Are you curious about the concept of a duplex apartment and eager to explore its unique features? Look no further! In this comprehensive Redfin guide, we will delve into everything you need to know about duplex apartments. Whether you’re hoping to move out of your cramped Houston apartment or you’re considering buying a property in Baltimore, this article will provide you with a detailed understanding of this distinctive residential arrangement. From its architectural design and layout to the benefits and considerations, join us for a comprehensive overview of duplex apartments so you can make an informed decision about this increasingly popular housing option.
What is a duplex apartment?
A duplex is a form of multi-family housing characterized by a building that contains two separate units. Duplex apartments can be vertically divided, with each level having its own entrance, or they can be horizontally divided, sharing a common entrance but with distinct living areas on each level.
In cases where outdoor space exists on the property, it is typically shared between the residents of both units or partitioned accordingly. A duplex building is owned by a single individual who may choose to reside in one of the units or not. The owner has the option to rent out either one or both of the units to tenants. Similar to duplexes, triplex and fourplex buildings are other types of multi-family housing, accommodating three and four units within the same structure, respectively.
Understanding the difference: duplex vs. apartment
A duplex refers to a building divided into two separate units, typically sharing a common wall, with each unit having its own entrance. This arrangement offers a sense of privacy and independence, as well as the opportunity for rental income. On the other hand, an apartment is a self-contained living space within a larger complex, typically consisting of multiple units in the same building. Apartments often offer amenities such as shared facilities, maintenance services, and a centralized management system.
Pros of living in a duplex
Spaciousness
Duplexes often offer more space than traditional apartments, with separate living areas, bedrooms, and sometimes even outdoor areas like patios or yards. This additional space provides residents with a greater sense of freedom and flexibility to personalize their living environment.
Homeownership potential
In some cases, duplexes are owned by individual landlords who rent out one unit while residing in the other. This arrangement can present opportunities for aspiring homeowners to live in one unit and generate rental income from the other, potentially helping with mortgage payments and building equity.
Noise reduction
Duplexes typically have fewer shared walls compared to apartments, which can result in reduced noise transfer between units. This can contribute to a quieter and more peaceful living environment, making it appealing for those seeking a balance between privacy and community.
Cons of living in a duplex
Limited availability
Duplexes may be less common in certain areas compared to apartment complexes, so finding a suitable duplex for rent or purchase can be more challenging. It’s important to thoroughly research the local housing market to determine the availability and pricing of duplex units.
Responsibility for maintenance
Unlike apartments where maintenance and repairs are typically handled by the landlord or management company, duplex residents are often responsible for the upkeep of their unit and the shared areas. This can involve additional time, effort, and expenses, depending on the terms of the rental agreement or ownership arrangement.
Potential lack of privacy
Despite the separation between units, living in close proximity to neighbors can sometimes compromise privacy. Noise, shared spaces, and occasional visual intrusions may diminish the feeling of complete seclusion typically associated with detached single-family homes.
Limited outdoor space
In many cases, duplexes have a smaller lot size compared to single-family homes. This can result in limited outdoor space, making it challenging for residents to have extensive yards or dedicated outdoor areas. Shared outdoor space might be required, which could require coordination and compromise with the other unit’s occupants.
What to consider when renting a duplex
Privacy vs. community
Duplexes offer a unique living situation where you share a building with another household. While this can foster a sense of community and potentially lead to friendships with neighbors, it’s essential to assess your personal preferences for privacy. Determine whether you are comfortable with shared walls, common outdoor spaces, and potential noise levels from the neighboring unit. It’s crucial to strike a balance that aligns with your lifestyle and social needs.
Rental agreements
Thoroughly review the lease agreement and ensure you understand the terms and conditions. Pay close attention to provisions related to maintenance responsibilities, utility payments, and potential restrictions on modifications or subleasing. Additionally, clarify the process for resolving any disputes that may arise with your landlord or the other tenant in the duplex. A clear understanding of the rental agreement will help set expectations and avoid any potential conflicts down the line.
Budget and affordability
Evaluate the rental price in relation to your overall budget and financial goals. Take into account not just the monthly rent, but also any additional costs such as utilities, maintenance fees, and potential shared expenses with the other tenant. Assess your current financial situation and ensure that renting a duplex aligns with your long-term financial plans. It’s important to strike a balance between finding a comfortable and suitable living space while ensuring it fits within your budgetary constraints.
Is a duplex the same as a condo?
While both can involve owning a portion of a building, a duplex is typically a single building divided into two units, whereas a condo is a type of ownership in which individuals own individual units within a larger complex.
Is a duplex apartment right for me?
The suitability of a duplex apartment depends on your lifestyle, preferences, and specific housing needs. Consider factors such as desired living space, privacy requirements, responsibility for maintenance, and availability in your desired location. Assessing these factors will help determine if a duplex apartment aligns with your living preferences and goals.
When I bought a home three years ago, the economic climate was different from today. Back then, a house would could be listed on Friday and a contract signed by Monday. It was easy to get a loan (too easy, in fact) and you could make every mistake in the book and still find yourself a home.
Despite the market differences, sound financial planning and a handful of smart moves will ensure that you won’t regret grabbing your piece of the American dream. This post isn’t going to go over the merits of buying versus renting or how you should pick a real estate agent. Instead, I’ll focus on the things you should do to prepare yourself before applying for a loan and then buying a home.
Don’t borrow money Your home will likely be the single largest debt you will take on and represents the greatest risk in the eyes of potential lenders. With lending rules tightening, it’s becoming more and more important that you make yourself look as safe as possible. Safe means as little debt as possible and as little access to credit as possible.
