15 Real Estate Markets Offering the Most Bang for Your Buck

The classic saying in real estate is “Location, Location, Location.” Everyone who buys a home knows that where homes are located—by market, by neighborhood, and even by block—can cause wide variation in what they will list and ultimately sell for.

Changes in the real estate market during the COVID-19 pandemic have shifted some of the calculus when it comes to choosing both the location and the particular home. On the one hand, low interest rates have increased the amount of money buyers are willing to spend, as evidenced in part by the ratio of contractor-built to owner-built housing starts. When interest rates are high, many potential buyers opt to build their own home as a way to save money, pushing the ratio down. Conversely, when interest rates are low, buyers are more willing to pay a premium on a home that someone else built, and the ratio rises.

New construction units built by contractors continue to rise as mortgage rates fall

Alongside lower mortgage rates and the corresponding increase in what buyers are willing to spend, COVID-19 has ushered in a resurgence of interest in large homes. With more people transitioning to virtual work and schooling, many previously high-demand markets have cooled off, while lower-cost markets offering larger houses and more “bang-for-the-buck” have new appeal.

To find the real estate markets where buyers can get the most for their money, researchers at Porch analyzed data from Zillow, Realtor.com, and the U.S. Census Bureau. They created a composite score based on five key metrics related to price, affordability, home size, and the recent and projected change in value.

At the state level, Kansas leads the nation by a large margin, followed by a number of other lower-cost states in the South and Midwest. Notably absent from the top of the list are coastal states like California and Massachusetts, where price per square foot and home payments as a share of income are much higher than in the rest of the country.

Coastal states noticeably absent from best "bang-for-your-buck" markets


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At the metro level, it is unsurprising to find that many of the best bang-for-the-buck markets are located in the same states that rate highly for value. Oft-overlooked large metros like Indianapolis, Kansas City, and Cleveland top the list, a function of low housing costs both on a per square foot basis and as a share of income.

Here are the best “bang-for-the-buck” real estate markets.

Small and midsize metros offering the best "bang-for-the-buck"

Large metros offering the best “bang-for-the-buck”

Downtown cityscape at dusk. Phoenix, Arizona, USA
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15. Phoenix, AZ

  • Composite score: 78.6
  • Median list price: $403,792
  • Price per square foot: $201.21
  • Monthly mortgage payment as a percentage of household income: 25.9%
  • Median home size (square feet): 2,121
  • Previous 1-year change in home price: +7.9%
  • Projected 1-year change in home price: +16.1%

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High Falls district in Rochester New York under cloudy summer skies
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14. Rochester, NY

  • Composite score: 78.8
  • Median list price: $236,986
  • Price per square foot: $125.99
  • Monthly mortgage payment as a percentage of household income: 16.2%
  • Median home size (square feet): 1,761
  • Previous 1-year change in home price: +11.3%
  • Projected 1-year change in home price: +8.9%

Richmond, Virginia Skyline
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13. Richmond, VA

  • Composite score: 79.2
  • Median list price: $347,950
  • Price per square foot: $156.34
  • Monthly mortgage payment as a percentage of household income: 20.8%
  • Median home size (square feet): 2,207
  • Previous 1-year change in home price: +7.5%
  • Projected 1-year change in home price: +10.1%

Downtown skyline on the Grand River at dusk. Grand Rapids, Michigan, USA
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12. Grand Rapids, MI

  • Composite score: 79.5
  • Median list price: $306,125
  • Price per square foot: $150.52
  • Monthly mortgage payment as a percentage of household income: 19.8%
  • Median home size (square feet): 2,018
  • Previous 1-year change in home price: +6.4%
  • Projected 1-year change in home price: +12.0%

Downtown city skyline. San Antonio, Texas, USA
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11. San Antonio, TX

  • Composite score: 79.9
  • Median list price: $301,805
  • Price per square foot: $144.93
  • Monthly mortgage payment as a percentage of household income: 20.5%
  • Median home size (square feet): 2,220
  • Previous 1-year change in home price: +1.7%
  • Projected 1-year change in home price: +11.1%

Downtown skyline at twilight. Oklahoma City, Oklahoma, USA
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10. Oklahoma City, OK

  • Composite score: 80.0
  • Median list price: $268,581
  • Price per square foot: $130.13
  • Monthly mortgage payment as a percentage of household income: 18.7%
  • Median home size (square feet): 2,105
  • Previous 1-year change in home price: +7.7%
  • Projected 1-year change in home price: +8.1%

Downtown skyline at dusk. Dallas, Texas, USA
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9. Dallas-Fort Worth, TX

  • Composite score: 81.1
  • Median list price: $351,276
  • Price per square foot: $152.27
  • Monthly mortgage payment as a percentage of household income: 20.5%
  • Median home size (square feet): 2,320
  • Previous 1-year change in home price: +1.0%
  • Projected 1-year change in home price: +12.6%

Downtown city of Houston, Texas
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8. Houston, TX

  • Composite score: 82.1
  • Median list price: $322,206
  • Price per square foot: $136.89
  • Monthly mortgage payment as a percentage of household income: 19.6%
  • Median home size (square feet): 2,368
  • Previous 1-year change in home price: +2.7%
  • Projected 1-year change in home price: +10.8%

Downtown skyline. Birmingham, Alabama, USA
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7. Birmingham, AL

  • Composite score: 82.9
  • Median list price: $263,736
  • Price per square foot: $122.40
  • Monthly mortgage payment as a percentage of household income: 18.8%
  • Median home size (square feet): 2,091
  • Previous 1-year change in home price: +5.7%
  • Projected 1-year change in home price: +11.7%

Skyline of Charlotte, North Carolina at dusk
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6. Charlotte, NC

  • Composite score: 83.1
  • Median list price: $358,347
  • Price per square foot: $153.40
  • Monthly mortgage payment as a percentage of household income: 23.3%
  • Median home size (square feet): 2,331
  • Previous 1-year change in home price: +5.1%
  • Projected 1-year change in home price: +15.1%

Downtown cityscape over Temple Square at dusk. Salt Lake City, Utah, USA
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5. Salt Lake City, UT

  • Composite score: 83.1
  • Median list price: $491,591
  • Price per square foot: $191.74
  • Monthly mortgage payment as a percentage of household income: 27.0%
  • Median home size (square feet): 2,664
  • Previous 1-year change in home price: +13.4%
  • Projected 1-year change in home price: +16.0%

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Historic Yates Water Mill in Raleigh, North Carolina
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4. Raleigh, NC

  • Composite score: 83.2
  • Median list price: $378,824
  • Price per square foot: $154.92
  • Monthly mortgage payment as a percentage of household income: 20.5%
  • Median home size (square feet): 2,480
  • Previous 1-year change in home price: +3.4%
  • Projected 1-year change in home price: +14.0%

Downtown skyline on the Cuyahoga River at dusk. Cleveland, Ohio, USA
Photo Credit: Alamy Stock Photo

3. Cleveland, OH

  • Composite score: 83.8
  • Median list price: $208,061
  • Price per square foot: $98.97
  • Monthly mortgage payment as a percentage of household income: 15.2%
  • Median home size (square feet): 1,901
  • Previous 1-year change in home price: +6.2%
  • Projected 1-year change in home price: +10.4%

Downtown skyline. Kansas City, Missouri, USA
Photo Credit: Alamy Stock Photo

2. Kansas City, MO

  • Composite score: 84.6
  • Median list price: $338,726
  • Price per square foot: $145.98
  • Monthly mortgage payment as a percentage of household income: 20.9%
  • Median home size (square feet): 2,294
  • Previous 1-year change in home price: +9.3%
  • Projected 1-year change in home price: +14.8%

Indiana Statehouse and Indianapolis skyline on a sunny afternoon
Photo Credit: Alamy Stock Photo

1. Indianapolis, IN

  • Composite score: 87.0
  • Median list price: $283,562
  • Price per square foot: $113.70
  • Monthly mortgage payment as a percentage of household income: 18.9%
  • Median home size (square feet): 2,308
  • Previous 1-year change in home price: +5.5%
  • Projected 1-year change in home price: +14.1%

Detailed findings & methodology

The data used in this analysis is from Zillow, Realtor.com, and the U.S. Census Bureau. To determine the best “bang-for-the-buck” real estate markets, researchers created a composite score based on the following factors and weights:

  • Price per square foot (40%) – the median price per square foot for 2020
  • Monthly mortgage payment as a percentage of household income (10%) – the estimated monthly mortgage payment based on the median list price and median household income; assuming a 30-year fixed rate mortgage with a 20% down payment
  • Median home size (20%) – the median home size in square feet for 2020
  • Previous 1-year change in home price (5%) – the average monthly year-over-year change in list price for 2020
  • Projected 1-year change in home price (25%)* – the forecasted one-year change in home price from Zillow

With the exception of the monthly mortgage payment as a percentage of household income, higher values corresponded to a higher score for all factors considered. In the event of a tie, the metro with the lower median listing price was ranked higher. To improve relevance, only metropolitan areas with at least 100,000 residents were included. Additionally, metros were grouped into cohorts based on population size: small (100,000–349,999), midsize (350,000–999,999), and large (1,000,000 or more).

