PHOENIX — Landlords wrongfully acted to evict metro Phoenix renters during the height of the COVID-19 pandemic, despite a federal law protecting tenants from losing their homes if they couldn’t pay rent.
More than 900 evictions were filed against tenants who likely should have been protected by the federal CARES Act, according to an investigation by the Arizona Republic, part of the USA TODAY Network.
Most of those renters also were wrongfully charged hundreds of dollars in late and legal fees.
Many had no lawyer to help them navigate the eviction process, no one to tell them about legal protections and nowhere to go when they were locked out of their homes.
The CARES Act, passed by Congress on March 26 to provide fast economic help to people hurt by the pandemic, stated landlords with federally backed mortgages couldn’t evict tenants before July 26 for not paying rent. Nearly half of the nation’s mortgages are federally backed.
Tenants living in apartments, condominiums or rental homes with federally backed mortgages didn’t have to prove they were impacted by COVID-19. Under the CARES Act, they were automatically protected from eviction for not paying rent.
An Arizona Republic investigation into the more than 8,000 evictions filed in Maricopa County, Arizona’s most populous county and home to Phoenix, during that period found more than 10% appeared to violate the CARES Act.
Not all of those 900-plus tenants were kicked out. Some paid their rent in time to stop the evictions, even though they weren’t required to, and others had their cases dismissed for unknown reasons.
However, the CARES Act should have stopped landlords from even starting the eviction process in court.
Landlords also have struggled during the pandemic, and the CARES Act allowed property owners with federally backed mortgages to skip their mortgage payments until the end of the year. This means some of the landlords who were allowed to miss their payments evicted renters who could not make theirs.
Landlord representatives and attorneys acknowledged that some evictions may have been filed in conflict with the CARES Act, but blamed the federal government’s lack of clarity for any potential errors.
Evictions did slow substantially in metro Phoenix during the CARES Act protection and Governor Doug Ducey’s eviction moratorium. But they did not halt like in other cities around the country.
Hundreds of tenants who should have been protected either by the CARES Act eviction ban or the state’s eviction ban were kicked out of their Phoenix area rentals.
The state court system recently acknowledged that landlords may have not followed the CARES Act and launched a task force to look into potential wrongful evictions and remedies for impacted renters.
Renters: Scared, struggling and homeless
The Republic found hundreds of court filings of metro Phoenix renters who had been threatened with wrongful evictions or locked out of their federally backed apartments.
The Republic researched all of the eviction claims filed in Maricopa County Justice Courts during the CARES Act and checked them against mortgage documents and databases to determine which properties should have been protected under federal law.
The Republic then reviewed all the eviction filings for the federally protected properties, case by case.
Dozens of renters contacted by The Republic recounted the fear, confusion and shame they felt as they tried to remain in their homes.
One woman started to lose her hair after she received a July eviction notice for an apartment covered by the CARES Act.
A single mother of four, in an apartment also covered by the CARES Act, threw out some of her family’s beds because she feared being evicted and locked out of her home without enough time to move everything.
A Phoenix woman is now homeless and living out of her truck with her 3-year-old daughter and dog after the owner of her mobile home park evicted her during the summer, even though she said she showed documentation that her income as a travel consultant plummeted because of the pandemic.
After being evicted in July, another family struggled to pay for a weekly motel so their boy could have Wi-Fi to attend school. They can’t find another apartment because of the black mark on their credit.
The federal eviction moratorium violations happened at the same time many renters also were protected by a state moratorium to keep tenants hurt by COVID-19 safe in their homes.
“Families are being devastated by illegal evictions in Arizona. It’s a nightmare for too many,” said Pamela Bridge, director of advocacy and litigation at the Arizona nonprofit Community Legal Services.
“These are evictions that shouldn’t be happening. The CARES Act is clear that evictions for not paying rent shouldn’t have happened.”
CARES Act confusion for tenants, landlords
The federal government swiftly passed legislation in late March to protect millions of renters against eviction as the coronavirus pandemic began to threaten the national economy.
