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14 Tips First-Time Home Buyers Must Follow



14 Tips First-Time Home Buyers Must FollowPhoto by Tierra Mallorca

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When buying a home for your first time you’re bound to be very excited. Why wouldn’t you be? Buying your first home is a big deal and it’s perfectly reasonable for you to have butterflies in your stomach. Those butterflies aren’t just caused by the exhilaration of buying your first home, they’re also caused by the fear of doing something wrong or making a mistake. When you’re searching for first-time home buyers programs you’re going to lack the confidence that experienced buyers have and you’re going to want to do everything you can to avoid buyer’s remorse.

There are so many things that you need to be aware of when you’re buying a home. Not knowing what questions to ask your real estate agent, the seller of the home and your home inspectors means that it’s possible to miss something. In the following article, we’ll go over some tips that have been compiled together by professionals in the home buying industry and make sure that you go into your first home buying experience confident so that you can be 100% happy with your decision when you choose the house you want to place an offer on.

Don’t look at homes prior to talking to a mortgage lender

When you’re first-time home buying it can be tempting to power up your computer for a home search or pop into open houses in your area. It’s important to rein in your enthusiasm and visit a lender before you fall in love with a home that you can never afford. In the current housing market, the number of buyers outweighs the number of homes available to purchase. This means that bidding wars are quite possible and if you don’t have your financing lined up you could lose your dream home to someone who talked to a mortgage lender and received mortgage pre-approval.

In order to avoid this make sure you have your finances ready to go so that when your dream house appears you can confidently approach the buyers with an offer. Sellers often only consider offers from buyers who have the backing of a mortgage pre-approval. Going into the buying process with your eyes open to the amount of mortgage funding lenders are willing to give you takes the guesswork out of how much of a home you can afford. You might surprise yourself and find out that you’re able to afford a far nicer home than you originally thought after you talk to a lender!

Talk to multiple lenders

It’s possible that the first mortgage lender you have a meeting with gives you the pre-approval letter you need to buy your home. So why should you shop around? Even though you might get instant approval from one lender, this doesn’t mean that they’re offering you the best interest rate on your mortgage loan or even the highest mortgage that you can get. Make sure to have meetings with at least three mortgage lenders and compare their interest rates and the amount of a mortgage that they’re willing to offer you. Don’t just look at the numbers though.

There is a lot of stress involved in purchasing a home and working with a lender that treats you fairly and communicates well can be just as important as the interest rate they offer. The home buying process is long and you want to ensure that you have the best team assembled around you to make the process go as smoothly as possible.

More: Best Online Mortgage Lenders: Everything You Need to Know

Only buy homes that you can honestly afford

Just because you are approved for a higher mortgage than you originally thought, it doesn’t mean that you should buy a house at the far end of your affordability spectrum. You know best what added payment you can afford and you need to keep in mind that the higher your mortgage is, the higher your monthly payment will be as well.

After you’re pre-approved for a set amount, sit down and figure out what your monthly expenses already are and think about what you can afford to add to them monthly. It also helps to consider how hard it would be for you to continue making those payments if you were away from work for a period of time due to illness or injury. You don’t want to buy your dream house only to lose it down the road because you can’t afford the mortgage payment.

More: First-Time Homebuyer Grants: Here’s What to Know

Take the time to plan for your purchase

When you decide you’re ready to buy a home, especially if it’s your first home, it can be tempting to dive right in. However, you should wait and plan out this purchase at least 12 months in advance. One of the main reasons for this is that you might have areas of your credit report that need fixing and this can take time. It’s worth the wait because a better credit score means a better interest rate which can save you thousands of dollars over the course of your loan.

In addition, the longer you wait the more you’re able to save up for closing costs, home inspector fees, and your down payment. The more you can save for your down payment the less you’ll have to borrow from a lender which can also save you on the amount your home will cost you. Taking the time to prepare is worth it in the long run.

More: 30-Year Fixed Mortgage Rates: The Truths You Have to Know

Spending every cent you’ve saved up

When you can gather together 20% of your home price to put towards a down payment it can pay off in the long run because you often don’t need to purchase mortgage insurance. However, if you can’t afford to put 20% down then it’s better off paying a little more every month for private mortgage insurance and putting down a smaller down payment.

