Tag: financing

How to Build Credit with Fingerhut

If you’ve been wanting to make a big purchase, but your credit is less than spectacular, you might have looked into Fingerhut as an option. 

Fingerhut is an online catalog and retailer that showcases a multitude of products. On this website, customers can shop for anything from electronics to home décor to auto parts. Fingerhut offers financing through their own line of credit, making it appealing to shoppers with poor credit or a nonexistent credit history. Many consumers have a better chance of getting approved by Fingerhut, than they might have of getting approved through most other credit card companies. It’s an option worth looking into if you want to improve your credit score through credit utilization.  

The major difference between Fingerhut and credit cards that cater to low credit scores is that Fingerhut credit is exclusively available for use with its own company’s products and authorized partners. You’ll also find that the company’s products are pricier than they would be through most other retailers, while also bearing the weight of higher interest rates. While it might seem like a good idea if you don’t have good credit, it’s best to familiarize yourself with the ins and outs of the company beforehand so that you know what you’re signing up for. 

How Fingerhut credit works

When you apply for a Fingerhut credit account, you can get approved by one of two accounts:

  • WebBank/Fingerhut Advantage Credit Account.
  • Fingerhut FreshStart Installment Loan issued by WebBank.

As it happens, by submitting your application, you are applying for both credit accounts. Applicants will be considered for the Fingerhut FreshStart Installment Loan issued by WebBank as a direct result of being denied for the WebBank/Fingerhut Advantage Credit Account. In other words, you won’t have a way of knowing which one you will be approved for prior to applying. Both credit accounts are issued by WebBank and are set up so that customers can purchase merchandise by paying for them on an installment plan with a 29.99% Annual Percentage Rate (APR). These are the only things that the different Fingerhut credit accounts have in common.

The WebBank/Fingerhut Advantage Credit Account

The WebBank/Fingerhut Advantage Credit Account works very much like an unsecured credit card, except that it’s an account that you can only use it to shop on Fingerhut or through its authorized partners. 

This credit account features:

  •  No annual fee.
  • A 29.99% interest rate.
  • A $38 fee on late or returned payments.
  • A possible down payment; it may or may not be required. You won’t know prior to applying. 

If you get denied for this line of credit, your application will automatically be reviewed for the Fingerhut FreshStart Credit Account issued by WebBank, which is both structured and conditioned differently.

Fingerhut FreshStart Installment Loan issued by WebBank

If you get approved for the Fingerhut FreshStart Installment Loan, you must follow these three steps to activate it:

  • Make a one-time purchase of no less than $50.
  • Put a minimum payment of $30 down on your purchase, and your order will be shipped to you upon receipt of your payment. You may not use a credit card to make down payments, but you can use a debit card, check, or a money order. 
  • Make monthly payments on your balance within a span of six to eight months.

You can become eligible to upgrade to the Fingerhut Advantage Credit Account so long as you are able to pay off your balance during that time frame or sooner without having made any late payments. Keep in mind that paying for the entire balance in full at the time you make your down payment will result in you not qualifying for the loan as well as being ineligible for upgrade. 

How a Fingerhut credit account helps raise your credit score

The fact that it can help you improve your credit is one of the biggest advantages of using a Fingerhut credit account. 

When you make your payments to Fingerhut in full and on-time, the company will report that activity to the three major credit bureaus. This means that your good credit utilization won’t go unnoticed nor unrewarded. If you use Fingerhut to improve your credit score, you will eventually be able to apply for a credit card through a traditional credit card company—one where you can make purchases anywhere, not just at Fingerhut. 

Additional benefits of a Fingerhut credit account

Besides using it as a tool to repair your bad credit, there are a few other benefits to using a WebBank Fingerhut Advantage Credit Account such as:

  • No annual fee.
  • Fingerhut has partnerships with a handful of other retailers, which means you can use your Fingerhut credit line to make purchases through a variety of companies. Fingerhut is partnered with companies that specialize in everything from floral arrangements to insurance plans.
  • There are no penalties on the WebBank Fingerhut Advantage Credit Account when you pay off your balance early.

How to build credit with Fingerhut

Fingerhut credit works the same way as the loans from credit card companies work: in the form of a revolving loan. 

A revolving loan is when you are designated a maximum credit limit by your lender, in which you are allowed to spend. Whatever you spend, you are expected to pay back in full and on-time through a series of monthly payments. This act of borrowing money and paying off bills using your Fingerhut account causes your balances to revolve and fluctuate, hence, its name. 

