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A new analysis from Zillow revealed that nearly half of mortgage applicants opted to pay points when taking out a home loan last year.

These optional costs allow homeowners to buy down their interest rate at closing.

Doing so lowers their monthly mortgage payment for the duration of the loan term.

And it saves them money on interest via a lower mortgage rate, meaning more of each payment goes toward principal.

But are points actually a good deal for homeowners? And do they make sense when interest rates are high?

A Lot More Homeowners Are Paying Mortgage Points These Days

Zillow Home Loan’s analysis, which used data from the Home Mortgage Disclosure Act (HMDA), found that roughly 45% of conventional primary home borrowers paid mortgage discount points in 2022.

As noted, these points allow borrowers to obtain a lower mortgage rate. They are a form of prepaid interest.

The result in a reduced monthly mortgage payment and a lower interest expense during the loan term.

What’s interesting is a lot more homeowners are paying these points than in prior years.

For example, when mortgage rates were at or near record lows, far fewer applicants paid points.

To put it in perspective, just 29.6% of borrowers paid points in 2021, 28.4% in 2020, and 27.3% in 2019.

As for why, it’s probably because the mortgage rate offered was so low that there was little need to pay points. And probably little desire.

Zillow notes that buying points is most often used by low-income borrowers (those who make between 30% and 50% of their area’s median income).

These tend to be the folks who are most fixated on keeping monthly payments down.

At the same time, borrowers were more likely to pay points in top and middle price tiers than for homes in the bottom price tier.

Simply put, a lower mortgage rate makes a bigger impact on a larger loan amount.

However, those who made less than 30% of their area’s median income purchased the most points overall for homes in that bottom price tier.

Another issue lately is because the mortgage market has been so volatile, many lenders made mortgage points compulsory.

[Why Mortgage Lenders Are Requiring Upfront Points]

Paying One Point Might Reduce Your Mortgage Rate by 0.25%

While this can certainly vary, Zillow found that mortgage applicants might need to pay 1% of the loan amount to reduce the interest rate by 0.25%.

For example, on a $300,000 loan amount with a rate of 6.75%, it could cost $3,000 to lower that rate to say 6.5%.

The difference in monthly payment would be about $50 and the interest saved about $18,000 over the full 30-year loan term.

Knowing this, you would need to determine if it’s worth that upfront cost. To do so, you figure out the break-even period, which is how long it takes to recoup those costs and begin saving money.

In our example, it might take around four years of reduced payments and interest to make that upfront point worth it.

And that’s the rub. You have to stay in the home AND keep the mortgage for at least that long to actually benefit.

Note that at the moment, mortgage discount points might be going a little further in terms of rate reduction.

Be sure to shop around with multiple lenders to see how far a point can go, as this can vary by company.

Is a Temporary Buydown a Better Option Than Paying Points?

While paying points wasn’t as popular when mortgage rates were rock-bottom, it may have been underutilized.

After all, someone with a 30-year fixed set at 2-3% will arguably keep that home loan for as long as possible. So paying upfront for even more savings could be a winning move.

Conversely, someone who takes out a mortgage set at 6.5% today may not want to keep it very long. Or pounce at the first opportunity to refinance.

There’s also an expectation that mortgage rates could ease later in the year and in 2024. As such, paying points at closing could be a money-loser.

Remember, if you don’t keep the loan past the break-even period, you won’t actually save money on the upfront costs.

This makes the argument for a temporary buydown, such as 2-1 buydown, perhaps more compelling.

You can save money for the first two years and get the lender, builder, or seller to pay for it.

And once a refinance opportunity comes along, you can swap your mortgage in for a new one at a lower rate.

Instead of banking on keeping the mortgage for a long-haul, you can take advantage of lower payments for the first couple years.

It’s less commitment, and possibly more cost-effective. You’re only using the payment reduction for the year or so until mortgage rates ideally come back down.

The homeowner who pays discount points might feel stuck in their loan knowing they’d “lose money” if they refinanced prior to breaking even.

However, the borrower who opts for the temporary buydown must ensure they can afford the actual mortgage payment if a refinance opportunity doesn’t come along.

Source: thetruthaboutmortgage.com

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The National Association of Realtors released its 2013 National Housing Pulse Survey recently, and they’ve been sharing bits and pieces for free on their blog.

