Why It’s the Year of the Side Hustle

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Why It’s the Year of the Side Hustle

Side hustles have always been a good way to earn more money and better your finances. With so many people in debt while wages have fallen flat, they’ve become especially popular over the past decade. Now, with the coronavirus pandemic, we’ve seen them shoot ahead in popularity even further.  According to a recent survey by […]

The post Why It’s the Year of the Side Hustle appeared first on Good Financial Cents®.

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15 best paid survey sites in 2020

If you have some spare time and are looking for ways to make a little extra money, you could try filling out surveys for money. With survey companies paying out millions of dollars to users each year, it’s a legitimate way to earn an income online.

Or is it? There’s a natural skepticism whenever this topic is brought up in personal finance circles, and for good reason. For starters, far too many people have been burned by the claims of ‘scammy’ survey sites in the past, walking away with nothing more than a whole lot of wasted time. And, let’s face it, you’re never going to get rich filling out online surveys. Forget rich, you’re going to struggle just to get to minimum wage.

So why even bother? Survey sites are definitely not for everyone, yet they remain very popular. If you stick to the most reputable ones, there is money to be made. We’re not talking rent-erasing money, but it might cover the cost of your monthly Netflix subscription, or subsidize your coffee habit, which for some people is worth the effort.

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What's the Best Type of Mortgage for You?

When you're ready to buy a home, choosing the best lender and type of mortgage can seem daunting because there are many choices. Since no two real estate transactions or home buyers are alike, it's essential to get familiar with different mortgage products and programs. 

Let's take a look at the two main types of mortgages and several popular home loan programs. Choosing the right one for your situation is the key to buying a home you can afford. 

What is a mortgage?

First, here's a quick mortgage explainer. A mortgage is a loan used to buy real estate, such as a new or existing primary residence or vacation home. It states that your property is collateral for the debt, and if you don't make timely payments, the lender can take back the property to recover their losses.

In general, a mortgage doesn't pay for 100% of a home's purchase price.

In general, a mortgage doesn't pay for 100% of a home's purchase price. You typically must make a down payment, which could range from 3% to 10% or more, depending on the type of loan you qualify for. 

For example, if you agree to pay $300,000 for a home and have $15,000 to put down, you need a mortgage for the difference, or $285,000 ($300,000 – $15,000). In addition to a down payment, lenders charge a variety of processing fees that you either pay upfront or roll into your loan, which increases your debt.

At your real estate closing, the lender wires funds to the closing agent or attorney. After you sign a stack of mortgage and closing documents, your down payment and mortgage money go to the seller and various parties, such as a real estate broker, title company, inspector, surveyor, and insurance company. You leave the closing as a proud new homeowner and begin making mortgage payments the next month.

What is a fixed-rate mortgage?

The structure of your loan and payments depends on whether your interest rate is fixed or adjustable. So, understanding how these two main types of mortgage products work is essential.

A fixed-rate mortgage has an interest rate that never changes, no matter what happens in the economy.

A fixed-rate mortgage has an interest rate that never changes, no matter what happens in the economy. The most common fixed-rate mortgage terms are 15- and 30-years. But you can also find 10-, 20-, 40-, and even 50-year fixed-rate mortgages.

Getting a shorter mortgage means you pay it off faster and at a lower interest rate than with a longer-term option. For example, as of December 2020, the going rate for a 15-year fixed mortgage is 2.4%, and a 30-year is 2.8% APR. 

The downside is that shorter loans come with higher monthly payments. Many people opt for longer mortgages to pay as little as possible each month and make their home more affordable.

Here are some situations when getting a fixed-rate mortgage makes sense:

  • You see low or rising interest rates. Locking in a low rate for the life of your mortgage protects you against inflation. 
  • You want financial stability. Having the same mortgage payment for decades allows you to easily budget and avoid financial surprises. 
  • You don't plan to move for a while. Keeping a fixed-rate mortgage over the long term gives you the potential to save the most in interest, especially if interest rates go up.

What is an adjustable-rate mortgage (ARM)?

