Tag: Moving

 

America’s Most Expensive Cities: How to Save on Rent in San Francisco

Welcome to Expensive Cities, a new series designed to help renters find affordable apartments in the nation’s most unaffordable metros.

If you’re hunting for an apartment in San Francisco, the city with the highest rents in the nation, congratulations on bucking at least three trends. First, you’re not joining the mass exodus from the Bay Area to cheaper cities like Las Vegas, Portland or Nashville. Second, you’re not squeezing into a dorm-for-adults where the building mom — er, building manager — keeps the laundry detergent stocked. Third, you’re not moving in with your parents, like one-in-three Bay Area millennials these days.

How much does it cost to rent in San Francisco?

Median rent in San Francisco rose to $3,490 for a one-bedroom apartment, up 3.6% from a year ago, according to apartment listing site Zumper. In iconic Pacific Heights, with its Victorian mansions and stunning views, one-bedroom units go for $3,695. In fashionable Hayes Valley, hip young professionals pay $4,025 for pads near the boutiques and restaurants. Renters insurance is San Francisco costs between $7 and $17 a month. (We’ve got a roundup of the best renters insurance companies in San Francisco here.)

Per Zillow, renters in San Francisco spend nearly 40% of income on rent. That’s slightly lower than the 47% of income renters pay in Los Angeles, where median rents are actually lower, but still well above the 30% most experts suggest you spend on housing.

Why are the rents in San Francisco so high?

San Francisco has a severe housing shortage that is driving many residents to seek extreme solutions. Generous tech wages draw hordes of workers to the Bay Area, but high costs soon drive many away.

Nearly half — 46% — of Bay Area residents plan to move from the area soon, according to a survey from Bay Area Council, a business-sponsored advocacy group. Their top reasons: expensive cost of living and rising housing costs. (Case in point: Even with rents climbing toward $4,000, it’s still more prudent to rent vs. buy in San Francisco.)

The city’s post-recession boom created this housing crisis.

“From 2010 to 2015, San Francisco created eight jobs for every home we built…and rents have skyrocketed as a result,” the city’s mayor-elect, London Breed, wrote in a essay on Medium.

How to find affordable rent in San Francisco

Keeping in mind that affordability is relative when it comes to the Bay Area (even New York City has areas where you can find studios for under $2,000), here are some neighborhoods in the area to search if you’re looking for cheaper digs.

1. Western Addition

Adjacent to Pacific Heights and Hayes Valley, Western Addition is an ethnically- and economically-diverse neighborhood that includes the small sub-neighborhood of NoPa (North of the Panhandle). There are no convenient train stations, but you can get around easily on a bike or use the multiple MUNI bus lines connecting the neighborhood to employment nodes in the Financial District, SoMa and Mission Bay.

“The western part of the city has smaller, older buildings and is less connected via public transportation than other sub-markets in the city, which keeps rents more affordable,” Katerina Cheok, market analyst at Costar Group, the parent company of Apartments.com, says.

Median rent is $3,300, though a recent online search turned up a bright NoPa one-bedroom — with hardwood floors and a decorative fireplace — listed for $3,095 with parking available for an extra $250 a month.

“Renters can get the nice amenities — shopping, trendy restaurants and bars — available in the neighboring areas, with more affordability,” Crystal Chen, a spokesperson for Zumper, says.

2. Inner Sunset

Another affordable option is the neighborhood of Inner Sunset, just three miles from the Pacific Ocean.

“It used to be like the suburbs of the city, quiet and family-oriented. But within the past few years, a lot of new restaurants and shops have been popping up in the area,” Chen says.

Young professionals looking for a laid-back neighborhood with a small-town feel have been moving there in droves. Though Inner Sunset is on the outskirts of the San Francisco, it’s easily accessible to downtown by the MUNI trains.

It’s important to note that Inner Sunset sits within the fog zone, which means mornings and evenings tend to be foggy year round. The median rent is $2,700 for a one-bedroom.

3. Downtown Oakland

About 20 minutes from downtown San Francisco via BART, Oakland has a variety of relatively affordable alternatives.

Rents in Downtown Oakland are currently hovering around $2,170, per Zumper. With many new residential projects under construction, it’s expected that 5,700 new apartments will be added in the next few years.

“These units will be close to, if not the same quality, as new units in South of Market and Mission Bay — but at much more affordable rates,” says Cheok.

4. North Oakland

North Oakland is one of the most rapidly gentrifying neighborhoods in the U.S — even inspiring a web series, “The North Pole,” that explores the changing racial and class dynamics when new residents and trendy businesses settle in a neighborhood.

North Oakland is next to downtown Oakland and also bordered by Berkeley, Emeryville and Piedmont. Renters can expect to pay $2,600 for a one-bedroom apartment, per Zumper.

5. Jack London

South of Interstate 880, the Jack London neighborhood is right on Oakland’s waterfront in a former warehouse and industrial zone. Also known as the Loft District, the area has been transformed by the arrival of live jazz bars and salsa dancing clubs. One-bedroom apartments in the neighborhood go for $2,750, according to Zumper.