Don’t apply for any new credit cards. They could be offering some hot credit card offers of a hundred bucks to make one purchase or 0% balance transfer, but you must avoid it at all costs. That hundred dollars will cost you thousands, if not tens of thousands, over the life of your loan. Don’t buy a car. Don’t take advantage of 12-month 0% financing “same as cash” offers at Best Buy to get that new flatscreen HDTV you’ve been thinking of.
Don’t make any drastic changes Don’t shuffle your funds around, don’t change your bank, and most of all don’t change your job. This won’t necessarily affect your credit score (some banks will do a hard credit check, which negatively affects your score) but it will give the lender headaches when they try to decipher all the moves you’ve made.
Making large transfers will bring up questions of fund origins. Is this really your money or did you receive it as a gift? Why are you opening up new accounts and shifting your money when you expect to spend it soon? Such moves will result in more questions for you to answer, which takes energy and will prolong the review process. It’s not necessarily bad — just a pain.
The only exception to the “not necessarily bad” is the part about changing jobs. Lenders like stability; stability equals low risk. If you’ve been working with a company for thirty years (or even five), chances are you’re going to work there for a while. If you’ve been working with a company for three months, there’s no saying how long you will work there. Maybe you have a falling out and are fired, maybe you can’t hold a job, maybe you’re perfectly fine and will have a successful career there. All those maybes make lenders nervous. Avoid changes if you can.
Play house There are two crucial steps to “playing house” (financially). First, you need to correctly estimate your monthly payment. Remember that your monthly payment will include the mortgage, taxes, and homeowners insurance. You will also probably want to add a buffer for maintenance and repairs, as you likely will have both. In three years, my wife and I have spent at least $10,000 in repairs and improvements (windows, roof, carpeting).
Another bit of information to research is how the recent federal housing rescue bill or how local first time home-buyer assistance programs may apply to you. The federal housing rescue bill offers a 15-year zero interest $7500 loan in the form of a tax credit to new home buyers. In Maryland, first time home buyers get one half of the transfer tax waived, which can be up to 0.75% the sale price of the home. Both of those will play crucial roles in how you calculate your monthly payment.
The second step is actually playing by budgeting for the mortgage. If you are currently renting, deduct rent from your monthly mortgage payment, and transfer those funds to an account that offers high interest savings. A great place to put those funds is in a fund you designate for your downpayment. As the months pass, you will get a feel for how much you can comfortably afford rather than simply guessing.
This also serves another purpose: it will keep you within your house budget. The Realtor will likely want to show you homes that are outside of your price range. It’s always good to see what is a little above and a little below your range just to see what the difference in value is. By playing house, you have a more accurate feeling of how differences in the monthly payment will affect your lifestyle because you’ve lived it.
Sell or donate your junk Two things will happen when you buy your house:
You will be short on cash.
You will have to move.
By selling some of your junk now, you get a little extra cash, which will likely go towards all the little things involved with a home, and you have less stuff to move. Your wallet will thank you for the former and your friends — whom you will have bribed with pizza and beer to help you move — will thank you for the latter.
Sell or donate anything and everything you honestly can’t see yourself ever using on your new home. Good stuff to purge includes:
Old furniture
Books (do you really need to keep your college textbooks?)
Old clothes
Electronics equipment
Decorations and wall coverings
This will require a bit of intestinal fortitude and an honest assessment of your belongings. It’s difficult to sell or give away things with emotional value. That couch you’ve had since college or that poster you hauled all the way from home — they have emotional value. If you can think of a great place in your new home for it, keep it; if you really can’t (where will a ratty old couch go?), give it a new home.
Donation is a great solution if you’re on a time crunch because organizations like Goodwill or the Salvation Army will happily come and haul away your gently used items absolutely free (and you get a bigger tax deduction).
I hope this list of ideas has been helpful, these were some of the tricks I used when my wife and I bought our first home three years ago. Since then, it’s been a wonderful ride. Home ownership truly has been all it’s cracked up to be. You might be buying a house, but it truly becomes your home.
Avoid applying for new credit before shopping for your mortgage, so you can maintain the best possible credit score.
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Mortgage rates today are far from the historic lows that new homebuyers were able to score through 2020 and 2021. You can find competitive mortgage rates around 6% to 7% APR on average today, depending on the loan term.
But that doesn’t mean you’re out of luck if you’re shopping for a home in 2023. Even small differences in your mortgage interest rate can save you money over the lifetime of your loan. By taking the following steps to prepare a solid loan application and score the best possible rate you can, you’ll reap the benefits for years to come.
Like federal interest rates, there’s a chance mortgage rates could continue rising this year. Don’t wait to start comparing the best mortgage rates you can qualify for now.
3 ways to get the best mortgage rates
Here are three things you can do now to make sure you get a great mortgage rate.
Boost your credit score
The information you include on your loan application can make a huge difference in the loan terms you qualify for.
“Your credit score is still going to be the biggest factor in determining if you will get the best rate,” says Colin Zizzi, CFP, founder of Zizzi Investments.
Before you apply for a mortgage, check both your credit score (which you can often find online from your bank or credit card company) and your credit report. You can access your full credit report for free from each of the three major credit bureaus.
Comb through the reports for any errors that could be hurting your credit score. If it’s still not where you’d like it to be, start taking steps now to improve it — like reducing your overall debt balance and paying all your bills in full and on time. Also, remember to avoid applying for any new credit or loans before taking out a mortgage. The hard credit check could temporarily bring down your credit score and keep you from getting a top rate.
Explore the best mortgage rates available today that you may be eligible for now.
Consider different loan details
If you’re flexible on the details of your mortgage loan, you may be rewarded with the potential to get a lower interest rate.