Financial experts agree that you should have 3-6 months worth of expenses saved up for and tucked away in an emergency savings account. You should never drain this account in order to make a larger down payment. Buying a home is more reason then ever to ensure that you have some money tucked away to cover expenses if something were to happen. A home is just one more expense and you need to make sure you have it covered in case of an emergency.


Making changes to your credit report

When applying for a mortgage your lender is going to comb through your credit report. It can be tempting to make large purchases such as a new living room set to go in your new house, but don’t do it! Any large purchases can negatively affect your credit. You should try to keep things as stable as possible. Make sure your bills are paid on time every month and ensure that your credit cards don’t carry a high balance in order to keep your credit report looking good.

You also shouldn’t apply for any credit, especially in the month between when you apply for your mortgage and when you close on the house. Your home purchase is the only large purchase that should be made. You can’t afford for anything else to negatively impact your credit score.

More: How to Improve Your Credit Score: 12 Tips & Tricks

Not searching out the right neighborhood

Buying your dream home isn’t going to have the same effect if you’re dream home is right beside a garbage dump or backs onto an airport. Before you even begin looking for your ideal home invest some time into looking for your ideal neighborhood. Your real estate agent can help with this. You should consider the school district, and not only if you have kids. Buying real estate in a neighborhood with a good school district will make it easier to re-sell your home if you need to move in the future.

You should also look at crime statistics and the time it will take to commute to work every day. Try going to neighborhoods that pique your interest and talking to people on the streets. Ask them how they like living in the neighborhood and get a sense of how friendly they are. Most people are more than happy to give you their honest opinion on what the neighborhood is like and you get a feel for the community that you can’t get through your computer research of the area. Only after you’ve narrowed your search down to a few choice neighborhoods should you begin to look for individual houses.

Letting your emotions get you in over your head

First-time home buyers are usually very excited! Those excited emotions can lead you astray when you’re trying to make a good financial decision. Buying a home is one of the biggest financial investments you’re ever going to make. So it’s important to let your brain be guided by your heart, but not overrun by it. One of the easiest ways to avoid your emotions hijacking the buying process and getting you to make an offer on a home that you just can’t afford is to avoid looking at homes out of your price range.

It can be tempting to see what’s out there, but doing so can lead you to fall in love with features in a home that your home just can’t afford like that backyard tennis court or the jacuzzi in the master bathroom. When this happens the homes that you can afford feel stale and they fall short in comparison, so do yourself a big favor and stick to your budget.

More: How You Can Compare Mortgage Rates To Ensure You Get The Best Deal

Focusing too much on a large downpayment

It’s true that putting 20% down on a home can help you avoid private mortgage insurance; however, it’s not the be-all and the end-all. Most people just can’t afford to save up that much money. It’s typical to see down payments closer to the 10-15% range in most home purchases. If you’re stuck on saving up 20% you can miss out on a great home because saving that amount can take you years to do. Instead, you should consider putting less down upfront and using any extra savings for other large expenses, emergency savings or even retirement savings.

Private mortgage insurance usually isn’t that expensive and you’re far better off paying the little extra every month if you end up with the house of your dreams. If you can only put a little down then consider looking at home buying programs that are offered through the government for first-time homebuyers. Don’t put your life on hold to save up for a big down payment. It’s not worth it in the long run and your money can be better put to use in other areas of your life.

Only accepting the perfect house

As in all areas of life, perfection in houses just doesn’t exist. You’re never going to find a home that checks all of the boxes on your wishlist. There will always be sacrifices in one area or the other. It’s important to make sure that you find a house that checks off a large number of items on your wishlist. When deciding what’s important to you in a home come up with a wishlist. Then try to put it in order of most important to least important. For example, the number of bedrooms or the size of your kitchen might be very important to you while having an extra bathroom might be nice, but not necessary.

Figure out what your top three necessities are and prioritize these features over all the others. Taking the time to determine which items on your wish list are make or break will help you pick out the best house for you. This way if you find one that checks all of your “must-have” boxes, but it falls short on some of your “nice to have” boxes you’ll know that this is still a good fit for you and you won’t rule out an amazing home for no reason.