6. Bonus tip: Moving in the off-season can pay off

In a quirk of the San Francisco rental market, new apartment buildings with many units to fill tend to offer some type of financial incentive to renters during the slow months. If you’re able take a lease that starts in the late fall or winter, when fewer people are moving, you may be able to bargain for a month or two of free rent or at least free parking, Chen says.

We can’t curb burgeoning rents in big cities, but we can help you save on coverage for your stuff. You can quickly compare renters insurance quotes here.


This article originally appeared on Policygenius.com

 

How to Determine the Budget for Your House

Saving up for a down payment on a house is one of the most important things you can do before starting your house hunt. But even a 20% down payment won’t help you much if your monthly payments on a new house stretch your budget too thin.

This is what is often referred to as house poor and it’s a wise idea to avoid this. So, how do you really know how much house you can comfortably afford to buy? You can start by estimating all of your eventual monthly housing costs, including your mortgage, insurance, taxes, repairs and more.

Read on to learn about the costs involved in buying a house. From there you can best determine what you’ll actually be spending every month.

Principal and interest

This is the basic monthly cost of your mortgage loan, which you pay directly to the lender. This includes your monthly principal as well as any interest that you pay on the life of your loan.

Keep in mind that if you’re making a down payment or have closing costs, the loan amount will be different than the sales price of the home. As an example, let’s say you have your eye on a home with a sales price of $250,000 and can afford a $25,000 down payment.

The closing costs, which are fees and expenses you pay to complete the sale of the home, will be three percent of the sales price or $7,500. You’ll be expected to pay this amount when you close on the sale of your house.

Getting back to the actual mortgage, in this scenario your total loan amount is $225,000. Let’s say you choose a 30-year fixed-rate mortgage with a 4.5% interest rate. Using a simple loan calculator, your monthly principal and interest payment would be $1,140.04.

Mortgage insurance

Depending on the type of loan you apply for and the size of your down payment, you may be required to pay mortgage insurance. The beneficiary of the insurance policy is the mortgage lender and this coverage protects the lender if you default on your loan.

To give you an idea of what to expect, here’s how much mortgage insurance typically costs by loan type and your loan-to-value ratio, which is calculated by taking your total loan amount and dividing it by the value of the home.

 

Loan type Loan to value Mortgage insurance cost
Conventional loan 0% to 19.99% $30 to $70 per month for every $100,000 borrowed
FHA loan All loans Upfront cost at closing of 1.75%; annual cost of 0.45% to 1.05%
USDA loan All loans Upfront cost at closing of 1%; annual cost of 0.35%
VA loan All loans Upfront cost of 1.25% to 3.3%; no annual cost

So, let’s take our previous example to calculate your monthly mortgage insurance costs. You opt for a conventional mortgage, and your loan-to-value ratio is 90%, so you’ll need to pay what’s called private mortgage insurance (PMI). The lender’s insurance company charges $50 per $100,000 borrowed. So, with a $225,000 loan, your monthly PMI bill would be $112.50. This premium will be added to your monthly mortgage payment.

With conventional loans, your PMI requirement will “fall off” your loan automatically once your loan-to-value ratio reaches 78%. That said, you can request to have it removed once your loan to value is 80%.

Homeowners insurance

Once you buy a house, it will likely be the most valuable asset you’ve ever had. As such, you’ll want to insure it against damage, loss and other hazards.

In addition, if you have a mortgage, the lender will require an adequate homeowners insurance policy because it technically owns the property until you pay off the loan. Homeowners insurance costs can vary depending on where you live and other factors. But the average annual premium in the U.S. is $1,083 or $90.25 per month.

Depending on your mortgage lender and situation, you will either pay this directly to the insurance company or to the mortgage company into an escrow account. In an escrow account, your lender collects your monthly insurance premiums and then pays for the insurance on your behalf. By tacking your homeowners insurance premium onto your monthly mortgage payment, it ensures that you don’t accidentally miss a payment and lose your coverage.

Property taxes

State and local government agencies collect property taxes every year based on the value of your home and the property upon which it stands.

Property tax rates not only depend on the state where you live but also your county, township or school district. So, let’s say you live in Arizona, where the average property tax rate is 0.77%. With a home value of $250,000, your property tax bill would be $1,925 annually or $160.42 per month.

Maintenance and repairs

Whether your home is brand new or 100 years old, you can expect to pay for regular maintenance and unexpected repairs. The worst part about this is that there’s no way to know for sure how much these expenses will cost.

For this reason, it’s wise to have an emergency fund with enough money in reserves. Consider opening a separate bank account to keep the money away from your everyday spending. As for how much you should have saved up, experts recommend that you save between one to three percent of the home’s purchase price. If you split the difference and save two percent on a home worth $250,000, that’s $5,000 a year or $416.67 per month.