For one, your loan term is a big factor to consider. Many lenders offer slightly lower rates on shorter 15-year mortgages than on 30-year mortgages. In fact, the average mortgage rate for a 15-year mortgage as of July 10 is more than half a percentage point lower than what’s offered for a 30-year mortgage, according to data from Bankrate. While a 15-year mortgage may carry higher monthly payments, you could pay less over the lifetime of the loan.
Another type to consider is an adjustable-rate mortgage or ARM. This type of mortgage generally starts with a lower rate that adjusts (up to a cap) over time. Certain types of homebuyers may also qualify for government-backed loans, which tend to offer among the lowest possible rates. However, these loans may have strict specifications that you’ll need to meet before you can qualify.
Shop around and compare
If you’re quoted an unfavorable loan rate from one lender, there’s no reason to settle for it — at least not without comparing what else you may qualify for. Plus, the earlier you get started, the better off you may be.
“As always, shop around with different banks and brokers, and do this well before starting to look at houses,” says Quinn Arnold, CFP, co-founder of Arnold and Mote Wealth Management.
Once you’ve settled on the best type of mortgage loan for you, start getting preapprovals and loan estimates from different lenders. It helps to do this after you’ve settled on your preferred term and loan type, so you can make a consistent comparison across different lenders. When you shop around for your mortgage within a 45-day window all the different credit checks that lenders make are also recorded as a single inquiry on your credit report, according to the Consumer Financial Protection Bureau.
Compare the top mortgage rates you may be eligible for today here.
The bottom line
Today’s mortgage rates are higher across the board than they once were. But taking steps to make sure you apply with the best possible credit score, researching the type of mortgage that best fits your needs and comparing multiple lenders can help you get a solid mortgage even in today’s higher rate environment.
With mortgage interest rates consistently rising, timing is also important. Locking in a great mortgage rate sooner rather than later can help you ensure you get the rates you’re pre-approved for before they increase again. Start your search by exploring today’s best rates here!
Despite what many have referred to as a clear or even robust housing recovery, most Americans continue to believe that we are still in the midst of a housing crisis.
A new survey released today by the MacArthur Foundation titled, “How Housing Matters,” found that 41% of Americans think we’re “still in the middle” of the housing crisis that began back in 2008 when unsustainable home prices came crashing down.
Another 20% believe “the worst is yet to come,” meaning nearly two-thirds of Americans aren’t convinced that the carnage related to shoddy mortgages and overpriced homes is over.
However, these numbers are down from a year earlier when they stood at 70% collectively, and much better than the 77% who held those views in 2013.
Meanwhile, 55% of respondents said they had to make at least one sacrifice/tradeoff in the past three years to pay their rent or mortgage, with many having to work more, stop saving for retirement, or move to areas considered less safe.
Even if they did want to buy a home, 60% said it was a challenge to find an affordable property in their community, up from 59% in 2014.
In fact, eight in 10 Americans believe housing affordability is a problem, with 60% calling it a very (36%) or fairly (24%) serious problem. Consider the fact that mortgage rates were probably around record lows when the respondents were surveyed in May…
But maybe that’s just how they feel, and not the reality of the situation.
There’s also a widespread belief that banks are foreclosing more these days and that accumulating wealth via homeownership (building home equity) is no longer as tenable as it used to be.
The one sliver of good news is that more Americans perceive homeownership as appealing again as a long-term investment.
Back in the 2013 survey, 57% of the public said purchasing a home was becoming less appealing, but in the latest survey 56% said they felt it was an excellent long-term investment.
Along with that, about seven in 10 continue to aspire to become homeowners, and 43% of non-owners consider a home purchase a “fairly to very high priority.”
Buy When You’re Scared
Here’s the problem. If you fret about the state of housing until it looks like a sure bet, you’ll probably lose. And that might mean losing a second time if you followed this logic during the prior boom.
It actually makes more sense to buy things like stocks and real estate when pessimism is still in the air. That’s when opportunity is at its best.
When nobody is worried, bubbles tend to be on the horizon and price drops will soon follow.
The unfortunate thing is most investors and Wall Street bulk buyers have already gotten in at bargain basement prices when the general public was still reeling from the crash.
Chances are they’ll unload when the American public’s fear finally subsides, at a time when prices are perhaps just within reach for many Americans.
This probably explains why we tend to repeat history over and over. The smart money gets in cheap, sells it to those who can’t afford it, and then we have a crisis on our hands.
The silver lining is that pessimism remains in today’s real estate market, meaning there’s still upside potential despite the recent double-digit gains.
Transamerica is considered to be one of the world’s leading insurance and financial services companies. The firm offers insurance and investments to more than 19 million customers worldwide.
As Transamerica’s slogan suggests, the company – and its customers – are “Tomorrow Makers.” This is because the company strives to make its customers’ tomorrows everything that they plan for.
Who is Transamerica?
Table of Contents
Transamerica is a financial services company that provides insurance, investment, and retirement products and services.
It was founded in 1904 and is headquartered in Baltimore, Maryland. Transamerica is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company based in The Hague, Netherlands.
The History of Transamerica
The company has been in the business of providing insurance and financial advice for more than 100 years and it began its operation in 1904 when Amadeo Giannini started the Bank of Italy in a converted saloon in San Francisco, California.
He strived to make financial services available to everyone of all financial classes, not just the wealthy. His business really ramped up following the 1906 San Francisco earthquake when he was able to provide loans to residents for rebuilding their properties.
Several years later, in 1928, the company merged with Bank of America, and two years after that, it acquired Occidental Life Insurance via Transamerica Corporation. In 1956, the banking and life insurance companies were separated, with the insurance component maintaining the Transamerica name. Today, customers of Transamerica have access to a wide variety of insurance and financial products and services.