The CARES Act was explicit. If a property had a federally backed loan, a landlord could not legally evict tenants for failing to pay rent between March 26 and late July. After the act ended, landlords had to give those tenants 30 days’ notice before evicting them, essentially giving renters a reprieve until the end of August.
Scott Williams, whose law firm Zona Law Group represents landlords, said the CARES Act passed without any warning for property owners, property managers, rental agents or attorneys, resulting in chaos and confusion as to how to properly interpret the law.
“No one — not the federal government, lenders or the courts — notified property owners how to comply with this law or how to determine if a property currently has a federally backed mortgage,” Williams said.
Many Arizona landlords with federally backed rentals did follow the CARES Act and didn’t file evictions on tenants when it was active. Evictions in Maricopa County decreased by 70% between April and July, compared with the same four months in 2019.
“That happened because we did everything in our power to follow the CARES Act despite rampant confusion and lack of communication from appropriate government authorities,” Williams said.
Courtney Gilstrap LeVinus, president and CEO of the Arizona Multihousing Association, said the CARES Act was rushed and the federal government failed to communicate with landlords and tenants — the people most affected by the law — causing confusion in addition to “massive financial stress.”
“In the midst of the pandemic, some rental owners may have sought evictions that – in retrospect, with more and better information available – should not have been filed. These cases don’t represent our industry as a whole. In fact, they are very much the exception and not the rule,” LeVinus said.
Chris Groninger, a consumer advocate with the nonprofit Arizona Bar Foundation, also has been researching eviction filings. She agrees the federal protection for renters was confusing.
It’s difficult to obtain information about which properties are covered by the CARES Act, she said, because mortgage records are not always conspicuously available and federal mortgage websites are sometimes inaccurate.
However, landlords — the ones who pay those mortgages — should have known their mortgages were federally backed and had the responsibility to inform their tenants of the protection, Groninger said.
According to Groninger’s research, the total number of wrongful evictions under the CARES Act in Maricopa County’s Justice Court system could top 2,000.
That information was submitted to the Administrative Office of the Courts in early November, at the first meeting of a new state task force looking into wrongful evictions.
The CARES Act was passed with no penalties for landlords that don’t follow the laws. Until recently, only a few landlords or their attorneys have faced any scrutiny over whether their evictions violated the CARES Act.
County justice courts, where evictions are handled, didn’t require landlords to declare whether a property was covered under the CARES Act on Arizona eviction filings until after a state Supreme Court ruling July 7, about two weeks before the protection expired.
Community Legal Services and other housing advocates are working to find renters illegally evicted under the CARES Act and Arizona eviction moratorium to help them get money back from fees and other costs and erase the judgement from their record.
‘The most scary thing of my life’
Luz Ryan helped people manage their debt before COVID-19 hit. Then she faced eviction herself.
Ryan, a Colombian immigrant, has lived in the same Scottsdale, Ariz. apartment complex for more than five years with her daughter, a biology major at Arizona State University considering medical school.
When the pandemic hit, the debt relief company she runs out of her apartment took a hit. Many of her clients, facing their own financial hardships, could not pay Ryan promptly.
She managed to pay her $1,600 rental payment in April and May, but come June her business hadn’t rebounded and she couldn’t afford the payment.
Ryan, 55, asked the apartment manager for an extension, hoping that paying on time for the past five years would allow her some wiggle room. The manager refused and told Ryan that she would evict her if she didn’t pay up immediately.
“I’m not from here. I’m from Colombia. Sometimes when we move to another country, another culture, another language, it’s hard for us. Because sometimes we see in different ways,” Ryan said. “If I had somebody who lived here for 5-6 years, I think I would have more (concern for the) human part than the money.”
Ryan said she spent most of June and July crying with her daughter and calling nonprofit lawyers and other advocates to try to find a way to stay in her apartment. She said her hair started falling out from the stress.