A more interesting tidbit shared over the weekend shed some light on the sacrifices home buyers make in order to scrounge up enough cash to buy a piece of property.

Ditching the Luxury Lifestyle

The top cutback made by all buyers was on “luxury items” or “non-essential items,” which is pretty standard if you’re gearing up to purchase anything expensive.

Of all buyers surveyed by NAR, 32% indicated that they had to cut back in those departments.

Broken down further, 42% of first-time buyers said they had to ditch such items, compared to just 26% of repeat buyers.

Entertain Yourself

The second biggest concession was entertainment, with 26% of all buyers indicating that they had to forego fun while saving up to buy a home.

Again, many more first-time buyers (35%) had to make this sacrifice compared to seasoned repeat buyers (20%).

Whether you’re in the market to buy a home or not, you should limit how much you spend on entertainment, which can add up in a hurry.

I Don’t Have Anything to Wear

The third biggest hard decision a prospective buyer had to make involved clothing, with 20% indicating that new clothes were on hold.

More than a quarter (27%) of first-timers had to wear their old clothes while home shopping, compared to 15% of repeat buyers, who perhaps felt more at ease with the process.

It’s certainly easier to buy a home the second or third time around, knowing the potential pitfalls and setbacks that can occur.

At the same time, the housing and mortgage market is constantly in flux, so what worked five years ago might not fly today.

How Does Camping Sound?

The fourth biggest guilty pleasure given up was vacationing, which 13% of buyers said they canceled to pursue their home buying crusade.

Again, more first-time home buyers (14%) cut back in this category compared to those who’ve already been there (11%).

Believe it or not, there are plenty of times when buyers or refinancers are out of town are critical periods during the loan process.

Don’t go on vacation if you know your loan documents might need to be signed, or if you’re anywhere in the process for that matter.

There’s a good chance you’ll need to sign or fax an important document, so stay close to home until the loan funds.

Ride a Bike

The fifth biggest sacrifice buyers made was either selling an existing vehicle or deciding not to purchase one, though only six percent of respondents noted this.

It was again higher for first-time buyers (7%) than repeat buyers (6%), but just barely.

For the record, you shouldn’t make any significant purchases when shopping for a home, especially something that requires a loan, like a car.

If you take out another loan around the same time you take out a mortgage, your credit score will likely take a hit, and you could even have issues with your debt-to-income ratio exceeding the allowable limits.

Conversely, selling a car could actually help you in the affordability department if you had an associated car loan/lease that you could now remove from your DTI calculations.

So those were the top five sacrifices. Some respondents (6%) also reported taking a second job to earn some extra income for the home purchase.

Just note that while it’s great to earn some extra dough, a short-term, part-time job likely won’t be used for qualification purposes.

Overall, 53% of buyers said they didn’t need to make any sacrifices at all, so perhaps affordability isn’t a concern just yet. Either way, save up, season your assets early on, and be ready to document everything!

Source: thetruthaboutmortgage.com

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The house rebuilding project is going well. We’ve finished all the framing, and the higher ceilings and more open floorplan are hinting at a level of awesomeness that surprises even me. A picture from just this morning:

Here is the new living room and the kitchen around the corner in the back. Old ceiling height was at the bottom of that steel beam. 2 more giant window openings still to come behind those plywood squares.

While I’ve destroyed and rebuilt quite a few houses for other people, this is the first one I have been fortunate enough to create from nearly scratch for my own family, so I am treating it as a bit of a science experiment. I want to build neat energy-saving features into it, but they need to be cost-effective and homegrown whenever possible.

Any old rich guy can hire the top architect and boutique builder to make him the latest LEED-Platinum superhouse to show off in Dwell magazine… at $1000 per square foot. But with energy cheap and skilled labor and high-end home materials expensive, it takes more thought and experimentation to save energy AND money at the same time. And one of these experimental projects is to build my own radiant under-floor heating system.

If you have never heard about this, you’ll want to tune in. The dominant heating method in the US right now is the forced air furnace – a big box in your basement that blows air (and dust) through a huge network of bulky air tubes so it can reach all parts of your house through floor vents. It works, but it is not elegant: they make noise, waste a surprising amount of interior space with ducts and chases, and are a hassle to install or upgrade.