Your credit activity, good or bad, gets reported to the three major credit bureaus and in turn, will have an effect on your credit report. Revolving loans play a large role in your credit score, affecting approximately 30% of your score through your credit utilization ratio. If your credit utilization ratio, the amount of available revolving credit divided by your amount owed, is too high then your credit score will plummet. 

When using a Fingerhut account, the goal is to try to keep your amounts owed as low as you possibly can so that you can maintain a low utilization ratio, and as a result, have a higher credit score.

Alternatives to Fingerhut

If you’ve done all your research and decided that Fingerhut isn’t the right choice for you, there are other options that might serve you better, even if you have bad credit. There are a variety of secured credit cards that you can apply for such as:

  • The OpenSky Secured Visa Credit Card: You will need a $200 security deposit to qualify for this secured credit card, but you can most likely get approved without a credit check or even a bank account. It can also be used to improve your credit, as this card does report to the three major credit bureaus. While this card does come with an annual $35 fee, you can use it to shop anywhere that will accept a Visa. 
  • Discover it Secured:  For all those opposed to paying an annual fee of any sort, this card might just be the one for you. With a $0 annual fee and the ability to earn rewards through purchases, there’s not much to frown about with this secured credit card. One of the best perks, is that it allows you the chance to upgrade to an unsecured card after only eight months. 
  • Deserve Pro Mastercard: This card is a desirable option for those with a short credit history. There is no annual fee and no security deposit required and, if your credit history isn’t very long-winded, that’s okay. The issuers for this card may use their own process to decide whether or not you qualify for credit, by evaluating other factors such as income and employment. This card is especially nifty because you can get cash-back rewards such as 3% back on every dollar that you spend on travel and entertainment, 2% back on every dollar spent at restaurants, and 1% cash back on every dollar spent on anything else. 

Final Thoughts 

Fingerhut is an option worth looking into for those with bad credit or a short credit history. If you want to use a Fingerhunt credit account to improve your credit score, be sure to use it wisely and make all of your payments on time, just as you would with any other credit card.

Even though it might be easy to get approved, the prices and interest rates on items sold through Fingerhut are set higher than they would be at most other retailers, so it’s important to consider this before applying. 

There are a ton of options available, regardless of what your credit report looks like, if you are trying to improve your credit. If the prices of Fingerhut’s merchandise are enough to scare you away, you might want to consider applying for a secured credit card. 

How to Build Credit with Fingerhut is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Bundle Up! Winter’s Home-Buying Game Has Changed. Here’s How To Win

How to buy a house this winterViktoriia Hnatiuk / Getty Images

Savvy home buyers know that winter is typically a good time to embark on a house hunt, since much of their competition stays holed up at home until spring. But this winter, buyers might notice that despite the cold and the holidays, they’ve got company.

Lots of it, in fact.

“Normally winter is a good time for buyers,” says realtor.com® chief economist Danielle Hale. However, since the coronavirus kept buyers on lockdown for much of spring, many are making up for lost time by home shopping hard right now.

“This year’s unusual seasonal pattern means that buyers aren’t getting the usual break from the market frenzy that they typically do in the cooler weather,” Hale explains.

As a result, this winter is shaping up to be a seller’s market, with low real estate inventory, high prices, and bidding wars that could give buyers a major run for their money.

This doesn’t mean you should throw in the towel—just that you’ll have to hone your house hunt in new ways to suit the times. Here are some tactics that will keep you ahead of the pack so you’ll be sitting in a new home by the new year.

Secure your financing as soon as possible

Getting pre-approved for a mortgage and securing financing are an essential first step when buying a home. It gives you a clear picture of how much house you can afford, and lets you make an offer as soon as you find your dream home.

Matt van Winkle, a real estate broker and owner at Re/Max Northwest Realtors in Seattle, says this process is more important now than ever.

“Getting pre-approved for a loan is obviously important, but is there anything else they can do to put themselves in a good position?” he says. “Buyers need to be ready to buy a house before they start looking.”

Too often, buyers don’t line up their financing until they find a home they want to buy, van Winkle says. In the current competitive market, waiting to get pre-approval means you could lose out on purchasing a home you love.

“That creates a mad dash and stress to get everything lined up under pressure,” he says. “Get all your financing secured and ready before you look, that way when you find the right home you’re 100% ready.”

Starting early could also help you lock in an ultralow interest rate, which could affect your monthly mortgage payment and mean you could afford a more expensive home. As of Oct. 22, Freddie Mac listed rates at 2.8% for a 30-year fixed-rate loan.

Know what you want before you house hunt

COVID-19 has changed how we live and work. We’re spending much more time at home, and people are looking for different features in their living spaces.

Make a list of your must-haves before you start house shopping—and share your needs with your real estate agent.

