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How can I refinance my mortgage with bad credit?

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If you have poor credit but want to take advantage of the current low interest rates and refinance your mortgage, make sure first it makes good financial sense, and don’t forget to factor in closing costs and other fees. (iStock)

Bad credit happens. This may be especially true for the thousands of people out of work due to the coronavirus pandemic. Even so, you can refinance your mortgage with bad credit. It may be more challenging, but it’s possible.

The coronavirus pushed interest rates to record lows. Such low rates are the driving force behind the surge in mortgage refinances — up 89.54% from last quarter and up 297.3% from just one year ago, according to US Mortgage Originations.

Take a look at your options and your limitations, and visit Credible to compare rates from multiple lenders all in one place.

How to refinance your mortgage with bad credit

If you have bad credit, you may qualify for private-sector programs, options backed by the federal government, or you can try co-signing with a stronger borrower. If you’re considering using a cosigner or want to see if you’re eligible for a refinance on your own, Credible can help. Click here to learn more about refinancing your mortgage and whether you’d be approved today.

Here are four mortgage refinance options for potential borrowers with bad credit.

  1. FHA Streamline Refinance program
  2. FHA rate-and-term refinance
  3. VA refinance 
  4. Portfolio loan

1. FHA Streamline Refinance program

If you have an existing FHA loan, you may qualify for the FHA Streamline Refinance program, which can permanently lower your monthly payments. Most lenders won’t check your credit or demand an appraisal because you already have an FHA loan. You may qualify for current refinance rates, but you’ll likely have to show you’ve made six consecutive monthly payments on-time, in-full.

2. FHA rate-and-term refinance

A rate-and-term refinance is for anyone who already has an FHA loan. It’s meant to help you refinance your current mortgage and reduce monthly payments. A new home appraisal and credit check are part of the application process, and like the Streamline Refinance program, you must show six months of consecutive on-time payments, paid in full.

3. VA refinance

If you currently have a VA loan, you can refinance with the Interest Rate Reduction Refinance Loan (IRRRL). Generally, lenders won’t require a credit check or home appraisal to qualify. The VA allows you to refinance up to 100% of the property’s value, but there is an upfront funding fee that may be added to the loan amount.

4. Portfolio loan

A portfolio loan is originated and retained by your mortgage lender. Because your mortgage lender is 100% responsible if you default on your loan, your credit history and finances will be reviewed. There are likely closing costs and other fees due at the time of closing or added into your loan payment.

HOW TO DECIDE IF YOU SHOULD REFINANCE YOUR MORTGAGE 

What are today’s mortgage rates?

The COVID-19 pandemic pushed interest rates lower than they have been in many years. That’s why it’s such a good time to refinance your mortgage — even if you have bad credit.

These are current mortgage rates, according to Freddie Mac:

  • 30-Year Fixed-Rate Mortgage (FRM): 2.79%
  • 15-Year FRM: 2.23%
  • 5/1-Year Adjustable Rate Mortgage (ARM): 3.12%

Mortgage interest rates fluctuate with supply and demand in the secondary market. If the supply of money goes up and the demand for money goes down, interest rates will go down as well — exactly what has happened due to COVID. If you want to take advantage of today’s low mortgage rates, make sure you use Credible’s free online tools to refinance and start saving today.

The Federal Reserve doesn’t set mortgage rates, but it can influence rates. This past August, Federal Reserve Chair Jerome H. Powell stated that interest rates would likely stay low for some time to recover from the recession the COVID-19 pandemic caused.

Compared to the current rate of 2.65% for a 30-year FRM, on January 2, 2020, the 30-year mortgage rate was 3.72%, and on December 26, 2019, the rate was 3.74%. On the same date in 2018, the rate was 4.55%. Even one percentage point can make a big difference in your monthly payments.

If you have bad credit, but you want to take advantage of the current low-interest rates, use an ​online mortgage refinance calculator to determine new monthly costs. Credible can also help you crunch the numbers and determine what your monthly payments and total costs would be.