Ryan reached out to the city of Scottsdale, and a social worker helped her access rental assistance funds from Maricopa County. The social worker wrote a letter for Ryan’s apartment manager saying that Ryan would receive three months of rental assistance but the money wouldn’t arrive until late July.
The state, county and some cities allocated more than $90 million in assistance for renters this summer, but many of the programs were slow to get off the ground. Others ran out of funds quickly.
Ryan’s apartment owner proceeded with eviction despite the promise of impending aid. The complex hired the law firm of Hull, Holliday and Holliday to take her to court — to force her to pay up and evict her.
The Court approved a $3,843 judgment against Ryan for two months’ rent, late fees, attorneys fees and court costs and ordered the constable to evict her.
The company that owns Desert Park Vista Apartments, where Ryan lives, has a Freddie Mac-backed loan (a federally-backed loan) on the property.
Ryan should have been protected from eviction for failure to pay rent, but Ryan did not know what type of loan her apartment complex had and therefore didn’t know she was protected under the CARES Act.
Ryan jumped when the constable thumped on her apartment door three times in late July.
“It was the most scary thing of my life,” Ryan said.
But she was prepared with letters explaining she had lost income because of the COVID-19 pandemic, the letter from the Scottsdale social worker and a copy of Ducey’s executive order explaining the state’s eviction moratorium.
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After the constable read through her proof of COVID-19 impact, he chose not to evict her because of Ducey’s executive order — giving her cover from eviction until her rental assistance kicked in in August.
Although she didn’t get evicted, the eviction court documents on her record have created issues.
After the constable allowed her to stay, Ryan’s apartment manager told her that the complex would not renew her lease after September.
Ryan, whose business had bounced back, looked at moving to a similarly priced apartment in the area, but her application was denied because of the eviction record. She asked her apartment manager to send a note to the new apartment to confirm she didn’t owe any money. But even with that letter, the new complex wouldn’t take the risk.
Right before she was set to move out, her current apartment complex got a new manager who told her she could renew her lease and even move to a nicer unit.
It was a miracle after a nightmare, Ryan said.
But in mid-October, her apartment manager alerted her that she owed almost $2,000. The rental assistance from Maricopa County had covered only her base rent. Costs like trash and water fees, taxes and other miscellaneous charges still racked up and the landlord wanted the debt paid by the end of November, or Ryan could face eviction again.
Ryan doesn’t know how she will afford the $2,000 payment and pay her rent. Her daughter, who works part time at a restaurant, is considering skipping her car payment to help with the rent.
Freddie Mac, Fannie Mae drop the ball
Struggling tenants unable to pay rent were told to check to see if their apartments or homes were covered by the CARES Act. But that was far from easy.
Renters had to search by address on multiple government websites. Fannie Mae and Freddie Mac — the biggest federal backers of residential mortgages in the U.S. — for example, don’t have complete, publicly available lists of their properties.
The U.S. Department of Housing and Urban Development also backs loans on rentals, and complete lists aren’t available from that agency, either.
Searching those websites can be difficult because one property may have multiple addresses, so renters can search the wrong address, housing advocates say.
Some rental properties’ mortgages only could be found on loan documents filed with the Maricopa County recorder, The Republic discovered. That’s not something the typical renter would know how to find.
“The average renter wouldn’t have been able to find out if their home was covered by the CARES Act,” said Groninger, who is the chief strategist at the nonprofit Arizona Bar Foundation.
“Only five of the more than 20 types of federally backed loans can be searched on government websites.”
After hearing from renters who were being evicted in apartments potentially protected under the CARES Act, Groninger started tracking evictions daily in June. She took screenshots of rental addresses that showed up one day on a government website as a federally protected rental property, only to disappear a few days later.
Fannie Mae and Freddie Mac were aware their search tools for renters weren’t 100% accurate or complete. They disclosed that on their websites.
“Fannie Mae makes no representation, warranty, or guarantee regarding the accuracy or completeness of the results. Information that does not match our records exactly may return inaccurate results,” the website said.
