monthly payments – 4 Walls And A View http://4wallsandaview.com/ Thu, 17 Mar 2022 13:40:12 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://4wallsandaview.com/wp-content/uploads/2021/06/icon-5.png monthly payments – 4 Walls And A View http://4wallsandaview.com/ 32 32 What to know about the Teacher Loan Forgiveness Program https://4wallsandaview.com/what-to-know-about-the-teacher-loan-forgiveness-program/ Thu, 17 Mar 2022 13:40:12 +0000 https://4wallsandaview.com/what-to-know-about-the-teacher-loan-forgiveness-program/ Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own. Educators who meet the eligibility criteria may […]]]>

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

Educators who meet the eligibility criteria may be able to get student loan forgiveness. (Shutterstock)

Student loan debt can be overwhelming, especially for borrowers who aren’t in a high-paying field. If you are a teacher with student loans, you may qualify for loan forgiveness choice. Here’s what you need to know about the Teacher Loan Forgiveness Program.

If you are considering refinancing your loans, you can use Credible to compare student loan refinance rates from various lenders in minutes.

What is the Teacher Loan Forgiveness Program?

Teacher Loan Forgiveness is a federal program for full-time teachers who work in low-income schools or educational service agencies. It was created to encourage teachers to work in areas where there is a shortage of qualified teachers. To qualify for the teacher loan forgiveness program, you must have federal loans and be considered a highly qualified teacher by the US Department of Education.

How much can we forgive?

The Teacher Loan Forgiveness Program offers up to $17,500 in forgiveness. You can receive the full $17,500 if you are a highly qualified special education teacher at the elementary or secondary level, or a highly qualified math or science teacher at the secondary level.

You could be eligible for up to $5,000 in loan forgiveness if you work in a different field, as long as you meet the other requirements.

What are the eligibility requirements for teacher loan forgiveness?

You may be eligible for teacher loan forgiveness if:

What does it mean to be a “highly qualified” teacher?

According to the US Department of Education, you are a highly qualified teacher if:

  • You hold at least a bachelor’s degree.
  • You hold a state teaching diploma.
  • No certification or licensing requirements have been waived, revoked or suspended for any reason.

Unfortunately, you will not be eligible for teacher loan forgiveness if you are a school administrator, school counselor, school librarian, or other education staff. You must be a teacher working in a classroom for an eligible employer.

What is considered a low-income school or educational services agency?

You can use the Directory of Low-Income Teachers (TCLI) to determine if your workplace qualifies as a school or low-income educational services agency.

You will need to click on yearbook search and select the school year and state you live in. To narrow your search, you can also enter the name of your school or educational agency.

If you are considering refinancing your student loans, you can use Credible to compare student loan refinance rates without affecting your credit score.

How do I apply for teacher loan forgiveness?

If you qualify and want to apply for teacher loan forgiveness, follow these steps:

  1. Complete the Teacher Loan Forgiveness Application. You can find the application on the Federal Student Aid website. You will need to provide your personal information as well as your employment details. You must also indicate if you have ever applied for teacher loan forgiveness. Make sure your teaching start and end dates include the month, date, and year.
  2. Contact your administrative manager. Contact the chief executive officer (CAO) of your school or agency to complete the certification section of the form. This person will likely have access to your academic records and will be able to confirm your employment. This could be your manager, your assistant manager, your superintendent or someone from human resources.
  3. Send the form to your loan officer. Once your application is complete, submit it to your loan officer(s) at the end of your fifth year of teaching. Make sure you have a copy for your records before sending it.

Keep in mind that if you have taught at different schools during the five-year period, the superintendent of each school must complete the certification section. And if you have multiple loans from different loan servicers, you’ll need a separate form for each.

If you’re not sure how many loans or services you have, check your Federal Student Aid account. Once logged in, you will be able to find all of your student loans and loan managers.

Your loan manager will determine how long it will take for your application to be processed. To avoid delays, make sure you have completed your application accurately. Remember to verify that your account has the correct contact information and continue to make your student loan payments to stay in good standing.

Can teachers benefit from the Civil Service Loan Forgiveness Program?

Civil Service Loan Waiver (PSLF) is another option you might want to explore if you’re a teacher. It is a loan cancellation program for public service workers, including teachers.

To qualify for the Civil Service Loan Relief, you must be a qualified full-time employee of a government entity or non-profit organization. You must also have direct federal loans under an income-based repayment plan. Once you have made 120 qualifying payments, you may be eligible to have the remaining balance on your loans forgiven. Federal Family Education Loans (FFEL) and Federal Perkins Loans are only eligible if you consolidate them into a direct consolidation loan.

Can you get both teacher loan forgiveness and utility loan forgiveness?

You may be able to take advantage of both the teacher loan forgiveness and the civil service loan forgiveness. But you will need to have separate periods of teaching service to do so. For example, if you receive teacher loan forgiveness after five years of teaching, you will not be able to count any of those payments toward the civil service loan forgiveness. You must make 120 additional eligible payments beyond this teaching period if you wish to benefit from the PSLF.

State Student Loan Forgiveness Programs for Teachers

If you are not federally eligible student loan forgivenessIt’s a good idea to look into state loan forgiveness options for your profession. The available forgiveness programs and their eligibility requirements depend on where you live. You can use the American Federation of Teachers Database to find out what’s offered in your state and school district.

Can private student loans be forgiven?

Private student loans are generally not eligible for loan forgiveness. The good news is that you may be able to refinance or even postpone these loans. Although refinancing doesn’t forgive your loans, it can lower your monthly payments, reduce your interest rate, or allow you to pay off your debt sooner.

With deferment, you may be able to temporarily defer your payments, especially if you are having financial difficulty. You will need to contact your lender to find out if this is an option and how it works.

You can compare student loan refinance rates quickly and easily with Credible.

]]>
Payday loans: your solution in the event of a financial crisis… but only as a last resort https://4wallsandaview.com/payday-loans-your-solution-in-the-event-of-a-financial-crisis-but-only-as-a-last-resort/ Wed, 16 Mar 2022 19:00:49 +0000 https://4wallsandaview.com/payday-loans-your-solution-in-the-event-of-a-financial-crisis-but-only-as-a-last-resort/ Pexels.com If you’re in a bind and need cash fast, payday loans might seem like the perfect solution. But before taking out a payday loan, it’s important to understand how they work and what the risks are. Payday loans are short-term loans with high interest rates that are designed to help people cover unexpected expenses. […]]]>

Pexels.com

If you’re in a bind and need cash fast, payday loans might seem like the perfect solution. But before taking out a payday loan, it’s important to understand how they work and what the risks are. Payday loans are short-term loans with high interest rates that are designed to help people cover unexpected expenses. They should only be used as a last resort when you have no other options available.

What are payday loans and how do they work?

Payday loans are short-term loans that are usually due on the day of your next payday. They are often used to cover unexpected expenses or to tide you over until your next paycheque. Payday loans are usually small, ranging from $100 to $500, and they come with high interest rates, usually around 400% APR. This means that if you take out a $100 payday loan, you’ll have to pay back $140 just two weeks later.

Payday loans are easy to get because no credit check is required. All you need is a stable source of income and an active checking account. The process is quick and easy – you can often get approved for a payday loan in just minutes.

The pros and cons of payday loans

There are a number of advantages and disadvantages to payday loans. On the plus side, payday loans are quick and easy to get, they don’t come with any credit checks, and you can usually have the money in your account within minutes.

In contrast, payday loans have high interest rates, they must be repaid quickly, and they can often trap borrowers in a cycle of debt. Payday loans should only be used as a last resort when you have no other options available. If you decide to take out a payday loan, be sure to read the terms and conditions carefully so you know what you’re getting into.