Properly research FHA, VA or USDA loans

It’s a seller’s market right now which means that there’s stiff competition to buy a house. A way of helping home buyers finance their homes in this tough market is to consider loans such as the ones you can get from the FHA, VA or USDA. These loans help buyers purchase a home with a lower down payment (as low as 3%) and they also help buyers that some banks won’t finance due to bad credit history. These three loans are all backed by a section of the government.

VA loans are backed by the Department of Veterans Affairs and are offered to any member of the military service and their families. For a VA loan, you can go to a private lender and you won’t have to pay a downpayment. You might have to pay a funding fee but the VA puts a limit on what fees a lender can charge so that you don’t have to pay too much.

FHA loans are backed by the Federal Housing Administration. For a borrower to get an FHA loan they need a credit score of 580 but they don’t require a deposit any greater than 3.5% which is attainable for most buyers. The catch to an FHA loan is that mortgage insurance is mandatory. You don’t have a choice, you have to pay the insurance when you close and once every year. For 3.5% down it’s worth paying the insurance if you’re eligible.

USDA loans are backed by the U.S. Department of Agriculture. These loans are geared towards homebuyers who live in rural areas as opposed to cities. If you live in such an area and you are in a lower income range than you might be eligible for this loan. Their guidelines mostly involve where you live, but you might have to meet some income levels as well. Whether or not you pay a down payment also depends on your individual financial situation.

Take into account all the hidden costs

The monthly cost of your mortgage isn’t the only fee that you have to take into account. You also are going to have to pay other monthly costs associated with owning your own home. For example, you need to estimate your home insurance fees, your property taxes and your new utility costs. You’ll also have to consider fluctuating fees like home maintenance and repairs.

These fluctuating costs can add up quickly so look at some estimates in the area that you’re thinking of moving to so that you can estimate how much savings you should have in case of something going wrong that needs repair on your home. For example, if the home you’re looking at has an older roof and it’s not enough to prevent you from buying the property in the first place but it’s something you think will need to be repaired or replaced in the next few weeks consider putting aside savings to cover that cost so you’re not left without a roof over your head. A good rule of thumb is to have at least 1% of the purchase price of your home available to you for these repairs every year.

Relying on gift money that falls through

It’s fantastic when your family, friends or a charity decide to pitch in towards the down payment on your house by offering you a gift. It’s not as fantastic however when that money falls through, is delayed or there’s miscommunication between you and the generous person offering the gift. Miscommunication over money can lead to a purchase on a house falling through and your relationship with the gifter being negatively affected. In order to prevent this from happening you should sit down with anyone who offers you a gift and you should put on paper how much they’re offering you and when you’ll receive this money. That way there’s no miscommunication.

In order to help out your real estate agents and mortgage lenders, you should keep a paper trail of every time money changes hands in relation to your home purchase. You’ll need this paper trail and a signed gift letter from the person who’s giving you the gift in order for your mortgage lender to verify that the funds are there and that they came from where you said they did.

Look into Homebuyer Rebates

After your home has been purchased, your real estate agent, the buyer’s agent can provide you with a homebuyers rebate that comes out of their commission. This rebate is usually around 1% of the purchase price of your home. There are 10 states that don’t allow homebuyers rebates, so where you live will impact whether or not you can receive one.

Not every agent will provide one, and most won’t freely offer this option, but it doesn’t hurt to ask and you might end up with a bit of money coming back to you at the closing of the house which is when you’ll need it the most. Above all please make sure you continue to educate yourself on the topic. Reading articles like this show that you are on the right path.

If you liked these 14 tips please let us know in the comments below. Please be aware of these Hidden Fees that can affect your numbers when buying a house.

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Inside the Highly Profitable and Secretive World of Payday Lenders



Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.

The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”

The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.

In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders

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What’s Questionable Credit and Can I Get a Car Loan With It?



Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Bad Credit

Entrepreneur Tae Lee Finds Her Fortune



By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: To learn more about Tae Lee and Never Go Broke Inc., visit and or email; you also can follow her on Facebook ( and Instagram (@nevergobrokeinc).

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