Calculating your monthly payment

Once you determine the budget for your new home, you’ll have an idea of whether or not you can afford the house you’ve got your eye on.

For that $250,000 home, here’s how the costs add up:

  • Principal and interest: $1,140.04
  • Mortgage insurance: $112.50
  • Homeowners insurance: $90.25
  • Property taxes: $160.42
  • Maintenance and repairs: $416.67

All told, the total monthly budget to afford that house is $1,919.88 — or $1,503.21 if you already have the $400 plus a month saved up in your emergency fund.

So, take a look at your budget before you decide whether you can comfortably afford to buy a particular house – without becoming house poor. If you discover that it’s just too expensive, no worries. You can either keep looking for another other house that fits your budget or continue to save more money for a bigger down payment.

 

5 Things I Wish I Had Known Before Buying My First House

When my wife and I bought our first home in September 2017, we made our fair share of mistakes. In hindsight, we should have done some things differently.

The good news: I won’t make the same mistakes again and am grateful that we did make the right choices in some instances. To help you learn from my mistakes as well as my smart money moves, here are 5 things I wish I had known before I started house hunting.

1. A mortgage broker won’t necessarily get you the lowest rate

A mortgage broker acts as a middleman between you and lenders. These brokers compare loan deals with several lenders to find you the best package. They charge a small fee for their efforts.

Since we were new to the game and didn’t feel comfortable doing everything on our own, we found a mortgage broker. He came highly recommended, and we were excited to work with him. Yet, when we were under contract for a house, I wasn’t impressed by the interest rate the broker was offering from one lender. I figured that this was a result of our low down payment —  just three percent at the time.

But when that deal fell through, we decided to build a house and had time to build up a 10% down payment in our savings account. Even better: the home builder told us that if we got our mortgage through one of their partner lenders, the builder would pay our closing costs. When we told our broker about the offer, he told us that was a common tactic by home builders and that we’d end up with a higher interest rate.

Not the case. In fact, the builder’s partner lender offered us a better interest rate than the broker. We gave the broker an opportunity to match or beat the rate, but he was unable to do so.

The bottom line: a mortgage broker won’t always get you the best interest rate. Do your research and explore all options before settling upon a mortgage.

2. Your emotions can work against your best interests

Once we signed an initial contract on the first home we fell in love with, we hired a home inspector to see if there were any major problems with the house.

The results of the inspection were overwhelming:

  • We would need to replace half of the roof.
  • We needed a new water heater.
  • The water pipes were cracking and the entire system needed to be replaced.
  • There was water damage in one of the bedrooms from a window leak.

To fix all of the issues, we were looking at $20,000 out of pocket, and the seller offered just $500. Yet, I loved the house and I wanted to make the repairs. I had to step back and detach emotionally. From that point, I realized this house was looking like a money pit.

The bottom line: don’t let your emotions rule as you may end up regretting your choice. Luckily, we got out before it was too late.

3. Your monthly payment is a lot more than your mortgage

Your monthly housing payment is a lot higher than your mortgage payment alone. Here are the main elements of a monthly housing payment:

  • Principal and interest: This amount goes toward paying off the mortgage loan.
  • Private mortgage insurance: You will pay this if your down payment is less than 20% on a conventional loan. You can, however, request to have it removed once your loan amount is 80% of the value of the house.
  • Homeowners insurance: This coverage protects you against damage and theft. We pay monthly into an escrow account, and the lender makes our premium payment for us annually.
  • Property taxes: These are due annually, but your lender may require you to pay a monthly portion into an escrow account.
  • Maintenance and repairs: Our home is only nine months old, and we’ve already spent money out of pocket for maintenance and repairs. To avoid any nasty surprises, real estate experts recommend saving between one percent and three percent of the home’s value each year. This way, you’ll be able to pay for those unexpected home repairs. .

When we received the final disclosure that broke down our monthly payment, it was higher than I anticipated. Yet, if we knew what the house would cost us each month from the beginning, we may have lowered our house budget even more to make more room for other things in our budget.

The bottom line: make sure you factor in the total monthly cost of owning that house. This will give you a true sense of what you can afford.

4. Your first home is never going to be perfect

After months of checking out existing homes, my wife and I were disappointed that we couldn’t find one without problems. Ultimately, we decided to build a new home.

Brand new homes, however, are not perfect and you may still have to pay for repairs or deal with issues – even in your first year in the house. For example, the insulation subcontractor didn’t blow any insulation above my kids’ rooms in the attic, and the builder made some major blunders with the landscaping that took months to fix.

Because we thought we were avoiding all of these problems by building a home from scratch, it’s been a frustrating experience.

The bottom line: be realistic and save your pennies. No house is problem-free.

5. Get everything in writing

During the building process, the construction manager for our home promised us some things that he didn’t deliver on. When we tried to get the builder to make good on the promises, he refused.

The bottom line: get everything in writing, even minor things. This will help keep the builder, seller and others accountable. After all, buying your first home is likely the biggest financial decision you’ll ever make, so take as much control of the process as you can.