Merjen Novosel from PaydayNow.net identifies bad loans like bad credit payday loans, where you can get payday loans even with bad credit. “There are plenty of payday lenders who are happy to work with borrowers whose credit isn’t perfect, and there are also payday loans specifically designed for those with poor credit,” Novosel says. So if your credit score is preventing you from getting the payday loan you need, don’t worry, many lenders will be happy to help.

How to get a payday loan if you need it

If you find yourself in a situation where you need a payday loan, there are things you can do to increase your chances of getting approved. First, make sure you have all the required documents – most payday lenders will require proof of income and an active checking account. You should also take the time to shop around and compare rates from different lenders. And finally, be sure to read the terms and conditions carefully so you know what you’re getting yourself into.

payday now Payday loans can be a useful tool if used correctly, but they can also be dangerous if used incorrectly. Be sure to research payday loans before taking one and only use them as a last resort when you have no other options available.

What to do if you can’t pay off your payday loan on time

If you find yourself in a situation where you can’t repay your payday loan on time, the first thing you should do is contact your lender and try to work out a payment plan. If that doesn’t work, there are a number of other options available, including:

– Consolidate your payday loans: If you have several payday loans, you may be able to consolidate them into one loan with a lower interest rate. This can help you manage your debt more easily and get it under control.

– Refinance your personal loan: another option is to refinance your personal loan. This means taking out a new loan with a lower interest rate and using it to pay off your existing payday loans. This can help lower your monthly payments and make it easier to pay off your debt.

Debt consolidation loan: If you are having trouble repaying your payday loans, you can consider a debt consolidation loan. This is a personal loan that can be used to consolidate all of your high interest debt, including payday loans. It usually comes with a lower interest rate than payday loans and can help you get out of debt faster.

If you’re having trouble repaying your payday loan, don’t despair: there are several options to help you get out of debt. Be sure to explore all of your options before making a decision and always make sure you can afford the payments before taking out a loan.

]]> When is it okay to use your emergency fund to pay off debt? https://4wallsandaview.com/when-is-it-okay-to-use-your-emergency-fund-to-pay-off-debt/ Fri, 25 Feb 2022 19:41:15 +0000 https://4wallsandaview.com/when-is-it-okay-to-use-your-emergency-fund-to-pay-off-debt/ Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners. For many people, getting out of debt as quickly as possible is a top priority, especially […]]]>

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

For many people, getting out of debt as quickly as possible is a top priority, especially if you’ve been carrying debt for several years and are crushed by high interest charges. So if you are so close To get rid of your balance once and for all, you might be wondering if it’s a good idea to use savings from an emergency fund to pay off your debt for good.

Why paying off a debt can seem so urgent

Another advantage when it comes to paying off debt quickly is being able to redirect your money to other goals. Northwestern Mutual 2020 Planning and Progress Study found that 58% of respondents with debt believe that their balance is preventing them from reaching major financial milestones. Of these respondents, 36% have delayed making major purchases, 29% said they have delayed saving for retirement, 18% have delayed buying a home, 8% have delayed having children and 7% delayed marriage.

So being able to finally reach certain financial goals can be a big factor when it comes to aggressively paying off your debt. If you’re spending $500 a month on credit card or loan payments, you can redirect that $500 toward retirement savings, a wedding, or buying a house once you’re debt-free. .

Should you use your emergency fund to pay off your debts?

The short answer is this: it depends on how much debt you have and how much money you have in your emergency fund.

Keep in mind that your an emergency fund exists to cover unforeseen expenses that would otherwise slow you down financially and put you further into debt. So if you had to use a significant portion of your emergency fund to pay off debt, you could significantly reduce your ability to cover a large, unexpected expense. This is why you need to consider the amount of your debts and the size of your emergency fund.

For example, if you have $10,000 in your emergency fund and a credit card balance of $5,000, paying off the debt would wipe out half of your emergency fund — and that could put you in a predicament. more vulnerable financial position if you don’t have one. other savings. But if you have an emergency fund of $10,000 left and a credit card balance of $500, you may be more likely to use some of your savings while feeling confident in your ability to manage. a significant unforeseen expense.

“If you reimburse these types of [debts] makes you vulnerable to a financial crisis that could potentially hurt your credit, file for personal bankruptcy, or be temporarily or permanently impoverished, so the financial reward of saving interest on debt reduction may not be worth the risk,” says JR Robinson, a personal finance expert at Belief.

And if you decide you could use some of the money in your emergency savings to pay off your debt, don’t forget to take steps to replenish your emergency fund.

Methods to pay off debt faster

There are many strategies you can use to get out of debt a little faster and make the process a little more manageable. If you have several debts with variable interest rates, you can try the debt snowball method to help you make additional payments on debt with the lowest balance first (while only making minimum payments on your other debts). This allows you to pay off a balance much faster, which will also motivate you to keep working on your other balances.

On the other hand, the debt avalanche method targets the debt with the highest interest rate first (while making the minimum payments on your other debts). This helps you save the most on interest charges.

You might also consider using a personal loan to consolidate multiple debts, especially if making payments on multiple balances seems a bit overwhelming. With debt consolidation, you will request a specific amount sufficient to cover the total of all your debts and the lender will send a specific amount to each of your creditors to pay off those debts. Thereafter, you will only be responsible for repaying the personal loan in the form of fixed, equal monthly payments plus interest. Most personal lenders — like LightStream and SoFi — allow you to apply for a debt consolidation loan.

LightStream Personal Loans

  • Annual Percentage Rate (APR)

    2.49% to 19.99%* when you sign up for autopay

  • Purpose of the loan

    Debt consolidation, renovation, car financing, medical expenses, marriage and more

  • Loan amounts

  • terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

SoFi Personal Loans

  • Annual Percentage Rate (APR)

    5.74% to 21.28% when you sign up for autopay

  • Purpose of the loan

    Debt consolidation/refinance, home improvement, relocation assistance or medical expenses

  • Loan amounts

  • terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

Another effective option can sometimes be to use a 0% APR balance transfer card if high interest rates make it difficult to pay off your credit card debt. Suppose you apply for a credit card like the Citi Simplicity® Card or the U.S. Bank Visa® Platinum Card: you will be able to transfer the balance of an existing credit card to a new card and pay off as much as you can with an introductory offer at 0% interest.

Citi Simplicity® Card

  • Awards

  • welcome bonus

  • Annual subscription

  • Introduction AVR

    0% for 21 months on balance transfers; 0% for 12 months on purchases

  • Regular APR

    14.74% to 24.74% variable

  • Balance Transfer Fee

    5% of each balance transfer; $5 minimum

  • Foreign transaction fees

  • Credit needed

U.S. Bank Visa® Platinum Card

On the secure site of US Bank

  • Awards

  • welcome bonus

  • Annual subscription

  • Introduction AVR

    0% for the first 20 billing cycles on balance transfers and purchases*

  • Regular APR

    14.49% – 24.49% (variable)*

  • Balance Transfer Fee

    Either 3% of the amount of each transfer or $5 minimum, whichever is greater

  • Foreign transaction fees

  • Credit needed

Finally, creating a budget can help you pay off debt faster while benefiting your overall financial health.

“By tracking your money and changing your spending habits, you can free up money to pay off debt faster,” says Robinson. “Look for ways to spend less money and also make more money. Where can you save money? Can you cook more and order less? How about a side gig or selling some items you own?”

