This Place Sure Has Changed: Which Cities Have Changed the Most?

A MagnifyMoney analysis looks at a decade of data to determine which communities are undergoing dynamic transformations, and which are standing still.

The cities that have changed the most in 10 years

“This place has changed” is a refrain you often hear from a city’s longtime residents. But change is a curious, inconstant thing; as some communities undergo great transformations, others seem frozen in time.

MagnifyMoney looked at nine elements of local change from 2006-2016 among the 50 largest metros in the United States, creating a Change Score (0-100) for each. The score factors in such measures as the changes in commute times, income, house prices, crime rates, building permits and more.

Change isn’t necessarily a good or bad thing. Big growth in commute times and rents can be negative, but they can also be a function of positive developments like job and income growth. Similarly, places without as much change could be more attractive to people working their way up the salary ladder or those retirees on fixed incomes, offering more affordable housing and less congestion.

But change often brings underlying challenges to the forefront, prompting communities to make tough calls on things that could hamper positive transformations going forward, like diversification of industries, infrastructure investment and tax policy.

MagnifyMoney is highlighting these places to encourage discussion in communities dealing with rapid change.

  1. Austin, Texas (90.4). Austin is a magnet for change, with the fastest job growth in the nation (+40% since 2006), 60% of residents moving since 2010, and a 54% rise in house prices since 2006, the most of the 50 metros ranked. Relatively lower living costs than tech centers like the San Francisco Bay Area and Seattle, along with a combination of satellite offices of larger tech companies, a burgeoning startup scene and no state income tax all contribute to Austin’s change leadership. The lowest-ranked element of Austin growth, building permits (No. 25 of 50), explains some of the outsize housing price appreciation.
  2. Dallas-Fort Worth (89.7). Dallas isn’t tops for change in any of the nine categories we looked at, but it ranks high because it’s in the top 10 for five categories, and ranks no lower than No. 19 (growth in rent, at 31% since 2006) for any single category. Dallas-Fort Worth’s top rank is for the decline in its crime rate, No. 4 (and down 43% from 2006).
  3. Houston (86.2). Houston rounds out the trio of big Texas cities at the top of the change list, led by housing factors. It ranks No. 2 for house price appreciation, at 38% from 2006, and No. 3 for building permit expansion. It lags on crime rate change (-27% from 2006), on which it ranked  No. 23 of 50 metros.
  4. Nashville, Tenn. (84.8). Ranking fifth in the nation for employment growth (24%) and building permit expansion, Nashville is the most changed city outside Texas in our ranking. In all, 53% of Nashville residents report moving since 2010, and median nominal income is up 26% from 2006. More challenging, median rent growth has far outpaced income growth, up 38% since 2006.
  5. Tie: Portland, Ore., and Denver (83.9).  Income, rent and commute times are where Portland ranks highest for change. Portland’s median rent of $1,158 a month is up 52% from 2006, while median income is up 31%, an impressive figure, but one that leaves many stretched in the face of rapidly rising rents. Commute times are up 12% on average from 10 years ago. As for Denver, its story is one of rising housing costs outpacing big job growth.  It ranks No. 2 for rent increases of 60% and No. 3 for house price increases of 35% in 10 years. Employment growth of 23% ranked No. 6, while income growth of 31% also ranked No. 6 of the 50 metros examined.

Places that changed the least

  1. Birmingham, Ala. (61.1) Birmingham ranks in the bottom half of change for all nine metrics we analyzed, and notably lags in employment growth, at 3% in the 10 years between 2006 and 2016. House prices, a double-edged sword, are down 2% from their 2006 level as of 2016, while commute times are identical to levels seen at the start of the 10-year period.
  1. Milwaukee (61.7) Milwaukee also lags in employment growth, at 4% in 10 years, but it’s one of the few areas where rent growth hasn’t significantly outpaced income growth, with median rent up 19% in 10 years (while incomes rose 15% over the same period).
  1. New Orleans (63.4) While New Orleans is third from the bottom in terms of change, in the wake of Hurricane Katrina in 2005, it has made big progress in one key metric; employment is up 30% since 2006, giving this city a No. 3 ranking among the 50 largest metros for growth. Where it lags is in metrics where too much change is a negative: rent growth and commute-time growth. Median rent in the New Orleans area is up 17% in 10 years, ranking No. 48 out of 50, while commute times are up just 1%, ranking No. 47.

What about the tech-heavy Bay Area?

With the rapid growth of tech companies in the last decade or so, there is some expectation that San Francisco and San Jose, the two metros that comprise the greater Bay Area, would rank higher on change than Nos. 24 and 10, respectively.

They are ranked Nos. 1 and 2, respectively, on income, Nos. 2 and 1 on commute-time growth, and Nos. 5 and 1 on rent growth, indicating significant shifts. The median income in San Francisco, the Peninsula, Marin and East Bay is up 37% in 10 years, while in the South Bay (San Jose) it’s up 36%, both leading the metros in our ranking.

Meanwhile, commute times increased 18% across both the San Francisco and San Jose metros, also ranked No. 1 of 50 metros, on top of already high levels of congestion from the peak of the last business cycle.

But house prices, while setting records and sitting among the most expensive in the country, have not grown as much over 10 years as other metros like Dallas, Houston, and Austin, which had less of a run-up during the housing boom of the mid-2000s.

San Jose ranked No. 20 for house price growth since 2006, while San Francisco ranked No. 47, using an index that accounts for all communities in the metro, not just desirable suburbs and neighborhoods that have seen outsize appreciation.  And crime rates have not declined as rapidly in the Bay Area as in other parts of the country, further limiting change rankings, with San Francisco ranking No. 44 for change in its crime rate.

Methodology

We looked at nine factors to assess change, including:

  • Commute times — the percentage change in average commute times reported for each metro area in the U.S. Census American Community Survey, released in September 2017 and covering 2006-2016.
  • Building permits — The number of residential building permits issued, 2007-2016, as a percentage of the 2006 base of households, using data from the Department of Housing and Urban Development.
  • Median age — The change in median age of residents, 2006-2016, via the American Community Survey.
  • Employment — The percentage change in people employed from 2006-2016, via the American Community Survey.
  • Income — The percentage change in nominal median household income, 2006-2016, via the American Community Survey.
  • House prices — The percentage change in the nominal house price index, 2006-2016, via the Federal Housing Finance Agency.
  • Rent  — The percentage change in median rent from 2006 – 2016, via the American Community Survey.
  • Crime rate — The percentage change in the crime rate from 2006-2016, via the Federal Bureau of Investigation  Uniform Crime Reporting program.
  • Recent moves — The percentage of residents who moved into their current residence in 2010 or later, via the American Community Survey.

Ranks for each of the nine factors were evenly weighted to create a Change Score for each metro, from 0-100, with 100 representing the top score.

 

The post This Place Sure Has Changed: Which Cities Have Changed the Most? appeared first on MagnifyMoney.

What Happens to Debt When You Get Married?

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According to the New York Federal Reserve, total student loan debt in the U.S. has reached $1.3 trillion, while more than 44 million Americans have student loan debt. Between these figures and soaring credit-card debt, paying off all we owe can take some people years, if not decades. 

The problem can seem particularly acute for young couples, more and more of whom are getting married with tens or even hundreds of thousands of dollars to pay off. In many instances, one partner has significantly more debt than the other. 

When Jeff and Cassandra Campbell of Austin, Texas.,  got married in 2006, Jeff was $61,000 in debt — his was a combination of credit card debt, a second-home mortgage and a car loan. Cassandra was debt-free, but the couple immediately agreed that with marriage, his debt was now the burden and responsibility of both of them.   

“I believe that successful couples combine everything when they say, ‘I do,’” says, Jeff, 53. “It’s no longer my income or your debt, it’s ours.”
 

Deciding how to tackle a single spouse’s or partner’s debt is no simple thing. It might be nice to chip in to help pay down your beloved’s debt, but in the eyes of the law, marriage doesn’t necessarily mean you have to. 

What happens to debt when we marry? 
 