The final word

While we made some mistakes buying our first home, we also learned from our experience.

When it comes time for you to buy a house, make sure you take the time to set realistic expectations and budget wisely. This will help you enjoy your new home without second-guessing yourself at every turn.

 

How We Saved BIG Buying Our First Home

Buying a house is a symbol of the American Dream, but it can also easily become the American Nightmare if you’re not financially prepared.

My husband and I bought our first home in May and we took all the steps needed to make this an enjoyable experience. We also didn’t want to go broke in the process. It was our goal to buy a house with a  mortgage payment we can afford. More importantly, we still wanted to enjoy our lives, travel, and continue to save money.

Here are a few ways we saved big as first-time home buyers. Better yet, we’re not house poor.

We Got a Fixed-Rate Conventional Loan

There are many different types of mortgages. We went for a conventional loan with a fixed interest rate.

Why? As mortgage interest rates are now low, we wanted to lock in the best rate possible to ensure that we have fixed payments every month.

Another reason why we chose a conventional loan was because we wanted to make a sizeable down payment and knew we would not have to pay private mortgage insurance (PMI) if we could pony up 20% of the cost of the house. A general rule of thumb is to put at least 20% down to avoid paying PMI. But, if you can’t do this, a conventional loan allows you to get rid of your PMI payment once you have 20% equity in your home – even if you couldn’t initially afford a hefty down payment.

We Improved Our Credit

My husband and I started working on improving our credit two years before we applied for a mortgage. We paid off debt, used credit cards wisely, and corrected any errors on our credit reports.

We focused on developing better spending habits and paying bills on time. By the time we got pre-approved and started looking for houses, both of our credit scores were over 750.

Because lenders look at credit scores for co-borrowers, they will often take the lowest score into account. Yet, neither of us wanted to be the weakest link. Plus, since both of us had such strong credit scores, we secured the best interest rate for our mortgage. This will save us thousands of dollars over time.

Our House Was Move-in Ready

Buying a move-in ready house was super important to me. My husband and I are not handy and we wanted something we would not have to completely renovate.

Our home was the perfect compromise. It was listed at a price that was at least $15,000 less than other homes in the area, was moderately maintained and had some good bones. The kitchen was updated along with one of the bathrooms. The roof was new, the HVAC system was in good shape and there was even a new deck in the backyard. Another bonus: a sprinkler system was recently installed. We definitely didn’t need to invest anywhere near $15,000 into the house. The only thing I really wanted to do immediately was hire a cleaning service and replace all the carpeting with laminate flooring. No big deal.

The best part: we didn’t have to spend extra money on hotels or stay with family while having major work done to the house.

We Bought Almost Everything Used

To save a ton of money when buying our house, we purchased used furniture. We also budgeted to buy stuff for the new house – using only the cash we had available in our bank account.

I found most of what I needed on the Facebook Marketplace. Among my bargain buys: a glass table with six chairs, a sectional sofa, an indoor storage bench, a patio table, and a wicker loveseat for the patio. Total cost: under $1,000. Can’t beat that price.

Our Sellers Purchased a Warranty

The sellers of our new house were kind enough to purchase a 13-month warranty that we can use if certain things in the home need repair. Because our house was built in the 60s, something is bound to need fixing.

Among other things, the warranty covers electrical work, plumbing and HVAC repairs. All we need to do is pay a service fee for a contractor to come out to either fix the issue or replace the item.

We’re DIYing like Crazy

Finally, we DIYed a lot to save money. As first time home buyers, we enjoy working on projects together and learning new skills. For example, I installed a backsplash and my husband sanded drywall in our second bathroom.

We’re even getting the family involved. My dad installed our flooring and window treatments, saving us the cost of hiring contractors to do this.

Final Word

Buying a home is a huge financial commitment. But, if you plan ahead you don’t have to go completely broke in order to achieve the American Dream. By taking a page from my book, you too can take steps to save money, pay down debt and become a homeowner.

 

America’s Most Expensive Cities: How to Save on Rent in Atlanta

Welcome to Expensive Cities, a new series designed to help renters find affordable apartments in the nation’s most unaffordable metros.

If you’re mulling a move to the Atlanta, you might find a quick perusal of its apartment listings disheartening. Luxury-priced listings abound, thanks to the hordes of construction crews putting up new complexes all over the city. But where are the reasonably-priced apartments for average working Joes and Janes?

The sad fact is, there is indeed a dearth of affordable apartments in booming Atlanta.

“Atlanta’s rents are quickly on the rise,” Joshua Clark, an economist at HotPads, an apartment search site that is part of Zillow Group, says. “While the area is still more affordable than San Francisco or San Jose, rents are appreciating faster in Atlanta right now than in either of those notoriously competitive, expensive markets.”

How much does renting cost in Atlanta?

Median rent in Atlanta climbed 8.1% in the past year to $1,460 for a one-bedroom apartment, and the city ranks No. 15 among the most expensive U.S. markets for renters, according to Zumper, an apartment search site.