Check out Select’s in-depth coverage at personal finance, technology and tools, The well-being and more, and follow us on Facebook, instagram and Twitter to stay up to date.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

]]>
Does PSLF really work? [Success Rates & Program Changes] https://4wallsandaview.com/does-pslf-really-work-success-rates-program-changes/ Sat, 19 Feb 2022 07:31:24 +0000 https://4wallsandaview.com/does-pslf-really-work-success-rates-program-changes/ [Editor’s Note: We are excited to now have the Peak Housing REIT on our list of available real estate investments! For a relatively small minimum investment ($25,000) for WCI readers, this fund could be a great way to add diversity to and minimize taxes in your real estate portfolio. The investment is relatively new, but […]]]>

[Editor’s Note: We are excited to now have the Peak Housing REIT on our list of available real estate investments! For a relatively small minimum investment ($25,000) for WCI readers, this fund could be a great way to add diversity to and minimize taxes in your real estate portfolio. The investment is relatively new, but it’s already performing far above expectations at 22% YTD. Check out our recent conversation with The Peak Group here on YouTube and see how the Peak Housing REIT could be your next big investing win!]

By Andrew PaulsonCSLP, Lead Student Loan Consultant and co-founder of our partner site StudentLoanAdvice.com

The Public Service Loan Forgiveness or PSLF is the well-known holy grail of loan forgiveness programs. Unlike most other loan forgiveness programs, PSLF offers tax-free loan forgiveness AND no cap on the amount of loan forgiven.

Any borrower who has a chance of working in a non-profit organization should definitely consider the program, even if you earn more than you borrowed for college. Yes, we’ve all seen the slew of articles professing the dismal success rate and subpar loan service that has sustained the program. But with recent changes to the program, there’s a big boost in the success rate, and it should be on more people’s radar.

In this article, we will discuss how the program works, how it was created, its success, and some speculations/projections for the future.

Civil Service Loan Cancellation Program

The PSLF program was created as part of the College Access and Cost Reduction Act of 2007 to provide tax-free loan forgiveness to indebted professionals who work as public servants. It was created for the benefit of nurses, teachers, military, law enforcement, government officials, and other employees of non-profit organizations.

PSLF can help encourage borrowers to pursue careers in lower-paying jobs than they would otherwise when entering the private sector.

What is Civil Service Loan Forgiveness?

Public Service Loan Forgiveness is a student loan forgiveness program that provides tax-free loan forgiveness.

PSLF has four requirements:

  • Eligible Federal Student Loans – Direct Stafford (unsubsidized and subsidized), Direct Plus Graduate Loans, and Direct Consolidation Loans
  • Qualifying repayment plan—IBR, PAYE, RPAYE, ICR, or the standard 10-year repayment plan
  • 120 one-time qualifying monthly payments, no obligation to be ongoing
  • Full-time employment with an eligible employer such as a nonprofit or 501(c)(3)

How to Apply for Civil Service Loan Forgiveness

The only mechanism in place to request a forgiveness of public service debt is the employment certificate form (ECF). This form must be completed for each eligible employer to receive credit for PSLF.

Although you can wait until you have reached 10 years of skilled employment, we recommend that borrowers complete the ECF form annually. The ECF form is used to get credit for past payments made and to request loan forgiveness once you have reached 10 years of payments. We recommend that you keep track of the ECF forms and the corresponding payment documents.

Expect the repairman to come back with errors. But if you certify regularly, it will be much easier to correct their mistake of two months ago than to go back eight years and two jobs, fighting them over payments to a now-defunct repairman.

Please note: Borrowers must still be employed by a 501(c)(3) nonprofit organization at the time of remittance.

Changes to Civil Service Loan Forgiveness

Civil service loan forgiveness has undergone some changes over the years. The first change or adjustment was the addition of the employment certificate form in 2012. In the first two years, borrowers had little to no understanding of the program, and if you didn’t have a buddy who followed student loan law closely, then you would have heard from your agent about financial aid than the program should not be relied upon.

The Temporary Extended PSLF (TEPSLF) was added in 2018 by the Consolidated Credits Act 2018. This happened when the first group of borrowers became eligible for PSLF in 2017 and about 99% of applicants were turned down. TEPSLF has slightly different requirements than PSLF and has a limited amount of money to support it. Thus, the program is first come, first served. Also in 2018, Federal Student Aid released the PSLF Helper Tool to assess your employer’s eligibility for the PSLF.

successful cancellation of civil service loans

The most recent change is the PSLF Limited Waiver released in October 2021. The Limited Waiver has huge ramifications for borrowers, but is most useful for those with FFEL loans. If you have FFEL loans and have worked as a civil servant, you should inquire. All you have to do is consolidate your FFEL loans into direct loans and submit a PSLF attestation form. However, we recommend that you review WCI’s interpretation of the PSLF Limited Waiver. Additionally, this is a time-limited waiver set to expire in October 2022.

Is the cancellation of civil service loans legitimate?

Yes, the PSLF is legitimate and many white coats have received it. WCI has a podcast dedicated to financial milestones called Milestones to Millionaire, and host Dr. Jim Dahle has interviewed a number of people who have actually received the PSLF. Not everyone had the smoothest process to get the PSLF, but the financial benefits outweighed the extra paperwork and headaches.

There is a significant part of StudentLoanAdvice.com’s customers who are also in the process of obtaining the PSLF. The added value of pursuing PSLF versus refinancing or taxable loan forgiveness is real, and it can be life changing in certain circumstances.

PSLF success rate

Ah, the number we were all waiting. . . here is a report from the Department of Education (ED) over the years. We took TEPSLF and PSLF and combined them in the report below.

Figures prior to September 2019 indicated that only around 2% of applicants received the PSLF. The reports started to improve in 2019. Here are some numbers:

Until September 2021, only 16,119 civil servants had benefited from the PSLF with a fairly low success rate still at 4%. It is important to realize that the number of requests above are totals going back to the start of loan forgiveness from October 2017. For example, there were not 16,119 borrowers who had their loan forgiven from September 2020-2021; there were 10,619.

But as of December 15, 2021, an additional 38,000 borrowers have now received the PSLF. Data has not yet been released on the number of candidates who applied in the last three months. If we launch a hypothetical number of 100,000 applicants over the last three months, from December 2021 to February 2022 (when this article was published), we would see a fairly significant increase in the success rate.

The reason for the increase in the number of approved applications is the recent PSLF waiver which primarily benefits FFEL loan holders. We expect that number to continue to rise in 2022, but lag behind as FedLoan shifts its 9 million borrowers to multiple loan servicers. All those on the right path to PSLF will be switched to MOHELA in 2022.

Now more than ever is the BEST TIME to consider PSLF, given the positive momentum of borrowers getting their loans forgiven tax-free.

The future of PSLF

Our crystal ball is cloudy on the future of the PSLF, but we believe the success rate will continue to increase – and not just a one-time bump with the recent release of the PSLF waiver.

During our consultations, many customers are expressing concern about future changes to PSLF.

  • “What if the loan forgiveness becomes taxable? »
  • “What if they cap the amount of loan forgiveness? »
  • “What if they phase out high earners?”

Each of you signed a Master Promissory Note (MPN) to take out your Federal Student Loans. If the federal government follows its normal process for modifying federal student loans, those currently in the program will be grandfathered into the old one. Basically, if you have a federal loan now, you can continue with the program.

pslf master promissory note

You are not alone if you have thought deeply about whether to do PSLF. At Student Loan Advice, we’ve met hundreds of borrowers just like you who are facing similar challenges. We can help you weigh the pros and cons of different options and which would result in the optimal outcome to beat your debt and get you closer to financial freedom. Contact our experienced team at studentloanaadvice.com today!

Did you manage to get the PSLF? What was your experience like? Do you think the new changes will help candidates pass? Comments below!