Adam S. Minsky, a Massachusetts-based lawyer and expert in student loan law, says that although it varies by state, most of the time debt brought into a marriage only affects the spouse who brought it in.   

“Generally speaking, certainly where I practice here in Massachusetts, there is no way to make a spouse liable for a debt,” he says.
 

An exception might be if the couple did a form of refinancing once they got married and now jointly own the debt together. But if one spouse brought a debt into the marriage and both spouses paid off the debt together, the other spouse would not be liable for the debt, and that debt wouldn’t affect his or her credit score.

“As long as [the debt] only stays in one of their names, it’s only going to be reported for one of them,” Minsky says. 

There are, of course, slightly different rules when it comes to couples who are divorcing. For example, if a spouse helped pay off the other’s debt in marriage, that circumstance is often taken into account in divorce proceedings, Minsky notes. 

Learning the legal nuances of spousal debt, having necessary premarital conversations and understanding  optimal strategies for paying off debt can allow a couple to avoid the uncomfortable and frustrating conversations that might accompany one spouse having significantly more debt that the other.
 

Here are some tips on how to tackle debt as a couple:  

Have those tough (but essential) conversations before getting hitched.

Minsky says his greatest piece of advice for couples in which one partner has significant debt and the other doesn’t boils down to this: Talk about it openly before marriage. 

“Communication is the most important thing,” he says. “Because you don’t want to get married and then find out there’s a bunch of debt you didn’t know about, or you didn’t fully understand the nature of the debt, or you didn’t have a plan. I’d say develop that communication and be comfortable talking about it.” 

Eric Bowlin, 32, a real estate investor based in Worcester, Mass., says he and his wife, Jun — whom he met during graduate school—always approached their finances as a team. Eric says Jun accepted his roughly $85,000 debt ($60,000 of which was related to student loans) before they got married in 2009. But a tough conversation ensued when Eric wanted to make a large real estate investment before they had paid off the debt.  

“I deployed to Afghanistan” around 2010, he says, “and when I got home, we had saved about $100,000. We could have easily paid off all my student loans, car and half the multifamily house we owned, but I told her I wanted to use every dollar to invest in more real estate and I wanted to drop out of our Ph.D. program.” 

He says despite Jun’s hesitation, she agreed. “To this day I’m amazed she ever agreed to let me do that,” Eric says. He spent all of his savings, maxed out all his credit cards and borrowed about $40,000 from friends.  

“She was crying at night and I couldn’t sleep because of the stress,” he says. But his decision paid off. He has since built up a successful real estate portfolio, and the couple paid off their debt in 2016.
 

Employ strategies for paying the debt off together.

Once you and your partner have agreed to tackle the debt together, come up with a solid plan.  

“I’ve seen trouble happen when married couples never really talked about [debt], and then it’s a thing,” Minsky says. “Or they didn’t really come up with a plan and now there’s complicated feelings of resentment or guilt or shame.” 

The plan a couple employs will vary based on an array of variables: the amount and type of debt, income level, housing situation, location and more. The Campbells, for example, didn’t decide to pay off their debt until the birth of their first daughter. 

Shortly thereafter, they discovered the “snowball method,” popularized by personal finance personality Dave Ramsey, and decided to pay off their debts from smallest to largest.

They put retirement savings and vacations on hold, paid cash for everything except bills and generally limited their eating out and social activities. They became debt-free about five years ago.

Jeff’s advice for newly married couples is to agree on a budget before each month. 

“Some spouses will naturally be more of the spender, saver or math nerd,” he says. “So while it’s not crucial that both be involved in doing everything, the discussion should happen prior to the start of each month about where ‘our’ money is going to go, and what out of the ordinary expenses may be happening.” 

 Don’t forget about your taxes.

Minsky advises giving thought to how you will file your taxes, especially in the case of student loan debt.

For example, if one spouse mostly has federal student loans and is going to do an income-driven repayment plan, there could be incentives for filing taxes as an individual as opposed to making a couple’s joint filing. That way, the income of the spouse without student loan debt won’t be factored in.   

We have previously explored the nuances of deciding whether or not to file jointly or single when spouses have student loan debt. 

Have a story to share? Send us a note at info@magnifymoney.com.

The post What Happens to Debt When You Get Married? appeared first on MagnifyMoney.

A Guide to Home Loans for Bad Credit

Getting a mortgage with bad credit isn’t easy. Banks and credit unions became ultraconservative with mortgage lending following the 2008 housing market crash. However, these days, tighter lending standards don’t have to force you out of the mortgage market. If you have a stable income, you may qualify for a mortgage, even with bad credit. We’ll explain the best home loans for people with bad credit, offer tips for cleaning up your credit histories and point out scams to avoid.

Quick guide to checking your credit score

If you’re just starting to shop for home mortgages, it pays to know if banks think you have bad credit or not. Here’s how FICO, the main credit score provider in the U.S., breaks down credit scores:

  • 800-plus: Exceptional
  • 740-799: Very good
  • 670-739: Good
  • 580-699: Fair
  • 579 and lower: Poor

A credit score above 740 is optimal for finding the best mortgages, but you can often secure a mortgage with a much lower score. You might find an FHA mortgage with a credit score as low as 500 (albeit with a 10 percent down payment rather than 3.5 percent rate for scores above 580), but a credit score of around 650 gives you a decent chance of qualifying for a home mortgage. Getting a mortgage with a truly bad credit score will be difficult, and improving your credit to “fair” status could make it much easier.

Where can you check your credit score? Banks and credit unions use the FICO Scores 2, 4 and 5. These are not the same scores you will find through a free credit scoring site. Unfortunately, we haven’t found a free option for checking your FICO Scores 2, 4 and 5. The best option for checking these is checking them on MyFICO, which costs $59.85.

If you don’t want to pay for a credit score, consider using a free scoring site. But don’t put too much stock in the number it offers. It may overestimate your credit score (for mortgage shopping), especially if you’ve paid off debt in collections recently, and some free scores don’t use the 300-850 scale FICO often uses. Instead, focus on the information about what’s helping and hurting your credit score, if the tool offers those insights, and use that knowledge to make improvements where you can.

You can get a free credit score through our parent company LendingTree.

Home loan programs for people with bad credit

FHA loans

FHA Loan Details

Credit score required

500, but banks have minimum underwriting
standards

Down payment required

Credit score between 500-579: 10 percent
Credit score above 580: 3.5 percent

Upfront financing fee

1.75 percent, which can be financed

Mortgage insurance

0.45 to 1.05 percent

Mortgage limits

Generally, $275,665 for single-family units, but it
varies by location and you should check the limits in your area

Fine print

Mortgage insurance premiums are paid for the life of the loan,
except when putting 10 percent or more down. If your down payment is
less than 20 percent but 10 percent or more, you must have
mortgage insurance for 11 years.

Quick take

If you have bad credit, an FHA loan offers a more accessible mortgage. While credit standards vary by lender, you may qualify for the FHA loan with a credit score as low as 500. With a credit score above the 580 threshold, you may qualify for the 3.5 percent down payment.

Unfortunately, an FHA loan can be expensive because of mortgage insurance fees. In addition to paying ongoing mortgage premiums for the life of the loan, you’ll have to pay a 1.75 percent upfront financing fee.

Pros:

  • 3.5 percent down payments (for those above the 580 credit-score mark)
  • Credit scores as low a 500
  • Can buy up to four units

Cons:

  • 1.75 percent upfront mortgage premium
  • Ongoing mortgage insurance
  • Smaller loan limits

Where to get an FHA loan

You can use the comparison tool on LendingTree or Zillow to find offers from FHA-approved lenders in your area willing to work with people with bad credit. If an online search doesn’t yield the results you want, you may need to work directly with a mortgage broker who specializes in finding mortgages for people with bad credit. You can use a site like Find A Mortgage Broker or Angie’s List to find brokers in your community.

Be sure to check the National Multistate Lending System (NMLS) to see if your broker has had any regulatory action filed against them. Regulatory actions against the broker are red flags that indicate you may want to take your business elsewhere.

Fannie Mae HomeReady Mortgage

HomeReady Mortgage Details

Credit score required

A minimum requirement of 620 generally applies
to Fannie Mae products.