The second primary type of home loan is an adjustable-rate mortgage or ARM. Your interest rate and monthly payment can go up or down according to predetermined terms based on a financial index, such as the T-bill rate or LIBOR

Most ARMs are a hybrid of a fixed and adjustable product. They begin with a fixed-rate period and convert to an adjustable rate later on. The first number in the name of an ARM product is how many years are fixed for the introductory rate, and the second number is how often the rate could change after that.

For instance, a 5/1 ARM gives you five years with a fixed rate and then can adjust, or reset, every year starting in the sixth year. A 3/1 ARM has a fixed rate for three years with a potential rate adjustment every year, beginning in the fourth year.

When shopping for an ARM, be sure you understand how often the rate could change and how high your payments could go.

ARMs are typically 30-year products, but they can be shorter. With a 5/6 ARM, you pay the same rate for the first five years. Then the rate could change every six months for the remaining 25 years.

ARMs come with built-in caps for how much the interest rate can climb from one adjustment period to the next and the potential increase over the loan's life. When shopping for an ARM, be sure you understand how often the rate could change and how high your payments could go. In other words, you should be comfortable with the worst-case ARM scenario before getting one.

In general, the introductory interest rate for a 30-year ARM is lower than a 30-year fixed mortgage. But that hasn't been the case recently because rates are at historic lows. The idea is that rates are so low they likely have nowhere to go but up, making an ARM less attractive. 

I mentioned that the going rate for a 30-year fixed mortgage is 2.8%. Compare that to a 30-year 5/6 ARM, which is also 2.8% APR. When ARM rates are the same or higher than fixed rates, they don't give borrowers any upsides for taking a risk that their payment could increase. 

ARM lenders aren't making them attractive because they know once your introductory rate ends, you could refinance to a lower-rate fixed mortgage and they'd lose your business after just a few years. They could end up losing money if you haven't paid enough in fees and interest to offset their cost of issuing the loan.

Unless you believe that rates can drop further (or until ARM rates are low enough to offer borrowers significant savings), they aren't a wise choice in the near term.

So, unless you believe that rates can drop further or until ARM rates are low enough to offer borrowers significant savings, they aren't a wise choice in the near term. However, always discuss your mortgage options with potential lenders, so you evaluate them in light of current economic conditions.

RELATED: How to Prepare Your Credit for a Mortgage Approval

5 types of home loan programs 

Now that you understand the fundamental differences between fixed- and adjustable-rate mortgages, here are five loan programs you may qualify for.

1. Conventional loans

Conventional loans are the most common type of mortgage. They're also known as a "conforming loan" when they conform to standards set by Fannie Mae and Freddie Mac. These federally-backed companies buy and guarantee mortgages issued through lenders in the secondary mortgage market. Lenders sell mortgages to Fannie and Freddie so they can continuously supply new borrowers with mortgage funds. 

Conventional loans are popular because most lenders—including mortgage companies, banks, and credit unions—offer them. Borrowers can pay as little as 3% down; however, paying 20% eliminates the requirement to pay an additional monthly private mortgage insurance (PMI) premium.

2. FHA loans

FHA or Federal Housing Administration loans come with lenient underwriting standards, making homeownership a reality for more Americans. Borrowers need a 3.5% down payment and can have lower credit scores and income than with a conventional loan. 

3. VA loans

VA or Veterans Administration loans give those with eligible military service a zero-down loan with no monthly private mortgage insurance required. 

4. USDA loans

The USDA or U.S. Department of Agriculture gives loans to buyers who plan to live in rural and suburban areas. Borrowers who meet certain income limits can get zero-down payments and low-rate mortgage insurance premiums.

5. Jumbo loans

Jumbo loans are higher mortgage amounts than what's allowed by Fannie Mae and Freddie Mac, so they're also known as non-conforming loans. In general, they exceed approximately $500,000 in most areas.

Always compare multiple loan products and get quotes from several lenders before committing to your next home loan.

This isn't a complete list of all the loan programs you may qualify for, so be sure to ask potential lenders for recommendations. Remember that just because you're eligible for a program, such as a VA loan, that doesn't necessarily mean it's the best option. Always compare multiple loan products and get quotes from several lenders before committing to your next home loan.