Simon Isaacs, broker and owner of Simon Isaacs Real Estate in Palm Beach, FL, says it helps cut down on the number of homes you’ll have to view before finding the right one.

“I would suggest buyers not look at 25 homes,” he says. “If the agent is showing them that many houses, the agent doesn’t know what they want.”

In such a competitive landscape, knowing exactly what you want enables you to act fast when you want to make an offer.

Tour homes virtually first

More real estate agents are embracing virtual tours and remote showings to ease coronavirus safety concerns. In some cases, they’re even limiting in-person showings to the most serious buyers—those with financing already secured, for example.

“Real estate agents in our local market are adjusting to the client’s needs by continuing to provide in-person showings with precautions and also assisting buyers virtually with their home purchases,” says Matt Curtis, owner of Matt Curtis Real Estate in Huntsville, AL.

Virtual home tours, using Zoom or FaceTime, let you view the home from anywhere, and depending on the setup, you might be able to ask questions in real time. So you can narrow down the homes you’re most interested in and physically visit only the ones that best meet your needs.

Don’t dawdle if you want to make an offer

In September, there were nearly 40% fewer homes on the market than during the same month last year, according to a realtor.com report. At the same time, buyer demand has increased, creating an incredibly competitive marketplace. Homes were on the market for an average of 54 days in September, 12 fewer days than last year.

Tracy Jones, a real estate agent with Re/Max Platinum Realty in Sarasota, FL, says the buyers she’s worked with lately have had just a few homes to consider. And, with all the other buyers in a location also looking at those same houses, you’ll need to act fast if you’re interested.

The challenge, she says, is potential buyers have little time to mull things over, and they are pitted against one another.

Isaacs is seeing a similar situation. Wait too long to submit an offer, and another buyer is likely to swoop in with an offer of their own.

“I would say don’t deliberate on buying,” he says. “I’ve had too many clients who were [saying], ‘Should we, shouldn’t we.’ I would say if it’s something that you want to do, do it.”

Make your offer stand out

Since inventory is so low, sellers are getting multiple offers on their homes these days. To make sure yours gets accepted, you’ll need to make it stand out.

Cash offers and inspection waivers are some ways to make your offer more appealing, Curtis says.

A cash offer, if you can afford it, is attractive to sellers because it eliminates dealing with a mortgage lender and often speeds up closings. An inspection waiver comes with lots of risks, since you’re essentially agreeing to purchase a home as is, but the waiver removes any repair negotiations and helps you close faster.

For competitive markets, where you know you’ll be competing directly with many buyers, Jones suggests talking to your agent about escalation clauses. This is a contract addendum where you agree to pay more than other offers (up to a maximum you set).

Bottom line: “Find a strategy to help make your offer stand out amongst the 10, 20, or more offers that may come in on your dream home,” Curtis says.

The post Bundle Up! Winter’s Home-Buying Game Has Changed. Here’s How To Win appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

Can I Get a Car Loan If I Have No Credit?

buy a car with no credit

Yes, lenders have auto loans for people with no credit, but getting one is not guaranteed. It will depend on the lender’s flexibility, the down payment you can afford, and the kind of car you want to buy. It may even depend on how you ask.

Phil Reed, senior consumer advice editor for the consumer auto site Edmunds has some good advice on how to get a car loan with no credit. He says a surprising number of people simply walk into a dealership and say, “Hi, I have no credit, and I want to buy a car.” He doesn’t recommend this approach. Instead, he offers these five tips for people who need a no-credit car loan.

1. Get Pre-Approved

If you have no credit or a thin credit profile, you should try to get preapproved for a loan before heading to the dealership. This will let you compare rates with any loan the dealer may offer. It may also give you a bargaining chip when negotiating the final deal.

If you have a relationship with a bank or credit union, you should start looking for financing there. Reed recommends making an appointment to meet with your bank’s loan officer in person.

“Make a case for yourself,” he says. That means bringing your pay stubs and bank account records with you. You should also check your credit reports, if they exist, and credit scores. You want to know as much about your credit profile as a lender would. If you don’t know your credit score, don’t worry—you can check your credit score for free every month on Credit.com.

If you can’t get a loan from your financial institution, you may be able to find a no-credit auto loan online. Just make sure it’s from a reputable lender. Credit.com can also help you find auto loan offers from trustworthy lending institutions.

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2. Negotiate a Good Price

A dealership could beat the offer you get from your bank or credit union. However, if you know you’re already approved for a loan, you can focus on comparing rates and prices instead of worrying about financing.

Reed says that it’s important to be wary. You don’t want to feel so indebted to the dealer for “giving” you a loan that you fail to negotiate the price of the car. And if the dealer’s financing isn’t better than the bank’s, at least you still have an approval in your pocket.