LeVinus of the Arizona Multifamily Association said property owners also struggled to find out whether their mortgages were federally backed. She said Freddie Mac, Fannie Mae and other federal housing programs should have directly notified owners of the CARES Act’s implications on their properties.
“While the eviction ban contained in the act may sound simple, it is not an easy process to determine whether a property has a federally backed mortgage. It’s not as simple as doing a Google search or looking at a statement and seeing to whom you write your mortgage check,” LeVinus said.
‘Trying to take care of my kids, find a job and survive’
Mary Gomez and her four children live in an Arizona apartment that was covered by the CARES Act eviction ban, but she didn’t know it in June when her complex’s property managers started asking her daily about paying rent.
“I was working in the insurance industry for five years when I was laid off in March,” said Gomez, who used her savings to pay her rent through May. “I applied for rent help and unemployment, but nothing was coming through. I lost my car and my child care.”
She said at first her apartment manager was understanding and took partial payments, but then encouraged her to move and asked for daily updates on when she could catch up on her rent.
When Gomez received an eviction judgment in September, she panicked and started clearing out her apartment. She feared leaving her belongings in the apartment after a lockout would affect getting her security deposit back — and she hoped to get her deposit back to pay off her $4,000 rent and late fee bill.
“I couldn’t afford a big storage unit, so I had to throw out some of our beds and other things we really miss now,” Gomez said. “I was just trying to take care of my kids, find a job and survive,” she said. “I didn’t know about the CARES Act or eviction moratoriums.”
When Gomez attended her eviction hearing, the judge told her that she could qualify for another eviction moratorium, this one from the Centers for Disease Control and Prevention. That allowed her to stay in her apartment. She also recently received rental aid and utility payment aid.
Thayne Cullimore, the eviction attorney for her apartment complex, said the landlord has not challenged Gomez’s CDC declaration under the national moratorium, and “there is no plan to file a new eviction” against her.
CARES Act protects landlords through 2020
While the lack of rental income has undoubtedly created issues for landlords during the pandemic, those with federally backed loans also had a reprieve.
Property owners with federally backed loans can skip payments through forbearance plans under the CARES Act.
Most of the deferred payment plans for landlords with Fannie Mae and Freddie Mac loans have been extended until the end of 2020.
Tenants in rentals with Fannie and Freddie forbearance agreements can’t be evicted while the property owners are receiving the federal aid, according to the Federal Housing Finance Agency, which regulates the two corporations.
“Landlords in forbearance must also inform tenants of other protections, including at least a 30-day notice to vacate, no fees or penalties for not paying rent and the flexibility to repay owed rent over time and not in a lump sum,” according to the regulator.
Information on which rental property owners have deferred mortgage payments under the federal programs hasn’t been released.
LeVinus said the forbearance allowed under the CARES Act did not provide total relief for landlords because mortgages represent “only a small portion of the monthly rental expenses.” Additionally, the forbearance only pauses payments — it doesn’t forgive them.
“At the conclusion of the forbearance period, owners will be required to repay any missed or reduced payments regardless of whether or not they actually received rent during the moratoriums,” LeVinus said.
‘Egregious’ eviction excuses, advocate says
The CARES Act only provided eviction protection to renters for not paying rent. Landlords still were able to evict their tenants if they committed a criminal offense or violated the terms of their lease in some other way.
Some advocates and experts believe landlords and their attorneys used this caveat to try to get around the CARES Act protection by evicting people who owed rent on low-level infractions like noise complaints or unauthorized guests.
The Arizona Republic found 150 “immediate evictions” in CARES Act-covered rentals that were filed to evict tenants who owed rent by accusing them of noncriminal breaches of their lease, including having a barbecue on a patio, stomping, an extra pet and “excessive traffic.”
Loretha Young received a court summons June 4, notifying her that her landlord Citi-Sun City Partners III had filed an eviction complaint against her for allowing an “unauthorized occupant” to stay in her apartment.
In the complaint, her landlord also claimed Young owed $992 in rent.