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5 Best Hedges in the Face of Inflation

Inflation measures how much an economy rises over time, comparing the average price of a basket of goods from one point in time to another. Understanding inflation is an important element of investing. The Bureau of Labor Statistics CPI Inflation Calculator shows that $5.00 in September 2000 has the purchasing power equal to $7.49 in […]

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Pulte Mortgage Review

A wholly-owned subsidiary of PulteGroup since 1972, the third-largest homebuilder in America, Pulte Mortgage gives customers a financing option that differs from those of banks and online lenders. As an imprint of the larger conglomerate, Pulte Mortgage leverages construction experience and a personal touch to take borrowers through the home purchase process, helping them understand […]

The post Pulte Mortgage Review appeared first on Good Financial Cents®.

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Health Insurance Myths Debunked

A health insurance policy is essential for anyone seeking to safeguard their future and avoid the catastrophic consequences of high medical bills. Whether you’re buying coverage for yourself or a health plan for your family, it’s important to get complete coverage. But despite this fact, millions of Americans remain uninsured, often because they believe one of the following health insurance myths. Myth 1: […]

Health Insurance Myths Debunked is a post from Pocket Your Dollars.

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How to Maximize Rewards on Everyday Spending

Woman using credit card on everyday spending

While many rewards enthusiasts focus on signing up for new credit cards to earn signup bonuses, not everyone has the time or desire to play the signup game. There is effort involved in tracking multiple cards, annual fees, and rewards programs, after all, and some people don’t want to spend their time or mental energy this way.

If you’re someone who falls into this category, you may be better off maximizing one or two cards instead of chasing rewards. Fortunately, you can earn plenty of rewards over time if you’re savvy about your card’s benefits and bonus categories.

The key to getting the most out of your rewards cards is understanding how they work and looking for opportunities to earn more points on your everyday spending. Here are some tips that can help.

Brainstorm every bill you could pay with a credit card

Because rewards cards offer points based on each dollar you spend, maximizing the amount you can spend on credit is the best way to boost your rewards haul. The smartest strategy to use here is figuring out how many of your monthly bills you can pay with a credit card.

While you may not be notified or aware, it’s possible that bills you’ve been paying with a check or debit card for years can be paid with a credit card without any fees. While your bills may vary, some expenses you should try to pay with a credit card include:

  • Rent
  • Utility bills like electric or gas
  • Health insurance
  • Cable television and internet
  • Cell phone
  • Taxes
  • Daycare
  • Auto and home insurance
  • Subscription services
  • College tuition or student loans
  • Medical bills
  • Lawn care

Keep in mind that these are just some of the bills you could be paying with credit. Depending on your situation, you could have additional, uncommon expenses to cover that could be paid with credit with ease.

Also, remember that these additional bills should be paid with credit on top of your everyday expenses like groceries, dining out, gas or bus fare, and miscellaneous spending. Every time you buy something in person or online, you should strive to pay with your rewards card if you can.

Leverage your rewards card bonus categories

It’s also important to leverage your favorite card bonus categories, whatever they may be. This is especially important if you have a few cards with different bonus categories since you’ll want to make sure you’re using the right card for bills that let you earn bonus points.

Let’s say you have a travel credit card that earns 3x points on dining and travel and another card that earns 6x points at the grocery store. In that case, you would be smart to use the travel card for dining and travel purchases and your other card when you stock up on food. While the amount of rewards you earn with individual purchases may seem nominal, using the right card for the right purchase can help you earn a lot more rewards over time.

Set up auto-pay bills to be paid with credit

Most of us have bills set up to be paid automatically, whether it’s our Netflix and Hulu subscriptions, gym membership, or utility bills. Make sure each bill you have set up to be paid automatically is set up to be paid with your rewards card and not a debit card. This way, you can earn rewards points on those expenses every month.