]]>
First-Time Home Buyer in DC | 2022 Programs and Scholarships https://4wallsandaview.com/first-time-home-buyer-in-dc-2022-programs-and-scholarships/ Thu, 10 Feb 2022 12:33:00 +0000 https://4wallsandaview.com/first-time-home-buyer-in-dc-2022-programs-and-scholarships/ What to know about buying a home in Washington DC Being a first-time homebuyer in Washington DC can seem like a daunting prospect; most houses in the district are extremely expensive. But there is also good news. You could be online for all kinds of help, from special mortgages to home buying education courses. Indeed, […]]]>

What to know about buying a home in Washington DC

Being a first-time homebuyer in Washington DC can seem like a daunting prospect; most houses in the district are extremely expensive.

But there is also good news. You could be online for all kinds of help, from special mortgages to home buying education courses.

Indeed, some DC homebuyers receive down payment assistance, which could help you cover any shortfall in your savings. So you could be moving into your first home sooner than you thought.

Check Your Home Buying Eligibility at DC Start here (February 10, 2022)


In this article (Skip to…)


DC Homebuyer Preview

The median sale price in the district was $740,000 in November 2021, according to Realtor.com. This is much higher than the national median price.

But first-time home buyers may be queuing up for help, which can put homeownership within reach, even at these high prices.

And there was a glimmer of good news. DC real estate listing prices rose just 4.2% in the 12 months ending November 2021. And that was just a fraction of the national average.

DC Home Buyer Overview
Average DC Home Selling Price $740,000
Minimum CD deposit (3%) $22,200
20% deposit at DC $148,000
Average DC Credit Score1 713
DC Home Buyer Loan Maximum2 Up to $84,000 through the DC government’s Home Purchase Assistance Program (HPAP)

Installment amounts are based on the state’s most recently available average selling price. The “minimum” down payment assumes a 3% down payment on a conventional mortgage with a minimum credit score of 620.

If you qualify for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the United States Department of Agriculture), you may not need a down payment at all..

Check Your Home Buying Eligibility at DC Start here (February 10, 2022)

Loans for buying a first home in DC

If you’re a first-time buyer in Washington DC with a 20% down payment, you can get a conventional loan with a low interest rate. And you’ll never have to pay for private mortgage insurance (PMI). The same goes for buyers all over the country.

Of course, few first-time buyers have saved a 20% down payment. But the good news is that you don’t need it.

DC homebuyers can often buy a new home with as little as 3% or even 0% down payment using one of these low down payment mortgage programs:

  • Conventional 97 – From Freddie Mac or Fannie Mae. 3% down payment and 620 credit points minimum. You can usually stop paying mortgage insurance after a few years
  • FHA loan – Supported by the Federal Housing Administration. 3.5% down payment and a minimum credit score of 580. But you are responsible for mortgage loan insurance until you refinance another type of mortgage, move house, or pay off your loan.
  • VA Loan – Only for veterans and military. No deposit is required. Minimum credit score varies by lender, but often 620. No outstanding mortgage insurance after closing. These are arguably the best mortgages available, so apply if you qualify
  • USDA Loan – For low to middle income people buying in designated rural areas. No deposit required. Credit score requirements vary by lender, but often 640. Low mortgage insurance rates
  • DC OpenDoors Mortgage – “Competitive interest rates and lower mortgage loan insurance costs. Plus the possibility of mortgage credit certificates giving mortgage interest deductions from federal taxes

Depending on the loan program you choose, you could potentially walk into a home with very little money out of your pocket.

These programs even allow you to use donated cash or down payment assistance to cover the down payment and closing costs.

If you’re unsure which plan to choose for your first mortgage, your loan officer can help you find the right plan for you based on your finances and buying goals.

Find the best first-time buyer loan for you (February 10, 2022)

DC Home Ownership Programs

The DC Housing Finance Agency (DCHFA) ​​offers a range of homeownership programs, including its DC Open Doors offering. This promises “competitive interest rates and lower mortgage loan insurance costs on the first trust [main] mortgages”. If you qualify, you can combine this with a down payment assistance program, which we’ll cover in the next section.

To qualify for a DC Open Doors loan, the main eligibility criteria require that you:

  • Choose a lender from a list of participants in the program
  • Have a credit score of 620 or higher
  • Do not earn more than $151,200 per year (this is the borrower’s income, not the household’s)
  • Take out a mortgage of $510,400 or less

These are early 2022 numbers and you should check the website to see that they still apply when you read this.

To find out more, book your place at one of DCHFA’s bi-monthly “information sessions,” which take place online. There is a calendar on this web page. Or you can simply get in touch with one of these participating lenders.

You may also be in line for a Mortgage Credit Certificate (MCC). According to the DCHFA website, an MCC “offers qualified borrowers the opportunity to claim a federal tax credit of 20% of mortgage interest paid in each calendar year.”

Grants for DC First Time Home Buyers

DCHFA’s down payment assistance program can be used in conjunction with one of its mortgages. It offers an interest-free loan up to the total amount you need for your down payment.

It is a deferred installment loan, which means that you do not make monthly payments.

Instead, you repay the amount you borrowed in full (without interest) under the following circumstances: “30 years from the loan closing date; the sale or any transfer (by gift or otherwise) of the property to another person, company or entity; the property ceases to be your principal residence or refinances your first trust [main] mortgage.”

In addition to the DCHFA offering, the DC Department of Housing and Community Development (DHCD) has a Home Purchase Assistance Program (HPAP).

The DHCD states, “Eligible applicants may receive a maximum of $80,000 in gap funding assistance and an additional $4,000 in closing cost assistance.” The “spread” is the difference between your savings and down payment requirements.

The DHCD agreement is very similar to that offered by DCHFA. It’s a no-interest, no-monthly deferred loan that you repay when “the property is sold, refinanced to take equity, or is no longer [the borrower’s] Principal residence.”

If you are a first responder or an employee of the DC government (not the federal government), you should check out the district’s installment assistance specials.

Check Your Home Buying Eligibility at DC Start here (February 10, 2022)

Where to Find Help Buying a Home in DC

The two organizations we’ve listed above should provide advice freely to any first-time home buyer in Washington D.C.

The US Department of Housing and Urban Development (HUD) also provides a list of city-specific programs in the district. These are:

What are the current mortgage rates in DC?

Mortgage rates vary by borrower. Your own interest rate depends on factors such as your credit score, loan program, down payment, etc.

Compare mortgage quotes from at least three different lenders to make sure you’re getting the lowest rate and upfront fees possible.

Borrowers who do this often save thousands of dollars on their home loans.

And don’t forget to ask your lender for help with the down payment and closing costs. These programs could seriously reduce the barrier to buying your first home.

Show me today’s rates (February 10, 2022)

1 Source: Experian.com 2021 study of 2020 data

2Based on a review of available DPA grants from the state at the time of writing this article

The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.

]]>
Should you take out a bill consolidation loan? https://4wallsandaview.com/should-you-take-out-a-bill-consolidation-loan/ Fri, 04 Feb 2022 19:31:14 +0000 https://4wallsandaview.com/should-you-take-out-a-bill-consolidation-loan/ Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own. Taking out a bill consolidation loan can […]]]>

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

Taking out a bill consolidation loan can make it easier to manage your bills and potentially lower your monthly expenses. Learn more. (Shutterstock)

If you’re having trouble coping with multiple debts, bill consolidation could be a solution. Bill consolidation is the process of combining multiple bills (like medical bills and credit card bills) into one debt by taking out a new loan.

A personal loan to consolidate your bills could help you get a lower interest rate if you’re burdened with high-interest debt. But before applying for this type of loan, you should consider all the pros and cons.

What is an Invoice Consolidation Loan?