When my small construction company was building some houses from the ground up a few years ago, the architect highly recommended that we use hydronic (radiant) heat instead of forced air. “It is a world of difference”, he said, “To have that silent warmth radiating at you through the floor instead of just blowing around some hot air.”

Unfortunately, when I got quotes from some plumbers for this type of heating system, the cost was astronomical: $35,000 or more, when a full conventional heating system was only $10,000 installed. Since these homes were being built to sell, on a tight budget to compete with other houses in the forced-air price range, I reluctantly decided to skip the luxury option. Plus, the passive solar design in our architecture would ensure that the furnace was used only lightly anyway.

Now, the picture has changed. I have learned to do my own plumbing, and new technologies have come down in price that make radiant heat much more affordable. After quite a few long nights of research and online training videos, I have bought all the necessary parts and we are about to put this sucker in.

What is Hydronic Radiant Heating?

Have you ever walked past a large brick building long after the sun goes down, and felt warmth all over your body even without touching the wall? How about feeling the heat from a hot bed of campfire coals even when sitting some distance away? This is radiant heat in action: a warm surface shines out infrared light (also known as heat), which directly warms your skin. With a hot campfire on a still mountain night, you can feel completely warm even when the air temperature around you is below freezing.

This same concept applies nicely to warming a house with hydronic radiant heat: warm water circulates in tubes under your floor, causing the floor to warm up and shine heat at you from all directions. There are no ducts and no blowing dust, and the system operates silently. And because the system is warming your skin directly at the same time it warms the air of your house, you feel warmer at a lower temperature setting, which allows you to keep the house cooler, saving energy. But the best part may be that you have constantly warm feet, wherever you go in your house.

So how do we build one of these systems? In a nutshell, you need something to heat the water (sometimes called a boiler), a network of tubing under your floor, and a pump to circulate that water through all that tubing:

While the concept is simple, my summary leaves out a lot of detail. When you look at the typical “boiler room” in a luxury house, there are all sorts of valves and sensors, and miles of meticulously soldered copper from the $35,000 plumber.  I mean, shit, does this look like an easy do-it-yourself project to you?

Me neither. This is why I have always gone with forced air furnaces in the past.

On top of that, hydronic heating is an art and science unto itself, with things like ΔT, GPM, BTU/hr, and R-value calculations involved. If you can get through all that, you’re faced with boilers that start at $2000, a complicated selection of parts that nobody except the experts really understands (you won’t be getting advice at Home Depot on building one of these systems), and all sorts of other hurdles.

However, after digging through all this rubble, I found a few simplifications that bring the cost and complexity of radiant heat way down, to make it a DIY-compatible project for the average handy Mustachian. The tricks I’m applying for my system:

  1. Using drinking-water-safe components allows an “open loop” system which requires fewer valves and allows item 2:
  2. Using a single tankless water heater for both hot water and house heating cuts out the $2000-$4000 boiler cost. I chose this extremely efficient Rheem Tankless unit that runs only about $1200.
  3. A single variable speed circulator pump eliminates most of the loss and loop size calculations by sensing the water temperature and adjusting its speed automatically (this also saves energy).
  4. Using a pre-made manifold from Rifeng allows easy multi-zone control and adjustment, without the need to ever mess with the tubing after you install it.
  5. And of course, everything is done in PEX, to eliminate the cost, slow installation, and boiler-room heat loss of copper pipes.

Disclaimer: Like all of my experiments, and indeed my whole lifestyle, there is some unproven stuff in here. I am using myself as a guinea pig, and there may be some trial and error, and even risk involved. Enjoy and learn, but don’t dive in as a beginner just to follow me (another beginner) blindly!

Boiling it all down, the system I ended up with is relatively simple, and I drew it out for you in this picture:

My proposed radiant heat system (click for larger)

So far, this is a work in progress. I have already run this by a system designer and received his nod of approval, and completed some of the installation, so I am sure we can get this to work. But there are surely improvements to be made.

The great thing about this blog is that there are many people reading right now (including professional plumbers) who have already done this, so if you have any suggestions on how to improve or simplify it further, it would be much appreciated and I will update the article as new information is received. I will also publish a second post when everything is done, to show a few of the steps in progress and the finished pictures.