REFINANCING YOUR MORTGAGE? 5 QUESTIONS YOU SHOULD ASK FIRST

Should I boost my credit score first?

Banks, credit unions, and many online lenders offer better interest rates to people with good credit. Although the required credit score to qualify for a refinance varies from lender to lender, most mortgage loans require a minimum credit score of 620, according to Experian.

To get the best rates (and pay less interest over the term of your loan), it makes sense to boost your credit score before applying for a mortgage refinance. Accordingly, interested borrowers should visit Credible​ to get prequalified without impacting their credit score.

THE MORTGAGE REFINANCE WINDOW COULD END SOON: WHY YOU SHOULD ACT NOW

How to increase your credit score

  1. Make all your payments on time. Payment history accounts for a large chunk of your credit score—35%. 
  2. Pay down debt. Paying down all credit card balances to less than 30% can improve your credit utilization ratio (the percentage of credit you’re using compared to your available credit) and boost your credit.
  3. Don’t close old credit accounts. Even if you’re not using an old credit card, keep it open to improve your credit history.
  4. Don’t open too many accounts. Lender’s inquiries into your credit can hurt your score, and carrying too much debt is never a good idea. 
  5. Keep a close eye on your credit score. Checking your score doesn’t hurt your credit. It can also give you an idea of where you stand when applying for a mortgage refinance
  6. Make sure your credit report is error-free. When you look at your credit report and find the information you’re not sure about, contact the three major credit bureaus and report your findings. 

If you’re thinking of refinancing, consider using Credible. You can ​use Credible’s free online tool​ to easily compare multiple lenders and see prequalified rates in as little as three minutes.

REFINANCING YOUR MORTGAGE? DON’T MAKE THIS MISTAKE

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Bad Credit

16 Key Signs That You Will Always Be In Debt

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©Shutterstock.com / Shutterstock.com

©Shutterstock.com / Shutterstock.com

Getting into debt is easy — and the numbers prove it. About 80% of Americans across generations are currently in debt, a 2019 Nitro survey found. And the total amount of household debt in America is nearly $13.95 trillion, according to the Federal Reserve Bank of New York’s most recent report on household debt and credit.

Find Out: 10 Credit Score Myths You Need To Stop Believing

There are plenty of ways people fall into debt, way too easily. The hard part can be getting out of debt, especially if you don’t recognize — or resist admitting — how you racked up debt. Here are 16 reasons you might have fallen into debt and how to avoid being stuck with it forever.

Last updated: May 13, 2021

Portrait of worried black woman standing beside window.

Portrait of worried black woman standing beside window.

You Believe Debt Is Part of Life

One of the biggest reasons people get stuck in debt is because they believe that debt is just a part of life, said Debbi King, owner of the personal finance coaching firm The ABC’s of Personal Finance. In fact, a 2015 Pew study found that 7 out of 10 people said debt is a necessity in their lives. “However, debt is a result of wanting or needing something that you don’t have the cash to buy at the moment,” King said.

See: 19 Ways To Tackle Your Budget and Manage Your Debt

Top view on a student with bunch of overdue bills.

Top view on a student with bunch of overdue bills.

The Solution

If you are determined to get rid of debt, you can rid yourself of these wants. “You have to not want debt so bad that you refuse to use it no matter what,” King said.

You also need to give yourself a wake-up call by keeping close tabs on your spending to see how much you’re relying on debt to maintain your lifestyle. “You may be using your credit card more than you realize,” said Bruce McClary, vice president of marketing for the National Foundation for Credit Counseling (NFCC).

Once you figure out how much you owe, make a plan to pay off the debt. Having a goal of getting out of debt might give you the motivation you need to stop relying on it.

Read More: Here’s How Much Debt Americans Will Have Due To the Coronavirus, by State

Man driving car and using phone to send text message.

Man driving car and using phone to send text message.

You Use Credit To Cover Emergencies

Many people assume they will never fall deeply into debt, said Matt Cosgriff, a certified financial planner and wealth management group leader at BerganKDV. “But it can happen so easily if you aren’t financially prepared,” he added.

