rate you might get include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Generally, you want a good credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate.

The interest rate isn’t the only factor that affects the cost of your home. Be sure to also consider other costs such as fees, closing costs, taxes and discount points. Be sure to speak with multiple lenders — like local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.

How does the loan term impact my mortgage?

One important factor to consider when choosing a mortgage is the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Another important distinction is between fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are stable for the life of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (usually five, seven or 10 years). After that, the rate adjusts annually based on the current interest rate in the market.

When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to stay in your house. Fixed-rate mortgages might be a better fit for people who plan on living in a home for a while. While adjustable-rate mortgages might have lower interest rates upfront, fixed-rate mortgages are more stable in the long term. However, you may get a better deal with an adjustable-rate mortgage if you only intend to keep your house for a couple years. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. It’s important to do your research and understand what’s most important to you when choosing a mortgage.

Source: cnet.com

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The average 30-year fixed rate mortgage managed another dip last week, falling two basis points to 2.94%, according to Freddie Mac‘s PMMS. Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and have remained under 3% for the past month.

Despites last week’s rates mirroring closer to what was seen in February, Sam Khater, Freddie Mac’s chief economist isn’t convinced they will last.

“The low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the
summer,” Khater said.

The Mortgage Bankers Association reported on Wednesday that borrowers finally got wise to the continued drop in rates and pushed mortgage applications up 2.1% after weeks of declines. So much so, the decline in rates helped the refinance index reach its highest level in eight weeks, driven by a 4% increase in conventional refis.

“Low rates offer homeowners an opportunity to lower their monthly payment by refinancing and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option,” said Khater.

Here’s what to expect in the mortgage application process

Buying your dream home starts with being a well-prepared buyer and beginning the mortgage application process before you even look at homes.

Presented by: Citi

A Wednesday research note from Freddie Mac’s economic and housing research group found that nearly 40% of all surveyed households could save at least $100 per month from refinancing at today’s mortgage rates ― this percentage is nearly 50% for Black and Hispanic borrowers and 38% for White borrowers. Moreover, nearly 15% of all borrowers could save at least $200 per month from refinancing, and this percentage is nearly 20% for Black and Hispanic borrowers and 13% for White borrowers.

A quarter of a drop in rates is significant when it comes to ushering borrowers through the refi door. In April, a 10-basis point drop gave 2 million high quality candidates the potential to save at least $300 a month, according to Black Knight. That’s a potential $3.6 billion back in to homeowners pockets.

Source: housingwire.com

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Our shoes reveal a lot about who we are, and there are many situations in which we need a wide selection of different shoe styles and colors; for work, for socializing, or just a casual pair to feel comfortable in.

If you have a small closet and a growing footwear collection, fear not. It’s totally possible to organize shoes in small spaces, you just need some space-saving shoe organizing methods and a few products to help.

small closet to allow for further purchases. 

Try these organization methods at home to free up shoe space in your closet

After organizing your clothes in a small closet, the next task is always your shoes. The last thing you want to do is to dirty, damage, or even lose your most-loved shoes.

These tips will save you space and time searching for your favorite pair.

(Image credit: Go Modern Furniture)

1. Declutter and prioritize

The first step is to start decluttering your shoe collection, you need to know exactly where all of your shoes are, their condition, and how many you have and need.

Take out all your shoes and assess which ones you truly need and wear regularly. If you notice that there are some damaged shoes or pairs that no longer serve you, put them in separate piles for donating or discarding.

Once you have been through all of your footwear, you will have freed up space in your closet which will make organizing the space easier.

2. Utilize vertical space

Often because we have a small closet we automatically assume that there is no room in it, but that is not always the case. Vertical potential is often overlooked and instead, it should be used to our advantage.

Vertical space is especially useful when it comes to organizing shoes, not only does it allow us to see our shoe collection easily, but it also helps us take up space that would otherwise be unused. 

A shoe riser is an effective and simple way to use up your vertical space in the closet and essentially increases the amount of shoe storage space you have on your shelves.

Professional organizer Caroline Guntur says that she relies on shoe risers, available at Amazon, and uses them in all small closets for her clients: ‘It allows both pumps and flats to be stacked instead of just side by side, this automatically increases the amount of shelf space available for your shoe collection.’

Caroline Guntur

Camilla Frederico, one space that is often overlooked is the closet door itself.

‘If the back of your closet door is bare, an over-the-door shoe organizer can make the most of this space,’ she says. ‘They also happen to store several pairs of shoes at once. Additionally, they can also double as storage for accessories!’