Having a good down payment or trade-in can also help your case. A trade-in would reduce the amount you’ll need to borrow, and a larger down payment would show the lender some commitment on your part. Edmunds recommends putting at least 10% down on a used car, so start saving now.

3. Choose the Right Car

Be sure the car you’re buying is affordable for you, even if it’s not the car you’d choose if you had more money and better credit. “If you have no credit, it’s not the time to get your dream car,” Reed says. “You have to choose the right car and the right amount [to borrow].”

You want reliable transportation you can afford. Making regular, on-time payments won’t just pay down your load, it will also build your credit, so don’t get a loan that requires higher payments than you can comfortably make.

Sites like Kelley Blue Book, Cars.com, and Edmunds can help you find information on the cars that match your budget. When you’re at the car dealership, remember your budget and don’t spring for optional add-ons you don’t really need.

4. Don’t Let Interest Rates Scare You Off

Reed cautions that when you get a loan with no credit, the interest rates you’re offered may seem appallingly high, but that’s part of the cost of having no credit history.

When you don’t have a credit score, lenders can’t assess how big of a risk they’re taking by giving you a loan. To protect the money they’re lending, they will likely treat you as a high-risk borrower, which means the loan will have a higher interest rate.

As you make payments, you’ll establish a pattern of reliably paying back money. Over time, you can improve your interest rate by refinancing. Reed says that, according to a dealership employee, a customer once lowered his interest rate from 13% to 2% in two years’ time by improving his credit and refinancing.

5. Give Yourself Some Credit, Not a Cosigner

Reed advises against cosigning—a process that involves checking someone else’s credit and using that score to qualify for a loan. It might get you a lower rate and help you get approved, but Reed says that if you bite the bullet and pay a higher interest rate rather than get a cosigner, you’ll have the opportunity to build credit.

In addition, having a cosigner will tie that person’s credit to yours, and the way you repay your car loan will influence their credit. Reed says if you’re going to do it, do it only as a last resort, and make sure the cosigner is a relative.

Bottom line, though, as Reed explains, “It’s asking a lot.” It’s better to finance the car yourself, pay on time, and build your credit. That way, the next time you need a loan, you won’t have to worry about whether you’ll qualify.

Good credit doesn’t just help you get reliable transportation: good credit can make a huge difference in improving your financial security and the peace of mind that comes with it. Start tracking your credit for free today at Credit.com. Your new car will get you moving around town, but your new credit score will get you moving up in the world.

Image: iStock

The post Can I Get a Car Loan If I Have No Credit? appeared first on Credit.com.

Source: credit.com

Auto Loan: New Car vs Old Pros and Cons

There are over 25 million auto loans every year in the United States, with the majority of drivers using finance to pay for new and used vehicles. Car loans are some of the most common secured loans in the country and for many Americans, a car is the second most expensive purchase they will make in their lifetime.

But shopping for a new car and applying for a suitable car loan is a stressful experience filled with uncertainty and difficult decisions. One of the most difficult decisions is whether to opt for a new car or a used one. In this guide, we’ll showcase some of the pros and cons of both options, pointing you in the right direction and helping you to make the right choice.

Reasons to Buy Used

It is satisfying to own something that is brand-new. It’s fresh out of the factory—you’re the first to use it, the first to experience it. 

Consumers are prepared to pay a premium just to be the first owner. iPhones and other tech are great examples of this. You could save 30% on the price of a new phone by opting for a refurbished model. The screen and case will be near-perfect, the hardware and software will be fully functional, and everything will be backed by a warranty. However, you don’t get the satisfaction of peeling back the protective stickers and being the first to open the box.

It’s a similar story with cars. There are no stickers to peel and boxes to open, but you can’t beat the new car smell or the way the steering wheel feels in your palms.

That’s not all, either. There are many other benefits to owning a brand-new car and using your auto loan to acquire one.

New Cars Depreciate Fast

A $200,000 mortgage acquired today might cost you $300,000 or more over the lifetime of the loan. However, in a couple decades, when that mortgage is in the final stretch and you own a sizeable chunk of home equity, you’ll likely have something worth $250,000, $300,000, or more.

If you get an auto loan on a new car, it’s a different story. As your interest increases and your payments exceed the original value, the current value nose-dives. At the end of the term, you could have something that is worth a small fraction of what you paid for it.

As an example, let’s assume that you purchase a $40,000 car with a $10,000 down payment and a $30,000 loan. With an interest rate of 6% and a term of 60 months, you’ll repay just under $35,000 over the lifetime of the loan.