For example, if you don’t have cash reserves to cover unexpected expenses, you might have to rely on credit cards. You will end up paying more than the original cost of the emergency if you do not pay off the balance quickly because of the interest on your card charges. Plus, you might not be able to build savings to cover future emergencies if your money is going toward paying off debt.

Stay on Top: This Easy Trick Will Improve Your Credit Score and Avoid Late Payments

A broken tire on the car.

A broken tire on the car.

The Solution

You can avoid this situation by creating an emergency fund, Cosgriff said. Ideally, you should save enough to cover up to six months of expenses. If necessary, start by setting aside a little each month, then increase the amount when you can. And make sure you have adequate insurance to cover catastrophic events, such as a medical emergency or car accident.

Score: 10 Things to Do Now If You Have a 500 Credit Score

Shot of a customer paying with a credit card in a clothing store.

Shot of a customer paying with a credit card in a clothing store.

You Make Only Minimum Payments

It’s hard to eliminate debt if you’re only paying the minimum you owe. In fact, McClary said it can become unmanageable if your balance continues to grow while you’re paying the minimum amount required.

For example, if you have a $5,000 balance on a card with a 17% rate and make a minimum monthly payment of 3% of your balance, it will take you 189 months — or nearly 14 years — to pay off your debt. Meanwhile, you will pay more than $4,000 in interest, according to Navy Federal Credit Union’s minimum payment calculator.

Cropped portrait of young woman paying via NFC in cafe, focus on female hands holding banking terminal, copy space.

Cropped portrait of young woman paying via NFC in cafe, focus on female hands holding banking terminal, copy space.

The Solution

Simply increasing the amount you pay can make a big difference. For example, you can cut the payoff time and interest in half by boosting your monthly payment to 5% of your balance.

Save Up: Americans’ Savings Drop to Lowest Point in Years

Young couple after grocery shopping on parking lot, putting groceries in car trunk.

Young couple after grocery shopping on parking lot, putting groceries in car trunk.

You Allow Expenses To Rise With Income

Andy Brantner, a certified financial planner and partner at BKLM Financial Services Consulting, knows financial discipline does not come easy. “It’s hard not to buy a better car or a bigger house when you get a raise,” he said. “But failing to keep your expenses steady when your income goes up creates a vicious cycle.”

It can be especially dangerous if you are still carrying debt from the days when you were earning less, and now are taking on more loans to help pay for that bigger house or a better car. Your debt will balloon, leaving you unable to pay if off despite the bigger paycheck.

Woman is shopping in supermarket and scanning barcode with smartphone.

Woman is shopping in supermarket and scanning barcode with smartphone.

The Solution

To avoid this, identify goals and review your spending to see if it’s in line with your priorities. If it’s not, you will need to create a spending plan that will align your expenditures with your values.

More Solutions To Paying Off Debt: 10 Best Personal Loans for People With Good Credit

One man, pouring gasoline in his car at the gas station.

One man, pouring gasoline in his car at the gas station.

You Use Payday Loans

If you get a payday loan to cover an emergency, it doesn’t mean you will be stuck in debt forever. After all, most of these short-term loans typically have to be paid back within 14 days.

But most people who get payday loans use them to cover everyday expenses, according to a report by Pew. And they often take advantage of rollover features that allow them to extend the amount of time they have to pay off the loans. Because the interest rates on these loans are so high — the average annual percentage rate is 391%, according to the Center for Responsible Lending — the debt can mount quickly.

If you roll over a typical payday loan of $325 eight times, you’ll owe $468 in interest and have to repay a total of $793, according to the center. Do that often enough and you will be stuck in debt forever.

coffee shop credit card payment.

coffee shop credit card payment.

The Solution

Make a plan to quickly pay off any payday loans you might have, even if it means getting a second job. Then take steps to improve your credit so you can qualify for lower-rate conventional loans going forward.

people talking toasting in a pub with the beers.

people talking toasting in a pub with the beers.