*Not available for U.S. states

Source: porch.com

10 Best Cities to Get Out of Credit Card Debt

Best Places to Get Out of Credit Card Debt – 2021 Edition – SmartAsset

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The Federal Reserve says that revolving consumer credit debt – including debt from credit cards, home equity lines of credit and personal lines of credit – increased to $974.4 billion in February 2021, marking a 10.1% annual rate increase from the year prior. This is almost one-third of all consumer debt – which also includes student and car loans – and adds up to a grand total of $4.2 trillion. With so many people trying to pay off credit card debt, SmartAsset crunched the numbers to identify and rank the best cities where it’s easiest to do so.

To do so, we considered unemployment rate, median post-tax income, lower-quartile rents and disposable income to find where debt could be paid off the fastest, assuming average interest rates and a total debt of $7,935. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

This is SmartAsset’s 2021 study of the best cities to get out of credit card debt. Read the 2019 version of the study here.

Key Findings

  • Timelines can vary widely. Debt in the top 10 cities of our study can be paid off in just over 10 months, while the average for the bottom 10 is almost 18 months. Frisco, Texas is the city where debt can be paid fastest – under nine months. And Arlington, Virginia takes more than four times longer – a little over 36 months.
  • Residents in smaller cities can pay debt faster. Small and mid-sized cities in this study can pay debt off quickly. All of the top five cities have fewer than 250,000 residents. Affordable rent and a sizable disposable income (which is the money you take home after taxes) are key factors for residents in these cities to pay off debt.

1. Frisco, TX

Frisco, Texas residents can pay off a credit card debt of $7,935 in 8.59 months. The post-tax income for high-school graduates in this city is just over $37,000. And with a lower-quartile rent (the most affordable unit one could reasonably acquire) of $1,126 per month, residents can afford to make monthly debt payments of $979.

2. Reno, NV

Reno, Nevada residents can get out of $7,935 debt in 9.43 months. The post-tax income for high school graduates is around $31,000 and the lower-quartile rent is $787 per month. This means that if they apply 50% of their disposable income after rent to paying down credit card debt, they can afford a monthly payment of $896.

3. Gilbert, AZ

The median post-tax income for high school graduates in Gilbert, Arizona is $35,463. Residents in this city can pay off a credit card debt of $7,935 in 9.60 months. And with a lower-quartile rent (the lowest number under which 25% of renters pay for rent) of $1,192 per month, monthly debt payments of $882 are possible.

4. Anchorage, AK

Anchorage, Alaska residents can pay off a credit card debt of $7,935 in 10.04 months. The median post-tax income for a high school graduate is $30,650 and the lower-quartile rent is $863 per month. If a resident applies half of their disposable income to paying down debt, they could make monthly payments of $846.

5. Chesapeake, VA

Chesapeake, Virginia residents can pay a debt of $7,935 off in 10.11 months. The median post-tax income for a high school graduate is $29,087, Furthermore, the most affordable rental unit, at the lower-quartile mark, costs $744 per month. With just over $20,000 in disposable income after rent, residents can apply half to monthly debt payments of $840.

6. St. Louis, MO

St. Louis, Missouri’s median income for high school graduates is just under $26,000 and the lower-quartile rent total is $519 a month. If someone with that income and rent adopted a relatively aggressive repayment strategy and put half of their disposable income towards paying a credit card debt of $7,935, they would be free of credit card debt in 10.37 months.

7. Fort Wayne, IN

Fort Wayne, Indiana’s median post-tax income for high school graduates is $24,881 – the lowest in the top 10 of this study. The lower-quartile rent (the most affordable unit one could reasonably acquire) in this city is $496 a month. Someone with almost $19,000 in disposable income after rent could pay off a total credit card bill of $7,935 in 10.81 months.

8. Lincoln, NE

The median post-tax income for a high school graduate in Lincoln, Nebraska is $25,828. And the lower-quartile rent in this city is $589. If residents were able to afford to put half of their disposable income after rent towards repayment, they could pay down a credit card bill of $7,935 in 10.91 months.

9. Tulsa, OK

Residents in Tulsa, Oklahoma could pay off a credit card debt of $7,935 in 10.98 months. This is based on a median post-tax income of $25,038 and a lower-quartile rent payment of $532, which means that they could afford a monthly debt payment of $777 using a relatively aggressive repayment strategy.

10. Oklahoma City, OK

Oklahoma City, Oklahoma is the most-populous in the top 10 of this list and it has a median post-tax income of $25,125 for high school graduates. The lower-quartile rent payment is $558 a month. Using a relatively aggressive repayment strategy, a resident who puts half of all disposable income after rent towards debt could pay a credit card bill of $7,935 in 11.12 months.

Data and Methodology

In order to find the best places to pay off credit card debt, we created a credit card debt payment model for 56 cities. To determine our list of cities, we excluded cities with a population smaller than 200,000 and those with a below-average unemployment rate.

To complete the analysis, we first calculated the amount of disposable income a high school graduate could have in each city, assuming he or she earned the median salary for high school graduates with no further education. Using SmartAsset’s income tax calculator, we found the after-tax income for local high school graduates. We then subtracted the annual lower-quartile rent to get how much disposable income the average high school graduate would have. Lower-quartile rent is the lowest number under which 25% of renters pay for rent.

We then assumed that high school graduates would dedicate half of their disposable income to credit card payments. Using that figure, we calculated how long it would take to pay off $7,935 of credit card debt, determined by dividing the estimated outstanding credit card debt by the number of households in the U.S. in February 2021. We also assumed consumers would be paying interest of 15.91%, which was the estimated average credit card interest rate, according to the Federal Reserve.

Data for population, median income for high school graduates and lower-quartile rent comes from the U.S. Census Bureau’s 2019 1-year American Community Survey. February 2021 unemployment figures come from the Bureau of Labor Statistics (BLS) and are measured at the county level.

Credit Card Tips

  • Consider consulting an expert. A financial advisor can help you plan so that you don’t find yourself in debt. SmartAsset’s free tool connects you with financial advisors in five minutes. If you’re ready to be matched with advisors, get started now.
  • Budgeting can go a long way in minimizing or even preventing debt. A budget is another way to make sure you don’t end up with too much credit card debt. Use SmartAsset’s free budget calculator to plan how much to spend on various categories so you don’t end up owing more than you make.
  • Choose the right card for you. If you do use a credit card, use SmartAsset’s Best Credit Cards rankings to find one that is best for your lifestyle.

Questions about our study? Contact press@smartasset.com. 

Photo credit: ©iStock.com/Farknot_Architect

Ben Geier, CEPF® Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
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Does a Year Make a Difference? How to Know Whether to Retire Now or Later

In some cases a year can make a huge difference. Think back to 2019. It was certainly different than 2020 (to say the least). But sometimes years go by and not all that much has changed. Knowing when to retire is a huge decision. It can be easy to put it off a year and then again another year.

Do those years really make a difference in the grand scheme of things? The answer largely depends on your perspective, but the answer is yes. Our choices about when to retire — even waiting just a year — impact both our financial as well as our emotional well being.

Current and Future Value of Your Decision

When figuring out when to retire, you need to think about both the present and your future. What does delaying retirement net you now? What does it mean to your future?

For example: If you retire earlier, can you still afford your future? If you delay retirement, can you be more financially secure without regretting the extra year working?

Let’s take a look at what the real differences are when you delay your retirement one year. What about if you wait another five years or longer?

Your time is your most valuable resource. And, let’s face it, how you spend your time gets increasingly more important as you age. You have fewer years ahead of you and you want to make the best use of them.

You should probably consider time as an important component in your when-to-retire decision making. What does delaying retirement for a year or more mean if you value your time?

If you are happy, fulfilled, and are finding meaning in work, then there is probably no need to rush to retirement. However, if there are other ways to spend your time that you think are more important, then you might want to prioritize retirement sooner rather than later.

Ashley Whillans, an assistant professor at Harvard Business School, writes about how to think about and value your scarcest resource, your time, in her book, Time Smart: How to Reclaim Your Time and Live a Happier Life.

She became interested in the value of time after observing that people don’t spend money for optimum happiness. (Get tips for how to spend money for happiness.)

Here is what she said on the NewRetirement podcast, “If people are not spending one resource that’s so precious in our lives, money, in a way that promotes happiness, I’m sure that they’re probably not optimizing the way they spend their time, either. And we also became really interested in trying to understand the trade-offs that we make between time and money.”

She advocates taking time seriously. “So I do hear from a lot of my MBAs, a lot of the executives I chat with, saying, ‘Well, once I get this title, once I hit this number in the bank, then I can start focusing on what I would like to do with my time. But it’s not until I achieve this title or achieve this amount of money in the bank that I’m really going to take time seriously.’”