Reader corrections so far:

  • Add the expansion tank before the pump, not after it as currently shown
  • Watch out for Legionella bacteria growth in an open-loop system like this. While rare, the bacteria is dangerous. Exactly the same risk exists if you have a tank-type water heater and keep the water under about 120F. Solution: make sure my tankless unit is hot (legionella dies above 122F, so perhaps 130 or higher), to exterminate bacteria. Also, drain or flush the heating loops during the offseason so the water does not sit stagnant for months.
  • OR, create two-loop system with a heat exchanger in between the two loops, so the heating water never touches the hot tap water. This requires oxygen-barrier PEX and an air eliminator. You can also buy tankless heaters with two independent loops: one for heating, one for potable water.
  • Add a check valve on the 3/4″ return line so cold water cannot sneak back into the manifold instead of going to the Rheem (I guess this could happen when the pump is off)
  • Actually, add a check valve on every loop, just to make sure there are no flow surprises and water goes the direction you want it to. Otherwise, cold water can be drawn through loops unexpectedly.
  • Many tankless heaters (including the Rheem I recommend above) are not warrantied for use in heating systems. This is fine for me, as I find warranties are generally useless anyway. But it is good to note.
  • Further criticism about this experiment showed up here on the forum of the useful site called heatinghelp.com. While the thread almost convinced me that I am an idiot, the thing is that a similar discussion forms somewhere on the internet about every single article that ever appears on this blog. Many plumbers spend their days cursing this site just because I recommend doing some of your own plumbing with PEX, for example. The problem is that my fellow tradesmen tend to use anecdotes rather than statistics to make these safety decisions. The experiment will go on undeterred, but I will make a point of doing some tests with my friend who works at the city’s drinking water treatment/analysis lab.

What About Cooling?

Every house should be designed to suit its own climate. Here in Colorado, we have intense sun nearly every day but much cooler nights due to our elevation 5000 feet above sea level. So the house has loads of South-facing windows to capture heat and more loads of thermal mass to smooth out day and night temperature swings.

In the summer, this picture flips around: the Earth tilts so the sun is nearly overhead (and the large overhangs I built onto the house shade the windows from the rest of it). You keep the windows closed during the 90F days and the interior stays cool. On summer nights, the temperatures drop below 60F, so you run a large fan blowing out the day’s heat to cool everything down and begin the cycle anew.

I find this strategy (along with not being a Giant A/C Wussy) allows us to live happily without turning on our A/C in Colorado. But there’s always a backup: most modern houses without ducts use a ductless mini-split air conditioning system for cooling. These can be more efficient than central A/C systems, because you only cool the rooms where heat is building up. I will add a system like this if necessary, but we will be sure to test out a summer without air conditioning first, since the place is likely to be even more comfortable than our current house, even without cooling.

As the final cheat sheet, here is my shopping cart from PexSupply, my preferred supplier of plumbing stuff. There are a few extra things in my shopping cart for building out the bathrooms, but in general this is a complete system for a 1500 square foot house: about $1100, with free shipping and no sales tax. Add in the water heater and you have a complete heat and hot water system that costs less than a single low-efficiency furnace.

 

An efficiency upgrade to this system: I also purchased two boxes of aluminum heat reflector plates from Amazon which should improve heat transfer and efficiency slightly. Cost was $2.45 per 4-foot plate ($245 for each box of 100).

Update: After building the system with these, I feel it was highly worthwhile as it makes installation faster and cleaner, and improving heat transfer is a worthwhile goal with wood floors – while they work well, you do need all the heat you can get.

Update: One Year Later

This system is now up and running and you can read the results in the update article here:

The Radiant Heat Experiment – Did it Work?

Source: mrmoneymustache.com

Apache is functioning normally

What a difference five years make…a new report from Zillow revealed that the national housing market ended 2016 worth a whopping $29.6 trillion.

It’s now January 5th, and based on how things are going, it’s probably safe to say we’ve eclipsed the $30 trillion mark, or are close to it…I say that semi-jokingly.

Last year, the total value of the U.S. housing stock increased $1.6 trillion, marking a 5.7% increase over the previous year.

The $29.6 trillion figure is a new record high, though it is only expected to go higher this year as homes continue to gain in value, despite the prospect of higher mortgage rates.

The housing market has now recouped the $6.4 trillion lost between 2006 and 2012 when the bubble burst.