You Don’t Track Your Finances

“If you aren’t paying attention to where your money is going, it’s easy to overspend in certain areas and then not have enough for those unexpected expenses or your regular bills, which puts you in debt and keeps you there,” said Andrea Woroch, consumer and money-saving expert.

Shot of a young man using a smartphone and having coffee on the sofa at home.

Shot of a young man using a smartphone and having coffee on the sofa at home.

The Solution

“Stay on top of your finances by checking your accounts daily,” Woroch said.

It’s easy to do this from your phone by using your bank and credit card apps, or you can use a tracking app like Mint, which links all your financial accounts in one place.

“When you see how much you’re spending in one area, it’s easier to cut back,” Woroch said. “Remember, you can’t change what you can’t see, so it’s important to actually look at your money regularly to make sure your spending aligns with your budget and goals.”

Young couple is sitting at the table with laptop and paying bills online.

Young couple is sitting at the table with laptop and paying bills online.

You Disregard Your Credit Score

“If you don’t have a healthy credit score, your interest rate on your credit cards and/or loans is likely really high,” Woroch said.

The higher the interest rate you have to pay on your debt, the harder it will be to pay it all off.

Find Out: Biden Wants to Shut Down Credit Bureaus – What Would That Mean for You?

Smiling man lying on the couch and shopping online with credit card and laptop.

Smiling man lying on the couch and shopping online with credit card and laptop.

The Solution

“Get on track by committing to improve your credit score, which you can do in a few ways,” Woroch said.

These ways include always paying all your bills on time, keeping your credit utilization rate below 30% and using a credit-building loan to boost your score.

“For example, Self is an app that helps you build credit while you save,” Woroch said. “It’s a credit-builder loan, which is an affordable and accessible loan you take out in your name — but you don’t receive the money upfront. Instead, you make payments to yourself over the course of one to two years, and Self reports the payments to all three credit bureaus. In the end, the money you’ve put aside every month unlocks in the form of savings minus fees. It’s a unique product that is an accessible option.”

Young man lying on couch watching TV.

Young man lying on couch watching TV.

You’re Not Maximizing Your Earning Potential

“There are only so many ways you can cut back on your day-to-day and monthly spending,” Woroch said. “Sometimes you have to make more money to really get ahead financially and get out of debt.”

That means that if your only source of income is your day job, you probably aren’t doing enough to get yourself out of debt.

“People often limit their ability to make more money because they don’t think outside the box,” Woroch said.

Dog walker enjoying outdoors in park with group of dogs.

Dog walker enjoying outdoors in park with group of dogs.

The Solution

“If you can’t ask for raise or find a better paying job, then take on a side hustle,” Woroch said. “For instance, you can make up to $1,000 a month by simply petsitting in your own home via sites like Rover.com, which makes it super easy to set up a schedule that works best for you. This doesn’t require any special skills or really any time commitment because you can do this from home when you’re already home. Plus, you can double your side income by doing another side hustle at the same time as petsitting, like freelancing via Upwork.”

Bad Credit: 30 Things You Do That Can Mess Up Your Credit Score

Closeup of sad young Asian woman at cafe leaning head on clasped hands and staring into vacancy.

Closeup of sad young Asian woman at cafe leaning head on clasped hands and staring into vacancy.

You Are Overwhelmed by Student Loans

Student loan debt has reached $1.5 trillion, and payments on more than 9% of this student loan debt are at least 90 days late, according to the Federal Reserve Bank of New York. “So many people right now are burdened with student loan debt,” McClary said.

How to write the perfect professional thank-you note.

How to write the perfect professional thank-you note.

The Solution

If your student loan debt is unmanageable, McClary recommends talking to a certified student loan counselor to identify your options, such as income-based repayment or loan consolidation. You can visit studentloanhelp.org to find an NFCC member who will offer student loan counseling at little or no cost.

To avoid racking up student loan debt, McClary recommended that parents and students look for sources of free money for college, such as grants and scholarships. And families should weigh the costs of the schools their child wants to attend against the child’s earning potential after graduation. That will help the family determine whether the child will be able to pay off student loans.