How do you value your time? How can you use that valuation to inform your decision of when to retire?

If you have a pension, waiting a year can make a HUGE difference between vesting into income or not. For most pension holdings, when they qualify for income is the most pivotal factor for when to retire.

This could be a million-dollar decision. Don’t retire before you get your pension.

(The other big decision is whether you take your pension as a lump sum or as payments)

There are a few considerations to think about with regards to delaying retirement and what that means for your Social Security retirement income.

First, you can retire from work and delay the start of Social Security. And if this is your decision, then when you retire might not have appreciable financial considerations.

However, if you need to start Social Security right away after you retire and you haven’t yet turned 70, then you may take a financial hit. Depending on your Social Security earnings and how long you live, the difference between starting Social Security at age 62 and age 70 can be a $500,000 decision in lifetime value.

But, what is the difference of just delaying the start of Social Security for one year?

Higher Earner: Let’s say you are a relatively high earner and will be earning the maximum Social Security benefit available. If this is true, then your monthly benefit at your Full Retirement Age (66 for most people) would be around $3100. If you were to delay for a year, then you could boost your monthly benefit to around $3300. That is a $200 monthly and a $2400 a year difference. The boost would result in almost an extra $50,000 over a 20-year retirement. 

Average Earner: What about someone more average? Does delaying a year still make a big difference? The average Social Security benefit at Full Retirement Age is $1,500. Delaying the start for two years boosts monthly income by an extra $200. That is a $2,400 a year difference and would result in an extra $48,000 over a 20-year retirement.

So, delaying retirement a year can indeed make a big difference in Social Security income because it is a decision that impacts you not just in one year, but over your lifetime.

Model different Social Security start ages in the NewRetirement Planner.

Retirement and retirement planning depends on a variety of inter-related levers: your income, expenses, how much you save, and how much you withdraw from savings will all be impacted whether or not you have work income.

Here are some estimates of what delaying retirement by a year might mean with regards to work income:

Let’s start with the obvious. Delaying retirement gives you an extra year of income. And that is no small chunk of change at probably $50,000 or more, perhaps much more.

Retiring early simply means that you aren’t banking that money or are able to use it for living expenses (and you need to pay for life somehow).

Work income enables you to delay making withdrawals to cover expenses. And, this delay enables the money to stay invested and continue to grow. So, the value of delaying a year can be equal to whatever you would have taken out of savings PLUS your returns on that money.

Many people withdraw about 4% of their savings a year (review 18 of the best withdrawal and retirement income strategies) and the average retirement savings for someone in their 60s is around $200,000.

So, with those averages, delaying that withdrawal for a year would net you $8,000 plus however much your money might appreciate.  (The appreciation might be $1500 over 20 years at a six percent return.)

When you are working, you might have higher (or lower) expenses than when you retire — depending on your personal situation.

You’ll want to think about commuting costs, lunches out, fancy coffee on your way to work and your wardrobe — well, if we ever get out of the pandemic anyway. And, if you choose to retire, you’ll want to carefully consider if your expenses will go up or down. Many people find that they spend a lot more after retirement. Explore best ways to budget for retirement. Or, create a detailed future budget in the NewRetirement Planner.

However, the biggest potential factor with regards to expenses and when to retire might be where you live. If you intend to relocate after retirement, this can be a pretty massive financial factor. Buying and selling a home is a big decision and timing those transactions can mean big swings in value. Relocation is another factor that can be modeled in the NewRetirement Planner.

Expenses can’t be easily generalized — delaying retirement a year might result in a higher or lower burn rate. So, let’s just call it even. (But we really recommend that if you are considering when to retire, do detailed personalized planning so that you can feel confident with your decision.)

First, do you know how much savings you need to have the retirement you want? (Use the NewRetirement Planner to get a detailed and reliable estimate.) If you don’t have enough and an extra year or more in the workforce could get you there, then keep working.

But maybe you want extra cushion or to leave behind a bigger financial legacy. Working longer could potentially enable you to contribute greatly to savings.

Extra savings — especially if you are able to do catch up savings — can be a great use of an extra year in the workforce. You are allowed to save up to $33,000 in tax-advantaged accounts after the age of 55 (as of writing).  (And, those savings might appreciate $6500 over 20 years.)

Many workplaces offer benefits in addition to salary. Health insurance and 401(k) matching are notable big ticket items that should be considered if debating if you should delay retirement a year.

If you are retiring before you are eligible for Medicare at 65, then you may face huge out of pocket insurance costs. And, if your employer offers 401k matching, then you will be walking away from that cash.

Health Insurance: Fidelity estimates that out of pocket costs for healthcare are just shy of $12,000 a year.

401(k) Matching: The most common employer match is 50 cents on the dollar of up to 6% of your salary. So, at a $150,000 salary, an employer might be adding $4,500 to your retirement account (assuming you saved at least $9,000).

Yes. Delaying retirement by a year can be meaningful. But, the reality is entirely dependent on your personal situation. Without counting appreciation on the additional savings, here is how it adds up:

Social Security: A year could mean a $0–$500,000 difference. Let’s take the modest example and say it costs you $50,000

Pension: (Because few people have a pension, and almost no one would retire before they vest, we’ll leave it out of this summation.)

Work Income: $50,000+

Work Benefits: $16,500 ($12,000 for health insurance and $4,500 for employer match)

Delayed Savings Withdrawals: $8,000+

Savings Contributions: $33,000 (if you can max out catch up contributions)

Your Time: As the TV commercial used to say, PRICELESS

There is a huge range for what delaying your retirement for just one year might cost you — but it is safe to say that $100–$200 thousand is a conservative estimate , except that your time really is priceless. At a minimum, it has some value to you that should offset whatever you might gain from working longer.

Use the NewRetirement Planner to run scenarios for what delaying retirement a year — or moving it up five years — might mean to you. Just remember to balance the financial side of the equation with how you really want to be spending time.

Source: newretirement.com

The 10 Most Dangerous Cities for Driving (and 10 Where Streets Are Safest)

Driving is one of the most common activities in everyday life, but it’s also one of the riskiest. According to data from the National Highway Traffic Safety Administration, traffic crashes injured more than 2.7 million people and killed more than 36,000 in 2019. The latter figure makes motor vehicle accidents one of the most significant causes of death in the U.S., especially for young people.

And while drivers have been spending less time on the roads over the past year due to the COVID-19 pandemic, preliminary data from the NHTSA suggests that 2020 saw an uptick in traffic fatalities. Over the first nine months of 2020, vehicle miles traveled were down 14.5 percent year-over-year in the United States, but fatalities reported were up 4.6 percent—to over 28,000—over the same span.

Fortunately, the overall trend in recent decades has been a reduction in fatalities, thanks to better vehicle safety and changes in public policy. Manufacturers have made vehicles safer with features like electronic stability control and automatic braking systems, which decrease the number of crashes, and improved airbags and collision technology, which make crashes less likely to be fatal. Meanwhile, states have sought to improve motorist safety with stricter laws on matters like seatbelts and the use of mobile devices while driving. Collectively, these changes have helped push the total number of motor vehicle fatalities down by more than 15 percent since 2005. When calculated relative to the U.S. population, motor fatalities are down 25 percent over the same span.

Efforts to improve safety laws have not been consistent across states, however, which has somewhat limited the progress that states have made in reducing fatalities. One major example is state law around drunk driving. The lenience of DUI laws varies from state to state, and in general, research shows that states with more lenient laws also tend to see higher rates of fatalities on the roads. In 2019, more than 9,000 fatal accidents involved a drunk driver, which accounted for 27.8 percent of fatalities that year.

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Another contributing factor to vehicle fatalities is the nature and safety of the roads people drive on. For example, rural roads tend to be narrower and less well-lit than their urban counterparts, which, among other factors, creates riskier driving conditions. As a result, rural roads accounted for the majority of vehicle fatalities up until 2015, and in more recent years, they still produce nearly half of all fatal crashes—while only representing around 30 percent of vehicle traffic. Traffic itself may also be a risk factor, as the lower number of drivers on rural roads produces a false sense of security, thereby increasing the incidence of unsafe behaviors like speeding or not wearing a seatbelt.

Given the variety of factors that can play into vehicle fatality rates, it should be no surprise that risks on the road vary by geography. To identify the locations where the risks are highest and lowest, researchers from Outdoorsy created a composite index of traffic safety indicators. These factors include each location’s collision likelihood relative to the U.S. average, the total motor vehicle fatalities per 100,000 people, and the percentage of fatal collisions involving a drunk driver.

Here are the cities with the most and least dangerous drivers.