Use shopping portals and dining clubs

Many flexible rewards programs, frequent flyer programs, and hotel loyalty programs have shopping portals you can access to earn extra points. Major airlines like American, Delta, and United also have shopping portals that work similarly. (See also: How to Maximize Rewards Through Credit Card Shopping Portals)

Some programs like Southwest and Delta also offer dining clubs. These programs let you earn additional points or miles just for dining at participating restaurants in your area. It’s easy and it’s free to join, so you may as well earn extra miles on your spending if you’re going to dine out anyway. (See also: Everything You Need to Know About Airline Dining Rewards Programs)

How much the average family can earn

If you are skeptical the average family can rack up meaningful rewards without signing up for new cards over and over again, look at how this might work in real life. For example, imagine a family of four with two rewards card-toting adults. Across the two of them, they have:

  • A cash back card that earns 2% back
     
  • A travel credit card that earns 3% on dining and travel
     
  • A rewards card that earns 6% cash back at the grocery store on up to $6,000 in spending each year

To figure out how much this family might earn, we used Bureau of Labor Statistics spending averages from 2017. Here’s a rundown of that data for the year plus how much a family could earn in rewards over 12 months based on average expenses:

  • Food at home ($4,363): $261.78 in rewards at 6%
     
  • Food away from home ($3,365): $100.95 at 3%
     
  • Utilities, fuels, and public services ($3,836): $76.72 at 2%
     
  • Household operations ($1,412): $28.24 at 2%
     
  • Household supplies ($755): $45.30 at 6%
     
  • Household furnishings and equipment ($1,987): $39.74 at 2%
     
  • Apparel and services ($1,833): $36.66 at 2%
     
  • Gasoline and motor oil ($1,968): $39.36 at 2%
     
  • Other vehicle expenses ($2,842): $56.84 at 2%
     
  • Healthcare ($4,928): $98.56 at 2%
     
  • Entertainment ($3,203): $64.06 at 2%
     
  • Personal care products ($762): $45.72 at 6%
     
  • Education ($1,491): $29.82 at 2%

Total rewards: $923.75

While $900+ is a lot to earn in rewards within a year, you have the potential to earn a lot more. After all, these are just some of the expenses the average family faces and not all of them. If you could pay some additional big bills with credit each month like daycare or your rent, you could significantly add to your bottom line.

What to watch out for

While maximizing rewards cards is a smart idea if you’re using them already anyway, there are always pitfalls to be aware of when you’re using a credit card. Here’s what to watch out for during your quest for more cash back and travel rewards.

Fees for using credit

While there are many bills you can pay with credit without a fee, some vendors, merchants, and service providers charge a fee to use a credit card as payment. Fees are especially prevalent on bills such as utilities, cable or internet, rent, and insurance. Make sure to verify you aren’t being charged a fee to use credit before you proceed.

Annual fees

Don’t forget that some rewards cards charge annual fees. These fees may be worth it depending on your spending and rewards haul, but you should always factor them into the equation to make sure each fee is worth paying. If you’re against paying annual fees, look for rewards cards that don’t charge one.

Budgeting mishaps

Using a credit card for all your expenses may simplify your financial life, but it could also cause your budget to fall out of whack. Make sure you’re only spending on purchases you planned to make anyway, and that you’re tracking your spending and paying off your credit cards regularly.

Debt

Never use credit cards for purchases you can’t afford to repay if you’re pursuing rewards. The interest you’ll pay will always be much more than the rewards you earn. If you’re worried using credit will cause you to rack up debt you can’t afford to repay, you’re better off sticking to cash or debit instead.

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Want to maximise your credit card rewards? The key to getting the most out of your rewards cards is understanding how they work and looking for opportunities to earn more points on your everyday spending. We’ve got the ultimate tips and tricks to help you save money and earn more rewards! | #creditcards #rewardsprogram #creditcardrewards


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15 Home Business Ideas & The Free Courses You Need To Get Started

Are you looking for a work from home job or some at home business ideas? If so, then I have a great list of free resources, such as courses and guides, that will help you find the best option and learn how to get started. Plus, all of the courses and guides in this article […]

The post 15 Home Business Ideas & The Free Courses You Need To Get Started appeared first on Making Sense Of Cents.

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16 Natural Remedies to Relieve Itchy Mosquito Bites

Papaya

Can’t stop scratching a bug bite? Just place a piece of papaya (the fleshy part, not the skin) on it. Papaya contains an enzyme called “papain,” whose protein-digestive properties helps to decompose insect venom, which will stop both itching and swelling.