A bill consolidation loan, also known as a debt consolidation loan, is a personal loan that you use to pay off your existing debt. If you are approved for one, a lender will give you a lump sum that you can then use to pay your bills. Or, the lender can use the funds to pay your creditors directly. Then you will start making payments on the new loan with one monthly payment.

Some benefits of taking out a debt consolidation loan include reducing the number of bills you have to keep track of and potentially reducing your interest rate and monthly payment amount. But some lenders may charge an origination fee for processing the loan, which is usually deducted from your loan amount. Before accepting the loan, make sure you fully understand all fees.

When does a bill consolidation loan make sense?

Signing up for bill consolidation could be a good financial decision in the following scenarios:

You want a lower monthly payment

If you’re having trouble keeping up with your monthly payments, loan consolidation can reduce the amount you pay each month. This could be the case if you get a lower interest rate or replace an existing debt with a loan with a longer repayment period. Remember that choosing a longer repayment period will likely mean you’ll pay more interest over time.

You want a single payment

Coping with multiple bill payments can be a challenge. And if you miss a payment, it could lower your credit score and lead to late fees. A bill consolidation loan combines your monthly payments into one. As a result, you may be less likely to make late payments, which could save you money and help avoid damaging your credit.

You want a lower interest rate

If your credit score and finances have improved since you took on debt, you may qualify for a lower interest rate with a bill consolidation loan. This could help you save money on interest and get out of debt much faster, especially if you’re consolidating high-interest credit card debt.

How to consolidate your debts with a bill consolidation loan

If taking out a bill consolidation loan is right for you, here’s what you should do to consolidate your debt:

  1. Make a list of your debts. Create a list of all the debts you want to consolidate. Add the total to find out exactly how much you need to borrow.
  2. Compare lenders. Research and compare different lenders. This will help you find the lowest rates and the best option for your situation.
  3. Get prequalified. Prequalify with as many lenders as possible to get an idea of ​​the rates and terms you could receive if approved.
  4. Choose the best loan for you. Once you’ve compared several loan options, choose the best lender for your situation.
  5. Submit a loan application. After choosing a lender, submit an official loan application. The lender will look at your credit score, income, debt-to-income ratio (DTI), and other key factors to determine if you qualify.
  6. Receive your loan funds. If you are approved for a loan, your loan funds are usually deposited into your account after you sign your loan agreement. This usually takes one to seven business days, depending on the lender.
  7. Pay off your debts. Use the loan funds to pay off the debts you want to consolidate, if your lender doesn’t pay your debts directly.
  8. Make payments on your bill consolidation loan. Repay your loan as agreed – remember to make payments on time to avoid possible late fees. Sign up for automatic payment, if possible, or use a bill management app to find out when your payment is due.

What to consider when choosing a lender

When shopping for a personal loan, it’s important to compare lenders and rates. This helps you find the best deal available. Here are some things to consider when doing comparison shopping:

  • Annual percentage rate – The APR of your loan takes into account your interest rate plus any fees. This is an important number because it helps you understand the true cost of the loan.
  • Costs – Origination fees, late fees, and prepayment penalties are all common types of personal loan fees. If possible, choose a lender that has no origination fees so that any funds you receive are used to consolidate your debts.
  • It’s time to finance — Consider how long you will need the loan funds. Some lenders can issue your funds the next business day, but others can take much longer. If you need your money quickly, choose a lender known for its speed of financing.
  • Minimum credit score — Different lenders have different minimum credit score requirements. While some lenders will approve borrowers with fair credit, other lenders will require you to have good to excellent credit.
  • Advantages of the lender — Many lenders offer additional perks, such as free credit monitoring and tailored monthly payments. These may be a factor in your decision.

Bill Consolidation Loan FAQs

What types of debt can I consolidate?

You can use your loan funds to consolidate several types of debt, such as credit card bills, utility bills, payday loans, and more. But before taking out a debt consolidation loan, check with the lender if they have any usage restrictions for borrowers. Some lenders may prohibit you from using personal loan funds to repay a student loan.

Should I consolidate all my debts?

You are allowed to choose which debts you want to incorporate into a debt consolidation loan. Consolidating all your debts may not be possible depending on the loan amount you receive. Also, consolidating certain debts may not make sense if it results in a higher interest rate.

Does debt consolidation hurt my credit rating?

When you apply for a debt consolidation loan, a lender does a thorough credit check to review your credit history. As a result, your credit score could temporarily drop by up to five points, according to FICO. But if you pay off your loan on time, it will add a positive payment history to your credit reports, which could increase your score over time.

Bill Consolidation Loan Alternatives

When it comes to simplifying your bills and potentially lowering your interest rate, a The debt consolidation loan is not your only option. Here are some alternatives to consider.

Balance transfer credit card

Looking to consolidate your credit card debt? A balance transfer credit card lets you transfer a balance from one credit card to another, and many offer an introductory interest rate of 0% or low for a certain period of time.

By taking advantage of one of these offers, you could save a lot of money on interest. The downside is that once the promotional period expires, you’ll have to pay the standard credit card interest rate on any remaining balance. Additionally, you may have to pay a balance transfer fee, which typically ranges from 3% to 5% of the transfer amount.

Student Loan Refinance

If you have student loans and want to consolidate them, student loan refinancing is probably a better option than a bill consolidation loan. When you refinance your student loans, you take out a private student loan to pay off your existing federal or private student loans.

If you have good credit and a decent income, you may qualify for a lower interest rate. The downside is that if you refinance your federal student loans, you will lose access to federal benefits, such as income-based and forbearance repayment plans.

The debt avalanche method

If you don’t want to consolidate or refinance your debt, you can use a debt repayment strategy to effectively eliminate your debt.

With the debt avalanche method, you first pay off your debt at the highest interest rate. You are putting any extra money you have on this debt while making the minimum payments on your other debts. Once that debt is paid off, you move on to the debt with the next highest interest rate.

One advantage of this method is that it helps you save the most interest. But it might take you a long time to pay off your debt with the highest interest rate if it is a large amount.

The Debt Snowball Method

The debt snowball method is another popular method you can use. With this repayment strategy, you pay off your debt with the smallest balance first. This means investing any extra money in this debt while making the minimum monthly payments on your other debts. Once that debt is eliminated, you move on to paying off the debt with the next smaller balance.

One of the main advantages of the snowball method is that you will eliminate your small debts more quickly. When you see this progress, it can motivate you to keep reducing your debt. But the downside is that you might pay more interest with this strategy because your high-interest debts might not be the first ones you focus on.

Home equity loan or home equity line of credit

If you’re a homeowner, you may be able to tap into the equity in your home by taking out a home equity loan or a home equity line of credit (HELOC).

Since these loans are secured by your home, they may come with lower interest rates than you would get with an unsecured personal loan. But you risk foreclosure on your home if you fail to repay the loan.

]]>
7 Best Ways to Get Out of Student Loan Debt https://4wallsandaview.com/7-best-ways-to-get-out-of-student-loan-debt/ Fri, 04 Feb 2022 15:52:42 +0000 https://4wallsandaview.com/7-best-ways-to-get-out-of-student-loan-debt/ Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own. If you’re struggling to repay your student […]]]>

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

If you’re struggling to repay your student loan, you have options. Keep reading for the seven best ways to get out of student loan debt. (Shutterstock)

Student loan debt accounts for a large portion of Americans’ total debt burden — it’s second only to mortgage debt. According to data from the United States Chamber of Commerce, more than 44 million Americans have student loan debt, which owes a total of more than $1.5 trillion.

While it can be difficult to get out of student loan debt, you have options for paying off your student loans to get out of debt sooner.

With Credible, you can compare student loan refinance rates from various lenders in minutes.