Down payment required

3 percent for credit scores above 680
(for single family homes). 25 percent for credit scores
between 620-680 (for single family homes).

Upfront financing fee

None

Mortgage insurance

0.125 to 3 percent

Mortgage limits

Generally, $424,100, though it varies by location

Fine print

You must earn less than the median income in
your ZIP code to qualify,
or buy a home in a low-income zip code.
You must take a homeowner’s education class to qualify for the mortgage,
mortgage insurance can be canceled when you reach a
loan-to-value ratio of 80 percent.

Quick take

If you’ve got a fair credit score but a big down payment, the Fannie Mae HomeReady mortgage is the best conventional mortgage for you. With a 620 credit score and a 25 percent down payment, you meet HomeReady eligibility requirements, and you’ll pay no mortgage insurance. Fannie Mae offers a 3 percent down payment option, but you need a credit score of at least 680.

HomeReady mortgages also allow for cosigners who won’t live at the address with you. That means a parent or grandparent with a high credit score could help you purchase the property by co-signing. If you can find a cosigner, you may qualify for the 3 percent down payment even if your credit score falls below 680.

Pros:

  • Can qualify with credit score as low as 620
  • A low 3 percent down payment if you have a 680 credit score
  • Down payment doesn’t have to come from personal funds
  • Mortgage insurance premiums are cancellable
  • Non-occupant cosigners are permitted

Cons:

  • Up to 25 percent down payment required in some instances
  • Not all lenders offer Fannie Mae HomeReady mortgages, so you might struggle to find a bank with this offering.

Where to get a Fannie Mae HomeReady mortgage

Fannie Mae doesn’t publish a list of lenders who offer the HomeReady mortgage, so you will need to work with your lender specifically to see if they offer it. Most major banks and credit unions will be approved to underwrite Fannie Mae mortgages, but the specific product offering will vary by bank.

Consider using an online mortgage comparison engine including LendingTree or Zillow to compare offers in your area. However, once you find lenders that will work with you, you’ll have to ask them about the HomeReady mortgage, especially if you want to use the 3 percent down or co-signing feature.

The Housing and Urban Development office of housing counseling may also help you connect with lenders who offer the HomeReady Mortgage.

VA loans

VA Loan Details

Credit score required

Credit standards set by lender

Down payment required

None

Upfront financing fee

1.25 to 3.3 percent, which can be financed

Mortgage insurance

None

Mortgage limits

Generally, $424,100, though it varies by location

Fine print

Must obtain a certificate of eligibility
(for military members and spouses)
before applying for a VA loan

Quick take

For people with a military background, the VA loan is a top mortgage option. The upfront financing fee can be hefty, but it’s a good deal if you plan to live in the house for several years. That said, not all VA lenders work with buyers with bad credit, so you may struggle to find a reputable lender in your area.

Pros:

  • No down payment required
  • No mortgage insurance
  • No firm credit minimums
  • Can buy up to four unit multi-family property.

Cons:

  • Upfront funding fee
  • Not all lenders issue VA loans to borrowers with bad credit
  • Must buy home with the intent to occupy for at least 12 months

Where to get a VA loan

To take out a VA loan, you must get a certificate of eligibility (COE) through the Veterans Administration eBenefits platform. Once you get the COE, you can use the Consumer Finance Protection Bureau’s interest rate data to learn about interest rates for VA loans.

To find a VA lender who works with bad-credit clients, you’ll probably want to work with a mortgage broker. You can find mortgage brokers online or through your state’s housing finance agency. Be sure that your broker has no regulatory action filed against them before you commit to working with them.

USDA loans

USDA Loan Details

Credit score required

As low as 580, but generally 640

Down payment required

None

Upfront financing fee

1 percent (can be financed)

Mortgage insurance

0.35 percent annually

Mortgage limits

No limits, but must meet standards of affordability based on moderate incomes

Fine print

You must meet income eligibility requirements,
and the property must be in a qualified rural area

Quick take

If you’re planning to buy in a rural area (and you may be surprised what qualifies, so check), a USDA loan offers a low cost, low money down loan. Technically, the absolute minimum credit score for this loan is 580, but most lenders won’t issue USDA loans to borrowers with scores below 640. USDA loans tend to be a better deal than FHA loans, but they may have higher costs compared to VA or conventional loans. If you’ve got fair credit, but you don’t have a big down payment, the USDA loan makes sense for you.

Pros:

  • No down payment
  • Only 1 percent upfront mortgage fee

Cons:

  • Ongoing financing fee cannot be canceled
  • Finding lenders who work with bad credit borrowers can be difficult
  • Must meet location and income criteria

Where to find USDA loans

If you meet the USDA eligibility requirements, you can start shopping for USDA loans through LendingTree, but you may not find many offers if you have a credit score below 640. If you can’t easily find a lender, you’ll want to work with an independent mortgage broker who will have insider access to multiple lenders in your city. You can find reputable brokers online through Find A Broker, Angie’s List or the Better Business Bureau (search for mortgage brokers, your city). Before committing to a broker, check that your broker has no regulatory action filed against them.

Manufactured home loans for bad credit

Manufactured homes are houses constructed off-site, transported and anchored to a permanent foundation at a new home site. On average, manufactured homes cost 80 percent less than site-built single family homes, but taking out a mortgage for a manufactured home can be expensive, even if you have good credit. According to the Consumer Financial Protection Bureau, almost 68 percent of all loans for manufactured home purchases were considered higher priced mortgages. On top of already high rates, bad credit will drive your interest rate even higher. However, thanks to the lower upfront price, people with bad credit may have an easier time finding home financing for manufactured homes than for site-built homes.

FHA Title I loans (Chattel loans)

FHA Title I Loan Details

Credit score required

No credit score minimums, but
must meet ability to pay criteria

Down payment required

5 percent down for credit scores above 500,
otherwise 10 percent down

Upfront financing fee

Up to 2.25 percent

Mortgage insurance

Up to 1 percent

Mortgage limits

  • Home only: $69,678

  • Lot only: $23,226

  • Home and lot: $92,904

Mortgage term limits

  • 20 years for home only

  • 20 years for single-section home and lot

  • 15 years for lot only

  • 25 years for a multi-section home and lot

Titling requirements

Manufactured homes can be titled as personal property.

Fine print

Manufactured homes must be situated on a lot that meets
FHA property standards (such as hookups for water and electricity,
and foundation anchors) that is owned or leased by the primary
mortgage holder. Manufactured home must be at least 400 square feet.

Quick take

The FHA Title I loan is an obvious choice for people with bad credit looking to buy a manufactured home, but you need to do your research before you commit to this loan. According to the CFPB, Chattel loans had 1.5 percent higher APRs than standard mortgages. These loans also come with expensive mortgage insurance fees that can be passed on to you.

However the Chattel loan makes sense if you’re buying a used manufactured home or if you plan to rent the lot where your home sits.

Pros:

  • No credit standards
  • Flexible terms for land ownership
  • Can title home as personal property

Cons:

  • Maximum loan is $92,904
  • Some lender restrictions
  • 5-10 percent down payment requirement
  • Must be a fixed term mortgage

Where to find Chattel loans

Chattel loans are a niche product that few banks and credit unions offer. Half of all Chattel loans are issued by five banks: 21st Mortgage, Vanderbilt Mortgage, Triad Financial Services, U.S. Bank, and Credit Human (formerly San Antonio Federal Credit Union), according to a 2014 report from the CFPB. You can also find local lenders through the Manufactured Housing Association’s lender search.

FHA loan

FHA Loans Details for Manufactured Homes

Credit score required

500 (varies by bank)

Down payment required

Credit score between 500-579: 10 percent
Credit score above 580: 3.5 percent

Upfront financing fee

1.75 percent, which can be financed

Mortgage insurance

0.45-1.05 percent

Mortgage limits

Generally $275,665

Titling requirements

Manufactured homes must be titled as real
property and you must own the lot.

Fine print

All manufactured homes must meet standards set by the
FHA including foundation anchors, water and electrical hookups and more.