Interestingly, had the housing bubble never occurred home prices would actually be higher than they are now, but chances are we’ll overshoot rational pricing again during this cycle.

The big question is how much more upward momentum there is before things begin to cool down, or potentially recede.

Los Angeles Real Estate Valued at $2.5 Trillion

Everyone knows real estate is expensive in LA, but who would have thought the total housing stock in metropolitan Los Angeles would be worth $2.5 trillion?

That makes it the most valuable metro in the nation, likely thanks to the sprawling landscape and number of homes in the vast area.

It also accounts for a staggering 8.6% of the country’s overall housing value.

It was followed closely by New York/Northern New Jersey, with a total value of $2.4 trillion. Rounding out the top five in terms of total value were San Francisco ($1.3 trillion), Washington DC ($975.1 billion), and Miami-Fort Lauderdale ($818.8 billion).

Homes tend to be priciest in San Francisco, but there just aren’t as many of them.

The NYC metro represented about eight percent of total U.S. real estate value, followed by San Francisco, with 4.2 percent of the overall value.

In other words, roughly 21% of the value of the U.S. real estate market is contained in just three metros, LA, NYC, and SF.

Obviously, price swings in these expensive metros can sway the national number quite a bit, which is why it should always be taken with a grain a salt.

Indy Leads Least Valuable Metros

The five least valuable metros of the 35 listed by Zillow included Indianapolis ($111.7 billion), San Antonio ($116.4 billion), Cleveland ($116.8 billion), Cincinnati ($128.6 billion), and Kansas City ($129.7 billion).

They’re all smaller metros relative to the others on the list and also tend to have cheaper homes available.

The biggest year-over-year gainer was Portland, which saw an annual value increase of 13.4%, which is shockingly strong. No wonder they don’t want Californians buying their homes.

Despite the impressive gains seen over the past four or five years, 60% of metropolitan markets nationwide are still below the peak valuations reached during the bubble years.

One example is Chicago, where homes are still collectively worth $134 billion less than the highest value reached back in 2006.

That means there are still opportunities out there to get a home for a historically low price, though the bargains seem to be long gone. And housing will just get more and more expensive for Americans, likely pricing out families as rates and prices rise in tandem.

Speaking of, renting is still big business, with a total of $478.5 billion in rent paid last year, a $17.7 billion increase from 2015.

Despite housing’s popularity, some 635,000 new renter households were created in 2016, increasing the total dollar amount paid despite a slowdown in rent appreciation.

In the New York/Northern New Jersey metro alone, nearly $55 billion was spent on rent last year, the most of any area in the country.

Read more: Should I rent or buy a home?

Source: thetruthaboutmortgage.com

Apache is functioning normally

The reality is that, much like that red wine stain on the rug, Sallie Mae student loans aren’t likely to evaporate into thin air. That’s because Sallie Mae is a private lender now.

And despite what you may have heard, there is currently no such thing as private student loan forgiveness.

Forgiveness is limited to federal education loans, and even then, the options are few. There are federal student loan forgiveness programs for those who go into public service or teaching. But other than that, it’s extremely difficult to cancel student loans.

Table of Contents

•   Can Older Sallie Mae Loans Be Forgiven?

•   What If You Don’t Qualify for Loan Forgiveness?

•   Are There Alternatives to Private Student Loan Forgiveness?

•   Can You Refinance Sallie Mae Student Loans?

Can Older Sallie Mae Loans Be Forgiven?

If you’re confused about whether your Sallie Mae loans are private or federal, it may be because the company has evolved over the years.

Though Sallie Mae, aka the SLM Corp., no longer services federal loans, that wasn’t always the case.

Sallie Mae was created in 1972 as the Student Loan Marketing Association, a government-sponsored enterprise that serviced federal education loans. Even though it became fully privatized in 2005, the company continued to service federal loans made under the Federal Family Education Loan (FFEL) Program until that program ended in 2010. Then, in 2014, Sallie Mae split into two companies: SLM Corp. and Navient Corp and shifted all its federal student loans to Navient.

So, if you have an older loan — one that originated before 2014 — it may have been a federal loan that started out with Sallie Mae and then moved on to Navient. And if that’s the case, you may be able to apply for Sallie Mae loan forgiveness.

Applying can be complicated, and you may have to consolidate your loans into a Federal Direct Consolidation Loan as part of the process.