However, as soon as you drive that car out of the lot, the price will plummet. At the end of the first year, it will have lost between 20% and 30% of its value. If we assume a 20% loss, that car is now worth just $32,000. The irony here is that you will have paid just under $7,000 in that year, and as the years progress, you fall into a pattern where the more you pay, the less it’s worth.

In the next 4 years, the car will experience an average deprecation of between 15% and 18%. Again, let’s assume a conservative estimate of 15%. That $40.000 purchase will be worth $27,200 at the end of year 2; $23,120 at the end of year 3; $19,653 in year 4, and $16,705 at the end of the loan.

And don’t forget, that vehicle cost you $45,000 in total.

Unless you’re buying a rare car that will become a collectible, all cars will depreciate, and that depreciation will be pretty rapid. However, used cars don’t suffer such rapid deprecation because they don’t have that inflated sticker price. If you take good care of them and pay a good price, you won’t stand to lose as much money.

Used Cars are Cheaper

As stated above, all cars depreciate, but if the first year suffers the biggest drop then why not buy a car that is just a year or two old?

It’s the same car and offers many of the same benefits, but you’re getting it for up to 30% less on average. For a $40,000 car, that’s a saving of $8,000. Once you add a 20% down payment, your loan only needs to cover $25,600. For a 6% loan, that’s just $495 a month, compared to the $619 you’d pay on a $40,000 new car with the same 20% down payment.

That puts more money in your pocket and less debt on your credit report. That’s a double-whammy well worth sacrificing a new car smell for.

It’s Still Nearly New

If you buy a used car that is just a couple of years old, you can still get something that has been well maintained and is just as impressive as it was the day it rolled off the lot. 

Think about the last time you bought a brand-new car, computer, phone, musical instrument—or anything else that came with a premium price tag. You probably kept it in perfect condition soon after buying. Everyone goes through a period of doing their utmost to keep a new purchase immaculate and the more they pay, the longer than period lasts.

Most consumers will keep a car in perfect condition for at least two or three years, but no matter what they do, they are powerless to the depreciation. This means you can get an almost-new, perfect car that is nearly a third cheaper than it was when it was new.

Reasons to Buy New

Α used car doesn’t provide you with that enjoyable, tactile experience. You can’t enjoy the ubiquitous new car smell and you won’t be the first owner. However, there are numerous benefits to buying used instead of new, not least of which is the amount of money you will save now and in the future.

More Finance Options

You have a few more options at your disposal when it comes to financing a new car. Many dealerships offer low-interest and even no-interest financing to encourage you to sign on the dotted line. 

These deals often have hidden terms, penalties, and other issues, and if you fail to make a payment, they won’t hesitate to take your car from you. However, if you’re struggling to finance elsewhere and have your heart set on a brand-new car, this could be your only option.

Make sure you read the terms and conditions closely and don’t let them bombard you with small print and sales talk. They are there to sell you a car. All they care about is your signature on that contract and if that means glossing over a few of the terms, they won’t hesitate.

More Customization and Better Features

Technology is advancing at a tremendous pace and this can be felt in all industries, including the automotive sector. A lot can happen in a few short years and if you buy a used car as opposed to a new one, you could miss out on a host of electronics, safety features, and more.

Customization is also possible with new cars. You can request colors, fabrics, and other aesthetic changes, as well as additional features relating to the power and performance of the vehicle.

Better Cover

New cars offer bumper-to-bumper warranty cover, which means that you’re covered in the event of an issue. If major repairs are needed, you won’t be out of pocket, and these warranty plans tend to offer roadside assistance as well.

This can be true for used cars as well, with the manufacturer’s warranty being transferred when the car is in the hands of a new owner. However, the warranty is at its longest and most useful when the car is first purchased.

Cheaper Maintenance

The warranty won’t cover everything, and you will still be responsible for normal wear and tear. However, because the car is new, it should require less maintenance and may take several years before you need to make significant purchases.

Surveys suggest that new car owners pay anywhere from $0 to $300 for maintenance during the first 12 months, with this fee spanning between $300 and $1,100 once the car is a decade old.

Simpler Process

Used car purchases take time. You need to find the vehicle, inspect it, negotiate with the seller, and then hope you can agree to a price and payment plan. If you want something specific with regards to colors and features, you may have to search many inventories and individual sellers before you find something that fits.

With a new car, you simply agree to a budget and see what’s available. If you need any tweaks or changes, you can request them directly from the dealer.

Summary: New vs Old

There are two ways at looking at this. Firstly, there are more advantages for buying a new car and these include some pretty important ones. However, the advantages for buying used are much bigger and if your bank balance or credit score is low, that could be the deciding factor. 