Quick take

A standard FHA loan makes sense if you’re planning to buy a manufactured home and land. While credit standards vary by lender, you may be able to qualify for the FHA loan with a credit score as low as 500. If you can raise your credit score to 580, you may even qualify for the 3.5 percent down payment.

This loan isn’t as easy to get as the Chattel loan, but some people with bad credit may qualify. If you want to use an FHA loan for a manufactured home, work with your loan officer closely, so your financing is in place before your home is completed.

Pros:

  • 3.5 percent down payments
  • Credit scores as low a 500
  • Up to $275,665 in financing

Cons:

  • 1.75 percent upfront mortgage premium
  • Must pay ongoing mortgage insurance
  • Must buy owner-occupied home

Where to get an FHA loan

The Manufactured Housing Association’s lender search will also provide a list of lenders who may offer FHA loans for manufactured homes in your state. If that list doesn’t provide the results you need, work with a HUD office of housing counseling center to learn about lenders who offer FHA loans for manufactured homes.

USDA

USDA Loan Details for Manufactured Homes

Credit score required

580 and below is considered a no-go;
generally 640 and up

Down payment required

None

Upfront financing fee

1 percent, which can be financed

Mortgage insurance

0.35 percent annually

Mortgage limits

No limits, but must meet standards of
affordability based on moderate incomes

Titling requirements

Home must be titled and taxed as real estate

Fine print

You must own the lot where your home is located and meet
income eligibility requirements and the property must be
in a qualified rural area

Quick take

If you’re purchasing a new manufactured home in a rural area, the USDA loan may make sense for you. The manufactured home must be new, and you have to own the site where the home is located. However, with the lowest acceptable credit score being at the 580 threshold, USDA loans aren’t suited for bad-credit borrowers. Improving your credit to “fair” could be the difference between rejection and approval..

Pros:

  • As low as no money down
  • Low financing fees
  • Competitive interest rates

Cons:

  • Higher credit underwriting standards
  • Must own lot
  • Must buy new manufactured home

Where to get a USDA loan

If you meet the USDA eligibility requirements, connect with the HUD office of housing counseling in your state. If the USDA loan is a good fit for you, staffers there will help you find lenders who work with USDA borrowers that want in on manufactured homes.

VA loans

VA Loan Details for Manufactured Homes

Credit score required

Credit score standards set by lender

Down payment required

None

Upfront financing fee

1.25-3.3 percent depending on your military status,
home buying experience and down payment.
This fee can be financed.

Mortgage insurance

None

Mortgage limits

$424,100

Titling requirements

The house must be titled as real property,
and you must own the lot where the house is located.

Fine print

Must obtain a certificate of eligibility
(for military members and spouses) before applying for a VA loan.

Quick take

The VA loan offers a down payment of 0 percent (even for manufactured homes) as long as you own (or will buy) the lot where the home is located. The drawback to the VA loan is that most lenders set their credit score standards in the 600-range, which means that people with bad credit might not qualify. On top of that, not every VA lender offers loans for manufactured homes. Those two factors mean the you may struggle to find a lender in your area who will work with you.

If you find the lender, the VA loan is a great choice, but if you can’t, consider an FHA loan instead.

Pros:

  • No down payment required
  • No mortgage insurance
  • No firm credit minimums

Cons:

  • Upfront funding fee
  • Not all lenders offer VA loans for manufactured housing
  • Must buy home with the intent to occupy for at least 12 months
  • Must own lot

Where to get a VA loan

To take out a VA loan, you must get a certificate of eligibility (COE) through the Veterans Administration eBenefits platform. Once you get this, find an independent mortgage broker who specializes in VA loans for manufactured homes or VA loans for people with bad credit. These brokers work with multiple banks and can help you find better deals than you might find on your own. Before committing to a particular broker, check for regulatory action filed against them. You don’t want to work with a broker who fails to meet the standards set by your state.

Conventional mortgages

Conventional Mortgage Details for Manufactured Homes

Credit score required

620

Down payment required

5 percent (10 percent for people with insufficient
credit for traditional scoring)

Upfront financing fee

None

Mortgage insurance

0.5 percent annually

Mortgage limits

Generally, $424,100

Titling requirements

Must own land, and home must
be titled as real property.

Fine print

You’ll have to pay mortgage insurance until your
home reaches at least an 80 percent loan-to-value ratio.

Quick take

If you’ve got a 20 percent down payment and at least a 620 credit score, and your home meets underwriting standards, the conventional mortgage is the best choice for you. This loan has competitive interest rates and no mortgage insurance for people with a loan-to-value ratio of at least 80 percent. Your home must be at least 600 square feet and meet HUD standards for manufactured homes, and you must own your lot. However, you can use this loan to purchase an existing manufactured home (built after 1976) if it is permanently affixed to an approved foundation.

Another advantage to this loan is that they do accept borrowers with thin credit files, provided they don’t have derogatory marks on their credit file.

Where to find conventional mortgages

Before you start shopping, you can use the Consumer Finance Protection Bureau’s interest rate data to learn about interest rates in your state. Compare real offers from local lenders using LendingTree, or work with your state’s housing finance agency to find reputable lenders in your area.

Other common financing deals

Aside from those mortgages, manufactured home buyers with bad credit might consider two other options. First, you might consider a retail installment contract. A retail installment contract is issued by the manufacturer (or installer) or your home. If you’re working directly with the manufacturer to take out a loan, you should take the time to understand upfront and ongoing fees, APR and what happens if you miss a payment. The Manufactured Housing Institute provides detailed information on buying and living in manufactured houses and on how to find manufacturers and lenders who can help you finance a manufactured home.

Borrowers with bad credit might also consider owner-held financing option. Owner-held financing is a readily available form of credit, but it is risky. Before signing a lease to own agreement, find a real estate lawyer who can help you uncover title issues and explain the loan. To learn more, you can either find a lawyer through your employer (who may offer legal benefits), the American Bar Association or by contacting HUD office of housing counseling in your state.

Clean up your credit before mortgage shopping

In 2016, the average new home cost $372,500, but that’s before paying interest. According to Informa Market Research, the average interest rate for a person with a credit score between 620 and 639 is 5.115 percent, but a person with a score of at least 760 gets a 3.527 percent rate. Does just a point and a half translate to much cost difference? Absolutely. If both people finance $298,000 on a new home, then the person with great credit will pay $1,343 per month. The person with lesser credit will pay $278 more, $1,621 per month. That translates to more than $100,000 more over the life of the loan.

Tips to improve your credit score

To repair your credit before taking out a mortgage, and qualify for better terms and more options, start with these three simple steps:

  1. Pay all your current debt accounts on time, each month.
  2. Reduce your credit card utilization by paying down your credit card debt.
  3. Stop applying for credit six months before mortgage shopping.

These three factors alone account for 75 percent of your credit score.

As you take care of those items, you’ll want to check your credit report from the three major credit bureaus through AnnualCreditReport.com.

You want to be sure that you recognize all the information on your credit report, and that there are no duplicate entries. Dispute any errors or duplicates. For further guidance, use the Federal Trade Commission’s free guide to disputing errors on your credit report. If you believe you’ve been a victim of identity theft, follow the Federal Trade Commission’s advice on identity theft recovery.

Disputing errors on your credit report may prevent a bank from issuing you a mortgage, so start disputes at least 90 days in advance of applying for a mortgage. While the credit bureaus should clean up the errors within 30 days, the process sometimes takes longer

Getting a mortgage after bankruptcy or foreclosure

Bankruptcy stays on your credit report for up to seven or 10 years, depending on the type, and foreclosures stay on your credit report for up to seven years, but you don’t have to wait that long to take out a mortgage. If you take steps to improve your credit, you can qualify for some mortgages one to four years after your bankruptcy is dismissed, or two to four years following foreclosure.