You can see if your old debt is a federal education loan by visiting the Federal Student Aid website. If it is, and you want to seek loan forgiveness, you’ll eventually make your application to the government.

Keep in mind that Navient shifted federal student loan accounts to Aidvantage, a division of Maximus Federal Services, after Navient cut ties with the Department of Education in late 2021.

You can contact your current loan servicer for information on how to get started.

Recommended: How Do Student Loans Work? Guide to Student Loans

Take control of your student loans.
Ditch student loan debt for good.

What If You Don’t Qualify for Loan Forgiveness?

If federal student loan forgiveness seems a long shot for you, don’t despair — you also may want to look into deferment or forbearance. These strategies allow qualifying borrowers to temporarily reduce or stop their federal student loan payments. However, depending on the type of federal loan you have, interest may continue to accrue while payments are paused, which could increase the overall cost of the loan.

Looking for a more long-term solution? An income-based repayment plan can offer qualified applicants another way to lower federal student loan payments. The four options limit how much money you put towards student loans each month based on family size and discretionary income (the difference between your annual income and 150% of the poverty guideline for your family size and state of residence).

You can contact your loan servicer for assistance with federal loan repayment. If you don’t know who your servicer is, you can find out by visiting your Federal Student Aid dashboard or calling 800-433-3243.

Are There Alternatives to Private Student Loan Forgiveness?

Although there currently is no such thing as Sallie Mae private student loan forgiveness, there are alternatives available to borrowers struggling to manage their private loans.

Private lenders don’t offer income-driven repayment plans. But if you feel comfortable calling Sallie Mae (or any lender) directly, you could ask about other repayment plans they might offer or what ideas they might have for your situation. At the very least, it doesn’t hurt to learn more about your loans.

And some lenders, including Sallie Mae, offer deferment and forbearance for those who qualify.

The timeline and cost for each of these programs may vary by lender. Sallie Mae, for example, may require a “good faith payment” to go into forbearance, and you can press pause on payments for only three months at a time, for a maximum of a year.

Something else to consider if you’re thinking about deferment or forbearance is that — just as with federal loans — even though the payments are paused, interest may continue to accrue. And this can increase the total cost of the loan.

Recommended: Private Student Loans Guide

Can You Refinance Sallie Mae Student Loans?

If you can’t make any headway with your current repayment plan, you can always look into refinancing student loans.

Though there are advantages to refinancing student loans, there are potential drawbacks to consider. For instance, if you refinance your federal loans through a private lender, you may give up some important benefits, such as access to the payment pause and federal repayment programs.

Sallie Mae doesn’t offer student loan consolidation and refinancing anymore, but you could potentially reduce your interest rate by refinancing your student loans with a different private lender, especially if you have a good credit history and strong potential earnings.

If you’re approved, the new lender will pay off your old loans and issue you one new student loan — hopefully with a lower interest rate. A lower rate can save money on interest payments over the life of the loan, provided that the loan term isn’t extended.

Though you can’t combine federal and private student loans through a federal loan consolidation program, some private lenders will refinance both.

You could extend your loan term if you’re hoping to make your monthly payments more manageable, or you could opt for a shorter loan term to try to get out of debt sooner.

Recommended: Student Loan Consolidation Rates: What to Expect

The Takeaway

Lender Sallie Mae used to offer federal student loans, and if you received one, you may be able to qualify for loan forgiveness. But federal student loan forgiveness can be hard to get — and if you have a private student loan through Sallie Mae, forgiveness is not available. There are, however, repayment options, including refinancing your student loans.

It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to career services, financial advisors, networking events, and more — at no extra cost.

Refi with SoFi today to get flexible terms and a competitive low rate before interest rates rise even higher!

FAQ

Does Sallie Mae service federal loans?

Sallie Mae only services private student loans, though that wasn’t always the case. If you have a loan that originated before 2014, it may have been a federal loan that started out with Sallie Mae and then moved to Navient. In early 2022, Navient shifted all of its federal student loans to a new servicer, Aidvantage.

How do I know whether my student loan is private or federal?

You can visit the Federal Student Aid website; information about your federal loans will be listed in your dashboard.

What student loans are not eligible for forgiveness?

Private student loans are not eligible for forgiveness.

SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

CLICK HERE for more information.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOSL1122005

Source: sofi.com

Apache is functioning normally

Guest post from Sarah of Saving Money Never Goes Out of Style

When it comes to savings, we often spend a lot of time focusing on coupons, special sales, and the hottest deals of the week. However, some of us frugal moms know it goes much further than that! Saving money for your family isn’t just about hunting down the next deal, but about making small lifelong changes in your home.

Here are 7 simple ways to save money every day that are easy to implement into your daily life. While not all will work for every family, you’ll easily find some tips that are simple changes you won’t even notice or feel like you’re sacrificing.

1. Ditch Paper Towels

If you have kids in the house you know that paper towels can be a monthly investment. Between meals, cleaning spills, and wiping sticky hands you are throwing away a ton of money each year.

Instead of buying paper, invest in some nice cloth napkins for your kids to use at meal time. Grab some old hand towels and wash cloths and designate those for cleaning up spills.

Tip: Colorful bandanas make great color coded dinner time napkins for large families! Each person has their own color to use.

2. Turn Off & Unplug Electronics

This is a great way to save money. While the savings are small, they do add up over time. Turn off all electronics when not in use and make a habit of hitting light switches as you leave a room as well.

Go even further by unplugging in between uses, too. That toaster sitting out on your counter that is rarely used? Simply unplug it and save yourself some money.

3. Plan a Menu

Taking the time to make a menu plan will cut back on last-minute take out and wasted food. And don’t forget to utilize your slow cooker during the school year or a busy season!

By having a plan in place, you will use more of what you have on hand and cut back on extra spending. No more running to the store for that one ingredient you forgot!

4. Learn To Sew

This is a great tip for those with girls, especially. Old pillowcases, t-shirts, ladies’ dresses, or men’s shirts can all be easily revamped and tailored into dresses for little girls. Shopping the thrift shop for gently used clothes in different patterns and styles can also lead to fun new revamped ensembles with a bit of sewing.

If you’re not a seamstress, even something as simple as replacing a button instead of throwing an item out is helpful. Or, if you have a son like mine, when he blows out the knees in his jeans, you can easily make them into shorts for the next season!

5. Brown Bag It

Taking your own lunch consisting of healthy portions of leftovers or specific lunch items can really save you a lot of money over time. If you also learn to make your own snacks and gourmet coffee, you’ll significantly increase your savings.

Don’t have time to make your own snacks all the time? Buying a box of granola bars in store is far cheaper than buying a single bar from the gas station or vending machine.

Do your kids like Lunchables? Make your own! All it takes is Ritz crackers, some deli meat, and cheese singles, and you’re good to go.

6. Cook From Scratch

It may seem like it will take so much more time, but simple things like making soups and beans in a slow cooker can cost a fraction of what canned varieties do.

Grab dry beans for $1-$2 a pound and cook them in your crock pot all day. When cooked, a $1 bag of dried beans will often be the equivalent to 4-5 cans you would have purchased at $1each. Over a year’s time, that can add up to quite a bit of savings in your grocery budget.

7. Pay With Cash

Make a point of paying for things with cash. There is a lot to be said about the concept of not buying anything else for the month once you run out of cash on hand. It helps you stay within your means, and not rely on credit cards. It also gives you a chance to save that change in a piggy bank for rainy days, treats, or vacations.

No matter what your household budget is, you can easily put into place a few of these 7 simple ways to save money every day and increase the money in your pocket. These things can free up money to pay off debt, or simply help you stop living paycheck to paycheck.

What simple things do you do to save money every day?

Sarah is a stay-at-home mom of two wonderful children. From homeless to well-off, this single debt-free mom is most known for her ability to live well on $18k/year. Sarah loves encouraging others that dreams do come true if they are willing to consistently work for it. Follow her blog: Saving Money Never Goes Out of Style.

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Source: moneysavingmom.com

Apache is functioning normally

This is fantastic guest post by Omie Ismall who shares his experience as successful entrepreneur. Looking to create your own start-up company from scratch? If so, read this and take notes.

Some years ago, I sat down with one of my Board members to discuss my next year’s compensation.  He said something that still sticks with me to this day,

“You know, your salary doesn’t matter because you’ll never build real wealth from it”

I dismissed the thought.  After all, I had built a six-figure portfolio by the time I was thirty and carried no debt.  My wife and I had lived cheaply since college and had saved 25% of our dual incomes.  But my advisor, who was worth tens of millions of dollars, knew firsthand that the truly rich almost all do it via equity not salary.