7 Best Ways to Get Out of Student Loan Debt

While you can’t eliminate student loan debt quickly, you may be able to lower your payments or shorten the term of your loan so that you can pay off your student loans faster. These seven strategies can help you get student loan debt under control — which one is right for you depends on the type of loan you have, your income, and your financial goals.

1. Learn about student loan forgiveness programs

If you have a federal student loan, you may qualify for student loan forgiveness, where you no longer need to repay part or all of your loan. (Note that if you don’t qualify for a student loan forgiveness program, you are still responsible for loan repayment.) Here are some common types of federal student loan forgiveness programs.

Civil Service Loan Waiver (PSLF)

If you work full-time for a U.S. federal, state, local, or tribal government or nonprofit organization, you may qualify for the Civil Service Loan Cancellation Program (PSLF), which forgives the remaining balance of your loan. To be eligible, you must have made 120 eligible monthly payments while working for an eligible employer. Note that if you work part-time for more than one eligible employer and your weekly hours of work total 30 hours or more, you may be considered for the program.

Military student loan waiver

If you are currently or have served in the military, you may qualify for loan forgiveness under the PSLF. If you served in a location where there was hostile fire or imminent danger, you may be eligible for half your loan forgiveness if your service ended before August 14, 2008. If you served in on or after this date, you may be able to cancel your entire loan.

Teacher Loan Forgiveness Program

If you taught full-time for five consecutive years at a low-income school or educational services agency, you could get a $17,500 or $5,000 forgiveness on your federal student loan. To obtain a pardon, you must have at least a bachelor’s degree, be a state-certified teacher, and not have a waiver of your certification or license requirements.

To get a $17,500 rebate, you must be either a full-time high school math or science teacher or an elementary or high school special education teacher. All other qualified teachers could receive $5,000 in loan forgiveness.

2. Ask for an income-based repayment plan

If your student loan repayments represent a large percentage of your income, you may qualify for an income-contingent repayment (IDR) plan, which is a reduced payment designed to be affordable based on your income and family size. The Ministry of Education offers four types of IDR plans.

Income Based Reimbursement Plan (IBR)

The IBR plan consists of monthly payments that are usually equal to 10% or 15% of your discretionary income (but never more than what you would pay under a standard 10-year repayment plan). New borrowers (on or after July 1, 2014) pay 10%, and all other borrowers (before July 1, 2014) pay 15%.

Repayment programs span 20 years for undergraduate loans and 25 years for graduate or vocational loans.

Income Contingent Repayment (ICR) Plan

With a ICR Plan, you will pay the lesser of two options: either 20% of your Discretionary Income or your 12-year fixed payment which has been adjusted to your income. The plan lasts 25 years and is available to any borrower with an eligible federal student loan.

Pay As You Earn (PAYE) Reimbursement Plan

The PAYE plan typically consists of payments that are 10% of your discretionary income (but never more than what you would pay under a standard 10-year repayment plan). The repayment term is 20 years.

Revised Pay As You Earn (REPAYE) Repayment Plan

With the REPAYMENT Plan, you’ll typically pay 10% of your Discretionary Income. The repayment term is 20 years for undergraduate loans and 25 years for graduate or vocational loans. This plan is available to any borrower with an eligible federal student loan.

3. Look for federal loan forgiveness or discharge

If you have a federal student loan, you may qualify for a forgiveness or discharge, both of which are similar to loan forgiveness.

  • Perkins Federal Loan Cancellation and Release — If you have a Perkins loan, a low-interest federal student loan for students with extreme financial need, you may be eligible for full or partial loan forgiveness if you teach at a school that serves students at low income, are a special education teacher, or if you teach math, science, foreign languages ​​or bilingual education. Other skilled occupations include firefighters, law enforcement officers, librarians, nurses, public defenders, speech pathologists, and AmeriCorps VISTA or Peace Corps volunteers. Perkins loan releases, where you do not need to repay the loan, are available under certain conditions, such as bankruptcy, death, school closure, veteran’s disability, spouse of 9/11 victim and total and permanent disability.
  • School outing closed — You may be eligible for a full loan discharge if your school closes while you are enrolled.
  • Disability leave — You may be eligible for a full loan discharge if you are totally and permanently disabled.
  • False certification waiver — You may be eligible for a discharge from your loan if your school has certified your eligibility criteria and you do not meet them, if the school has certified your eligibility but you had a status that legally disqualified you, or if the school has signed your name on the application or endorsed a check for you.

4. Ask your employer for repayment assistance

Some companies offer student loan repayment assistance as a benefit of work. The employer will usually pay some or all of your loan repayments to you or your lender.

This benefit has become increasingly popular since the enactment of the Consolidated Credits Act (CAA) in December 2020. It allows employers to offer student loan repayment as a tax-free benefit to employees and is expected to last. until December 31, 2025. Research which companies offer this or consider asking about it during your interview.

You can use Credible to compare student loan refinance rateswithout affecting your credit.

5. Consolidate your federal loans

If you have a federal student loan with multiple student loans, you can consolidate your federal student loans with a direct consolidation loan at no cost. Combining multiple loans into one direct consolidation loan will not necessarily give you a lower interest rate – your new rate will be a weighted average of all your existing loans. But you’ll have an easier time tracking your student loan debt, especially if your loans are with different loan servicers.

Note that if you made payments under an IDR plan, consolidating your loans into a direct consolidation loan resets your payment clock. You will generally lose credit for the months you have already paid on your loans. But because of the pandemic, you won’t lose credit for those payments for a limited time.

6. Refinance your student loans

If you can get better terms on your loan by refinancing, you might want to consider this option. The common advantages of refinancing a loan are get a lower interest rate or a longer repayment period that lower the monthly paymentfreeing up money for daily expenses.

You can refinance federal student loans, private student loans or a combination of both with a private lender. But if you refinance a federal loan into a private loan, keep in mind that you will lose the benefits and protections that come with federal loans, such as PSLF and income-based repayment plans.

Credible, it’s easy to compare student loan refinance rates.

7. Take a scramble

Another option for pay off your student loan sooner is to double your payments. Consider taking up a side hustle to earn extra income, like delivering groceries or food, tutoring online, or caring for a home or pet.

]]>
5 Smart Ways Fintech Companies Can Help You Debt Free https://4wallsandaview.com/5-smart-ways-fintech-companies-can-help-you-debt-free/ Sun, 23 Jan 2022 19:02:38 +0000 https://4wallsandaview.com/5-smart-ways-fintech-companies-can-help-you-debt-free/ Whether it’s high-interest credit cards, medical bills, or student loans, many people find themselves in dire financial straits with more debt than they can handle. This leads them to scour the internet for a solution. Luckily, there are plenty of fintech companies that can help them navigate these tricky financial waters, pay off debt, and […]]]>

Whether it’s high-interest credit cards, medical bills, or student loans, many people find themselves in dire financial straits with more debt than they can handle. This leads them to scour the internet for a solution. Luckily, there are plenty of fintech companies that can help them navigate these tricky financial waters, pay off debt, and get their finances back on track. Here are five ways fintech companies can help someone get out of debt.

1) Organize your bills

We live in a time where we have different bills from all directions, whether it’s cable, utilities, subscription services, credit cards, or student loans; the list goes on endlessly. There are many services and apps that allow you to manage your bills and track your payments. If you can see all your bills in one place, instead of having to dig through endless paper statements or emails, it will make your life easier. Becoming debt-free starts with physically organizing your spending, and there are plenty of fintech services that can help you do that.