 

Conventional

FHA

VA

USDA

Chapter 7

Four years from discharge or dismissal (except in extenuating circumstances)

Two years (or one year in extenuating circumstances)

Generally, two years (though it is not a disqualifying standard)

Generally, three years

Chapter 11

Four years from discharge or dismissal (except in extenuating circumstances)

Must meet credit standards

Generally, two years

Must meet credit standards

Chapter 13

Two years after discharge or four years after dismissal

Two years (or one year in extenuating circumstances)

One year of payments

Generally, one year

Foreclosure

Seven years, except if foreclosure was discharged in bankruptcy (then use bankruptcy limits)

Three years except in extenuating circumstances

Generally two years

Generally, three years

Even if you can get a new mortgage just a year or two after bankruptcy or foreclosure, it makes sense to wait longer in most cases. By waiting around three or four years, the damage of the bankruptcy and foreclosure fades, and you’ll have that extra time to revive your credit score.

To get your credit in shape after bankruptcy or foreclosure, you’ll want to continue to make bankruptcy payments as agreed and consider opening a secured credit card to rehabilitate your damaged credit. Use the credit card for daily expenses, and pay it off in full each month.

Improve your shot at approval even if you have bad credit

If you’ve got bad or fair credit, and you don’t have a lot of time to improve it, you can still take out a mortgage in some cases. These are a few things that can help you get approved with a low credit score.

  • Choose a house well within your budget. If you’ve got a strong income and a low monthly payment, the bank may be more likely to approve your loan.
  • Come up with a larger down payment. While the median down payment is just 5 percent, a person with bad credit may need quite a bit more (up to 25 percent) to get a loan.
  • Work with your loan officer: Give them paperwork in a timely manner, and follow their instructions regarding credit repair, collection repayments and debt repayments. If you’re close to gaining approval, the loan officer can help you take the last few steps to meet the bank or government’s underwriting criteria. Loan officers may take advantage of manual underwriting provisions for FHA, VA, USDA and conventional loans, but that requires more information and participation from you.
  • Ask for rapid rescoring if you’re disputing errors on your credit report, or paying down credit card debt.

Rapid rescoring

A rapid rescore is a method for “re-checking” your credit score on an accelerated time scale. Banks usually only check your credit score once when they’re considering your for a loan, but they may pay a fee to see a new score if you’ve paid down debt or removed negative information from your report, according to Experian. The bank will use the new information to recalculate your credit score to see if you qualify for a loan.

Should I keep renting?

A bad credit score by itself shouldn’t stop you from buying a home. You’ll pay more in interest costs over the life of the loan, but you’ll also start building equity sooner. Plus, a few years of paying on a mortgage will help you raise your credit score, so you can refinance later on.

However, a bad credit score can be a symptom of a bad financial situation. If you’re struggling to pay your bills on time, buying a house isn’t usually a good idea. During financial stress, a new mortgage bill is more likely to be a curse than a blessing.

Watch out for these scams targeting people with poor credit

Financial scammers are always on the prowl for desperate people who might become their next victims. These are a few pitfalls that all homebuyers need to avoid as they shop for homes and mortgages.

Mortgage closing scams

Mortgage closing scams are pernicious schemes that involve falsifying wiring instructions, the FTC warns. In a mortgage closing scam, a hacker poses as a title closing agent. He or she may email you fraudulent information about where to wire the money, or claim that there’s been a last-minute change to the details.

Closing for a home is an incredibly busy time, especially if you’ve struggled to qualify for the mortgage in the first place. To prevent mortgage closing scams, ask your title agent to send the wire information in an encrypted email. You can also request a call with the details.

Anyone who has been a victim of a mortgage closing scam should report it to the FBI immediately, and log a complaint in the FBI’s Internet Crime Complaint Center.

Complex lease-to-own deals

Owner financing isn’t necessarily a scam, but it can be complex. Many owner financing deals don’t put the title into your name until you’ve paid off the entire loan, and some deals require balloon payments after a few years, the FTC warns. If you can’t cover the balloon payment, you lose every cent of equity you’ve paid.

Even worse than difficult loan terms are situations when the owner can’t legally issue a first-lien loan. If the owner has used the house to secure any other loan, then the bank has a first-lien position on the loan.

Don’t sign an owner financing agreement until a lawyer explain the details of the loan to you. You must take steps to protect yourself from owner fraud if you want to own the house in the end.

Hard money loan scams

Hard money loans are real estate loans for investors interested in flipping a property. Hard money loans come with high interest rates, hefty down payments and short payback periods. Most of the time, hard money lenders evaluate project quality rather than investor credit when issuing loans.

If you’re considering a hard money loan at all, you should have plans to flip a property for a profit. If you can’t earn a profit on the house, then a hard money loan doesn’t make sense.

If you are considering a hard money loan because you can’t find traditional financing, be careful. There’s little oversight of hard money loans, so it’s important you know what you’re getting into with these products. You can check out this guide to hard money loans if you want to learn more.

FAQs

If a bank turns you down for a mortgage, you can ask for an explanation. When you ask, the lender has 30 days to prepare an answer in writing, as required by the Equal Credit Opportunity Act and the Fair Credit Reporting Act. A few common responses include:

  • We don’t think you can afford the payment (for instance, you’ll have to high of a debt-to-income ratio).
  • Your credit score’s too low.
  • You have an insufficient down payment.

Anyone struggling to find a mortgage should consider working with a licensed mortgage broker in his/her county. Mortgage brokers work with multiple local banks and credit unions, and they can often help if a banker cannot.

The best credit score to get a mortgage is any score above a 740, but most people with credit scores above 620 will qualify for some mortgages. And yes, it’s possible to qualify for a mortgage if you have a score of 500-620.

Yes. If you took out a loan when you had bad credit, you may qualify for a much better rate by improving your credit after just one to two years of on-time payments on all your lines of credit, according to research from VantageScore Solutions. However, if your bad credit score is the result of foreclosure or bankruptcy, your credit score may not fully recover for seven to ten years, so don’t count on a massive rate drop right away if those are the reasons for your bad credit score.

Given how much easier it is to qualify for a mortgage and how much you can save when you have good credit, waiting to buy often makes sense.

VA loans don’t require a down payment, and they have no firm credit minimums, but you’ll still need to meet a bank’s underwriting standards (which could be as high as a 640 credit score). If you have a credit score of 580-640 and you meet other qualifying standards, you may qualify for a no-money-down USDA home loan..

Outside these options, the only no-money-down mortgages for people with bad credit include owner-held mortgages or rent-to-own deals. Do your homework.

Not all mortgages allow cosigners, but a cosigner could help you qualify. Asking someone to cosign essentially means asking that person to pay your mortgage if you’re ever unwilling or unable to pay the bill. We generally don’t recommend becoming a cosigner unless you plan to live in the house.

An adjustable-rate mortgage makes a lot of sense if you have bad credit and you are confident you can improve your credit score within seven years before your interest rate adjusts (in the case of a 7/1 ARM). If your credit improves, you may be able refinance at a lower, fixed rate before the interest rate adjustment takes place. However, this option is risky. You may be stuck with higher interest rates if your credit doesn’t improve or if interest rates rise by the time you need to refinance.

The post A Guide to Home Loans for Bad Credit appeared first on MagnifyMoney.

What Is the NSLDS? A Tool to Keep Track of Student Loans

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Over the course of a college career, a student may take out multiple education loans of different amounts and term lengths. Loans are often granted on an annual basis, and by the time you graduate, it’s easy to lose track of your total borrowing.

What’s more, holders of federal loans get a short reprieve from repayment after graduation — up to six or nine months, depending on the loan time — making it can be easy to forget that you’ve got money due. It’s smart to use that grace period to begin planning for repayment, rather than viewing it as a vacation from thinking about your college loans.

One of the best ways to keep track of your federal student loans and payments is through the National Student Loan Data System, a centralized database for federal student loan and grant information managed by the U.S. Department of Education. By checking in regularly on the NSLDS, you can stay on top of how much you owe, the repayment terms of your loans and the monthly payment amounts.

For new graduates making a budget — sometimes for the first time — this student loan information can help them understand how much money they need to set aside for monthly payments, or if they need to look into alternative loan repayment programs.

“It’s a helpful tool, and so often as humans, we’re inclined to denial or procrastination,” says Melinda Opperman, executive vice president with Credit.org, a nonprofit organization focused on personal finance education. “By ignoring that tool, you could have a problem compounding. See what’s in there, and get yourself anchored and prepared.”