Sure, anyone that makes a reasonable salary can build up a million-dollar portfolio by simply living below their means and investing the excess cash.  That’s much of what we preach at LiveCheap.  It takes a long time with great expense control, but it is the safest way to becoming relatively well-off at minimal risk.

But the amount of wealth that can be built up with an equity position can make your best efforts saving salary look like a pittance. It’s not the only way, as I wrote in 5 Ways to Get Rich in Less Than 15 Years, but for those that want to build something and make a fortune, small companies can be a goldmine.

Average Entrepreneur

I’m not talking about the Bill Gates’ or the Michael Dell’s of the world.  That’s not your average entrepreneur.  Most small company business owners make their money by dramatically increasing their net worth on the path from $1 million in revenues to $10 million.

At $1 million, the company is nearly worthless but at $10 million it could be worth $20 million or more.  In fact, once the $10 million mark is crossed, a whole host of potential buyers are quite eager to write you a big check.  If you can spend 10 years of your life and grow a company past that mark, you will be wealthier than almost anyone of reasonable income.  Sound easy?  It’s not.

It took me 18 months to hit the $1MM mark from the day of our first sale, but it took nearly 5 more years to get beyond $5MM.  And by most business standards, especially when you are creating an industry, that’s fast.

The small company is a massive wealth builder for a couple key reasons.  Running a successful small company forces you to live below your means.  Your net worth includes a concentrated position in something that you cannot access: private company stock.

Since you are always exposed to downside risk, you tend to be very hesitant about spending money, as you may need to invest capital into the company at any time.  Also, being successful at a small business usually means watching expenses carefully, something that usually is done in one’s personal life too.

When you finally sell, it is treated as a long term capital gain subject to a maximum 15% federal capital gains tax.  If it were income, it would be taxed at more than twice the rate.  So when the day comes to sell, most entrepreneurs are able to undergo a radical change in lifestyle, although many stay true to their frugal ways.

This varies dramatically from doctors or lawyers who tend to scale their expenses as their incomes grow and don’t fall victim to the common traits of the wealthy.  An entrepreneur that has never pulled down more than a $150,000 salary may suddenly have a check for $10 million dollars.

So what’s the catch?

Well, few people want to work hard enough to make it happen.  You make less than you would at a regular job and work far more hours, anywhere from 60 to 100 a week, for many years.  The stress is enormous and you find out very quickly how hard it is to consistently meet payroll.  You’ll expose your family to downside risk that you never had being a regular employee and you’ll put off the things that your family wants to do for years all in the name of the business.

Unlike a regular job, you just can’t hop to a new gig every few years: your employees depend on you and you’re tied to the business.  There are dozens more drawbacks but for me they were all overshadowed, not by the ability to build wealth, but rather the ability to build something of lasting value.  And that’s probably the reason why most entrepreneurs don’t want to sell their business even when they have multiples of what they need to retire.  They love it and become inseparable from it.

Interested in building real wealth?

The following list is a quick gut check for being an entrepreneur and learning how to make a million:

  • Are you willing to put your family at financial risk in order to grow a company?
  • Are you willing to put in the late nights and weekends to make it happen?
  • Do you have core skills that will let you become a great business owner?
  • Do you know an industry well enough to run with an opportunity?
  • Do you have a passion for something? – just wanting to make money usually isn’t enough
  • Do you have enough capital to start the business or make an acquisition?
  • Will your spouse or significant other support you in your endeavor?

The last point is vitally important.  Entrepreneurs often have no idea how much they put their wives (or husbands) through.  If you answered yes to these questions, then start heading down the path of entrepreneurship.  In 10 to 15 years, you may have more than enough money to retire, even if you don’t want to.

Omie Ismail is the CEO of Live Smart Media Inc. the holding company for LiveCheap.com.  Omie is a successful information and software CEO for the past decade having taken eCivis Inc. from concept to become the leading grants management company for governments nationwide.  He has a passion for helping people live the good life cheaply and for growing businesses from the ground up.  Omie currently splits his time between his family, LiveCheap, and his next venture.

Source: goodfinancialcents.com