Over-the-door organizers, at Wayfair, will help take the clutter away from inside the closet, conjuring up space from nowhere and making it much easier to see everything.

Camilla Frederico

Relaxing Space. ‘It will maximize your storage and you can easily see which shoes you have.’

Stackable clear shoe boxes, at Amazon, not only save space but also protect your shoes from dust. Furthermore, the clear view allows you to simply locate the shoes you want at any time.

Aleesha Dane

Inspire Clean. ‘Store out-of-season shoes in a separate location, such as under-bed storage or a different closet, and swap them out as the seasons change.’

Rotating your shoes seasonally allows you to align your footwear to the clothes in your closet. For example, you are more likely to wear your summer sandals versus winter boots during the warmer months. 

Consider how often you are going to be wearing each type of shoe and create space by removing the pairs not needed for now.

Nathaly Viera

washing machine; however, those made with leather, suede, rubber, or vinyl should not be placed in the washer.

When you organize a closet that has limited space, you have to keep in mind that each closet is different, it is best to choose the storage and organizational solution that works for you and your space. These organization ideas will set you up for having a manageable and functional closet in no time.

Source: homesandgardens.com

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In most major cities in the United States, homes in gayborhoods are worth more than the typical home – in some cases several times more.

To identify gayborhoods across the country ahead of Pride Month, Zillow analyzed data from the American Community Survey to find which neighborhoods have the highest share of same-sex couple households compared with others in the areai.

The neighborhood with the highest share is North Banker’s Hill, San Diego, where 10.1 percent of households are same-sex couples. The North Banker’s Hill housing premium is about 25 percent – the typical North Banker’s Hill home is worth $792,400, compared with the citywide median value of $632,600.

West Palm Springs in California has the second-highest share of same-sex couple households at 9.2 percent, but homes there come with a much higher premium. Homes in West Palm Springs are worth more than three times as much as the typical home in the broader Riverside metro.

In fact, there are 10 major cities where home values in the gayborhood are more than double the community at large, including Houston, Charlotte and Philadelphia. That’s not to say home values are necessarily higher simply because it’s the gayborhood. Other factors could be driving the premium; gayborhoods are often close to amenities like bars, restaurants, and job centers.

There are a few places where gayborhoods buck this trend. In the downtown area of San Jose, Calif., homes are worth 38.1 percent less than the typical San Jose home. The area also has the smallest share of same-sex couples in the analysis at 1.1 percent. Gayborhoods in San Antonio and Kansas City have a similar discount on housing.

“The narrative of gayborhoods as a signal for rapid home value appreciation and gentrification has been around for decades, with Greenwich Village and the Castro long held up as examples,” said Zillow Director of Economic Research Skylar Olsen. “Today, the story is a little different. While these neighborhoods still foster a sense of community and social acceptance, living within them often comes at premium many may not be able to afford. This has a disproportionate effect on intersectional LGBTQ people —not just gay, but a person of color, transgender, a woman—those who are disadvantaged when it comes to earning potential.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
Latest posts by Mike Wheatley (see all)

Source: realtybiznews.com

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Florida resident Jaclyn Lambert (who happens to be our PR consultant) never thought she’d ever sell a home during a global pandemic. 

In fact, when the World Health Organization (WHO) announced the seriousness of COVID-19, she temporarily put selling a house on hold. But after a few weeks of self-quarantine, she received a call from her trusted realtor assuring her they could handle the listing and transaction in a safe manner. 

Within a week, Lambert witnessed a bidding war on her home. It closed shortly after that. Aside from signing the closing paperwork curbside, it was a contactless procedure, one that she confidently described to me as, “safe and easy.” 

“I couldn’t have imagined just how well the process would have gone during this crazy time, but I really do owe it all to my realtor who I’ve turned to a couple of times. In fact, I wouldn’t use anybody else,” said Lambert.

But Lambert’s experience as a repeat customer is actually rare. A recent study by Porch.com (my parent company) found that only 8% of repeat home buyers have used the same realtor more than once. 

Why do 92% of recent home buyers search elsewhere? What causes this gap in return customers, and what can realtors know to navigate customer relationships better in 2020– even during a pandemic? Here are a few things to keep in mind when marketing your services under “the new normal”. 

Confidence Is Key With Nervous Buyers & Sellers 

Recent studies show that both buyers and sellers are heeding caution during this time, with 70% of home sellers willing to take a lower asking price just to sell their home quickly, and 58% of recent potential buyers/renters putting their moving plans on hold until further notice. 