What’s the purpose of the National Student Loan Data System (NSLDS)?

The NSLDS was authorized as part of the 1986 Higher Education Act (HEA) Amendments and is administered by the Office of Federal Student Aid. It was formed with three purposes:

  • To better the quality of student aid data and its accessibility
  • To decrease the administrative work required for Title IV Aid
  • To decrease fraud and abuse of student aid programs

The NSLDS initially focused on federal loan compliance but eventually expanded to encompass detailed data from federal student loan and grant programs in which students are enrolled.

Where does the NSLDS get its information?

The NSLDS gets information from several government and loan processing services. Here are the sources for NSLDS data:

  • Guaranty agencies, which are state agencies or private, nonprofit organizations that provide information on the Federal Family Education Loan (FFEL) Program
  • Department of Education loan servicers
  • Department of Education debt collection services (information about defaults on loans held by the Department of Education)
  • Direct loan servicing (information on federal direct student loans)
  • Common origination disbursement (information on federal grant programs)
  • Conditional disability discharge tracking system (information on disability loans)
  • Central processing system (information on aid applicants)
  • Individual schools (information on federal Perkins loan program, student enrollment and aid overpayments)

When data from these sources are combined, you can get a comprehensive overview of your outstanding loans, repaid loans and repayment schedules.

The NSLDS is updated according to each organization’s loan reporting schedule. Some report monthly, and many report data more frequently.

What you’ll find on the NSLDS

After signing up for an FSA ID (Federal Student Aid ID), you can log into the NSLDS to see the updated status of your federal student loans and grants, as well as your college enrollment status and the effective date of your status.

Loans are listed from newest to oldest, and you can find more information about each, including the loan servicer’s name and contact information, by clicking on the loan number. You also will have access to an array of details about each of your federal loans and grants:

  • Name
  • Disbursed amount
  • Date of disbursement
  • Last-known balance
  • Outstanding interest
  • Status (e.g. repayment, in grace, paid in full)
  • Status effective date
  • Interest rate
  • Progress toward the 120 qualifying payments needed for Public Service Loan Forgiveness
  • Income-driven repayment plan anniversary date

“It gives a centralized, integrated view of the loans and grants under the student’s complete life cycle,” Opperman says. “Everything is there.”

You may see a lot of terms and abbreviations you don’t recognize, but there’s a glossary to help you understand them.

What you won’t find

The NSLDS only provides information about federal loan programs, so you will not see details about private loans. To get that information, you’ll need to contact your private loan’s servicer or your school’s financial aid department. You also can review your credit report (you are entitled to one free credit report annually) to find the information.

You also won’t find:

  • Real-time balance accounts. You should see the outstanding principal balance for each loan, but this number may not include the most recent data. Contact your loan servicer for the most up-to-date numbers.
  • Information about nursing and medical loans. While these are federal loan programs, they are not included in the NSLDS. Contact your school’s financial aid department for information about nursing or medical loans.
  • Loans you are not responsible for paying. Any federal loans your parents took out on your behalf, including federal PLUS loans, will not be listed on your NSLDS account. For information about federal student loans that they are responsible for paying, your parents will need to create their own FSA ID and password to access the NSLDS data.

Even with these gaps in information, the NSLDS is a great place to start when you’re not sure whom to contact with student loan questions or when you’re trying to get on top of your loan payments. It’s also helpful if you’re trying to figure out what type of loans you have, which is necessary when you’re applying for certain loan forgiveness programs.

How to sign up for the NSLDS

As mentioned previously, to use the NSLDS you must have an FSA ID username and password, which serve as your login information and allow you to access data about your federal loans and grants online. The ID and password also provide access to many other Department of Education websites.

To create an FSA username and password, visit this link. Opperman says the certified student loan counselors who work with Credit.org recommend you never give out your FSA number or password, even to credit counselors. This information carries the legal weight of a signature, and it can be used to commit identity theft. Credit counselors can get student loan information from you rather than by directly accessing your NSLDS account.

The FSA ID and password application requires your email address, mailing address, date of birth and Social Security number. A cellphone number can be provided if you’d like to bypass answering security questions to retrieve an FSA ID or password.

To look at your federal loan and grant information, click on “Financial Aid Review” after entering your FSA ID and password into the NSLDS website. You do not have to enter loan information, as agencies that issued your federal grants and loans will be responsible for reporting information to the NSLDS.

Is this site accurate?

While the information on the NSLDS generally is accurate because it is provided by loan servicers, it is usually not up to date. Organizations that provide loan information for the NSLDS report on different schedules..

What if the info is wrong?

The NSLDS is not infallible; it’s important to check your page regularly for errors and inaccuracies. Here are some common issues with the NSLDS and how to remedy them:

An error

Check the NSLDS record for this loan, and contact the data provider listed. You will need to give the data provider information that will help the organization look into the error and remedy it. If the data provider is uncooperative and will not fix the error, contact the NSLDS Customer Service Center at (800) 999-8219.

Missing data

If updated loan information is not available within 45 days of disbursement, contact a guaranty agency, the loan’s servicing center or your school’s financial aid office. Otherwise, allow for typical time lapses in reporting.

Frequently asked questions about NSLDS

Usually, no. Typically, only data providers can update information related to your loan when they make their reports to the NSLDS.

The site has an SSL certificate, which means all data passing between your web browser and the site server is encrypted (provided you’re using an SSL-compatible browser, like the latest versions of Chrome, Firefox, Safari or Internet Explorer).

The Department of Education does not charge a fee to use the site.

The site is designed to work best with Microsoft Internet Explorer. You can use other browsers, but keep in mind that the NSLDS pages may not function or display properly on other browsers. The NSLDS system requirements page provides help with browsers and a link to contact information for further assistance.

You are strongly advised not to share your FSA password — ever — as your FSA ID and password are for your use only. Anyone else who uses your FSA information is committing a security violation, and your user ID can be terminated. Organizations can lose access to the NSDLS if they share FSA IDs and passwords.

No. FSA ID passwords expire every 90 days. Fifteen days before the password expires, you will see a warning that it must be changed soon. Users can reset their passwords anytime during that 15-day window by clicking on the “change password” link on the FSA login page.

In this situation, call the NSLDS support number: (800) 999-8219.

You can call the Federal Student Aid Information Center at (800) 4FED-AID — 1-800-433-3243 — between 8 a.m. and 11 p.m. Eastern Time, Monday through Friday, and 11 a.m. to 5 p.m. on Saturday and Sunday. This helpline is not available on federal holidays. You can also contact the office by email or live chat through the website.

The post What Is the NSLDS? A Tool to Keep Track of Student Loans appeared first on MagnifyMoney.

What Credit Score Do I Need to Buy a Car?

What Credit Score Do You Need to Get An Auto Loan?

If it’s time to purchase a new vehicle, you may be wondering about one obstacle that could get in your way: your credit. Maybe you’re unsure how good your credit is and you don’t know what credit score is needed to buy a car either.

Unfortunately, there’s no simple answer to this question. No matter your credit score, you can probably find a way to finance a car loan if you absolutely must buy a new vehicle. The real question is what your credit score will cost you when you make the purchase. The better your credit score, the better your chances of getting a cheaper rate.

So while there’s no minimum credit score for a car loan, your credit history can make a big difference.

Bad Credit Scores Mean Much Higher Interest Rates

According to data from Experian Automotive, the difference in interest rates on a new car loan for someone with excellent credit versus someone with very poor credit is over 11 percentage points. In fact, 2.84% was the average interest rate someone with a super-prime (excellent) credit score paid in the first quarter of 2017, while those with deep subprime (very poor) credit paid an average interest rate of 13.98%.

To illustrate this difference, consider that you apply for a 60-month loan on a car that costs $25,000. With a 2.84% interest rate, the total cost of your car would be $26,847 with payments of $447 per month. Not too shabby.

For the same loan but an interest rate of 13.98%, your car loan would cost you $34,887, and you’d pay $581 per month. That’s more than $8,000 extra! Clearly, poor credit can result in you paying a lot more for your new vehicle.