The firm is licensed to provide insurance in all U.S. states, and the District of Columbia, and it has approximately $223 billion of premiums in force. Transamerica has a roughly $29.5 billion in assets under management.
Products Offered By Transamerica
Transamerica offers a variety of products to both consumers and businesses.
On the insurance side, the company provides numerous options, including the following types of coverage:
Term Life
Term life insurance offers pure death benefit protection for a specific period of time.
This is typically 10 years, 15 years, 20 years, or 30 years. Should the insured pass away during the time that a term life policy is in force, the named beneficiary will receive the stated amount of death benefit.
Because term policies do not offer any type of cash value or savings component, the premiums for this type of coverage are typically more affordable than other, “permanent,” forms of coverage.
For example, you can get a $1 million term policy for less than 20% of a permanent policy with the same face value. Term life is sometimes referred to as “temporary” life insurance coverage as it is often used for covering temporary needs such as the balance of a mortgage.
Whole Life
Whole life insurance offers death benefit protection as well as cash value build up.
The funds that are inside of the cash value grow on a tax-deferred basis, meaning that no tax is due until the time of withdrawal. The cash grows at a guaranteed rate over time.
Whole life is considered permanent coverage because as long as the premium is paid, coverage remains in force – oftentimes for the “whole” of a person’s life.
Universal Life
Universal offers a death benefit protection as well as a cash value build up. However, it provides more flexibility than whole life in that the policyholder can choose to pay higher or lower premium amounts as their financial needs change over time.
The policy value may simply increase or decrease accordingly. Like with whole policies, the cash value is allowed to grow on a tax-deferred basis.
Variable Universal Life
Variable life, provides death benefit protection and cash value.
With variable universal life, however, the cash value’s return is based on underlying investments in market-related “subaccounts.” These can allow the funds in the account to grow a great deal – provided that the market moves upward. These accounts can also be riskier in a downward moving market.
Accidental Death
This can help to ensure that their loved ones will be taken care of should the unthinkable occur. (It is important to note that this benefit will not typically pay out in the event of death that is caused by sickness or other natural causes).
Final Expense
Final expense coverage focuses on paying for a person’s funeral and related expenses.
Today, the cost of a funeral – including the burial plot, headstone, and other related expenses – can exceed $10,000. Unfortunately, many families are not able to pay these costs immediately upon the death of a loved one.
Having final expense insurance allows for a way to do that – eliminating stress on loved ones, in an already stressful and emotional time.
Key Man Life
What is key man life insurance you ask?
Key person insurance is a form of business insurance that people can overlook, but one that can make all the difference in keeping a business or firm successful in the face of losing an owner, or important team member.
In addition to life insurance, Transamerica also offers a number of other financial products, including long-term care insurance, annuities, and retirement/investment savings options for those who are planning for retirement, as well as those who are already there.
Financial Strength Ratings of Transamerica
Transamerica has been given very good ratings by the insurer rating agencies.
These ratings include the following:
A.M. Best
Moody’s Investor Services
Fitch
Standard & Poor’s
A+
A1
AA-
AA-
Is Transamerica a Legit Company?
Yes, Transamerica is a legitimate company. It is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company. Aegon is rated highly by financial rating agencies such as Standard & Poor’s, Moody’s, and Fitch Ratings.
Transamerica has been providing insurance, investment, and retirement products and services since 1904 and is regulated by state and federal government agencies.
Biggest Risks Choosing Transamerica for a Life Insurance Policy?
Choosing a life insurance policy, including one from Transamerica, comes with certain risks. Some of the biggest risks to consider include policy lapse, which occurs when you fail to pay the premium on time and could result in losing coverage.
Another risk is market risk, which refers to the performance of any investments within the policy, such as a cash value component, that can be subject to market fluctuations and result in losses.
Misrepresentation is another risk to consider, as providing incorrect information on your life insurance application could result in your policy being denied or not paying out as expected in the event of a claim.
Lastly, it’s important to make sure the life insurance policy you choose is appropriate for your needs and financial situation, as Transamerica offers a range of policies.
Advantages and Considerations
When seeking life insurance, it is important that the insurer is able to offer choice and flexibility – especially such that it meets with your specific needs. Many have the misconception that they cannot find a policy for them because of their lifestyle choices, such as one looking for life insurance for a smoker, there are options out there for you and I can help with finding the best for your needs.
Transamerica provides an extremely flexible and diverse product line up, including:
Term
Whole
Universal
Variable
Final Expense
Accidental Death
This, coupled with the company’s excellent customer support team can make for a nice mix – especially for customers who may need assistance in figuring out the details in terms of how much to purchase and what type of coverage may be best for their specific needs.
In addition, Transamerica’s policies also come with a nice assortment of riders – which can make their plans even more customizable. For example, the firm offers an estate protection rider that can help in protecting loved ones from estate tax obligations that may arise from the payment of the policy’s own death benefit.
The company’s website provides additional information on both policies and policy riders so that interested potential applicants can obtain more information on how these may work in their specific scenario.
Yet, even with all of the good, there are some considerations that should be taken into account when searching for coverage – especially when doing so through just one single insurer. This is especially the case if you have certain health issues, such as searching for best life insurance rates for smokers and/or you possess other factors that may deem you as being a higher risk applicant. This may lead you to need to look into a company that offers no medical exam life insurance policies.