Vapo-Rub

That jar of vapor rub at the back of your medicine cabinet isn’t just good for breaking up chest congestion, you can also use it to stop mosquito and other bug bites from itching and swelling. Just dab a little on the spot, and you’ll stop scratching in seconds, thanks to the combination of menthol and eucalyptus.

Whipped Cream

Covered in mosquito bites? Get some relief with a surprising ingredient: whipped topping. The same nondairy topping that you’d use for ice cream or pies also helps stop insect bites from being so darn itchy.

Mouthwash

To help reduce the itchiness associated with insect bites, try applying an antiseptic mouthwash (such as Listerine) to the area with a cotton ball.

See also: How to Get Rid of Bad Breath Naturally

Bar Soap

Ease mosquito and other bug bites by rubbing them with some dry bar soap like Ivory. It will provide quick relief from itching!

If you don’t have any bar soap on hand, you could also use hand soap (it’s just harder to keep on the bite!).

Tea

Tame that painful bug bite with a little tea. Soak a bag of black tea in warm water and then apply it to the bite. The tannic acid will help reduce swelling and pain.

Alka Seltzer

If it’s bug season and your family has got the itch, apply this solution to the affected areas for relief: Add two tablets of Alka Seltzer to a half a glass of water. Use a cotton ball to rub this into your bites, and let it sit for 30 minutes

Milk of Magnesia

Want to eliminate the itch from a bug bite? Look no further than the milk of magnesia in your medicine cabinet. Dab a little bit on the spot, and the antacid will stop the itchiness in its tracks.

Hemorrhoid Cream

You may have heard that hemorrhoid cream can relieve undereye puffiness, but did you know it could also help your mosquito and other bug bites? Applied topically, it will reduce the pain and the swelling of an insect bite.

Deodorant

We love this quick fix for an insect bite! Just rub antiperspirant or deodorant over the spot and the itch will go away. It contains some of the same ingredients as anti-itch creams.

Related: 6 All Natural Ways to Get Rid of Body Odor

Antacid

Here’s a clever use for that roll of antacids you’ve got at the bottom of your purse: an itch reliever! Crush one tablet with enough water to make a paste and spread it over any itchy spots for relief, especially mosquito bites.

Thousand Island Dressing

We know this one sounds a little goofy, but it actually works. The next time you get a bug bite, try applying a little thousand island dressing to stop the itch.

Toothpaste

Have a bug bite that won’t stop itching? Get relief with a dab of toothpaste (the white, non-gel variety works best) and it will take the itch away as well as a dab of calamine lotion does.

Rubbing Alcohol

A great way to stop mosquito (and other) bites from itching is with a dab of diluted rubbing alcohol. In fact, ammonia is the main ingredient in many of the itch-relief products currently on the market. Just mix four parts water for every one part alcohol. You can also use ammonia in place of the rubbing alcohol.

Caution: Don’t apply rubbing alcohol or ammonia if the skin is broken near the bite! It will sting.

Meat Tenderizer

If you’ve just come back from a long weekend camping, you’ll love this tip. Use meat tenderizer to treat insect bites! Moisten a teaspoon of tenderizer with a little water and rub it immediately into the skin. Commercial meat tenderizers contain papain, the same enzyme as papaya. It actually decomposes insect venom, easing itchiness and swelling.

Aspirin

The next time you get a bug bite, crush an aspirin tablet and rub it into damp skin. The active ingredient in aspirin, salicylic acid, is an anti-inflammatory, and it will reduce the pain of the swelling and itching. 

Just for fun: How to Solve Your Biggest Summer Problems

For more ways to deal with insects and bites from all around the internet, check out our Bug and Pest Natural Remedies board on Pinterest. And don’t forget to follow us on Instagram!

Image courtesy of Shutterstock.

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What Are the Best Loans If You Have Bad Credit?

If you need to borrow money but your credit is less than stellar, it’s possible you’ll wind up with a bad credit loan. These loans are geared toward individuals with imperfect credit histories who can prove their income and ability to repay the loan. As a result of their bad credit, however, consumers who use […]

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