As a realtor, it’s your job and responsibility to ease the stresses of the home buying and selling process to your current and future customers. Deep-dive on CDC recommendations. Learn what a safe home buying, selling process looks like. For example, some things to consider might be: 

  • When selling, make it a “no-contact” process for your sellers 
  • Create a process for virtual tours, and use technology to your advantage
  • When showing to potential buyers, maintain six-foot distance and have proper PPE 

Implement these procedures and communicate loudly and clearly that working with you will be a pleasant (and safe) experience. 

And remember that this is a particularly sensitive time to conduct business, so the key here is to provide the latest and greatest safety measures and technologies with authority to put your current and future client’s minds at ease. 

Update Your Reviews and Testimonials to be COVID-related

Successfully made a customer happy during this time? Great! Now, make sure you request an online review, especially with them addressing the safety precautions your team took to make sure things run as smoothly and safely as possible. 

With 66% of prospective buyers polled by Porch finding their realtor from an online review, it is quite possible that hearing this type of pandemic-safety language might be exactly what your prospective customer needs to hear in order to make that call. 

Hand Off Customers to People Who Also Practice Non-Contact

And reviews are not the only way technology can be your friend during this time. If you haven’t looked toward online collaboration tools for all things home searching, contract signing, and closing paperwork. Make sure to have your trusted lenders and insurance brokers ready to forward to your clients for an easy contactless closing/home searching process. 

And always lead by example; be open to meetings via Zoom to replace the valuable face-to-face time you’d in the past use for coffee shop meetings. 

Provide Extra Support Beyond The Norm

The Porch study also found that homebuyers aren’t reading the paperwork, with first-time homebuyers feeling especially unprepared. Coupled with pandemic nerves, this calls for some intervention.

Perhaps it’s a no-brainer that going above and beyond is good customer service, but knowing that paperwork is going unread, now would be an especially good time to prepare a conference or phone call to go over any questions or technical paperwork your client may need help deciphering. 

After the sale, provide guidance on the safest way to move, provide a digital thank you gift (think: e-cards and Amazon gift cards), and simply just find any way you can to make an above-and-beyond connection with your customers, despite the lack of in-person attention you are able to give at this time. 

Remain a Pandemic-Proof Realtor

Maintaining real estate customer relationships is hard, and while the pandemic certainly adds a new level of complexity to the mix, as a forward-thinking real estate agent, it’s important to look toward the signs of what a “new normal” might look like. 

Lean on the proper technology to adopt now and potentially forever, and communicate to your past/future customers just how top of class your services really are. That will get you the rare repeat customer, no matter what outside variables you encounter.

Source: geekestateblog.com

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A 401(k) loan allows you to borrow money from your retirement savings and pay it back to yourself over time, with interest. While this type of loan can provide quick access to cash at a relatively low cost, it comes with some downsides. Read on to learn how 401(k) loans work, when it may be appropriate to borrow from your 401(k), and when you might want to consider an alternative source of funding.

What Is a 401(k) Loan & How Does It Work?

A 401(k) loan is a provision that allows participants in a 401(k) plan to borrow money from their own retirement savings. Here are some key points to understand about 401(k) loans.

Limits on How Much You Can Borrow

The Internal Revenue Service (IRS) sets limits on the maximum amount that can be borrowed from a 401(k) plan. Typically, you can borrow up to 50% of your account balance or $50,000, whichever is less, within a 12-month period.

Spousal Permission

Some plans require borrowers to get the signed consent of their spouse before a 401(k) loan can be approved.

You Repay the Loan With Interest

Unlike a withdrawal, a 401(k) loan requires repayment. Typically, you repay the loan (plus interest) via regular payroll deductions, over a specified period, usually five years. These payments go into your own 401(k) account.

Should You Borrow from Your 401(k)?

It depends. In some cases, getting a 401(k) can make sense, while in others, it may not. Here’s a closer look.

When to Consider a 401(k) Loan

•  In an emergency If you’re facing a genuine financial emergency, such as medical expenses or imminent foreclosure, a 401(k) loan may provide a timely solution. It can help you address immediate needs without relying on more expensive forms of borrowing.

•  You have expensive debt If you have high-interest credit card debt, borrowing from your 401(k) at a lower interest rate can potentially save you money and help you pay off your debt more efficiently.

When to Avoid a 401(k) Loan

•  You want to preserve your long-term financial health Depending on the plan, you may not be able to contribute to your 401(k) for the duration of your loan. This can take away from your future financial security (you may also miss out on employee matches). In addition, money removed from your 401(k) will not be able to grow and will not benefit from the effects of compound interest.