The Top 10 Most Dangerous Cities for Driving

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1. Dallas, TX

  • Composite index: 88.48
  • Average number of years between collisions: 7.2
  • Relative collision likelihood: +46.5%
  • Total motor vehicle fatalities per 100k: 14.3
  • Share of fatal collisions involving a drunk driver: 42.4%
  • Population: 1,343,565
Photo Credit: Alamy Stock Photo

2. Baton Rouge, LA

  • Composite index: 85.60
  • Average number of years between collisions: 6.8
  • Relative collision likelihood: +55.1%
  • Total motor vehicle fatalities per 100k: 21.9
  • Share of fatal collisions involving a drunk driver: 27.7%
  • Population: 220,248
Photo Credit: Alamy Stock Photo

3. San Bernardino, CA

  • Composite index: 83.02
  • Average number of years between collisions: 7.5
  • Relative collision likelihood: +41.8%
  • Total motor vehicle fatalities per 100k: 17.9
  • Share of fatal collisions involving a drunk driver: 30.4%
  • Population: 215,780

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4. New Orleans, LA

  • Composite index: 80.84
  • Average number of years between collisions: 7.1
  • Relative collision likelihood: +49.1%
  • Total motor vehicle fatalities per 100k: 11.1
  • Share of fatal collisions involving a drunk driver: 36.4%
  • Population: 390,144
Photo Credit: Alamy Stock Photo

5. Atlanta, GA

  • Composite index: 77.90
  • Average number of years between collisions: 7.1
  • Relative collision likelihood: +49.5%
  • Total motor vehicle fatalities per 100k: 13.5
  • Share of fatal collisions involving a drunk driver: 27.2%
  • Population: 506,804
Photo Credit: Alamy Stock Photo

6. Fort Worth, TX

  • Composite index: 77.84
  • Average number of years between collisions: 8.2
  • Relative collision likelihood: +29.7%
  • Total motor vehicle fatalities per 100k: 11.5
  • Share of fatal collisions involving a drunk driver: 43.3%
  • Population: 913,656
Photo Credit: Alamy Stock Photo

7. Detroit, MI

  • Composite index: 76.78
  • Average number of years between collisions: 8.6
  • Relative collision likelihood: +22.9%
  • Total motor vehicle fatalities per 100k: 16.1
  • Share of fatal collisions involving a drunk driver: 37.1%
  • Population: 670,052
Photo Credit: Alamy Stock Photo

8. Houston, TX

  • Composite index: 76.20
  • Average number of years between collisions: 7.7
  • Relative collision likelihood: +38.1%
  • Total motor vehicle fatalities per 100k: 10.1
  • Share of fatal collisions involving a drunk driver: 40.4%
  • Population: 2,316,797
Photo Credit: Alamy Stock Photo

9. Cincinnati, OH

  • Composite index: 75.52
  • Average number of years between collisions: 7.2
  • Relative collision likelihood: +47.6%
  • Total motor vehicle fatalities per 100k: 8.7
  • Share of fatal collisions involving a drunk driver: 37.5%
  • Population: 303,954
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10. Cleveland, OH

  • Composite index: 73.04
  • Average number of years between collisions: 8.9
  • Relative collision likelihood: +19.0%
  • Total motor vehicle fatalities per 100k: 12.3
  • Share of fatal collisions involving a drunk driver: 42.1%
  • Population: 380,989

The Top 10 Safest Cities for Driving

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1. Cary, NC

  • Composite index: 4.54
  • Average number of years between collisions: 12.0
  • Relative collision likelihood:  -12.0%
  • Total motor vehicle fatalities per 100k: 1.8
  • Share of fatal collisions involving a drunk driver: 22.2%
  • Population: 171,143

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Are you planning to go on a road trip soon? Read our detailed guide about the best RV parks in the country.

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2. Overland Park, KS

  • Composite index: 6.12
  • Average number of years between collisions: 12.4
  • Relative collision likelihood:  -15.0%
  • Total motor vehicle fatalities per 100k: 3.5
  • Share of fatal collisions involving a drunk driver: 15.8%
  • Population: 195,483
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3. Gilbert, AZ

  • Composite index: 12.26
  • Average number of years between collisions: 10.8
  • Relative collision likelihood:  -1.6%
  • Total motor vehicle fatalities per 100k: 3.1
  • Share of fatal collisions involving a drunk driver: 21.7%
  • Population: 254,115
Photo Credit: Alamy Stock Photo

4. Olathe, KS

  • Composite index: 12.64
  • Average number of years between collisions: 12.7
  • Relative collision likelihood:  -16.5%
  • Total motor vehicle fatalities per 100k: 3.6
  • Share of fatal collisions involving a drunk driver: 26.7%
  • Population: 140,557
Photo Credit: Alamy Stock Photo

5. Oxnard, CA

  • Composite index: 12.74
  • Average number of years between collisions: 10.1
  • Relative collision likelihood: +4.3%
  • Total motor vehicle fatalities per 100k: 2.9
  • Share of fatal collisions involving a drunk driver: 5.9%
  • Population: 208,875
Photo Credit: Alamy Stock Photo

6. Boise, ID

  • Composite index: 13.86
  • Average number of years between collisions: 13.7
  • Relative collision likelihood:  -22.6%
  • Total motor vehicle fatalities per 100k: 6.0
  • Share of fatal collisions involving a drunk driver: 22.2%
  • Population: 228,965
Photo Credit: Alamy Stock Photo

7. Naperville, IL

  • Composite index: 14.72
  • Average number of years between collisions: 9.8
  • Relative collision likelihood: +8.5%
  • Total motor vehicle fatalities per 100k: 1.8
  • Share of fatal collisions involving a drunk driver: 0.0%
  • Population: 149,640
Photo Credit: Alamy Stock Photo

8. Madison, WI

  • Composite index: 15.24
  • Average number of years between collisions: 12.2
  • Relative collision likelihood:  -13.2%
  • Total motor vehicle fatalities per 100k: 3.0
  • Share of fatal collisions involving a drunk driver: 30.0%
  • Population: 259,673
Photo Credit: Alamy Stock Photo

9. Lincoln, NE

  • Composite index: 22.30
  • Average number of years between collisions: 11.5
  • Relative collision likelihood:  -7.7%
  • Total motor vehicle fatalities per 100k: 4.2
  • Share of fatal collisions involving a drunk driver: 31.4%
  • Population: 289,096
Photo Credit: Alamy Stock Photo

10. Chandler, AZ

  • Composite index: 24.48
  • Average number of years between collisions: 11.2
  • Relative collision likelihood:  -5.7%
  • Total motor vehicle fatalities per 100k: 6.1
  • Share of fatal collisions involving a drunk driver: 26.7%
  • Population: 261,149

Detailed Findings & Methodology

The data used in this analysis is from Allstate America’s Best Drivers Report 2019, the U.S. National Highway Traffic Safety Administration’s (NHTSA) Fatality Analysis Reporting System, and the U.S. Census Bureau’s 2019 American Community Survey. To determine the cities with the most and least dangerous drivers, researchers created a composite index based on the following factors:

  • Relative collision likelihood (40% weight)
  • Total motor vehicle fatalities per capita (40% weight)
  • Share of fatal collisions involving a drunk drinker (20% weight) 

In the event of a tie, the city with the greatest average number of years between collisions was ranked higher. Only the largest American cities with available data from all three data sources were included in the analysis.

Source: outdoorsy.com

11 Ways Spending Money Can Bring You Joy

They were wrong. The answer to the question does money buy happens is… yes! In fact, the research is overwhelming. And, there are actually multiple ways to spend to increase happiness. Here are 11 ways to spend money to buy happiness.

does money buy happiness?

The following 11 tips are valuable whether you are 75, 65, 55 or 15!

Time is indeed more precious than money.

Research has found that when people spend money on time saving services like a house cleaner, gardener or take out and grocery delivery, they can feel happier than if they are spending on material goods. 

How much happier? The researchers report: “What we found is that people who spent money to buy time reported being almost one full point higher on our 10-point ladder, compared to people who did not use money to buy time,” Dunn explains. People from across the income spectrum benefited from “buying time,” she adds.”

It makes sense. People who feel time crunched are stressed and research suggests that they are less active and less able to be around friends and family — both  proven to increase happiness.

Saving is a form of spending.

People who have a written retirement or financial independence plan are more likely to adequately save and make better financial decisions. Furthermore, people with a plan are more confident and experience less worry and stress.

Use the NewRetirement Planner to create your roadmap to a more secure, wealthier and happier future. Find out how much you need for financial independence, if you are saving enough, whether or not you’ll run out of money in the future and how to get on track plus guidance for better decision making.

3. Invest in Experiences

The purpose of life is to live it, to taste experience to the utmost, to reach out eagerly and without fear for newer and richer experience.” ―Eleanor Roosevelt

When it comes to discretionary spending, you have a lot of choices for how to spend your money.  There are two broad categories of spending. You can buy things or experiences.

If you want to buy happiness, invest in experiences.