In Atlanta’s Midtown neighborhood, where large swaths of Peachtree Street have been transformed by large residential and office developments in the past three years, apartments rent for substantially more, around $1,800 to $2,200 a month. Old Fourth Ward in the Martin Luther King Jr. National Historic District — where you can sample South African-style beef jerky and 1960s craft cocktails in the food hall at Ponce City Market — costs renters about $1,500 to $1,800 per month for a one-bedroom unit, according to Danny Sirikoun, Zumper’s Atlanta market specialist.

Why is the rent in Atlanta so high?

Rapid job growth in the nation’s third-fastest growing metro helped attract nearly 90,000 new people to Atlanta, causing furious demand for apartments. Many came for entertainment industry jobs. Atlanta has become the third-biggest hub for the film industry, after Los Angeles and New York, producing blockbusters like “Avengers: Infinity War” and Netflix’s “Stranger Things”.

“Given that so many new rental listings have become available in the past year, and rent growth still hasn’t let up, it’s clear that the city is still seeing high demand,” Clark says.

How to find affordable rent in Atlanta

Despite the general upward price trend, budget-minded renters can still find some relatively well-priced apartments, both inside the perimeter (ITP) of Interstate-285 and outside (OTP). Check out these up-and-coming neighborhoods with lots of exposure to the ATL’s most exciting offerings that still tout affordable rents.

1. For proximity to everything, look at West Midtown

Love the museums and fancy shops of Midtown, but found the area too pricey? Consider bustling West Midtown, the neighborhood right next door to Georgia Tech. Average rents around there are $200 to $300 dollars cheaper than rents for comparable apartments in Midtown proper. You can find a studio for around $1,100 and for a one-bedroom you’ll pay around $1,300 to $1,500.

“That’s pretty cheap, considering its proximity to everything,” says Sirikoun.

In recent years, this former industrial neighborhood has seen its old warehouses rapidly converted to trendy urban lofts, galleries and live music venues. It is also easily accessible to the Westside BeltLine, a new walking and biking trail that showcases public art exhibits and links intown neighborhoods.

“People are starting to flock to Westside Provisions and Marietta Street for nightlife, restaurants and boutiques,” Sirikoun says.

2. An alternative booming area? Smyrna

An OTP alternative that offers a good lifestyle on a budget is Smyrna, or “Jonquil City,” which is about ten miles northwest of Atlanta and considered an integral part to its metro area. Smyrna is best for those who want a family-friendly community with a village-within-a-city feeling, along with easy access to downtown Atlanta.

Smyrna has boomed recently after the Atlanta Braves built their new stadium, SunTrust Park, in the area. The project included the development of a new entertainment district The Battery Atlanta, with shopping, restaurants and bars.

“It’s only a ten-minute drive into the city, which makes it popular with out-of-towners looking for a place that is affordable,” says Sirikoun.

One-bedroom apartments in older buildings start at around $900 a month, while those in new developments go all the way up to $1,500.

“The average is more on the low end of the spectrum, around $1,000 to $1,100 for a one-bedroom,” says Sirikoun.

3. Bonus tip: Budget for higher rents if you own a pet

Atlanta is famously dog-friendly. You’re fine to bring your animal companion along on your Home Depot errands or to brunch al fresco at many Atlanta restaurants. When it comes to renting an apartment, most Atlanta landlords happily welcome your furry friends — albeit for a price. (Note: You might pay more renters insurance, too. We can help you compare renters insurance quotes here.)

“Most, if not all, landlords allow dogs, with a certain pet fee, plus ‘pet rent’ per month,” Sirikoun says. “Aggressive breeds are not allowed in most, and weight restrictions are imposed as well. As a financially-responsible mom or dad, you’d be wise to budget an additional $300 to $500 per pet at move-in time, plus about $10 to $15 a month extra in pet rent.”

What cities have the savviest renters? Check out the Policygenius Renters Index to find out.


This article originally appeared on Policygenius.com

 

5 Financial Moves to Make Before You Go House Hunting

So, you’ve been poking around at houses. You’ve found the neighborhood of your dreams and you’re ready to say “sayonara” to your grouchy landlord.

Yet, moving out of your apartment and buying a house isn’t as easy as it sounds. While you may be mentally ready to make the leap, you also need to be financially prepared. This means you’ll need enough savings for a down payment and a strong credit score – especially as we are in seller’s market.

In a seller’s market, homes sell at an accelerated rate, at higher prices – often after bidding wars. According to Realtor,com, homes are selling 10 percent faster and for nine percent more money than at this time last year. If you’re a first-time house hunter and you aren’t prepared, you may end up losing out on house after house.

Sounds stressful, right? Luckily, we’re here to help with 5 ways to prepare for house hunting. Take a look:

1. Get Pre-Qualified

Pre-qualification for a mortgage is a quick and free process that can be done online or in-person with a lender. In the pre-qualification process, you start by answering a few questions about your finances. Based on the information you provide, the lender will tell you if you’ll be approved, how much house you can afford, and what your interest rates will be. It is ideal to get a quote from two or three different lenders. This way you can choose the lender with the best rates and fees.