Couple enjoying beach vacation holidays at tropical resort with swimming pool and coconut palm trees near the coast with beautiful landscape at sunset, honeymoon destination.

Couple enjoying beach vacation holidays at tropical resort with swimming pool and coconut palm trees near the coast with beautiful landscape at sunset, honeymoon destination.

You Allow FOMO To Dictate Your Spending

“One of the biggest things that causes people to overspend and brings them into debt is FOMO — the fear of missing out is a real thing,” said Ande Frazier, CEO of online financial community MyWorth. “It’s easy to get anxious when other people are having fun without you, especially when it’s happening in real-time on social media. This feeling might have you saying ‘yes’ to more dinners, drinks, activities and vacations than you want or can reasonably afford to attend.”

A woman is paying at a coffee shop.

A woman is paying at a coffee shop.

The Solution

Frazier recommends using cash instead of credit so that you really think about your spending decisions, rather than mindlessly swiping to keep up with the Joneses.

“The tangible nature of cash gives more value to the decision to spend that money, rather than just swiping a credit card, because you can see it and feel it,” she said. “It’s a form of mental accounting.”

Photo of asian man paying for his food delivery at home with credit card.

Photo of asian man paying for his food delivery at home with credit card.

You Have Your Financial Priorities Mixed Up

If you’re not allocating your money wisely, it will take you longer to pay off debt than it should.

“The most common mistake when it comes to short-term debt (i.e., credit card debt) is the belief that one needs to save and invest simultaneously,” said Roi Tavor, CEO and co-founder at Nummo, a personal finance management platform.

Any money you are putting toward saving and investing accounts is money you aren’t putting toward paying down debt.

Tax Season: The 6 Most Important Tax Deductions You Need to Claim

Young woman working at home.

Young woman working at home.

The Solution

“Before putting money in a savings account that yields 1% or 2%, make sure to pay off credit cards that charge you 10% or more on outstanding amounts,” Tavor said.

Beautiful, young female athlete running uphill.

Beautiful, young female athlete running uphill.

You Set Unrealistic Goals for Yourself

If you’ve been in debt for a while, maybe you’re constantly telling yourself that this will be the month you pay off all your debt. But if you have thousands of dollars of debt, this goal likely isn’t realistic.

“Having a plan to pay down debt is a great starting point; however, if you make your goals too lofty, you’ll set yourself up for failure,” said Leslie Tayne, founder and head attorney at debt solutions law firm Tayne Law Group. “In doing so, you’ll likely get discouraged and may even give up, preventing you from reaching your goal of paying off your debt.”

Group of hikers and friends walking on a mountain at sunset.

Group of hikers and friends walking on a mountain at sunset.

The Solution

“While you, of course, want to pay down your debt as quickly as possible, keeping your goals reasonable will help keep you motivated and on track to get that debt paid off,” Tayne said.

Start by making it your goal to pay off one credit card or loan at a time. Ideally, start with the card or loan with the highest interest rate, and move down the line in order from highest to lowest interest until they’re all paid off.

Tourist riding camel in Desert.

Tourist riding camel in Desert.

You Justify Credit Card Spending Because of the Points You Earn

Many credit cards offer rewards systems that can be beneficial if used correctly.

“Many people charge almost all of their everyday purchases to their credit cards to take advantage of these rewards,” Tayne said. “However, if you’re carrying debt, the interest you’re paying will be negating the value of your points. Keeping the mindset that you’re always working towards the point may also be keeping you in debt if you’re not paying off your balances in full every month.”

Young cheerful woman at the market.

Young cheerful woman at the market.

The Solution

“Consider switching your everyday purchases to cash or debit, or ensure that you’re paying off each of your credit card purchases in full while you’re working to pay down your debt,” Tayne said.

Smart modern male customer choosing large TV-sets at electronics store.

Smart modern male customer choosing large TV-sets at electronics store.

You Don’t Differentiate Between ‘Wants’ and ‘Needs’

Sometimes there can be a fine line between “wants” and “needs.” Let’s say your TV breaks and you need a new one. You head to the store and see a brand new 65-inch TV and decide that’s the one that you “need.”