2) Find the best interest rate

Comparison shopping is no longer just for retail. Now consumers can go online and find financial products that match their income and goals. When it comes to paying off debt, most people turn to debt consolidation loans to lower their monthly payments and/or lower their interest rates. This speeds up their debt repayment and, more importantly, gives them a concrete finish line as to when they can expect to be debt free. Many fintechs have technology that can connect consumers with the right lender in seconds and make the loan application process as easy as possible. Users can compare lenders side by side and make an informed decision on their best option. The market of potential borrowers being this competitive, the real winner is the consumer, who can now easily find the best offer(s).

3) Boost your credit score

Credit score and debt often go hand in hand. Those who have debts they would like to pay off are usually also concerned about their credit score. While most credit card providers offer a free service that lets you monitor your credit score, some other apps and companies take your credit score deeper, usually as a subscription-based service. Consumers can now view their entire credit history in real time, find out what’s currently affecting their score, and find ways to improve it. Although credit score is not an end in itself when it comes to your financial situation, it is essential to be aware of it if you are looking to get your finances back on track.

4) Education

Unfortunately, many people are unfamiliar with debt and financial education. Some of the essential principles, be it budgeting, investing, or debt repayment, are not taught in our schools. For this reason, many people turn to fintech companies that offer free financial education resources. Not only can people learn basic personal finance concepts, but they can then apply them to their own personal lives. Fintech companies can tell us about credit scores, savings, budgeting, and investing. When it comes to debt repayment, consumers can also learn about the different debt consolidation options, the pros and cons of each, and when each makes sense. There is no single answer to any personal finance question, as each person’s situation is unique. Luckily, with the amount of free content available online from fintechs, you’ll be able to find the answer you’re looking for.

5) Budget, savings, investment

Learning to budget and save not only helps you pay off debt faster, but it’s also a life skill that will help you build wealth for you and your family. Once your debt is paid off, most people will look to invest the extra money they currently have. The fintech industry is currently booming with companies and services that can help newbies invest their money. Depending on your level of risk aversion, you’ll want to choose the right service and investments that fit your unique profile. Many platforms can help you achieve your investment goals, and most have little or no fees.

Getting out of debt can seem like a daunting task. Yet, with the technological advances that have taken place across the fintech industry, consumers now have plenty of resources to simplify the process. Fintech companies help educate consumers on financial best practices, allow them to compare different products, and make it easier for them to invest their money once they are debt-free.

***

About the Author: James Lambridis is the founder and CEO of Debt®

]]> 3 bargains that Cathie Wood loves https://4wallsandaview.com/3-bargains-that-cathie-wood-loves/ Sun, 16 Jan 2022 13:17:00 +0000 https://4wallsandaview.com/3-bargains-that-cathie-wood-loves/ In 2020, there was no bigger investing star than ARK portfolio manager Cathie Wood. main sound ARK Innovation ETF (NYSEMKT:ARKK) jumped 156.61% that year, catapulting Wood’s status as an expert in the field of disruptive growth stocks. However, 2021 has not been so kind, with the fund down 23.56%. And 2022 doesn’t look any better, […]]]>

In 2020, there was no bigger investing star than ARK portfolio manager Cathie Wood. main sound ARK Innovation ETF (NYSEMKT:ARKK) jumped 156.61% that year, catapulting Wood’s status as an expert in the field of disruptive growth stocks.

However, 2021 has not been so kind, with the fund down 23.56%. And 2022 doesn’t look any better, with the ARKK ETF already down 10.74% on the year.

After the strong sell-off in growth stocks, investors may want to check Wood’s portfolios for high-quality, battered names that may have been punished too much. Here are three that look particularly cheap today, not only relative to Wood’s other high-growth portfolios, but also on an absolute basis.

Image source: Getty Images.

Splunk

IT infrastructure, cybersecurity and application observability company Splunk (NASDAQ: SPLK) is Wood’s 15th largest holding company ARK Next Generation Internet ETF (NYSEMKT:ARKG). Believe it or not, even though Splunk is a loss-making, high-growth software company, it’s actually on the rise in the first two weeks of January. Few software companies can say the same.

This could be because Splunk had already had a very difficult 2021 before the swoon from November. The stock is still down 29.2% from a year ago and 46.2% from its all-time highs. Even after the positive start to the year, the stock is trading at only 7.7x sales, well below the average high-growth SaaS stock.

But Splunk is even cheaper than that. The company is going through several transitions, from selling perpetual licenses to subscriptions, as well as deploying its on-premises services at customers to the cloud. These transitions resulted in lower revenue in fiscal 2021, as large one-time sales were replaced by lower but recurring annual or monthly payments. But the company is past the bulk of the transition, so revenue growth has turned positive again this year and is accelerating now.

When looking at Splunk’s annualized recurring revenue (ARR), which adjusts for its multiple transitions, the ARR figure of $2.83 billion is more than 10% higher than revenue of $2.52 billion. from Splunk over the last 12 months. ARR was also up 37% last quarter, compared to revenue growth of just 19%. And the growth of ARR in the cloud was 75%, well above the overall growth rate of ARR.

Splunk appears to be more than halfway through its transition, with 68% of reservations moving to the cloud last quarter. At the end of the transition, revenues should approach the ARR.

Growth is expected to remain strong as cloud growth accounts for a larger share of overall revenue and customers continue to build more digital infrastructure, all of which needs to be secured and monitored. Accelerating growth and a low valuation are why Splunk was my favorite software stock this year.

Skill

video game platform Skill (NYSE: SKLZ) is in both ARK’s Core Innovation Fund and Next Generation Internet Fund. The company has developed a two-sided platform that allows mobile gamers to play against each other for cash or points, and developers to reach new audiences and monetize their content in a way different.

Skillz went public through a Special Purpose Acquisition Company (SPAC) in December 2020 and hit a high of $46.30 before the recent growth stock crash sent the stock plummeting to around $6 today. This is below the initial price of $10 at which most SPACs fundraise.

Of course, Skillz is still losing money – a lot of money compared to its earnings. In the last quarter, the adjusted EBITDA margin was -45.5%. Wall Street has also pretty much dismissed SPACs as an asset class in recent months, another reason the stock has fallen so much.

However, the hate may have gone too far. Skillz increased its revenue by 70% in the last quarter, and its opportunity remains very important. Mobile gaming was an $86 billion industry in 2020 and is growing in double digits.

In the last quarter, $611 million in gross market volume (GMV) passed through Skillz’s platform, which Skillz’s revenue capture rate was $102 million. This represents approximately a GMV rate of $2.5 billion and a revenue rate of $410 million. The company therefore still has a fairly small market share. And with a market cap of just $2.5 billion, Skillz only trades around 6 times its sales. That sounds pretty cheap for a company whose sales are growing 70%, and that only scratches the surface of its international opportunity. On January 3, Skillz launched a pilot program in India. If he finds success there, it’s 1.4 billion new additional people who will soon be able to play games on the Skillz platform.

Yes, future earnings are a question, but Skillz has a gross margin that exceeds 90%. So if Skillz scales enough, it could be a very profitable business one day. Meanwhile, founder and CEO Andrew Paradise bought $5 million worth of Skillz stock on the open market in November, at an average price of $11.50. You can buy shares for almost half that price today.

loan club

loan club (NYSE:LC) is another cheap stock you can find in the ARK Fintech Innovation ETF (NYSEMKT: ARKF). Like many fintech stocks, LendingClub sold off heavily late last year and into January. Investors appear to view these stocks more as high-risk tech than financial stocks, which have held up better in the face of rising rate concerns.

While LendingClub started as a technology platform connecting personal loan borrowers with yield-seeking investors, it is now much more of a bank, following its acquisition of Radius Bank in February 2021. LendingClub will always be a platform. form, but it will also keep 15-25% of its loans on its own balance sheet, backed by new low-cost deposits from Radius.