In these cases – or in any case – it is always good to do some comparison shopping. Otherwise, you are essentially “locked in” to whatever price the insurer presents you with. This can be somewhat similar to only going to one car dealer or one computer dealer when shopping for these items, and never even checking prices elsewhere before moving forward with your ultimate purchase. With this in mind, regardless of how good the product, it always makes good sense to shop around first.
How and Where to Get the Best Life Insurance Coverage for Your Needs
When you’re in the process of searching for the best life insurance coverage – regardless of your current health condition or status – it is important that you compare the type of policies that are available to you, as well as the premium cost from different carriers.
This is because there could be a significant variation between one insurer and another – even for the very same type and amount of coverage.
Transamerica is a financial services company that provides insurance, investment, and retirement products and services. It has a long history, having been established in 1904, and is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company.
One of the strengths of Transamerica is its broad range of products and services, which includes life insurance, annuities, mutual funds, and retirement plans. This allows customers to choose from a variety of options to meet their financial goals and needs. The company has a strong online presence, offering convenient access to account information and resources, as well as easy policy management and premium payment options.
Cost and Fees
Customer Service
User Experience
Overall
3.8
Pros
Wide range of life insurance products: Transamerica offers a variety of life insurance products, including term life, whole life, and universal life insurance, which allows customers to choose the policy that best suits their financial goals and needs.
Strong financial stability: Transamerica is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company, which has a strong financial position as indicated by its highly rated financial standing from credit rating agencies.
Convenient online services: Transamerica provides a convenient online platform for policy management, which includes access to account information, policy details, and premium payment options.
Professional support: Transamerica has a team of trained professionals who can help you understand the policy options and select the one that best suits your needs.
Cons
Potential policy lapse risk: If you fail to pay the premium on time, your life insurance policy may lapse, which can result in the loss of coverage and any accumulated cash value.
Market risk: Depending on the type of policy, there may be investment components within the policy that are subject to market risk, meaning that the policy’s value can decrease in value.
Complexity: Some of Transamerica’s life insurance products, such as universal life, can be complex and may require a higher level of understanding and management to ensure that you are making the most of your coverage.
Premium costs: The premium costs of Transamerica’s life insurance policies may be higher compared to other insurance companies, and it’s important to consider your budget when choosing a policy.
GMAC reported a first quarter loss of $675 million thanks to elevated credit-related costs, valuation adjustments on mortgage servicing assets, and weaker performance on both auto and mortgage loans.
“The effects of a soft economy and weaker credit performance on legacy assets continued to put pressure on GMAC’s financial performance in the quarter,” said GMAC Chief Executive Officer Alvaro G. de Molina, in a release.
“We continue to manage through this economic cycle and focus on strengthening operations for the long-term.”
Despite the poor performance of existing mortgage assets, losses in the company’s mortgage division were only $125 million during the quarter, compared with $859 million a year ago, partially offset by a gain of approximately $900 million from the extinguishment of debt.
The mortgage lender saw loan origination volume of $13.2 billion during the quarter, compared with $8.2 billion in the fourth quarter of 2008 and $18.7 billion in the first quarter of 2008.
However, GMAC said margins improved due to higher government production and the record low mortgage interest rates have boosted rate and term refinance interest; the company also re-entered the jumbo loan market, though on a restrictive basis.
GMAC is participating in the Home Affordable Modification Program as well, with 10,000 financial packages already distributed to potentially eligible homeowners.
“There were also several signs of progress to mention, such as expanding retail auto lending, maintaining our commitment as a leader in wholesale financing, re-entering the prime jumbo mortgage market, and increasing bank deposits by about $3 billion from the end of the year,” added Molina.
Last September, GMAC’s Residential Capital announced it would close 200 GMAC Mortgage retail locations and cease lending its wholesale subsidiary Homecomings Financial.
Months later, the company got the okay to become a bank holding status at the eleventh hour, which helped it stave off potential bankruptcy with the help of much needed TARP money.
[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Avail.]
Avail enables DIY landlords to easily manage their properties. Their product streamlines online rental listings, applications, lease templates, rental payments, maintenance requests, and tenant vetting. Scales with landlords as they acquire additional properties by serving as a central dashboard to manage everything.
Avail handles syndication of rental properties across the web and gives landlords a full profile of potential tenants by providing credit scores, criminal backgrounds, and eviction reports. They provide lawyer-approved, state-specific templates and integrated rental insurance. We completed a full product review as part of our category product review series for the small landlord property management software sector.
The company recently completed its 4.2 million Series A.
What we like: The maintenance and repair tracking feature relieves’ landlords from a plethora of manual tracking. There is little friction to onboarding users since the product is Free for landlords, with an option to upgrade later for $5.00 per unit per month.
A diagonal spread is an options trading strategy that involves taking a long and short position on the same stock with different strike prices and different expiration dates. It’s a combination of a vertical spread and calendar spread.
Using this strategy can allow the trader to get an early payday if the stock moves in a direction that’s in their favor. The way it works is the trader makes two options trades — either call options or put options simultaneously, with different strike prices and expiration takes.
Diagonal Spreads Defined
Diagonal spreads combine a two-step options trading strategy and are considered an advanced trading tactic. It’s a combination of a calendar spread and a short call or put spread. These positions have different expirations and different strikes which spread off diagonally, hence the name of the strategy.
A calendar spread is when a trader buys a contract with a longer expiration date while going short on an option with a near-term expiration date with the same strike price. But if two different strike prices are used, this is a diagonal spread.
A diagonal spread includes a calendar spread, also referred to as a horizontal spread or a time spread, combined with a vertical spread, because different strike prices are involved.