“Sure it’d be nice to have in your living room, but do you need a $2,000 item for entertainment? Especially if you are going into debt for it and it’s going to cost $3,000 with interest by the time it’s paid off?” said Brandon Neth, credit card and award travel expert at FinanceBuzz.

“When you’re at Best Buy, you may be able to tell the difference between a 55- and a 65-inch screen mounted right next to one another, but once you’re home, you realize you’ll likely be fine with a smaller TV,” he continued.

Find Out: How Do Your Stimulus Payments Affect Your Taxes?

Joyful young attractive multiracial couple checking out plasma TVs in the electronic store.

Joyful young attractive multiracial couple checking out plasma TVs in the electronic store.

The Solution

Set a budget for yourself before you walk into a store, and consider buying items that aren’t name-brand.

“As a former Magnolia/Best Buy employee here’s a friendly piece of advice: Many of the non-brand-name TVs use the same panels and technology as the big brand TVs,” Neth said. “Often they’re just calibrated differently out of the box. They can be adjusted to create almost the exact same picture in many cases. Save the money, invest it and build wealth — not debt.”

Smiling young couple buying Christmas presents online using a credit card and a digital tablet.

Smiling young couple buying Christmas presents online using a credit card and a digital tablet.

You Go Overboard During the Holidays

Nearly half of those surveyed in 2019 by Discover said they plan to rely on credit to pay for most of their holiday spending. That can lead to starting off the new year in debt. If you don’t pay it off quickly and turn to credit again every holiday season, your debt will mount.

Cheerful mature African American manager smiles while listening to a colleague during a weekly staff meeting.

Cheerful mature African American manager smiles while listening to a colleague during a weekly staff meeting.

The Solution

“It’s really important at this time of year for people who might have a weakness to find support,” McClary said. Find a credit counselor through NFCC.org or look for a workshop to get support for building a habit of saving rather than spending, he said.

McClary also recommended avoiding spending time around others who have a tendency to overspend and “getting in situations where you’ll be melting the plastic at the register. Lock up the credit cards this time of year.”

Lovely modern girl enjoying her time at a coffee shop.

Lovely modern girl enjoying her time at a coffee shop.

Your Focus Is On the Short Term Rather Than the Long Term

“People don’t think long-term,” Neth said. “They are too focused on the now and looking for instant gratification.”

He gives the example of regularly charging coffee to your credit card — even if it only costs $5.

“If you’re doing that twice a week, that $10 adds up quickly,” Neth said. “Even worse, if you’re putting this on a credit card that you’re not paying off in full each month, paying interest on your two cups of coffee may raise the cost to over $20. Although it’s convenient and tastes good, remember how much further your money can go.”

Happy attractive young women in casual shirts sitting at table in coffee shop and photographing together while drinking coffee.

Happy attractive young women in casual shirts sitting at table in coffee shop and photographing together while drinking coffee.

The Solution

A change in your spending mindset can help you break this debt-causing behavior.

“The one thing we don’t get more of in life is time, so look at your expenses as time,” Neth said. “How much are you actually making an hour once you deduct taxes, expenses and other related costs? A $15-an-hour job is probably closer to $9. Stop and think, is two cups of coffee worth an hour of my time?”

This is an especially important mental exercise for larger purchases.

“How many extra years must you work to pay off that car or TV? These numbers just get higher as you account for accruing interest,” Neth continued. “Don’t stall your financial future by making impulse decisions today. Set goals for the future and remind yourself of them daily. It takes hard work to get out of debt and stay out of it, but when you do, you take back control of your life.”

More From GOBankingRates

Cameron Huddleston contributed to the reporting for this article.

This article originally appeared on GOBankingRates.com: 16 Key Signs That You Will Always Be In Debt

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Rtbshopper Announces Partnership with Acima Credit for Better Shopping Experience without Credit

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Rent-to-own store RTBShopper has partnered with financial service provider Acima Credit so their customers can have access to additional leasing finance option while purchasing goods

Winter Garden, FL – RTBShopper is proud to announce its partnership with Acima Credit, a reputable company that offers financial and leasing solutions for shoppers. Acima employs proprietary technology to help consumers find the merchandise they’re looking for, acquire the item, and get immediate approval. Customers get a tailored payment schedule that is flexible, convenient, and affordable.