Over the past 15 plus years, an abundance of psychological research has concluded that  buying experiences improves our well being far more than buying stuff. A new car, sweater or bike simply aren’t going make you feel as good as going on a hike, concert, vacation or almost any other experience.

In 2003, Thomas Gilovich was the first to put forth this idea.  He has added to his research and has shown time after time that experiences are what bring us happiness. And, he has also shown that experiences trump material possessions for pleasantness and excitement as well as happiness.

Part of the reason that experiences are better at returning happiness is that experiences enable you to anticipate an event and, more importantly, you are left with memories to draw on for the rest of your life.

NOTE: Additional research has shown some interesting demographic differences.  The happiness advantage of experiential spending is stronger for women than for men. And, other studies suggest that it is more relevant to young people and those who are highly educated.

Throw a party! Meet up for lunch! Travel across the country to reunite with college buddies! Take your kids or grandkids on a cruise.  These things cost money (and may have to wait until after the pandemic), but they connect you to other people. And, money spent on strengthening social bonds is money well spent if happiness is your goal.

However, if you can’t make the experience social, additional research suggests that talking about what you did — telling stories, showing pictures and sharing how it made you feel — can also increase your happiness return on investment.

Experiences that put you in a state of flow are some of the surest to deliver an immediate sense of well being. Flow? What is flow?

Psychology Today defines flow as follows: “Flow is when a person [1] is engaged in a doable task, [2] is able to focus, [3] has a clear goal, [4] receives immediate feedback, [5] moves without worrying, [6] has a sense of control, [7] has suspended the sense of self, and [8] has temporarily lost a sense of time.”

Think about experiences where you are so totally engrossed in a task that you lose the sense of time. Flow activities can be physical, intellectual, work related, anything.

In addition to improving happiness, flow has been proven to improve well being, concentration, self esteem and performance.

A 2008 study gave participants $20 to spend on themselves and $20 to spend on someone else.  Guess which expenditure delivered greater happiness? Yep. Spending on someone else.

Treating others — even with a minor amount of money can deliver happiness. (Did you hear about the recent “pay it forward” chain that happened at a Minnesota Diary Queen? A succession of 900 strangers bought the meals of the car behind them! Dairy Queen manager Tina Jensen told the Washington Post, “This was a feel-good moment at a time when we really needed to hear some happy stories.”

A 2011 study suggests that — for happiness — it is important that you spend money on people you are close to and care about. Study participants who recalled spending a modest amount of money on someone close to them reported feeling more positive emotion than those who remembered spending on a mere acquaintance. 

Charitable giving is a solid recommendation for how to spend money for happiness. 

However, research suggests that if you know exactly how your money will be spent and, ideally, can see the spending in action, then you will feel happier than just giving the money to an organization without knowing or seeing the impact.

Not all material purchases deliver less happiness than experiences.

Studies have shown that if you can think about how you experience things, then you are more likely to experience happiness (or, at least, less regret) from a purchase.

So, if you buy a new car, think about the purchase in terms of the exciting road trips you’ll take, how you can see better out the windows and will better enjoy the view or how the stereo system will enable you to belt out your favorite tunes on the way to the grocery store.

Whether possessions or experiences, spending that is a reflection of your personality or identity can make you happy.

A 2016 study found that people with a better match between their personality and the personality of their purchases reported more satisfaction with life. So, if you love travel and identify with an adventuresome lifestyle, then spending money on travel (an experience) or even a travel gadget (possession) will both give you joy. Whereas, if you consider yourself a technology geek, then the new iphone (a possession) might indeed give you happiness.

And, follow up research focused on the differences between spending by introverts and extroverts. Your personality type will define the type of spending that makes you happy.  Introverts found happiness spending $10 in a quiet bookstore whereas extroverts loved spending on a drink in a crowded bar — but not vice versa.

11. Spend Within Your Lifetime Means

Even if you are spending on experiences or people you love, if you are spending beyond your means, you are bound to be stressed and unhappy.

And, over spending is not just a matter of your monthly finances.

It may be useful for you to think about your finances not as a monthly inflow and outflow, but rather as a big pool that you fill up or drain over your entire life. Think in terms of the lifetime value of your financial decisions rather than simply how it impacts you today.

You see, in life, you have a finite amount of time to create a finite amount of money. That money is used to fund your entire life.  Spending more now, means that you have less to spend later.  Saving more now means spending less in the near term, but more in the future. 

Creating and maintaining a detailed retirement plan is a great way to visualize and manage your total pool of resources over your entire lifetime.

Dive in! Get your pool started now with the NewRetirement Planner.

Source: newretirement.com

4 Top Retirement Planning Tips from Warren Buffett

Warren Buffett earned his nickname honestly. The Oracle of Omaha’s success at investing is legendary, and he has ranked among the world’s wealthiest people time and again. But Buffett isn’t your typical wealthy business magnate. His retirement planning advice isn’t just for the rich and famous – it works for everyone.

President Barack Obama meets with Warren Buffett, the Chairman of Berkshire Hathaway, in the Oval Office, July 18, 2011. (Official White House Photo by Pete Souza)

He’s known as frugal, still living in the same home in Nebraska that he’s owned for decades, and surprisingly down to earth, especially considering his net worth. If anyone knows how to build wealth, it’s him. And here are some of his best tips for creating a comfortable retirement.

Investing isn’t for the faint of heart. But because most everyone should be investing, that leaves a large portion of society at odds with a bad case of nerves every time the market wobbles. Jeff Rose, a certified financial planner, writes for U.S. News & World Report that Buffett’s strategy is long-haul investing. The people who weather the storms usually come out on the other side in a better position.

If the daily ups and downs get to you, you’re selling yourself short. Buffett believes that investors should stay the course, even when you’d really rather cash in your chips and go home. Pay more attention to stocks using index funds, and less attention to short-term gains and you’re more likely to come out ahead.

Bonds and other cash-based investments might seem safe, but Buffett believes that they’re anything but. In the book, “Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A FORTUNE Magazine Book,” he warns that currency-based investments, even money-market funds, can be downright dangerous.

Currency-based investments are dependent on the value of the dollar, which means that even mortgages as investments are risky. He says “the dollar has fallen 86 percent in value since 1965.”

Retirement isn’t the end. If it was, you wouldn’t need to spend so much time and exert so much effort planning the financial side of it. So while you should devote a healthy amount of attention to retirement income, don’t forget to plan what you’ll do after retirement.

According to U.S. News & World Report, Buffett says retired folks need a purpose. Without it, you risk losing your health. Plan for retirement as if it’s the next phase of your life (which it is) instead of the slow wind down (which it otherwise could become).

You shouldn’t devote too much time to planning what you’ll one day leave to your family. Retirement is about your life, not how you can finance everyone else’s. That doesn’t mean that you should only think about yourself, but that you shouldn’t risk your own security and happiness for the sake of people who should also be working toward their own.

In “Tap Dancing to Work … ” Buffett suggests that “the perfect amount is enough money so they would feel they could do anything, but not so much that they could do nothing.” He intends to leave more (by far) to charity than to his family.

It’s sometimes difficult to think about following the advice of people who might as well be considered professional billionaires. Sure, they can invest a certain way because they can afford to. But Warren Buffett uses plain common sense when it comes to investments, and you can, too.

NewRetirement can also help you create the best possible life after you decide to leave the workforce full time. Whether you’re beginning from the ground up or just looking for ways to improve on what you’ve already got, we can help. For the best place to start, check out our retirement calculator. You’ll see where you stand, and find out more about how to get to where you want to be.

Source: newretirement.com

The 9 Top Reasons Mortgage Loans Are Denied in the U.S.

Although interest rates have inched up recently, they remain at historic lows, spurring demand in both home purchases and mortgage refinancing. However, many lenders have tightened up their borrowing standards due to the economic uncertainty of the pandemic, and hopeful loan applicants may find it hard to get approved. According to loan-level mortgage data from the Home Mortgage Disclosure Act, the denial rate for conventional, single-family loans was 18.8% (excluding withdrawn and incomplete applications) in 2019.

Mortgage application denial rates vary by purpose of the loan. When considering total loan applications for conventional, single-family loans, 2,055,774 applications were denied. At 43%, denial rates were highest for home improvement loans. Loans for home purchases had the lowest denial rate, at just 10%. Refinancing applications, both with and without a cash-out component, had denial rates in between, at 16% for non-cash-out and 18% for cash-out refinance loans.

Mortgage application denial rates vary not only by purpose of the loan but also by the race and ethnicity of the applicant. Non-Hispanic White applicants and co-applicants of different races (“Joint”) had the lowest denial rates at 17%. Black, American Indian or Alaskan Native, and applicants of two or more minority races all had a denial rate that was more than twice as high as that for White applicants. Hispanic or Latino borrowers also had high denial rates, at nearly 30%. The difference in denial rates reflects differences in credit profiles and application types across different demographic groups, but it also may reflect racial and ethnic discrimination in lending behavior.