 

While this is not a promise or guarantee that you’ll be approved for the loan, you’ll have an estimated loan amount that can help you determine your house budget.

2. Save for a Down Payment

While some first-time home buyer programs help you purchase a home for as little as three to three-and-a-half percent down, here’s the truth: a higher down payment can help you get approved for a loan quicker and grant you access to lower interest rates, according to Experian.

Also, if your down payment is less than 20 percent of the home price, you’ll typically be required to pay annual Private Mortgage Insurance (PMI.) We know: 20 percent can be a of lot of cash to save up. For a $250,000 home, for example, you’ll need to save $50,000. And, while it’s a good idea to save as much money as possible before house hunting, it’s also important to buy a home you can afford. For this reason, it’s a good idea to talk to a real estate agent and mortgage lender to help you figure out how much home you can realistically afford to buy.

3. Boost Your Credit Score

An excellent credit score isn’t just for bragging rights. A score higher than 740 will allow you to get approved for a better mortgage with lower interest rates.

Not sure what your credit score is? You can fix this fast by ordering a free credit report through Annualcreditreport.com. With your credit report in hand, make sure all the information is accurate. If not, go through the proper channels to fix this (Annual Credit Report’s website helps you with this).

If you need to improve your credit score, there are many ways to do this. According to Randall Yates, founder of online mortgage marketplace The Lenders Network, here’s a good first step: “A simple way to increase your credit score quickly is by paying down the balances on your credit cards.”

“Try to get each card balance below 15% of the credit limit to maximize your score and improve your chances of getting approved with the best loan terms,” says Yates.

By doing this, you’ll be slowly but surely improving your credit utilization rate, which accounts for up to 30 percent of your credit score. You can figure out your credit utilization rate by taking the amount of your credit card debt and dividing it by your credit limit. For example, if you have $1,000 in debt and a $2,000 line of credit, your credit utilization rate is 50 percent. You can learn more about how to improve your credit utilization rate here.

4. Have a Steady Source of Income

Even if you hate your job, think twice before getting a new job immediately before house hunting. Why? Your work history and income paints a picture for mortgage lenders. A solid job makes you appear financially stable and reliable. And, you often won’t get approved for a loan if you’re unemployed or have only been at your job for a short period of time.

5. Get Pre-Approved

Once your finances are ready and you are actively looking for a house, it’s time to secure a mortgage pre-approval letter. A pre-approval letter is different from a pre-qualification letter because an underwriter investigates your finances top to bottom. There is no hiding a late payment or excess amount of debt from the underwriting process.

“The pre-approval process is very quick, and can be completed in as little as an hour,” says Ariel Szabo, a Boston-based real estate agent. “The one variable that could hold up the process is how long it takes you to submit the necessary documentation,” she explains.

What financial paperwork should you have ready to submit?

“At a minimum, your mortgage officer will need to review your taxes, proof of income, and statements of your assets and debts,” Szabo says. You should also have your driver’s license and social security number ready.

A pre-approval is a game changer. Once you have a pre-approval letter, you become a noteworthy buyer and sellers will know you can actually afford to buy the house.

Are You Homeowner Material?

Buying a home is an exciting adventure, but it is also a serious commitment. By following the 5 steps here and being prepared, you’ll be ready to start house hunting and hopefully snag your dream home.

 

How to Change Banks When Moving Out of State

No matter if you’re leaving town to buy a new home across the country or relocating around the corner, moving is never fun.

First off, there are tons of things you have to do. You have to find a new home, pack up all of your possessions, move them to your new location, clean your old home, clean your new home, unpack, organize, and more. This doesn’t even include all of the other logistics that can go along with moving, like setting up new accounts for utilities, switching Internet providers, and changing your address on pretty much everything.

This list can be even longer if you’re moving to a new state. And, one of the most important things to add to this to-do list is to change banks.


Open a bank account online for free

Banking like it should be.

No hidden fees and get paid up to 2 days early.

Free to sign up and takes less than 2-minutes!

Apply Now


Before you get stressed out thinking about changing banks while in the midst of a move, we’re here to offer a helping hand. Take a look at the following steps to change banks.

Open a New Account

One of the very first things you must do is open a new account – ideally for free. Unfortunately, this might take a little legwork to find a bank with the best features for your lifestyle. For example, you may want a bank account with no fees. You may also want to pay bills online via a sweet mobile app.

With these goals in mind, you may prefer an online only account, like Chime. Or, perhaps you’ll want to open an account at a bank with brick and mortar locations in your new state. The benefit of opening an account with an online bank is you’ll never need to worry about changing banks again if you move out of state.

After deciding which kind of bank you prefer, you will need to provide identification, such as your social security number and a government-issued I.D. In addition, you will need a small amount of money to deposit into your new account. The minimum amount required can differ from bank to bank. In some cases, there is no minimum deposit required at all, such as the case with Chime.