How Diagonal Spreads Work
A long put diagonal spread involves purchasing a put for some time in the future while selling a put in the short-term. Purchasing an option in the later term tends to be more expensive due to the embedded value of time. On the other hand, the trader sells the nearer term option to lower the cost of the other option. Traders usually use diagonal spreads when they have conviction on a stock’s movement while minimizing the effects of time.
A diagonal bull spread becomes a valuable trade when the price of the stock increases, while a diagonal bear spread increases in value when the stock price decreases.
Diagonal spreads require experience because traders have to account for volatility and have a good sense of timing.
Setting Up a Diagonal Spread
When traders are bullish on a stock, they generally use call options vs. using put options when they’re bearish on a stock.
The most common way to set up a diagonal spread is to buy a back month option that is in the money, which is a futures contract whose delivery dates are further into the future. Then, you sell a front month option with a strike price that is out of the money, which is a contract that has a near-term expiration date.
Setting up a diagonal spread in this manner would constitute a debit spread, though credit spread structures can also be used.
Maximum Loss
When a stock’s price rises, the maximum loss is equal to the premium paid when buying a call. If the stock falls, the maximum loss is the difference between the strike prices plus or minus the option premium paid or received.
Maximum Profit
It can be difficult to anticipate what the maximum gain may be since traders can’t know what the back-month option will be trading at when the front-month option expires as a result of shifting volatility expectations. In a long diagonal spread, the stock price must be near the short strike for a trade to go in the market participant’s favor.
The max profit potential for a short diagonal call spread is the net credit received minus commissions. If the strike price plummets below the short call, the value of the spread will be close to zero and the credit received is profit.
On the other hand, the max profit scenario of a short diagonal put spread is when the stock price soars above the strike price of the sold higher strike put option, as the value of the spread nears zero and the credit received is profit.
Breakeven Point
The breakeven point cannot be calculated, rather it can be estimated. The breakeven price at expiration for a long call is below the strike price of the short call. During expiration of a long call, the breakeven point is the stock price at which the price of the short call is the net credit received for the spread.
Traders are not able to predict what the breakeven stock price will be because it depends on market volatility, which can impact the price of the short call.
Diagonal Spread Examples
In one example, a trader is bullish on ABC stock, currently priced at $300. If the front month is January and the back month is February, the trader may want to purchase a $298 strike call with February expiry, which is in the money. Then the trader sells a $302 strike call with January expiry, which would be out of the money. This would give the trader a four-dollar wide diagonal spread.
In another scenario, a trader is bearish on XYZ stock at a current market price of $129. To set up a diagonal spread, the trader could buy a $132 February put, which would be several dollars in the money. Next, the trader could sell a $126 January put, which would be a few dollars out of the money. This trade would be a six-dollar wide diagonal spread.
Types of Diagonal Spreads
There are different types of diagonal spread strategies traders can use to get their desired outcome. Here are several diagonal spreads traders can try:
1. Long Call Diagonal Spreads
To execute on a long call diagonal spread, traders must buy an in the money call option with a longer term expiration date and then sell an out of the money call option with a nearer term expiration date. Traders can use this advanced options strategy if they are mildly bullish on a stock in the near term and very bullish in the longer term. An ideal set up for a long call diagonal spread is during times of low volatility as you do not want your trade to be disrupted by sharp price swings.
2. Long Put Diagonal Spreads
To execute on a long put diagonal spread, traders must buy an in the money put option with a longer term expiration date and then sell an out of the money put option with a nearer term expiration date that has an out the money strike. Traders typically use long put diagonal spreads to mimic a covered put position.
3. Short Call Diagonal Spreads
A short call diagonal spread is when traders sell a long-term call with a lower strike price and buy a shorter-term call with a higher strike price. A trader benefits from a short call option when the price of the underlying asset falls, thus making this a bearish strategy.
4. Short Put Diagonal Spreads
A short put diagonal spread involves selling a longer-term put with a higher strike price and buying a shorter-term put with a lower strike price. This is a bullish strategy, as the trader benefits if the underlying asset goes up in price, making both options expire worthless and netting the investor the net credit earned at the beginning of the trade.
5. Double Diagonal Spread
A double diagonal spread is when a trader buys a longer-term straddle and sells a shorter-term strangle, a trade that benefits from time decay and an increase in volatility. Traders setting up a double diagonal are long the middle strike calls and puts, which expire further in the future, and short out of the money call and put options with sooner expiries. The ideal outcome for double diagonals is to stay between the two OTM strike prices as they approach expiration.
Risks of Diagonal Spreads
The biggest risk traders have in diagonal spreads is overpaying for the diagonal spread. That said, the maximum risk is the debt a trader incurred to enter the position. If traders pay too much for their diagonal spreads they can remain unprofitable.
Market volatility can be used to the trader’s advantage when using diagonal spreads, although it can also pose a risk to such trades. Depending on the level of volatility, it can substantially change the price of the option and impact the trader’s profit potential. Diagonal spreads are an advanced trading strategy so traders who are experienced in dealing with volatility are best suited to incorporating diagonal spreads in their investment strategy.
The Takeaway
Setting up a diagonal spread correctly is an important part of the profit potential of the strategy, otherwise traders are at risk of losing money. This advanced options trading strategy requires traders to make both long and short trades, either with calls or puts, that have different expiration dates and strike prices. Traders should know these option trades are lined up diagonally from one another.
Qualified investors who are ready to try their hand at options trading, despite the risks involved, might consider checking out SoFi’s options trading platform. The platform’s user-friendly design allows investors to trade through the mobile app or web platform, and get important metrics like breakeven percentage, maximum profit/loss, and more with the click of a button.
Plus, SoFi offers educational resources — including a step-by-step in-app guide — to help you learn more about options trading. Trading options involves high-risk strategies, and should be undertaken by experienced investors.