Change is a big deal. Although LendingClub had similar loans last quarter to the fourth quarter of 2019, it is making a lot more money.

Metric

Q4 2019

Q3 2021

Origins

$3.1 billion

$3.1 billion

Income

$188.5 million

$246.2 million

GAAP net income

$0.2 million

$27.2 million

Data source: LendingClub Q3 presentation.

Yet even this impressive new profitability underestimates LendingClub’s earnings trajectory, because it has to fund all future charges when it makes a loan, but receives interest income over three to five years. So if LendingClub ramps up origins quickly, as it is currently, provisioning costs may be higher than normal.

LendingClub just returned to profitability in the second quarter, so its trailing 12-month earnings are still negative, which could explain why the stock has been halved since mid-November. But investors may be unaware of the fact that LendingClub now looks more like a highly profitable bank. Analysts expect earnings per share next year to be $1.73, so LendingClub shares are trading at only 14 times those estimates, making it the rare value stock that has found its way into Cathie Wood’s portfolio.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

]]>
How to Pay Off Credit Card Debt: Financial Plan https://4wallsandaview.com/how-to-pay-off-credit-card-debt-financial-plan/ Fri, 14 Jan 2022 22:00:00 +0000 https://4wallsandaview.com/how-to-pay-off-credit-card-debt-financial-plan/ CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. We may receive a commission if you apply and are approved for a card, but our reports are always independent and objective. If you’re struggling to pay off your credit card debt, you’re definitely not alone. A recent […]]]>

CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. We may receive a commission if you apply and are approved for a card, but our reports are always independent and objective.

If you’re struggling to pay off your credit card debt, you’re definitely not alone. A recent report from Lending Tree showed that Americans collectively owed $804 billion on their credit cards at last count, and the average outstanding balance per borrower was $6,569.

Unfortunately, the average credit card interest rate or annual percentage rate of charge (APR) was 14.54% in the third quarter of 2021. This means that the average consumer with credit card debt has a significant percentage of its payment for interest costs. It also means that, for consumers paying this rate or even higher, paying off credit card debt is more difficult (and expensive) than it should be.

Fortunately, there are plenty of strategies you can use to manage your debt and pay off your credit cards once and for all. So if you’re struggling with debt that you can’t pay off, consider one of the following proven debt repayment strategies.

The Debt Snowball Method helps consumers pay off their debts by helping them achieve psychological gains early on. With this strategy, participants list all the debts they have, from smallest to largest, and then focus on the smallest debts at the start.

To use the debt snowball, you would make the minimum payments on all of your largest debts, then funnel the extra money you have into your smallest debt each month. Over time, the smaller debt is paid off, at which point you snowball the extra money you pay for the next smaller debt.

With the debt snowball method, smaller debts melt away over time, leaving only larger ones. Eventually, users only pay off their largest debt until they are fully debt free.

Example: Let’s say you have four credit cards with balances of $7,000, $4,000, $3,300, and $2,500. With the debt snowball, you would focus your largest payment on the $2,500 balance first, followed by the $3,300 balance, then the $4,000 balance before focusing on paying off the balance. $7,000 last.

All debt reduction strategies have pros and cons — there is no perfect solution. So here are the pros and cons of the debt snowball.

Advantages:

  • Score psychological victories by paying off your small debts early on
  • Helps you reduce the number of bills you pay early in the process

The inconvenients:

  • May result in higher total interest charges over time

Unlike the debt snowball, the debt avalanche method helps consumers pay off their debts in the most mathematically advantageous way possible. With this strategy, participants list all the debts they have according to their interest rate, then focus on the debts with the highest interest rates first.

To use Debt Avalanche, you make the minimum payments on all of your lowest interest rate debt, then funnel all the extra money you have into your highest APR debt. Over time, the debts with the highest interest rates are paid off, at which point you “swim” the money you were paying for the debt with the next highest APR.

As you go, you will pay off your debts with the highest interest rates, then those with lower interest rates, then some debt, then none. This strategy helps you save the most on interest since you tackle the debts with the highest APR first.

Example: Let’s say you have four credit cards with APRs of 22.99%, 19.99%, 12.99% and 11.99%. With Debt Avalanche, you would focus your biggest payout on Debt with the 22.99% rate first, followed by 19.99% Debt, then 12.99% Debt and then Debt. with the APR of 11.99% last, regardless of the size of that debt. .

Advantages:

  • Save money on interest by tackling debts with the highest interest rates first

The inconvenients:

  • You might end up paying off bigger debts first, which can be daunting
  • May take longer to reduce the number of payments you make each month
black woman with debt consolidation plans

iStock

Consumers can also use a debt consolidation loan or personal loan to get out of debt. With this strategy, you borrow enough money to pay off all your credit cards, then start making one monthly payment for your personal loan instead.

Personal loans can be a good choice for debt consolidation since they come with fixed interest rates, fixed monthly payments and a fixed repayment schedule. This means you know exactly how much you owe at any given time and exactly when you will be debt free.

Example: Let’s say you owe $10,000 on four credit cards with relatively high APRs. If you took out a seven-year personal loan for this amount, you would use the loan funds to pay off all of your credit cards, and then use all of your monthly payments to pay off the single personal loan. If you qualify for a loan with an interest rate of 6%, you will pay $146 per month for seven years (84 months) until you are debt free. In the meantime, you would pay a total of $2,271 in interest charges.

Advantages:

  • Simplify your finances with one monthly payment
  • Consolidate your debts at a lower APR than what you are paying now
  • Know exactly when you will be debt free
  • Many personal loans have no annual fees and no hidden fees

The inconvenients:

  • You need good credit to get a personal loan with the best rates and terms

Another debt repayment strategy is to apply for a balance transfer credit card. Cards in this slot allow you to consolidate and pay off your debts at 0% APR for a limited time, typically up to 21 months. A balance transfer fee is required, but people who can pay off their debt during their card’s introductory period have the opportunity to save big on interest and progress to paying off their debt faster.

Example: Let’s say you owe $10,000 on four credit cards with relatively high APRs and you request a balance transfer card that offers 0% APR on balance transfers for 21 months in exchange for a 5% balance. After consolidating your debts, you owed $10,500 including fees, but if you could pay $500 a month over 21 months, you could pay off that debt with $0 in interest charges.

Advantages:

  • You can pay no interest on your debt for a long time
  • Most balance transfer cards don’t charge an annual fee

The inconvenients:

  • You generally need good credit to qualify
  • You only get 0% APR for a limited time, after which the standard variable APR applies
woman with calculator and laptop budgeting getting out of debt

If you want to get out of debt, you have to be willing and able to change your lifestyle, at least for a while. Here are some simple tips that can help you stay on track:

Make sure the debt repayment strategy you use matches your personality and lifestyle. For example, don’t apply for a balance transfer credit card if you know you’ll be tempted to use it for purchases.

If you continue to use credit cards, you may never pay off your debt. While you’re in debt repayment mode, it’s helpful to avoid credit cards and stick to cash or debit instead.

Take a closer look at your lifestyle for signs of wasting money. Try shopping for groceries, cooking more meals at home, and avoiding places and situations that might tempt you to overspend.

Write down your income in one column and all your regular bills and expenses in another, then compare them. A written budget can help you stay focused and on track with your goals, including your current debt repayment strategy.

Racking up debt is often a breeze, but paying it off can be downright painful. Fortunately, these debt relief methods can help you save money, pay off your debts faster, or both.

We hope one of the strategies in our guide can help you come up with a plan that works, even if it takes a while. And if you’re worried about breaching your credit or defaulting on your obligations, you can contact a credit counseling agency for help.

Get all the latest personal finance deals, news and advice from CNN Underscored Money.

]]>