Loan approvals and denials also vary widely by location. Denial rates skew higher in the South, Southeast, and parts of the Northeast, while denial rates are much lower in the Midwest. This could be due to varying demographic makeups and local job market conditions. At the state level, Mississippi and Florida have the highest mortgage denial rates in the U.S. at 27.3% and 25%, respectively. At the opposite end of the spectrum, North Dakota has the lowest mortgage denial rate in the country, at just 10.2%.

To find the top reasons mortgage loans are denied, researchers at Construction Coverage analyzed the latest data from the Home Mortgage Disclosure Act. The researchers ranked reasons mortgage loans are denied based on the percentage of all denials mentioning each reason. For each reason that mortgage loans are denied, researchers also calculated the total annual denials and the percentage of denials that were due to that reason for several loan types: home purchase, refinancing, cash-out refinancing, and home improvement.

The Top Reasons Mortgage Loans Are Denied

Couple stressed about bills

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1. Debt-to-income ratio

  • Percentage of all denials: 37.2%
  • Total annual denials: 765,772
  • Percentage of home purchase denials: 36.2%
  • Percentage of refinancing denials: 38.0%
  • Percentage of cash-out refinancing denials: 35.4%
  • Percentage of home improvement denials: 37.2%

The debt-to-income ratio (DTI) ratio is the share of gross monthly income (pre-tax) that goes towards debt payments (rent or mortgage, car payment, credit cards, student loans, etc.). A lower DTI can help applicants get approved for a mortgage.

Paying with a credit card

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2. Credit history

  • Percentage of all denials: 34.8%
  • Total annual denials: 715,393
  • Percentage of home purchase denials: 34.2%
  • Percentage of refinancing denials: 24.8%
  • Percentage of cash-out refinancing denials: 25.8%
  • Percentage of home improvement denials: 44.8%

A mortgage applicant’s credit history gives lenders an idea of how risky it is to loan an applicant money. Credit history is a record of how an individual repays debts, such as credit cards, mortgages, car loans, and other bills.

Fixer upper house in disrepair

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3. Collateral

  • Percentage of all denials: 19.7%
  • Total annual denials: 404,084
  • Percentage of home purchase denials: 13.9%
  • Percentage of refinancing denials: 18.5%
  • Percentage of cash-out refinancing denials: 19.6%
  • Percentage of home improvement denials: 23.4%

Insufficient collateral means that the home an applicant is trying to purchase, refinance, or borrow against is not worth enough compared to the proposed loan amount.

Mortgage loan

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4. Other

  • Percentage of all denials: 12.9%
  • Total annual denials: 265,772
  • Percentage of home purchase denials: 13.2%
  • Percentage of refinancing denials: 12.9%
  • Percentage of cash-out refinancing denials: 15.0%
  • Percentage of home improvement denials: 12.0%

The “Other” category covers all other reasons that an applicant could be denied a home loan besides the eight covered by the Home Mortgage Disclosure Act and listed here.

Woman filling out paperwork

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5. Credit application incomplete

  • Percentage of all denials: 8.9%
  • Total annual denials: 183,024
  • Percentage of home purchase denials: 8.5%
  • Percentage of refinancing denials: 14.4%
  • Percentage of cash-out refinancing denials: 14.6%
  • Percentage of home improvement denials: 4.1%

Incomplete credit applications lack the necessary information for the lender to make a credit decision, resulting in a loan denial.

Tax forms

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6. Unverifiable information

  • Percentage of all denials: 6.7%
  • Total annual denials: 137,968
  • Percentage of home purchase denials: 8.9%
  • Percentage of refinancing denials: 5.8%
  • Percentage of cash-out refinancing denials: 4.5%
  • Percentage of home improvement denials: 6.4%

Mortgage denials due to unverifiable information often arise from inaccuracies in an applicant’s employment history or tax records or discrepancies between the application and credit report.

Writing a check

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7. Insufficient cash (down payment, closing costs)

  • Percentage of all denials: 4.0%
  • Total annual denials: 82,354
  • Percentage of home purchase denials: 8.6%
  • Percentage of refinancing denials: 4.0%
  • Percentage of cash-out refinancing denials: 4.4%
  • Percentage of home improvement denials: 1.4%

Mortgage applicants must have sufficient funds to cover down payments and closing costs and fees, or lenders may deny their application.

Woman learning on the job

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8. Employment history

  • Percentage of all denials: 1.8%
  • Total annual denials: 37,567
  • Percentage of home purchase denials: 3.9%
  • Percentage of refinancing denials: 1.4%
  • Percentage of cash-out refinancing denials: 1.6%
  • Percentage of home improvement denials: 1.0%

Mortgage lenders prefer that applicants have worked in the same field for at least two years. However, a new job is not necessarily a hurdle to securing a loan as long as it pays a steady salary.

Stressed out man

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9. Mortgage insurance denied

  • Percentage of all denials: 0.1%
  • Total annual denials: 1,665
  • Percentage of home purchase denials: 0.2%
  • Percentage of refinancing denials: 0.1%
  • Percentage of cash-out refinancing denials: 0.0%
  • Percentage of home improvement denials: 0.0%

Mortgage insurance protects the lender and allows borrowers making a down payment of less than 20% to still qualify for a home loan. Applicants who are denied mortgage insurance that need it are also likely to be declined for their loan.

Detailed Findings & Methodology

A low debt-to-income ratio (DTI) is the number one reason that mortgage applications are denied. Over 37% of denied applications had a low DTI as a reason for denial. This rate is constant across home purchase loans, refinancing loans, and home improvement loans. The second most common reason for mortgage application denials is credit history, accounting for almost 35% of denials. Indeed, credit history was a reason that almost 45% of home improvement loans were denied. The third most common reason for mortgage application denials is collateral, which was cited in about one out of five mortgage denials. Together, these top three reasons account for the vast majority of mortgage denials.

Less common reasons for mortgage denials are an incomplete credit application, unverifiable information, insufficient cash, employment history, and mortgage insurance denied. While most applications list one denial reason, some applications list two or more.

To find the top reasons mortgage loans are denied, researchers at Construction Coverage analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. The researchers ranked reasons mortgage loans are denied according to the percentage of all denials mentioning each reason. For each reason that mortgage loans are denied, researchers also calculated the total annual denials and the percentage of denials that were due to that reason for several loan types: home purchase, refinancing, cash-out refinancing, and home improvement.

Only conventional, single-family mortgage applications were considered in the analysis. In the calculation of denial rates, withdrawn and incomplete applications were excluded.

Source: constructioncoverage.com

The Average Homeowner Could Reap $4,000 a Year by Refinancing

Tips for Your Mortgage Refinance Savings | Money

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Source: money.com

7 Credit Card Debt Mistakes to Avoid

There’s really only one way to get out of credit card debt: by paying off the balance. But there are plenty of pitfalls along the way to make the payoff more costly than it needs to be.

If you’re among the consumers who paid off $108 billion in credit card debt in 2020, good on you! However, that still leaves $820 billion left to go, so it’s in your best interest to do everything you can to put a dent in debt that costs you in double-digit interest rates every month.

Picking a method for paying down the balance should be your first step — there are plenty of options, including avalanche, snowball and lasso — but there are mistakes you should avoid to ensure you get the maximum value out of whatever method you choose.

We’re here to help you avoid the most common — and costly — errors people make when getting out of debt. Let it help you make the best money decisions during your climb.

7 Credit Card Debt Mistakes to Avoid

You’re ready to pay off that credit card. That’s great! But just randomly paying back money without a strategy could end up costing you more money.

1. Forgoing a Budget

You know how if you don’t make plans for a day off, you end up wasting it on a Netflix binge instead of doing something productive?

Well, the same goes for paying off debt. If you’re simply going about it without a plan, there’s a good chance all your good intentions — and extra payments — will end up getting spent elsewhere.

How do you prevent the money from disappearing? By creating a budget.

Stop whining — it’s no different than planning a vacation itinerary. Instead of blowing your money on new shoes, you’ll create an attack plan and pay off debt faster with a clear direction.

Pro Tip

Never miss a bill — and incur late fees — by automating payments. Many service providers and banks provide automatic withdrawals for bills on specified dates each month.

By reviewing a monthly budget, you can see where you might be overspending in certain areas (I spent how much on takeout?!?) and commit to applying that money to your credit card debt instead.

Even if you’ve never lived with one before, we can help you create a budget that fits your lifestyle and your money goals.

2. Never Applying for a Personal Loan With a Lower Interest Rate

Don’t make the mistake of assuming that replacing credit card debt with a personal loan is just trading one debt for another. Interest rates can make a big difference.

How much of a difference? Let’s say you have $5,000 in credit card debt and you commit to paying $400 every month.

If your credit card interest rate is 17%, it will take you 14 months to pay off the debt, and you’ll pay $542 in interest. Alternatively, if you take out a low-interest loan at 4%, it will take you one less month to pay off the loan, and you’ll pay $116 in interest — a savings of $426.