The difference was even starker for those financing used cars. Those with super-prime credit paid an average rate of 3.56%, while those with deep subprime credit paid an average of 19.62%—more than 16 percentage points higher.

Average New Car Loan Rate by Credit Score (Q1 2017)

  • Super-prime (781–850): 2.84%
  • Prime (661–780): 3.77%
  • Nonprime (601–660): 6.60%
  • Subprime (501–600): 11.05%
  • Deep subprime (300–500): 13.98%

Note that the credit labels above represent Experian’s credit ranges. Other credit reporting agencies use different scales and labels.

Average Used Car Loan Rate by Credit Score (Q1 2017)

  • Super-prime: 3.56%
  • Prime: 5.29%
  • Nonprime: 9.88%
  • Subprime: 16.48%
  • Deep subprime: 19.62%

The dealer may also evaluate your credit using another type of credit score called VantageScore. VantageScore, which was developed by all three of the major reporting agencies, assigns different weights to different parts of your credit history, such as on-time payments, balances, and utilization. Some people may benefit from a lender using their VantageScore, while others may be at a disadvantage.

Where to Start If You’re Unsure

If you’re nervous about letting a car dealer check your credit—but even if you aren’t—it’s helpful to check your score yourself in advance. You can check your credit report for free to make sure you don’t have any surprises and to find mistakes.

Note that the credit score an auto lender uses may be a slightly different because it will be tailored for an auto loan. Still, it’s a good start—if your general credit score is strong, you can also bet that the score the dealer uses is strong.

We also recommend that you try to get pre-approved for a car loan from a bank or credit union before setting foot in the dealership. With a set interest rate in hand, if the dealer can offer you a better rate, perfect! If not, you’ll be prepared to pay what your bank approved you for.

A Word of Caution

Credit inquiries related to auto loans made within a short time frame (usually 14 days, or 45 days depending on the credit score model being used) are supposed to count as a single inquiry. However, some of our readers have found their credit scores dropping after multiple car dealers sent credit inquiries for financing. This is another reason why getting pre-approved before going to the dealership is a good idea.

If you still have questions about how your credit score can affect your car-buying decisions, check out our auto loan resource center, or visit one of the links below.

Here’s What Else You Should Know about Auto Loans:

The post What Credit Score Do I Need to Buy a Car? appeared first on Credit.com.

13 Ways to Give to Charity without Breaking Your Budget

Affinity credit card programs offer a way to support the causes and charities near and dear to your heart. Here are some of the leading options.

Giving to charity doesn’t require a lot of disposable income. If you want to make the world a better place, you can still contribute without cutting a big check.

Here are 13 ways to give to charity on a budget.

1. Donate Your Time

Many charitable organizations survive through the efforts of volunteers. Volunteering is a worthy way to contribute to your community and can be just as valuable as cash donations.

“Donate your time,” says Karen Hoxmeier, founder of MyBargainBuddy.com. “Homeless shelters, soup kitchens, senior centers, hospice facilities, big brother/big sister programs, and animal rescues all need people to help out by being physically present and volunteering their time.”

2. Donate Your Skills

If you have a special skill—such as writing, cooking, or photography—consider offering your services pro bono. Many charities, nonprofits, and advocacy groups have specialized needs but can’t afford dedicated staff.

3. Give Blood

Donating blood to organizations like the Red Cross is free, doesn’t take much time, and might even land you a cookie. More importantly, your donation could help save someone’s life—approximately 10,000 units of plasma are needed daily in the US.

4. Donate Your Stuff

Many charities and nonprofits accept donated goods, including clothes, shoes, furniture, and cars. If you have some stuff to get rid of, consider giving it to a good cause rather than throwing it out.

5. Organize a Drive

If you have the time and enthusiasm but not the money, consider organizing a drive to gather donations for an organization. “Organize a food drive at your work, at your child’s school, or in your neighborhood,” says Hoxmeier. “It just takes one person to get the ball rolling and head up [a] food collection/drop-off.”

6. Raise Funds

You can raise funds for charity in many ways—by organizing a local collection, sharing your favorite causes on social media, or participating in a sponsored walk. If you have a network of caring people and some hustle, you can raise a hefty donation.

7. Shop at the Right Places

In the age of corporate social responsibility, many businesses donate part of their proceeds to charities. For instance, AmazonSmile will donate 0.5% of your eligible purchases to a charitable organization of your choice, and Whole Foods gives you the option to donate your five-cent reusable bag credits to a local organization. Check with the merchants you shop at regularly to see if they offer opportunities to donate to an organization as part of your purchase.

8. Employer Gift Matching

Some employers offer matching gifts, meaning they will match some or all of your charitable donations. Check to see if your employer offers this policy and potentially double your donation. If your company doesn’t currently offer this benefit, talk to your HR department about how to encourage the company to implement a matching gift program.

9. Donate Your Tax Refund

By the time you receive a tax refund, it can feel like found money. If you receive a tax refund next year, consider donating some or all of it. Some of your donations may even be tax deductible for next year!

10. Ask for Gift Donations

If your friends and loved ones often ask you for birthday or holiday gift ideas, you can ask them to donate to a favorite charity instead. Many charities make it easy to set up a campaign to gather birthday donations for their organization.

11. Become an Organ Donor

Around 21 people in the US die every day needing donor organs. You won’t need your organs once you pass away, and becoming a donor is free. Simply register with the National Donate Life Registry and designate your donor status on your license or state ID.

12. Donate Your Credit Card Rewards

Rewards credit cards will often let you donate your cash back, points, or miles directly to charity. Even if that isn’t an option, you may be able to redeem your rewards for cash back and simply donate those funds once they land in your account.

“Most credit card companies allow you to do this directly from their website. Simply log in to your account, go to the section to manage your rewards and look for a charity link,” says Hoxmeier.

13. Get a Charity-Focused Credit Card

Some credit cards are specifically designed for charitable giving. Check out our list of charity-focused credit cards to find one that works well for you.

Giving back to your community is important, but so is sticking to your budget. Luckily, the two don’t have to be mutually exclusive. Start by trying out these thirteen frugal ways to give to charity. Then visit our Personal Finance Learning Center for more tips on managing your personal finances.

Image: Tassii 

The post 13 Ways to Give to Charity without Breaking Your Budget appeared first on Credit.com.

I’m a Single Mom With a 6-Figure Business. Here Are the 3 Rules I Live By Every Day.

Emma Johnson and her two children. ( Courtesy of Emma Johnson)

Emma Johnson thrived, both financially and professionally, after enduring a complex, costly and painful divorce in 2009.

Johnson, now 40, a journalist and founder of WealthySingleMommy.com, an online community of professional single mothers, was at that time pregnant with her second child, working just 12 hours a week and living paycheck to paycheck. The fear of not being able to support her children on her own drove her to juggle multiple jobs and painstakingly manage her finances.   

Today she’s an entrepreneur with a successful digital marketing business, which includes her blog and podcast targeting professional single mothers, along with a new book, “The Kickass Single Mom: Be Financially Independent, Discover Your Sexiest Self, and Raise Fabulous, Happy Children.” In the book, which debuted Tuesday, Oct. 17, Johnson tells her personal journey as an entrepreneur and mom. She also maps out financial management strategies she hopes other single mothers can use, both to improve their finances and to establish a career they love.  

“Money is power and money is control,” Johnson tells MagnifyMoney. “Men have been very comfortable with that since a long time. And women are never going to have equality in the world, we’ll never have control of our life individually … until we have our money and just as much as men.” 

We spoke with Johnson about the three mantras of her daily life.  

1.Create a lifestyle that you can afford now.

Johnson lived a comfortable life, largely dependent on her ex-husband’s income and benefits while she worked part time. She found that separating from her husband also meant learning to recalibrate her money mindset. 

Legal expenses from the divorce quickly piled up, and she decided to return to full-time freelance work, which meant shelling out $2,000 a month for child care. She knew she had to live frugally in order to make ends meet. Some of the immediate changes she made: Stop buying new clothing for herself. And find as many useful secondhand items for her children as she could. 