In any case, it’s important to look closely at the pros and cons, evaluate them based on your personal situation, and don’t rush this decision.

Auto Loan: New Car vs Old Pros and Cons is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How to Qualify for the Coronavirus Economic Relief Package

The coronavirus economic relief package for workers and small businesses can be confusing. Who qualifies for what programs? How do you apply successfully?

If you’ve been laid off or had your work hours cut due to the pandemic, you're eligible for both state and federal unemployment compensation. That’s a pretty straightforward situation.

If you run a business that’s been hurt by the economic downturn and you have employees, you qualify for the Paycheck Protection Program (PPP). It’s a loan backed by the Small Business Administration (SBA) that offers relief if you want to continue paying your employees, even if they can’t do their jobs during the health crisis. If you use PPP funds for approved business expenses, such as payroll, rent, and utilities, you don’t have to repay the loan.

Additionally, there are other types of loans you can get through the SBA, such as the Economic Injury Disaster Loan (EIDL). It comes with potentially higher loan amounts than the PPP but must be repaid. You may also qualify for an Economic Injury Disaster Grant (EIDG), which pays businesses $1,000 per employee, up to a $10,000 maximum, and doesn’t have to be repaid.

Whether you call yourself a full or part-time freelancer, gig worker, or an independent contractor, you’re still a small business. If you’ve suffered financially due to the pandemic, you have several options to get relief.

But what’s been unclear are the options for the self-employed who have no employees except themselves. Whether you call yourself a full or part-time freelancer, gig worker, or an independent contractor, you’re still a small business. If you’ve suffered financially due to the pandemic, you have several options to get relief.

I interviewed Gerri Detweiler, a nationally recognized financing and credit expert with more than 20 years of experience. She’s the Education Director for Nav, a trusted financing partner for more than 1.2 million businesses. Gerri gives Nav’s customers certainty in an uncertain world through expertise and actionable advice. 

On the Money Girl podcast, Gerri and I cut through the confusion to help businesses of any size, including solopreneurs, understand how to get economic relief during the coronavirus crisis. We cover a variety of topics, including:

  • Understanding the coronavirus relief options for businesses, the self-employed, and the unemployed
  • Whether a solopreneur should file for unemployment or the PPP
  • Documents you need to prepare before applying for an SBA-backed loan
  • How business credit is different from consumer credit
  • Common mistakes that keep businesses and the self-employed from qualifying for economic relief
  • Tips to make sure a PPP loan you receive will be forgiven
  • How consumers who are struggling to pay bills can protect themselves from debt collectors

Listen to the interview using the embedded audio player or on Apple PodcastsSoundCloudStitcher, and Spotify.

If you’re a struggling entrepreneur, check out these resources to understand your options:

11 Options If Your Small Business Can’t Pay Its Bills Due to Coronavirus

Applying for a Business Loan Is Changing Due to COVID-19: Here’s What It Means

How to Apply for a Payroll Protection Program (PPP) Loan

Source: quickanddirtytips.com

How To Retire At 50: 10 Easy Steps To Consider

Can you retire at 50? On average, people usually retire at 65. But what if you want to retire 15 years earlier than that like  at 50? Is it doable? Below are 10 easy steps to take to retire at 50.  Retiring early can be challenging. Therefore, SmartAsset’s free tool can match you with  a financial advisor who can help to work out and implement a retirement income strategy for you to maximize your money.

10 Easy & Simple Steps to Retire at 50:

1. How much you will need in retirement.

The first thing to consider is to determine how much you will need to retire at 50. This will vary depending on the lifestyle you want to have during retirement. If you desire a lavish one, you will certainly need a lot.

But according to a study by SmartAsset, 500k was found to be enough money to retire comfortably. But again that will depends on several factor.

For example, you will need to take into account where you want to live, the cost of living, how long you expect to live, etc.

Read: Can I Retire at 60 With 500k? Is It Enough?

A good way to know if 500k is possible to retire on is to consider the 4% rule. This rule is used to figure out how much a retiree should withdraw from his or her retirement account.

The 4% rule states that the money in your retirement savings account should last you through 30 years of retirement if you take out 4% of your retirement portfolio annually and then adjust each year thereafter for inflation.

So, if you plan on retiring at 50 with 500k for 30 years, using the 4% rule you will need to live on $20,000 a year. 

Again, this is just an estimation out there. You may need less or more depending on the factors mentioned above. For example, if you’re in good health and expect to live 40+ years after retiring at 50, $500,000 may not be enough to retire on. That’s why it’s crucial to work with a financial advisor.