The partnership means that RTBShopper.com is now an online store that accepts Acima Credit. It’s a massive development that gives customers additional access to simple lease-to-own financial solutions.

“We’re excited about our partnership with Acima because we know they’ll provide our customers with the best options when purchasing electronics, furniture, and appliances through rent to own payment plans,” said Tony C, Chief Operating Officer at RTBShopper.com.” “Acima Credit specializes in affordable financial solutions for lower-income consumers, and this agreement will help us to provide flexible payment plans from a company everyone knows and can trust.”

RTBShopper is an online store offering rent to own opportunities for shoppers, even those with bad credit. The company’s philosophy is that no one should be judge by their credit history. That’s why they don’t require credit score when shopping. To shop on site, the customer must be 18 years or older. They will also have to provide social security number or individual taxpayer identification number, debit or credit card, checking account, and government-issued photo ID. 

Customers can shop thousands of products in different categories, including computers, TV, cameras, furniture, home appliances, toys, cell phones, smartwatches, electronics, etc. Add the merchandise to the shopping cart, checkout, fill out the no-obligation lease form, pay the initial deposit, and get the item. Customers get an email when the item is ready for pick up or shipping.

RTBShopper.com help consumers get approved for up to $5000 worth of brand name electronics. They serve low-income consumers who can’t afford to pay one-time for these items, allowing for monthly or weekly payment plans.

As a store that accepts Acima, they hope to make shopping more fun and exciting for customers. The application of Acima’s technology and versatility combined with their customer service and the vast collection of products offers an innovative approach for product financing.

For more information, please visit https://www.rtbshopper.com/.

About RTBShopper.com

RTBShopper.com is an online store offering consumers rent to buy opportunity without considering their credit. They have a huge collection of brand name products in their store arranged in categories. The store offers competitive monthly payment plans and free shipping on all orders.

About Acima

Acima provides instant credit and financing for people looking to buy products on lease. Using machine learning technology, they empower merchants and consumers with point-of-sale leasing solution with no credit needed. They have a partnership with many stores and merchants, helping them grow their business using modern technology.

Media Contact
Company Name: RTBShopper.com
Contact Person: Media Relations
Email: Send Email
Phone: 855-785-6501
Country: United States
Website: https://www.rtbshopper.com



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7 questions from first time home buyers that every broker needs to answer

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Buying a home is a huge investment for first time home buyers – and their inexperience means that they often have a lot of questions.

The good news is you don’t need to do something heroic to get buyers to trust you. You just need to be ready to address their concerns and answer their questions. So below, we answer seven questions first time home buyers may ask their mortgage brokers.

Read more: Is there hope for first-time buyers post-COVID-19? Part One: The case against

1. “Buying a house is expensive. Is it worth it?”

The first thing you should do is understand the reason why the buyer is thinking of buying a house. Are they buying to build their asset portfolio? Or are they looking for a place to live and settle down in?

If they’re buying a house to build wealth, then yes it’ll be worth it – though you have to be clear that they shouldn’t expect their investment to see immediate growth.

If they’re looking to buy a primary residence, then it depends – after all, the process of buying their dream home could potentially stretch their funds a bit. In that case, you can steer them towards considering a more affordable starter home that they can trade up in the future.

Get to know their reasons first so you can answer honestly and professionally.

Read more: Six ways real estate agents can manage unhappy homebuyers

2. “I’ve owned a house before. Am I still considered a first-time home buyer?”

The US Department of Housing and Urban Development (HUD) defines a first time home buyer as:

  • an individual or person who hasn’t owned or bought a principal residence in the last three years;
  • a single parent who previously owned a house while still married to their former spouse;
  • a displaced homemaker (such as a stay-at-home spouse) who owned property with their former spouse;
  • an individual or person who owned a principal residence or property that wasn’t affixed to a permanent place or foundation in accordance with applicable regulations (such as a mobile home); and
  • an individual or person who owned a property that was not in compliance with local, state, or model building codes, and whose property can’t be brought into said compliance for less than the cost of building a permanent structure.