•  You may change jobs in the next several years If you anticipate leaving your current employer in the near future, taking a 401(k) loan can have adverse consequences. Unpaid loan balances may become due upon separation, leading to potential tax implications and penalties.

How Is a 401(k) Loan Different From an Early Withdrawal?

When you withdraw money from your 401(k), these distributions typically count as taxable income. And, if you’re under the age of 59½, you typically also have to pay a 10% penalty on the amount withdrawn.

You may be able to avoid a withdrawal penalty, if you have a heavy and immediate financial need, such as:

•  Medical care expenses for you, your spouse, or children

•  Costs directly related to the purchase of your principal residence (excluding mortgage payments).

•  College tuition and related educational fees for the next 12 months for you, your spouse, or children.

•  Payments necessary to prevent eviction from your home or foreclosure

•  Funeral expenses

•  Certain expenses to repair damage to your principal residence

While the above scenarios can help you avoid a penalty, income taxes will still be due on the withdrawal. Also keep in mind that an early withdrawal involves permanently taking funds out of your retirement account, depleting your nest egg.

With a 401(k) loan, on the other hand, you borrow money from your retirement account and are obligated to repay it over a specified period. The loan, plus interest, is returned to your 401(k) account. During the term of the loan, however, the money you borrow won’t enjoy any growth.

Recommended: Can I Use My 401(k) to Buy a House?

Pros and Cons of Borrowing From Your 401(k)

Given the potential long-term cost of borrowing money from a bank — or taking out a high-interest payday loan or credit card advance — borrowing from your 401(k) can offer some real advantages. Just be sure to weigh the pros against the cons.

Pros

•  Efficiency You can often obtain the funds you need more quickly when you borrow from your 401(k) versus other types of loans.

•  No credit check There is no credit check or other underwriting process to qualify you as a borrower because you’re withdrawing your own money. Also, the loan is not listed on your credit report, so your credit won’t take a hit if you default.

•  Low fees Typically, the cost to borrow money from your 401(k) is limited to a small loan origination fee. There are no early repayment penalties if you pay off the loan early.

•  You pay interest to yourself With a 401(k) loan, you repay yourself, so interest is not lost to a lender.

Cons

•  Borrowing limits Typically, you are only able to borrow up to 50% of your vested account balance or $50,000 — whichever is less.

•  Loss of growth When you borrow from your 401(k), you specify the investment account(s) from which you want to borrow money, and those investments are liquidated for the duration of the loan. Therefore, you lose any positive earnings that would have been produced by those investments for the duration of the loan.

•  Default penalties If you don’t or can’t repay the money you borrowed on time, the remaining balance would be treated as a 401(k) disbursement under IRS rules. This means you’ll owe taxes on the balance and, if you’re younger than 59 1 ⁄ 2, you will likely also have to pay a 10% penalty.

•  Leaving your job If you leave your current job, you may have to repay your loan in full in a very short time frame. If you’re unable to do that, you will face the default penalties outlined above.

Alternatives to Borrowing From Your 401(k)

Because withdrawing or borrowing from your 401(k) comes with some drawbacks, here’s a look at some other ways to access cash for a large or emergency expense.

Emergency fund Establishing and maintaining an emergency fund (ideally, with at least three to six months’ worth of living expenses) can provide a financial safety net for unexpected expenses. Having a dedicated fund can reduce the need to tap into your retirement savings.

Home equity loans or lines of credit If you own a home, leveraging the equity through a home equity loan or line of credit can provide a cost-effective method of accessing extra cash. Just keep in mind that these loans are secured by your home — should you run into trouble repaying the loan, you could potentially lose your home.

Negotiating with creditors In cases of financial hardship, it can be worth reaching out to your creditors and explaining your situation. They might be willing to reduce your interest rates, offer a payment plan, or find another way to make your debt more manageable.

Personal Loans Personal loans are available from online lenders, local banks and credit unions and can be used for virtually any purpose. These loans are typically unsecured (meaning no collateral is required) and come with fixed interest rates and set terms. Depending on your lender, you may be able to get funding within a day or so.

The Takeaway

Borrowing from your 401(k) can provide short-term financial relief but there are some downsides to consider, such as borrowing limits, loss of growth, and penalties for defaulting. It’s a good idea to carefully weigh the pros and cons before you take out a 401(k) loan. You may also want to consider alternatives, such as using non-retirement savings, taking out a home equity loan or line of credit, or getting a personal loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2023 winner for Best Online Personal Loan overall.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Source: sofi.com