“You absolutely have to go frugal,” she says. “I don’t care how rich you were before you were divorced or your kids’s dad is. … Your lifestyle is determined by how much money you have coming in the bank right now.” 

For other single mothers looking to cut spending, she has suggestions both big and small — downsizing to a smaller home, for instance, or just getting rid of unnecessary expenses like a cable subscription or a rarely used gym membership. 

When you are successfully living beneath your means, especially as a breadwinning single mother, Johnson says you can finally start to feel as though you’ve got control over your life again. “You have no control of your life,” she says, “if you are worrying about paying your rent.”   

2. Focus on earning more — unapologetically.

Single mothers shouldn’t just focus on saving more. They should also be unashamed about taking steps to earn more, Johnson says.   

The median income for families led by a single mother in 2014 was about $24,000, far below the $88,000 median for married-parent families in which Mom was the higher earner and the $84,500 median for households where Dad was the principal earner, according to a Pew Research Center report. 

Emma Johnson

The surprising upside of her divorce, Johnson found, was that she realized she had unintentionally suppressed her own financial and professional goals during her marriage to preserve the status quo. 

“Our society definitely values monogamous partnerships and marriage, and women genuinely do want that, but it often comes at a price for reaching our own potential,” she says. 

For Johnson, embracing her ambition wasn’t just a matter of choice. She was granted only one year of child support from her ex-husband, and the clock was ticking. She set about beefing up her income from freelance assignments, taking on everything from corporate blog posts to journalistic articles.  

By the time child support ended, she felt financially stable enough to refinance the the apartment in Queens, N.Y., that she and her ex-husband had bought in her own name. Roughly half a year later, she says, she had lined up enough consistent writing work to confidently support her family independently for the first time.   

Something else happened when she re-entered the labor force full time. She found she had bigger career ambitions than simply writing. She started WealthySingleMommy.com in 2012 as a hobby and slowly grew a loyal audience. (She reports 100,000 unique monthly visitors and 190,000 monthly page views.) 

A few years later, she experimented with monetizing the effort, snagging a mix of brand partnerships, speaking engagements and eventually, a book deal. While she worked on building the WSM brand, she continued to work as a freelancer (her primary income source).  

Finally, in 2016, Johnson says, she made an “internal shift” to focus on her business full time because she saw in it a better financial opportunity.  

“I really feel like it was an important internal shift I had to make because all the freelance writers I knew were [complaining] about not making money,” she says.  

This year, she expects to bring in $400,000 in revenue.  

3. Outsource labor — time is money.

Efficiency is the centerpiece of Johnson’s finance management philosophy. She quickly learned the value of paying professionals to take on some tasks in order to free up hours she could use to work, spend time with her children or focus on her personal needs.  

“You have to be very diligent with how you use all of these things — your time, your money, your energy, your headspace and your emotions,” she says.  

Johnson says that over the years she has invested heavily in child care, housekeeping and outsourcing chores (like laundry) that that take time away from work and her children and aren’t enjoyable. In her book, she writes that she has a handyman on call.  

To be sure, not all single mothers earn enough to outsource, a fact Johnson acknowledges. But she still encourages women not to feel guilt over delegating some household duties in pursuit of that extra quality time. She argues that it’s a worthy investment for peace of mind and efficiency. 

The bottom line: ‘You have go to bigger’

An advocate for gender equality, Johnson says her ultimate goal with the new book is to empower women across society — not just single mothers — to pursue their passions and become role models for a next generation with increasingly abundant resources and opportunities available. 

She hopes single moms will stop taking pity on themselves or viewing their situations as detrimental. “I want women to start seeing themselves as more than they are, and that their family status can be an an asset,” she says. 

For women living in small communities, Johnson’s advice is that maybe they should consider relocating for better job opportunities or finding work that they could be doing virtually.  

The fear of being on one’s own, Johnson says, can become the biggest motivator for pursuing a big goal, be it starting a business or returning to school. And she is convinced that the risks women take and sacrifices they make along the way will eventually pay off. 

“You have to go bigger,” she says. “You have to go bigger because there is less security.” 

The post I’m a Single Mom With a 6-Figure Business. Here Are the 3 Rules I Live By Every Day. appeared first on MagnifyMoney.

How the Discover it Miles Card Can Help You Afford Next Year’s Vacation

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[Disclosure: Cards from our partners are reviewed below.]

If you’re already daydreaming about next year’s vacation, take notice: the Discover it Miles credit card could help you make it happen. Discover’s flexible rewards program and impressive sign-up bonus can take a big bite out of your travel expenses.

Here’s how you can use the Discover it Miles card to splurge on an epic vacation next year.

All Purchases Earn Miles

To save on your trip, you’ll need to earn miles, which can be redeemed for travel expenses.

All purchases automatically earn 1.5 miles per dollar, with no confusing restrictions or spending categories to keep tabs on. You also have the opportunity to earn additional miles when shopping at more than 100 merchants on the Discover Deals platform.

Miles are unlimited and don’t expire as long as your account stays open. You can even earn miles using mobile wallets, as the card is compatible with Apple Pay, Android Pay, and Samsung Pay.

If you begin earning miles now, you’ll have a head start saving up for your vacation.

The First-Year Matching Bonus

Here’s how Discover can really make a big difference on your next trip.

After the first 12 consecutive billing periods, Discover will match all the miles you’ve accrued, posting them to your account within a month or two. This automatically doubles the miles you earn. Essentially, you’ll be earning three miles per dollar (rather than 1.5) for a full year.

After you make a year’s worth of purchases and receive your first-year matching bonus, you should have a sizeable stockpile of miles to redeem for your trip.

Redeeming Miles for Your Vacation

Redeeming miles is simple and flexible. You won’t have to deal with special travel booking platforms, and you aren’t limited to certain travel providers.

You can redeem miles at any time for travel purchases made on your card within the past 180 days. Simply select the desired purchase(s) you wish to redeem for, and your miles will be posted in the form of a statement credit.

Qualifying travel purchases include airline tickets, hotel rooms, car rentals, cruises, local and public transportation, and more. There are no blackout dates.

One mile has a cash value of one cent, so every 100 miles is worth $1 in travel redemption.

The Costs

The card has no annual fee. There’s an introductory 0% annual percentage rate (APR) on purchases for 14 months, and then a variable 11.99% to 23.99% APR applies. Balance transfers get an introductory 10.99% APR for 14 months for transfers that post to the account by January 10 in 2018, after which the standard purchase APR applies.

Balance transfer fees are 3% of the transfer amount, and there are no foreign transaction fees.

How to Use the Card to Your Advantage

The quickest way to earn miles is to use your card for all your everyday purchases. That way, you’ll earn miles as you spend and get rewarded with a big sign-up bonus after a year.

Of course, you should always try to pay down your balance in full each month. Miles are great, but they aren’t much help if you can’t afford to make timely payments. And even though you won’t incur interest on purchases for 14 months, you don’t want your balance to become unmanageable.

When booking your next vacation, timing is important. You don’t want to make travel purchases too early, as your miles can only be redeemed for purchases made in the last 180 days. If you plan on making travel purchases ahead of time and redeeming miles later, make sure to check your calendar first. Keep in mind that the first-year matching bonus may take a month or two to show up.

Discover also provides up to $500,000 in flight accident insurance and up to $25,000 in auto rental insurance. So feel free to decline the extra insurance offered at the car rental agency.

If the Discover it Miles card isn’t right for you, review our other featured travel rewards credit cards. But before you apply for any credit card, you should be reasonably confident that you will be approved, as hard inquiries can lower your credit score. Review your credit report for free on Credit.com for the best chance of successful approvals.

Image: istock

At publishing time, the Discover it Miles card is offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved, or otherwise endorsed by the issuer(s).

Note: It’s important to remember that interest rates, fees, and terms for credit cards, loans, and other financial products frequently change. As a result, rates, fees, and terms for credit cards, loans, and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees, and terms with credit card issuers, banks, or other financial institutions directly.

The post How the Discover it Miles Card Can Help You Afford Next Year’s Vacation appeared first on Credit.com.