As you can see, the term has a bit more leeway than its name suggests. For example, if the buyer has owned a property or house within the last three years but their spouse hasn’t, then both of them can still buy a house as first time home buyers.

This is important because there are many government incentives for first home buyers, especially if they’re part of the remote workforce.

3. “I have a 401(k). Can I use it to buy property?”

The short answer is yes – but should you? That’s the real question.

A buyer can tap into their 401(k) if they’re short of the funds they need. They can do it two ways – either as a straight withdrawal or as a loan.

However, a buyer can only withdraw from their 401(k) after turning 59 and a half years old (or 55 years old if they lost their job or have retired). Younger buyers can still withdraw their funds, but they’ll have to pay an early withdrawal penalty of 10% of the amount they take out. They’ll also owe income tax on the funds they take out, regardless of their age.

Meanwhile, if a buyer opts to borrow from his or her 401(k), then they’ll have to pay it back – with interest. And the repayments won’t count as contributions, meaning no reduction on their incomes.

So, to put it simply, yes they can use their 401(k). But the trade-off isn’t ideal, so it might be better to look for other options.

4. “I have no cash so can I put $0 for down payment?”

Yes, but there could be some work involved.

A first time home buyer can only put $0 down payment if another entity foots the bill. In this case, it’s the federal government through what’s called a government-backed mortgage.

Three US federal agencies can give mortgage assistance to first time home buyers: the Department of Veteran Affairs (VA), the US Department of Agriculture (USDA), and the Federal Housing Administration (FHA). These agencies will insure all loans given, so lenders are protected in case the borrower can’t pay their debts.

However, you may still have to check if a lender accepts USDA loans. Quicken Loans, for instance, stopped accepting applications since July 2020.

5. “Am I qualified for the $15,000 tax credit?”

The bill hasn’t passed yet, but if it becomes law, the First-Time Homebuyer Act will require participants to be:

  • a first-time homebuyer, with the same conditions mentioned above; and
  • an individual who doesn’t earn more than 160% of the median income in their area.

Additionally, the price of the house they purchase must not be more than 110% of the median price in their area. The house should also have been purchased after Dec. 31, 2020.

6. “I don’t have a good credit score. Can I still buy a home with bad credit?”

The short answer is yes, you can still buy a home with bad credit.

Lenders often don’t have a minimum credit score requirement because no two credit scores are the same. A buyer might have a credit score of 400 – a poor score according to the main credit bureaus – but the circumstance behind that score is different from what another borrower with the same score has gone through.

Additionally, lenders often take other things into consideration in their decisions – such as the amount of debt accrued, income, debts in collections, and the size of the down payment.

Different lenders have other requirements but having plenty of cash available for down payment is always a plus. The buyer can always repair their credit and refinance down the road.

7. “I’ve heard 2021 is a bad time to buy a house. Should I go for it or just wait?”

Again, it’s best to assess the buyer’s needs and know the reason why they’re looking into buying a home.

They might be thinking of purchasing because the mortgage rates are so low. But you must remind them that the cost of buying a house goes beyond the purchase price. They also need to consider property taxes, insurance, and upkeep costs. Maintaining a house isn’t cheap and so many new homebuyers fail to realize that.

Read more: New data finds high level of regret among homebuyers who purchased during COVID-19

On the other hand, mortgage rates will likely rise once the pandemic eases up. So, if the buyer is looking into buying a house to cater a growing family, they might have to seriously consider buying regardless of market conditions.

The key is knowing your client’s priorities and going from there.

A first time home buyer is eager, but undoubtedly full of questions. They will be leaning on your advice for their final decision. Getting to know them, building a strong rapport, and answering clearly, honestly, and professionally will instill the trust that will help build lasting bridges for years to come.

 

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