Get Matched With 3 Fiduciary Financial Advisors
Managing your finances can be overwhelming. We recommend speaking with a financial advisor. The SmartAsset’s free matching tool will pair you with up to 3 financial advisors in your area.

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1. Answer these few easy questions about your current financial situation

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2. Maximize your tax-advantaged retirement accounts.

Once you have an idea of how much you need in order to retire at 50, your next step is to save as much as possible at a faster rate. If you are employed and you have a 401k plan available to you, you should definitely participate in it. Nothing can grow your retirement savings account faster than a 401k account.

See: How to Become a 401k Millionaire.

That means, you will need to maximize your 401k contributions, for example. In 2020, and for people under 50, the 401k contribution limit is $19,500.  Also, take advantage of your company match if your employee offers a match.

In addition to the maximum contribution of $19,500, your employer also contributes. Sometimes, they match dollar for dollar or 50 cents for each dollar the worker pays in.

In addition to a 401k plan, open or maximize your Roth or traditional IRA. For an IRA, it is $6,000. So, by maximizing your retirement accounts every year, your money will grow faster.

3. Invest in mutual or index funds. Apart from your retirement accounts (401k, Roth or Traditional IRA, SEP IRA, etc), you should invest in individual stocks or preferably in mutual funds. 

4. Cut out unnecessary expenses.

Someone with the goal of retiring at 50 needs to keep an eye on their spending and keep them as low as possible. We all know the phrase, “the best way to save money is to spend less.”

Well, this is true when it comes to retiring 15 years early than the average.  So, if you don’t watch TV, cancel Netflix or cable TV. If your cell phone bill is high, change plans or switch to another carrier. Don’t go to lavish vacations.

5. Keep an eye on taxes.

Taxes can eat away your profit. The more you can save from taxes, the more money you will have. Retirement accounts are a good way to save on taxes. Besides your company 401k plan, open a Roth or Traditional IRA.

6. Make more money.

Spending less is a great way to save money. But increasing your income is even better. If you need to retire at 50, you’ll need to be more aggressive. And the more money you earn, the more you will be able to save. And the faster you can reach your early retirement goal.

7. Speak with a financial advisor

Consulting with a financial advisor can help you create a plan to. More specifically, a financial advisor specializing in retirement planning can help you achieve your goals of retiring at 50. They can help put in a place an investment strategy to put you in the right track to retire at 50. You can easily find one in your local area by using SmartAsset’s free tool. It matches users with financial advisors in just under 5 minutes.  

8. Decide how you will spend your time in retirement.

If you will spend a lot of time travelling during retirement, then make sure you do research. Some countries like the Dominican Republic, Mexico, Panama, the Philippines, and so many others are good places to travel to in retirement because the cost of living is relatively cheap.

While other countries in Europe can be very expensive to travel to, which can eat away your retirement money.  If you decide to downsize or sell your home, you can free up more money to spend.

9. Financing the first 10 years.

There is a penalty of 10% if you cash out your retirement accounts before you reach the age of 59 1/2. Therefore, if you retire at 50, you’ll need to use money in other accounts like traditional savings or brokerage accounts. 

10. Put your Bonus, Raise, & Tax Refunds towards your retirement savings. 

If retiring at 50 years old is really your goal, then you should put all extra money towards your retirement savings. That means, if you receive a raise at work, put some of it towards your savings account.

If you get a tax refund or a bonus, use some of that money towards your retirement savings account. They can add up quickly and make retiring at 50 more of a reality than a dream.

Retiring at 50: The Bottom Line: 

So can I retire at 50? Retiring at 50 is possible. However, it’s not easy. After all, you’re trying to grow more money in less time. So, it will be challenging and will involve years of sacrifices, years living below your means and making tough financial decisions. However, it will be worth it in the long run. 

Read More:

  • How Much Is Enough For Retirement
  • How to Grow Your 401k Account
  • People Who Retire Comfortably Avoid These Financial Advisor Mistakes
  • 5 Simple Warning Signs You’re Definitely Not Ready for Retirement

Speak with the Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning to retire at 50, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post How To Retire At 50: 10 Easy Steps To Consider appeared first on GrowthRapidly.

Source: growthrapidly.com

Tips for Financing Investment Properties

Purchasing an investment property can be an exciting milestone for a would-be landlord or entrepreneur. The financing for investment properties, on the other hand, isn’t nearly as exciting. It can be a trouble spot, though. Investment property loans aren’t as easy to get as conventional home purchase financing. If you don’t have the cash to […]

The post Tips for Financing Investment Properties appeared first on The Simple Dollar.