3. Ignoring Balance Transfer Offers

If you’re paying off credit cards and you know you’re within striking distance of wiping them out, you could be throwing away money on interest by not researching short-term options.

By opening a balance transfer credit card, you could save yourself a bundle on interest. Balance transfer credit cards generally come with lower introductory interest rates for a set amount of time (plus any transfer fees). The rates then rise to a higher annual percentage rate after the promotional period ends.

If you’re prepared to pay off your credit cards within the promotional period, it would be a big financial faux pas not to put in the extra effort to research balance transfer offers.

And consolidating your credit card balances could not only save you money with a lower interest rate but also keep you on a more livable payment schedule, thus avoiding those pesky late payment fees.

4. Focusing Only on Saving Instead of Making Money

If you’ve reduced your expenses, but you’re still coming up short on extra credit card payments, remember the other half of the financial equation: money coming in.

Getting a side hustle to bank extra money for payments can accelerate your payoff schedule in a meaningful way. Consider this: If you make $50 extra each week, you could pay an extra $600 toward the credit card balance after just three months.

Pro Tip

An exit plan that defines clear financial goals can stave off a reliance on money from gig work to cover basic necessities and stop you from getting stuck in an endless hustle.

One of the keys to making the side gig work for you is to create a specific goal for the money you want to earn or the time you want to spend working. By developing an exit plan for your side gig, you won’t end up burning out and spending all the extra cash on ways to make up for being overworked.

A woman sits on the floor of her home while cradling her head on her lap to show being stressed.
Getty Images

5. Refusing to Ask for Help

If you feel like you’ve tried everything — or nothing, because you’re too overwhelmed — it’s time to swallow your pride and ask a professional for help.

A credit counselor can review your financial situation and make recommendations to improve it. Depending on your situation, they might help you organize your credit accounts, obtain a credit report, develop a budget or even help you set up a plan to pay off your debt.

If your credit card debt is more temporary but urgent — think: you got laid off and your water heater just died — you can also ask your credit card issuer for a break via a credit card hardship program.

The little-advertised assistance option could suspend your minimum payments or reduce your interest rate temporarily. But you won’t get the help unless you ask for it.

6. Forgetting the Residual Interest

Let’s say you’ve been paying down your credit card balance for a few months (or years). You get the statement in the mail that says your current balance is $1,000 and you’re ready to pay it off.

You go online to make the payment in full, but you schedule it for 10 days later because you’re waiting for pay day.

When you get next month’s statement, you’ll see that you were charged interest on that $1,000 for the 10 days between the account closing date and your payment (and probably a couple extra days for the time it took for the statement to arrive in the mail). That’s called residual interest (or trailing interest).

It might only be a few dollars, but if you don’t pay the residual interest — which could easily happen if you think that the balance is paid in full so you ignore the next statement — that amount will continue to accrue interest.

And not paying it will result in late fees and a hit to your credit score.

Instead, call your credit card company for the full payoff amount as of the date the issuer will receive the payment, then monitor your credit card statement for at least a couple months after to make sure the residual interest has been paid off, too.

7. Losing Sight of Your Future

Paying off your credit card bill is important. But so is your future.

If you’re putting every last dime toward credit card payments, you could be setting yourself up for a big financial hardship down the road.

In the short term, that could be due to an unexpected expense and no emergency fund to cover the cost.

In the long term, you could be losing out on retirement savings by not investing early and letting compound interest do its thing to grow your nest egg.

And once you make that last payment — oh, joy! — you’ll understandably want to celebrate.

But you’ll also want to think about life after debt, including sticking with the good strategies you used to get out of debt rather than falling back into bad habits that got you into debt in the first place.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

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Source: thepennyhoarder.com

17 Ways to Dig Yourself Out of a Financial Hole

 At age 47 I was jobless, emotionally broken after an abusive marriage, and running through savings to keep a divorce attorney in my corner. Grieving my mother’s death and terrified that my disabled adult daughter and I would end up homeless, I couldn’t see any kind of future for myself.

Within five years I had earned a university degree on scholarship, found a new career as a personal finance writer, paid off divorce-related debt, and started rebuilding my cash reserves. In the next four years, I would open a Roth IRA and a SEP-IRA. I never was homeless, and I’ve never carried any debt since then.

Dig out of a financial hole

It’s possible to dig yourself out of a financial hole if you’re willing to do the work. But you can’t stop there. It’s absolutely crucial to establish smart money habits in order to build your financial future — and to keep from winding up back in the hole.

Maybe you’ve stalled financially because you never learned how to manage money. Or maybe you’re mired in debt due to circumstances beyond your control, such as job loss or serious illness.

It doesn’t matter how you got there. What matters is that you get yourself out. Use these basic tactics to get a handle on your finances.

The best time to have started getting your finances together was 20 years ago. The second-best time is right now.

If you’re in debt, quit adding to it. Easier said than done, I know: My divorce attorney charged by the minute, for heaven’s sake, yet I couldn’t do without representation.

What could I do without? Almost everything else. I’d always been fairly thrifty, so it wasn’t as hard for me as it might be for others. However, I hadn’t done such a deep dive into frugality since my single-mom days, when I did all the laundry (including diapers) on a scrub-board in the sink. Not everyone can (or wants to) go to the lengths I did, such as living mostly on dry beans and homemade soups, using coupon/rebate deals to stretch my budget, buying almost no new clothing for years, recycling cans picked up on walks around the neighborhood, looking for any possible side gig (babysitting, participating in medical studies, shoveling snow) to add a few dollars to debt payoff.

If you find it tough sledding at first, welcome to the club of being human. Then think about your spending in this way: Adding more debt doesn’t just mean paying extra interest, but also something called “opportunity cost.” Every dollar you spend is a dollar that can’t work for you any other way.

While you’re still in the hole, this means dollars that can’t help you dig your way back out. And once you’re debt-free? It means dollars that can’t help you meet new financial goals: retirement savings, paying off your mortgage, a trip to your family reunion, or whatever will make your life better.

To be clear: Your tolerance for frugal hacks is as unique as you are. I can’t force you to wash out Ziploc bags or to shovel snow for that matter. What I can do is urge you to adopt the main attitude that helped get me through those five years — something I call the Frugal Filter:

  • Do I really need this whatever-it-is?
  • Is there something I already have that might work?
  • If I absolutely must get this item, is there a way to do so for free (borrowing it from a friend, using Freecycle)? And if not, how can I make it as affordable as possible? (Some examples: thrift store, yard sale, cashing in rewards points for gift cards to pay for it.)

Start by adding up all your income sources. Next, list all your obligations, including but not limited to mortgage, minimum credit card payments, utilities, insurance car note, and legally mandated payments (e.g. alimony or child support).

Subtract the second number from the first. If your monthly expenses are lower than your current income, that’s a good sign. But keep in mind that these are your anticipated expenses. You’ll also need money for irregular expenses such as home repair or a replacement vehicle, as well as for vacations, gift-giving, and other things that make our lives richer.

Tracking spending means you’ll know where you stand. The next thing to do is look for the best ways to use your money.

A lot of people swear by the 50/30/20 plan: Spend no more than half your after-tax income on needs, 30% on things you want, and 20% on savings and debt repayment.

Arrange your current spending into those categories. If you’re spending more than you should in any given department, find ways to bring costs down. For example, you might be able to refinance the mortgage and cut grocery costs (more on that in a minute) to get your “needs” spending under 50% of your take-home pay.

The categories can be flexible, though. For example, if debt repayment is more important to you right now than going out to eat, you could use some of your “wants” dollars toward paying down your credit cards.

Speaking of which, you also need to…

Earlier you added up your basic monthly expenses. But what’s the total amount owed? A lot of people honestly don’t know, because they never added it up. Full disclosure: I still don’t know how much my divorce cost, because I don’t want to know. (Hint: It was a lot.)

Don’t be like me. Add up your credit card balances while seated, because the total might make you feel a little faint (especially when you consider how much interest you’re paying). Let that Big Number inspire you to get real about paying it off.

First: If you’re making extra payments on your current mortgage, stop for now and put that money against your credit card balance. Talk with a mortgage specialist about the possibility of refinancing; your loan would be longer, but the money you’d save each month can be used against higher-interest debt.

Next, call your credit card issuers and ask for lower interest rates. There’s no guarantee you’ll get them, but it can’t hurt to ask.

Some people swear by the “debt snowball.” You pay minimum payments on all your credit cards except for the one with the lowest balance (but not necessarily the lowest interest rate); for that one, make the biggest payment you can. Once it’s paid off, you attack the card with the next-lowest balance, and so on.

The theory is that paying one card off quickly encourages you to keep going. Then again, you’re paying more interest on the other cards. That’s why some suggest it’s better to pay off the cards with the highest interest rates first.