Get a Debit Card

A debit card can be a convenient way to access the money in your new checking account, plus it’s also a good way to grow your savings.

Some bank accounts, like Chime, offer programs that round up your debit card purchases and deposit those round up amounts into your savings. This spare change can add up over time to make a big difference.

Keep in mind: getting a debit card for your new account may take some time, so make sure you factor in a week or two until your new card arrives.

Set up Automatic Withdrawals

As soon as you have enough funds in your new account, you should set up automatic withdrawals to come out of your new account – instead of your old one. For example, you can set up automatic withdrawals to pay new creditors, such as your landlord, your mortgage company, your homeowner’s or automobile insurance, or your utilities. You can also schedule automatic payments to pay your credit cards bills, Internet provider, and any other monthly bills you need to pay.

Schedule Automatic Deposits

Automatic deposits are another area you must address as you change banks when moving out of state. Talk to your new bank and employer about setting up direct deposits of your paychecks to the new account.

You should also set up automatic transfers into your new savings account too. Automating your savings can help you save money with each paycheck and reach your goals faster.

Monitor All Accounts

For starters, make sure you don’t immediately close your old bank account when you move. The reason for this is that there may still be outstanding checks, transfers, or other transactions that have not been completed yet.

Instead, monitor all of your accounts – the new and the old – until all of your pending transactions have cleared your old account.

Close Old Accounts

Once all of your transactions have cleared your old bank account, you are ready to close it.

Next up: contact your old bank and let the customer service representative know you are closing your account and intend to deposit the money into your new bank account located out of state. You can then ask for a cashier’s check for the remaining balance.

Ease the Stress of Changing Banks

Moving to a new state is a difficult process, but changing banks doesn’t have to be. Hopefully these tips will help ease the stress of moving out of state by making the process of changing banks a little smoother.

Have you ever moved out of state? How did you handle changing banks?

 

7 Ways to Save Money When Moving Out of State

On the list of the most stress-inducing life events, moving is often at the top. And if you’re moving across state lines, it can be even worse.

Thankfully, there are ways to reduce the cost of moving cross-country, even if you can’t minimize the hassle. Here are 8 simple ways to save money when moving out of state.

1. Drive Your Own Truck

Hiring movers to drive your stuff across the country can cost several thousand dollars. At the same time, handling everything yourself just isn’t worth the headache. You can split the difference by hiring movers to pack up the truck and then drive it cross-country yourself. Or, if you’re motivated and want to save the most cash, pack up yourself and also drive your stuff to your new location.

A quote from moving.com showed that a move from New York City to Los Angeles costs between $6,120 and $8,676 with professional movers. However, renting a truck from Penske costs between $2,606 and $3,447, depending on the size of the truck.

Here’s another pro tip: remember to rent the truck in advance. The closer you are to your moving date, the more you’ll pay for a moving truck. You should also try to reserve a truck on a weekday and avoid holidays. Moving companies often jack up prices on weekends as well as on popular holiday moving dates like Memorial Day and Labor Day. Even if you aren’t exactly sure when you’ll move, book a date as soon as you find out you’re relocating. You can always change the exact date or type of vehicle later if your plans change.

2. Throw a Packing Party

If you’re truly committed to saving money on your move, you can take the above tip a step further. Instead of hiring movers to pack the truck or doing it all yourself, consider inviting friends over for a going away/packing up party. It won’t cost more than a few pizzas and some beverages, and you can drive away full of positive vibes and happy memories.

3. Get Free Boxes

Warehouse clubs, liquor stores, and other retailers are known for having boxes laying around the back room that are free for the taking – if you ask. You can also search for boxes on Craigslist. Many people are happy to give their moving boxes to someone else for free. If you have friends who work retail, ask if they have access to boxes.

4. Declutter

The less you have, the cheaper it is to move. Consider every item you own and ask if you really want to take it with you. Do you need to keep the boxed DVD set of “Charmed” or can you toss it? You can sell any large or valuable items online and put the proceeds toward the move.

Another pro tip: If you donate your items and itemize your taxes, you can claim the contribution as a tax deduction.

5. Switch Banks

It’s time to close your old bank account. When you move to a new state, you might find your bank no longer has local branches or ATMs. Out-of-network ATM fees typically cost about $3 each time you use a cash machine. This can add up quickly if you use cash on a regular basis. But, if you switch to an online bank like Chime, you won’t have to worry about finding a location or ATM near you. Better yet, ATM fees for Chime members are free – all the time.

6. Keep All Receipts

The IRS permits you to deduct moving expenses if you relocate for work. If this is the case for you, keep any receipts related to your move so you can deduct them when tax time rolls around. Keep in mind that you can only deduct expenses such as gas, rental truck, and hotel.