With SoFi, user-friendly options trading is finally here.
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While many may have familiar-sounding job titles, some have ventured off the beaten path and pursued unique careers. Despite the unconventional work, there are a plethora of lucrative job opportunities available. In this article, we’re exploring some weird, high-paying jobs worth considering.
1. Bereavement Coordinator
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A bereavement coordinator is tasked with assisting families who have terminally ill or recently passed loved ones. Their responsibilities include overseeing administrative tasks, scheduling appointments, managing funeral arrangements, and supervising staff and volunteers to alleviate the burden on grieving families.
Offering Words of Wisdom
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Additionally, a bereavement coordinator may also arrange counsel for those who are struggling with grief. This role often involves working in hospitals, nursing homes, or hospice settings and can be considered a type of counseling service.National Average Salary is $47,660
2. Online Dating Ghostwriter
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An online dating ghostwriter is a professional who writes online dating profiles on behalf of clients. This individual is responsible for creating an engaging and attractive online dating profile that accurately reflects their client’s personality and interests. The ghostwriter must have strong writing skills and be able to craft a compelling narrative that highlights the client’s best qualities.
Matchmaker, Matchmaker
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They may also assist with messaging and communication with potential matches. The goal of an online dating ghostwriter is to help their clients stand out in a crowded online dating market and increase their chances of finding a compatible match. The national average salary is $54,204 per annum.
3. Art Therapists
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Art therapy is a unique profession that blends the principles of therapy with the creative process of art. Art therapists utilize various forms of artistic expression to aid patients in their healing journey. By reducing stress levels and enhancing self-esteem, art therapy can help improve overall mental health. This therapy is particularly useful when individuals have difficulty expressing themselves verbally.
Wisdom and Creativity
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Becoming an art therapist requires a background in psychology or counseling and specialized training in art. Art therapists have the flexibility to work in a variety of settings, including schools, communities, and private practices. Companies can even hire them to help employees manage stress and improve their mental well-being. The National average salary is $58,139.
4. Flavorist
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As a Flavorist, your primary responsibility would involve developing both natural and artificial flavors. To accomplish this task, you must possess a wealth of knowledge regarding essential oils, botanical extracts, flavor aromas, and essences in order to replicate natural flavors accurately.
Education… and Good Taste
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Additionally, you would be tasked with inventing new and captivating flavors that appeal to consumers. This highly specialized profession necessitates a Ph.D. in chemistry or biochemistry, along with extensive apprenticeship experience with flavor companies. The National average salary is $60,640.
5. Color Designer
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The role of a color expert involves utilizing color psychology, trends, statistics, and theory to recommend optimal color schemes for various settings, including homes, company buildings, brand logos, and more. As a color expert, you would be responsible for creating layouts and designs for a variety of purposes, such as branding, interior design, and architecture.
Think Outside the Box
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A college degree is not typically required for this position, although specialized training is necessary. Additionally, possessing a creative and innovative mindset can be beneficial when pursuing a career as a color expert. The National average salary is $61,554 per annum.
6. Veterinary Acupuncturist
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Veterinary acupuncture is a form of alternative medicine that involves using techniques similar to those used in human acupuncture to treat animals. As a veterinary acupuncturist, your primary objective would be to provide non-surgical and non-pharmaceutical treatments to animals using methods such as needle insertion, massages, blood-moving approaches, frequency approaches, and polarity devices.
A Big Heart
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In order to pursue a career in this field, you would need to acquire the necessary training and certification in acupuncture. Furthermore, genuine love and compassion for animals would be crucial to succeed in this role. The National average salary is $69,167 per annum.
7. Equine-Assisted Therapy
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An equine therapist is a profession that merges horseback riding with therapy to help both children and adults. This therapy involves using horses to provide patients with physical and emotional benefits. To pursue this career, you would need to be a certified therapist with extensive knowledge of various disabilities, as well as experience working with horses.
Ready to Ride
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Hippotherapy has proven to be an effective method to improve recreational activities, socialization, and interactions with other patients. As a hippotherapist, you would be a valuable member of a team of experts responsible for designing customized plans and objectives for each patient. National average salary is $74,434 per year.
8. Toy Designer
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A toy designer is a professional who creates toys that are not only fun but also safe for children to play with. This role may also be referred to as a product designer or toymaker, and it requires a keen artistic and imaginative sense. Toy designers must have a good understanding of materials to create toys that do not pose any safety risks to children. They should also have the ability to design toys that are sturdy and easy to maintain.
Are You a Tinkerer?
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In addition, a love for gadgets and proficiency in mechanical skills are highly desirable traits. To pursue a career as a toy designer, you would need to earn a degree in the arts, such as a design degree. Furthermore, proficiency in CAD and engineering skills would be necessary to succeed in this field. The national average salary is $74,913 per year.
9. Podiatrist
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A podiatrist is a healthcare provider who specializes in the examination, diagnosis, and treatment of conditions affecting the feet, ankles, and lower legs. They are also qualified to perform surgeries on these body parts.
Take Good Care of Feet
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Podiatrists possess the expertise to detect and manage abnormalities in the feet, prevent and correct deformities, and alleviate foot pain and infections. To pursue a career as a podiatrist, you would need to obtain a degree from an accredited podiatric medical college. The National average salary is $90,795 per year.
The job market is full of unique, unconventional job opportunities that can offer excellent salaries. Pursuing a career in one of these jobs may lead to a rewarding career path with significant income potential. So, if you’re looking for an exciting and well-paying job, don’t be afraid to explore some of these unique professions!