Do what works best for you. If you need that encouragement, go with the debt snowball.

Another option is a 0% balance transfer credit card: moving all your debt onto a new card that offers 0% interest for 12 to 18 months. You’ll pay a balance transfer fee, typically about 3% of the total debt. However, if you pay the card in full during the introductory period, you won’t owe any interest.

This could save you a ton of money. (Wish I’d known about it back when I was paying off my divorce debt.) However, you shouldn’t get a 0% balance transfer card unless you have an ironclad plan to pay it off. Otherwise, you’ll wind up paying a ton of interest anyway, in addition to the transfer fee.

Another credit card debt tactic is a personal loan, that is if you can get a decent rate. You’d need an ironclad payoff plan for this option, too. And no matter how you pay off your debt, you absolutely need a plan to keep you from running up the credit cards all over again.

Our consumerist culture tells us that if we want something, then we should have it. This is why some people shop for fun, I guess, even if they don’t technically need anything.

“Need” is the operative word. Food, shelter, basic clothing, and utilities are needs. Everything else is a parade of wants.

There’s nothing wrong with wanting things. But there’s a whole lot that’s wrong with buying things we can’t actually afford. So if you shop for fun, stop doing that. Stop it right now. Un-bookmark your favorite shopping sites. Avoid brick-and-mortar stores.

Delete your stored credit cards, and remember that “one-click” shopping is of the devil.

Sound harsh? Reframe that thought right now: This is prudence, not punishment. It’s part of your plan to meet financial goals, including getting out of debt.

Since we get a nice dopamine rush whenever we find that Really Good Deal, our brain will try to trick you into “just looking.” Look for other ways to feel good, whether that’s The New York Times crossword puzzle or bingeing your favorite shows on an affordable streaming service.

Find a friend who’s also trying to get out of the financial hole, and the two of you can support each other. (“I just saw the most amazing price on cheese straighteners and I really want to get one! Talk me out of it!”)

Here’s what worked for me: Thinking about what I did have, rather than obsessing about what I didn’t. Sounds corny, but hear me out. While living on about $1,000 a month (and still helping my daughter), I made an actual list of my advantages: decent health, a university scholarship, a library card, a part-time job, a 99-cent radio from the St. Vincent de Paul thrift shop, and the absolute conviction that I would one day be back in the black.

The only person who can help me is me,” I said out loud, more than once, developing a stoic pride in — once more! — making do on nothing. I was dirt-poor but I was not dirt. I had a plan. (I also still had the scrub-board, and even used it sometimes.)

Sure, sometimes I still wanted stuff I couldn’t afford. Most of the time, my attitude of gratitude helped me power through. After all, I had things that were important to me and I knew if I just kept working at it, my debt would be gone. It wasn’t easy. But as my dad used to say, “That’s why they call it ‘work.’ If it were fun, they’d call it ‘fun.’”

Be an adult. Own your mistakes or your misfortunes. And do the work.

Part of the reason I went broke was the financial support I gave to my daughter, whose disability benefit was minuscule. Ultimately she got married, found a job she could do from home, became self-sufficient, and moved to a different city. I kept giving, though: treating them to multiple meals out when I visited, sending numerous “just because” gift cards throughout the year, forgiving them a decent-sized loan (as a wedding gift).

Maybe you do this sort of thing, too. Keeping your grown kids on the family phone plan. Paying for their health insurance. Covering some (or all) of their rent. A financial planner told me some clients routinely buy extra stuff at Costco to bribe their children to drop by.

Perhaps your own kids don’t have to drop by because they’re already there: boomerang offspring who came back due to job issues, or who live with you so they can save up for their own homes. Or maybe your kids never launched in the first place — and why should they? Mom and Dad have a comfy home, a well-stocked fridge, and all the streaming platforms.

It’s natural to want to give our children the best. But here’s the thing: You cannot finance retirement. Your kids have many decades to build their financial lives. You, on the other hand, have a finite number of years to make the right money choices.

If you are in debt and/or have an underfunded retirement, do not set yourself on fire to keep someone else warm. Doing so could leave you out in the cold, financially speaking.

To be clear: I would have helped my daughter forever if necessary, but I’m very glad it wasn’t. Those dollars wound up going to retirement savings, my emergency fund (more on that below), and some cash reserves. I refuse to put my daughter in the position of having to support me if I run out of money in retirement. Don’t put that burden on your kids, either.

This may sound counterintuitive. Why save for retirement while I still have balances on 18% credit cards?

Because you can’t finance retirement, remember?

Retirement isn’t a question of simple-interest savings. It’s about growth, and growth takes time. The years you spend not contributing will be felt keenly when you retire — especially if you, like me, got something of a late start.

As noted, the 20% part of the 50/30/20 budget includes saving for the future. Ideally, you’ve already got some retirement savings from your current (or recent) job, and it will continue to grow as you figure things out. Resist the temptation to raid it early; the longer it stays there, the better your chances for its lasting throughout your retirement.

For some people, a 10% (or higher) contribution to their house of worship is absolute. If that’s you, know that it still may be possible to keep tithing at that level — but the money has to come from somewhere else in your budget. As noted above, you can find other ways to cut in order to keep the tithes coming.

If need be, talk to your religious leader about temporarily cutting back or even pausing your contribution. You could always promise to restart and to make up for the lost time.

Even when things were pretty dire for me I gave $20 a month to my church. Sure, that money could have gone toward my credit card debt. But giving to others got me out of my own head. That $240 a year reminded me that not only were my basics covered, I could even afford a little help for others who needed it. Never underestimate the satisfaction and peace this knowledge can bring.

I kept a certain amount of liquid cash while paying off the divorce-related debt. It was tempting to throw every dime I had toward the balance. But I also wanted cash on hand so I could pay for utilities, car insurance, and food in case my job went away.

Some money experts suggest having a year’s worth of expenses banked. Others say that amount discourages people from even trying to save. Instead, they suggest one to three months’ worth as an initial goal, with additional contributions when possible.

I’m in the latter camp. Rather than pressuring yourself to come up with tens of thousands of dollars, aim for a single month’s worth. Go back to that household budget and look for places to cut. Canceling a subscription box you’ve stopped being thrilled by, skipping that automobile detailing you normally get every couple of months, dropping the gym membership that you haven’t been using anyway — these and other budget trims can help plump up the EF faster than you would have thought possible.

Food is the budget category with the most flexibility. You probably can’t negotiate your car payment or your son’s college tuition, but you can cut down on meals outside the home and be choosier about shopping.

Accustomed to stores like Whole Foods and Sprouts? You might be surprised by the organic options available at regular grocers and even discount markets. Take an hour a week to browse different stores, and plan future shopping accordingly.

If you eat most of your meals away from home, gradually change your ways. Buy good-quality coffee and breakfast ingredients so you aren’t tempted to grab takeout every morning. Batch-cook and freeze breakfast sandwiches on weekends, or buy premade ones from a warehouse club (still more affordable than breakfast out).

Carrying your lunch just one day a week could likely save you $10 to $20, or $520 to $1,040 a year. Over time, work your way up to brown-bagging it at least three times a week, and put the thousands of dollars you save toward some other financial goal. In the four years it took to get my degree, I never once bought a single meal at school. An occasional snack or drink, maybe, but I carried all my meals. Again, I’m hardcore and looked at lunch as the fuel I needed to get through the day. Your mileage may vary. Just make sure it’s something you actually like to eat — and again, start slowly so that you don’t set yourself up to fail.

Dinners can be tough since most people arrive home as tired as they are hungry. A little weekend planning or some monthly batch cooking — especially with an Instant Pot — can change the way you eat, and will certainly change how much you spend.

Don’t know how to cook much, or at all? Do an online search for “easy affordable recipes with [your favorite ingredients].” Remember, you didn’t know how to use a smartphone until you made it your business to learn. The same is true of cooking.

It is worth it to shop around for something like car insurance.

Ask me how I know. When I arrived in Seattle, fresh out of my horrible marriage, I used the insurance agent a relative recommended. And wound up paying about $700 more a year than I needed to, for five years. Still shake my head sometimes about that $3,500 worth of opportunity cost, but I didn’t know what I didn’t know.

Look for better deals on Internet, phone, and cable service, too. This can save you some serious bucks, especially if you bundle services.

Note: Many people have ditched cable entirely in favor of streaming services. If you haven’t investigated these lately, you’ll be surprised by the options — and the potential savings.

All of it. You won’t get out of the financial hole overnight, so it’s essential to note individual steps along the way. For some, a spreadsheet makes things easier.

Or use my daughter’s method, which is to list debts on a whiteboard. Each time you make a payment, you get to amend the total to reflect the change — and oh, my, how satisfying it is to literally wipe the debt off the board.

Once you’re back in the black, keep those savvy money moves in place. Spend less than you earn. Contribute to retirement regularly. Build an emergency fund to guard against the unexpected.

Source: newretirement.com