Source: thesimpledollar.com

6 Types of Home Loans: Which One Is Right for You?

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If you’re a first-time home buyer shopping for a home, odds are you should be shopping for mortgage loans as well—and these days, it’s by no means a one-mortgage-fits-all model.

Where you live, how long you plan to stay put, and other variables can make certain mortgage loans better suited to a home buyer’s circumstances and loan amount. Choosing wisely between them could save you a bundle on your down payment, fees, and interest.

Many types of mortgage loans exist: conventional loans, FHA loans, VA loans, fixed-rate loans, adjustable-rate mortgages, jumbo loans, and more. Each mortgage loan may require certain down payments or specify standards for loan amount, mortgage insurance, and interest. To learn about all your home-buying options, check out these common types of home mortgage loans and whom they’re suited for, so you can make the right choice. The type of mortgage loan that you choose could affect your monthly payment.

Fixed-rate loan

The most common type of conventional loan, a fixed-rate loan prescribes a single interest rate—and monthly payment—for the life of the loan, which is typically 15 or 30 years. One type of fixed-rate mortgage is a jumbo loan.

Right for: Homeowners who crave predictability and aren’t going anywhere soon may be best suited for this conventional loan. For your mortgage payment, you pay X amount for Y years—and that’s the end for a conventional loan. A fixed-rate loan will require a down payment. The rise and fall of interest rates won’t change the terms of your home loan, so you’ll always know what to expect with your monthly payment. That said, a fixed-rate mortgage is best for people who plan to stay in their home for at least a good chunk of the life of the loan; if you think you’ll move fairly soon, you may want to consider the next option.

Adjustable-rate mortgage

Unlike fixed-rate mortgages, adjustable-rate mortgages (ARM) offer mortgage interest rates typically lower than you’d get with a fixed-rate mortgage for a period of time—such as five or 10 years, rather than the life of a loan. But after that, your interest rates (and monthly payments) will adjust, typically once a year, roughly corresponding to current interest rates. So if interest rates shoot up, so do your monthly payments; if they plummet, you’ll pay less on mortgage payments.

Right for: Home buyers with lower credit scores are best suited for an adjustable-rate mortgage. Since people with poor credit typically can’t get good rates on fixed-rate loans, an adjustable-rate mortgage can nudge those interest rates down enough to put homeownership within easier reach. These home loans are also great for people who plan to move and sell their home before their fixed-rate period is up and their rates start vacillating. However, the monthly payment can fluctuate.

FHA loan

While typical home loans require a down payment of 20% of the purchase price of your home, with a Federal Housing Administration, or FHA loan, you can put down as little as 3.5%. That’s because Federal Housing Administration loans are government-backed.

Right for: Home buyers with meager savings for a down payment are a good fit for an FHA loan. The FHA has several requirements for mortgage loans. First, most loan amounts are limited to $417,000 and don’t provide much flexibility. FHA loans are fixed-rate mortgages, with either 15- or 30-year terms. Buyers of FHA-approved loans are also required to pay mortgage insurance—either upfront or over the life of the loan—which hovers at around 1% of the cost of your loan amount.

VA loan

If you’ve served in the United States military, a Veterans Affairs or VA loan can be an excellent alternative to a conventional loan. If you qualify for a VA loan, you can score a sweet home with no down payment and no mortgage insurance requirements.

Right for: VA loans are for veterans who’ve served 90 days consecutively during wartime, 180 during peacetime, or six years in the reserves. Because the home loans are government-backed, the VA has strict requirements on the type of home buyers can purchase with a VA loan: It must be your primary residence, and it must meet “minimum property requirements” (that is, no fixer-uppers allowed).

USDA loan

Another government-sponsored home loan is the USDA Rural Development loan, which is designed for families in rural areas. The government finances 100% of the home price for USDA-eligible homes—in other words, no down payment necessary—and offers discounted mortgage interest rates to boot.

Right for: Borrowers in rural areas who are struggling financially can access USDA-eligible home loans. These home loans are designed to put homeownership within their grasp, with affordable mortgage payments. The catch? Your debt load cannot exceed your income by more than 41%, and, as with the FHA, you will be required to purchase mortgage insurance.

Bridge loan

Also known as a gap loan or “repeat financing,” a bridge loan is an excellent option if you’re purchasing a home before selling your previous residence. Lenders will wrap your current and new mortgage payments into one; once your home is sold, you pay off that mortgage and refinance.

Right for: Homeowners with excellent credit and a low debt-to-income ratio, and who don’t need to finance more than 80% of the two homes’ combined value. Meet those requirements, and this can be a simple way of transitioning between two houses without having a meltdown—financially or emotionally—in the process.

The post 6 Types of Home Loans: Which One Is Right for You? appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com