Image Credit: Shutterstock – Denis Makarenko
Who is one actress you can never stand watching, no matter their role? After polling the internet, these were the top-voted actresses that people couldn’t stand watching.
10 Actresses People Despise Watching Regardless of Their Role
These 7 Celebrities are Genuinely Good People
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We’ve all heard the famous adage that “no publicity is bad publicity,” and while it tends to be accurate, there are certainly exceptions. But what about those few stars who stay out of the limelight and get along without a hint of trouble?
These 7 Celebrities are Genuinely Good People
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Have you ever known someone and thought you liked them—until you learned about their hobbies? Then you get to know them and then you’re like, “Wow, red flag.” Well, you’re not alone.
These 10 Activities Are an Immediate Red Flag
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Some celebrities definitely seem to enjoy the limelight and keep working to stay in the public eye. While others quickly move out of the spotlight. Many of these actors and actresses stepped out of the spotlight to live a more private life without constant media pressures.
10 Celebrities That Made the Big Times Then Disappeared Off The Face of the Earth
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We’ve all been there – sitting through a movie that we can’t help but cringe at, but somehow it still manages to hold a special place in our hearts.
These 10 Terrible Movies Are Still People’s Favorites
You know what the mortgage crisis needed more of? Adjustable-rate mortgages.
Yep, we needed more loans with variable interest rates to both avoid such a disastrous downturn and recovery more quickly.
Allow me to explain. James J. McAndrews, executive vice president and head of the Research and Statistics Group at the Federal Reserve Bank of New York, delivered the opening remarks during a panel about mortgage contract design last week.
ARMs May Not Require Any Work
While most probably think of ARMs as a lot of work and stress
They can actually adjust with the economy
So you don’t necessarily need to do anything
Assuming economic conditions are favorable and rates fall over time
His angle was an interesting one, strikingly contrarian to the common belief that a fixed-rate mortgage is the smartest and only choice to avoid another housing meltdown.
The basic premise is that ARMs naturally rise and fall with the economy, and thus any necessary interest rate adjustment can come with little action on behalf of the borrower or a government entity.
So had everyone had ARMs prior to the mortgage crisis, they wouldn’t have needed to refinance via HARP or get a loan modification through HAMP.
Instead, accommodative monetary policy would have pushed interest rates on ARMs lower automatically.
After all, look at the mortgage indexes tied to ARMs, such as LIBOR, that are a fraction of a percent. Coupled with the margin on an ARM, the fully indexed rate would be very low today.
In fact, borrowers who never refinanced their ARMs could be enjoying rates in the 2-3% range month after month, all because of macroeconomic trends and Fed policy.
These borrowers would also have saved money by avoiding a refinance, which McAndrews said could cost the average borrower about $2,000 plus one percent of the loan amount.
And their loans would still be on course to be paid off when originally taken out because the term would be unchanged.
In other words, many homeowners would be about halfway through their 30-year terms right now.
More importantly, many of these borrowers would be enjoying these low rates regardless of whether they had equity because there are no LTV constraints involved with a variable rate mortgage.
Conversely, without programs like HARP and the FHA streamline refinance, many borrowers would have been stuck with their higher-rate fixed mortgages because refinancing wouldn’t be an option.
Borrowers Stuck in Fixed Mortgages
Fixed mortgages generally seem like a no-brainer
No matter what the economic climate
A lot of borrowers got stuck with high-rate fixed mortgages
Thanks to negative equity, while ARM borrowers enjoyed lower rates
McAndrews went on to argue that fixed-rate features limited the benefits of accommodative monetary policy by the Fed because borrowers continued to pay their higher-rate mortgages.
This is evidenced in the following chart, which shows rates on outstanding mortgage loans for fixed mortgages vs. ARMs.
As you can see, the interest rates on ARMs declined much more rapidly and fell lower than the rates on fixed mortgages.
And this happened despite the fact that many ARMs are hybrids, where the first three or five years are fixed before becoming adjustable based on associated indexes.
So borrowers with fixed mortgages continued to overpay each month, despite action by the Fed.
This is important because research by the Fed has shown that these lower payments resulted in significant declines in these homeowners’ default probabilities. And there’s evidence that these borrowers increased their consumption.
In other words, the Fed could have saved all these borrowers lots of money and got the economy humming again a lot faster without the need for complex and pricey mortgage help programs like HARP and HAMP.
And $100 billion or so wouldn’t have needed to be spent on refinancing from 2008 through 2013, not that the mortgage industry is complaining.
The Reality of the Situation
While the basic premise makes sense
Assuming interest rates don’t rise a ton over a long period
ARMs can also get homeowners into a lot of trouble
Make sure you can afford payments no matter what happens in the future
It’s clear that McAndrews favors ARMs, or at least sees their grand potential. But in reality, a lot of homeowners got stuck with some really questionable ARMs at the height of the housing boom.
In fact, many of the loans weren’t even affordable at origination, and there was little evidence to predict they would be later on.
I don’t know if anyone expected the associated indexes to plummet as they have, resulting in rock bottom mortgage rates for the lucky borrowers who stuck with their ARMs.
My guess is that most expected interest rates to worsen, putting these borrowers in an impossible position, especially since many used stated income to qualify.
Going forward, you could make a stronger argument for ARMs, seeing that borrowers are actually qualified using full documentation nowadays.
But then you have to contend with the fact that fixed mortgages are near all-time lows, making them extremely attractive as well.
While it’s true that the central bank could have helped borrowers with ARMs in a faster and more direct manner, it might be better to question why they needed help to begin with.
If it weren’t for those shoddy ARMs that artificially increased affordability and allowed home prices to swell and swell to unreasonable levels, maybe I wouldn’t be writing this post.