7. Ship Your Belongings By Train

If your moving plans follow a train route, you may have a unique option available. Many people have success shipping their belongings by train and then flying to their destination. Amtrak allows you to ship up to 500 pounds total, with each package weighing no more than 50 pounds. You’ll need to call to get a specific estimate, but it’s about $67 per pound for the first 100 pounds and then 70 cents per pound after that.

 

So You Want to Move Out of Your Parents’ House? Try These 8 Strategies

As millennials, we want to do it all, be it all and see it all. But there’s one big thing holding many of us back from achieving our version of the American dream — financial independence.

In fact, according to ABODO’s analysis of U.S. Census data more than one-third of millennials have yet to leave the nest. And the proportion of older millennials — ages 25 to 34 — who are living with their parents has reached 19 percent, the highest point ever, according to the Associated Press. Why the high numbers of millennials residing in their childhood basements? Economic necessity.

The good news? Your circumstances right now don’t have to determine your possibilities for the future. Here are 8 strategies for achieving financial independence and moving on out of that musty basement:

Know where you stand today

It’s time to have a heart-to-heart with yourself about your current financial situation. When I first started on my journey to financial freedom, the first thing I did was review my bank statements from the previous 90 days. I was shocked to find out that $20 here or $50 there added up to hundreds of dollars each month spent on things I didn’t need.

Apart from coming to terms with your spending habits, it’s important to calculate your total debt number. Try creating a simple spreadsheet to list all your student loans and credit cards. Good ole fashioned pen and paper will work just fine as well.

The purpose of this exercise isn’t to throw yourself a pity party but rather to lay the groundwork for getting to where you need to be.

Beef up your financial knowledge

It can be really overwhelming to start learning everything there is to know about personal finance. However, online bank accounts like Chime can help you make proactive money decisions.

Start with the basics such as understanding how to create a budget, manage debt, save for retirement and invest for the future. When you’re just starting out, it’s important to do your own research but remember there’s no shame in asking for help from a financial expert. You can search for a fee-based financial advisor here.

Work backwards

Armed with some financial knowledge, it’s now time to set your plan into motion. Choose one big picture goal that you’d like to achieve over the next 12-24 months. For example, moving out of your parents’ house.

The cost to move out will likely be several thousand dollars including a security deposit on an apartment, first month’s rent and buying furniture. Once you’ve come up with the amount of money you’ll need, divide this up into months. Monthly savings goals are a lot more manageable and you can give yourself a small reward each time you achieve them — #winning.

You can use this same approach to figure out your monthly expenses when you move out.

Automate your savings

Having a plan means very little if it’s hard to execute. One of the easiest ways to save money is to take the guesswork out of the equation completely. Chime makes it easy for you to achieve this goal through automation. With a Chime bank account you can save when you get paid by automatically directing 10% of every paycheck into your savings account.

As a bonus, if you use your Chime card to make purchases, Chime will round up each purchase you make to the nearest dollar, and transfer the roundup amount from your Spending Account to your Savings Account.

Get aggressive with paying off debt

There are so many advantages to eliminating your debt sooner rather than later. Apart from achieving financial zen and saving on ridiculously high-interest costs, getting rid of debt frees up your income. Imagine a life without payments — the possibilities are endless!

There are lots of ways to pay down debt quickly such taking on a side hustle or two, dramatically reducing your expenses or considering tools such as credit card balance transfers.

Go on a fiscal fast.

You could also try out a fiscal fast. This is like going on a diet but for your finances. The idea of a fiscal fast is to completely eliminate all non-essential spending – like coffee runs – for a specific period of time. Short fasts last only a few days whereas more extreme ones can last an entire month. Along with jump-starting your savings goals, fiscal fasts also teach you to be financially disciplined and even creative.

The key to success is to transfer all the money you would have spent during the weekend or month into a savings account. I’ve done five fiscal fasts in the past year or so. Each time I’ve saved between $250 and $300. This helped me get rid of my credit card debt a lot quicker.

Invest in yourself.

You are your biggest asset. Take the time to invest in your personal and professional development and watch the returns roll in. You might choose to start with investing in your career or professional advancement by learning new skills, participating in training sessions, or taking a new course. These steps can set you up for your next promotion and possibly even a raise.

There’s also huge potential in exploring your creative side. Lifehack notes, “creativity, in any form, helps us to grow personally and professionally, to view problems and solutions in different ways and to utilize other parts of our mind that may have been previously untapped.”

Throughout this journey, don’t neglect self-care like eating well-balanced meals and exercising. Remember, health is wealth.

Check your thoughts regularly.

You might be surprised by what positive thinking and even meditation can do for developing good financial habits. These tools can help you stick to your goals, bounce back from setbacks and reduce anxiety when it comes to your finances. Now, it’s time to go and do! Start implementing even one of these strategies per week and start writing your financial independence story today.

Banking Services provided by The Bancorp Bank, Member FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. Chime and The Bancorp Bank, neither endorse nor guarantee any of the information, recommendations, optional programs, products, or services advertised, offered by, or made available through the external website ("Products and Services") and disclaim any liability for any failure of the Products and Services.