In court documents, Young explained that the person staying in her apartment was a family member whose roommate had to self-quarantine because of COVID-19.
“I nor my family member were by no means trying to take advantage of any rules or policies — just trying to keep each other safe with minimal contact tracking means,” Young wrote.
Her rent was late because of confusion with the online payment system, she said.
Her landlord continued with the eviction proceedings.
Tannisha Hill’s landlord, Glendale Enterprise Live Work Lofts LLC, moved to evict her in June after her child and a friend ding-dong-ditched some of their neighbors late at night. She also owed $950 in rent.
Both Hill and Young lived in properties with federally backed mortgages and had federal subsidies that helped them pay their rent. Both of those parameters meant they could not be evicted for nonpayment of rent under the CARES Act.
Both women contacted Community Legal Services, which agreed to take their cases. Attorneys for Hill and Young challenged the validity of the lease breaches, and both landlords agreed to dismiss their cases.
The Law Offices of Scott M. Clark represented both Young and Hill’s landlords.
Christopher Walker, of the Law Offices of Scott M. Clark, maintained that both women’s evictions were filed for reasons other than nonpayment of rent.
Walker said the landlord worked out an agreement with Hill at court “to preserve her housing and she remains in her home to date.”
Walker said Young’s landlord moved to evict her because her Section 8 housing voucher, which pays for a portion of her rent, specifies only one person can live in the unit. The landlord ultimately agreed to vacate the judgment and worked with Young on her rent balance.
Bridge said the women’s cases were “egregious,” and there are more renters like them who can fight wrongful evictions or win a court case or a settlement with their former landlords.
In court, renters typically lose eviction cases
Arizona’s eviction process moves fast. Tenants can be locked out of their home within days after receiving an eviction judgment.
Renters facing eviction are summoned to appear at a hearing, but most don’t, either because they don’t understand the process or can’t get there at the set time.
Gomez, who rode her bike several miles to her hearing, said she was the only renter to show up in eviction court that day.
Only about 2% of all tenants facing evictions between March and August in Maricopa County had legal help. About 94% of all landlords filing evictions had lawyers, according to Groninger’s research.
New York City, Philadelphia, Washington D.C., San Francisco and Minneapolis provide free legal help to low-income tenants facing eviction.
Using CARES Act money, the city of Phoenix funded a $1 million legal eviction-prevention program with Community Legal Services.
Many housing advocates were concerned about Arizona’s eviction process before the pandemic.
Matthew Desmond, chief investigator for the Eviction Lab at Princeton, said there is no one source for evictions in Arizona and finding information on filings is hard for both tenants and the people trying to help them.
He and other housing advocates say the state’s eviction system leans toward landlords and their attorneys.
Kimberlyn Malinka was evicted from her Phoenix mobile home park in early June, about two weeks after her landlord filed the case against her. She said she didn’t receive court documents that the court told her had been sent and didn’t understand why her landlord wouldn’t communicate with her.
Malinka said she submitted documentation showing her salary had shrunk due to COVID to qualify for Arizona’s eviction moratorium, but it didn’t help. She also tried to work with the post office to track any letters that should have come to her from the court, but couldn’t.
She has been unable to get unemployment and has been living in her truck with her daughter and small dog since June.
“I don’t understand how this could happen. I was trying to pay rent,” Malinka said. “The whole thing was so fast and so confusing. I lost my home, and I still don’t understand why or how it could have happened.”
Courts look into wrongful acts
Research from the Arizona Bar Foundation shows about 1,200 of the 2,000 potentially wrongful evictions under the CARES Act in Maricopa County had court judgments.
That means the cases weren’t dropped or dismissed.
“The initial findings claim that some eviction cases did proceed in violation of the CARES Act. The courts have not undertaken our own review of those findings, but we have no reason to dismiss the research done by the Arizona Bar Foundation or the Arizona Republic,” said Scott Davis, spokesperson for the Maricopa County Justice Courts.
“The findings are concerning because they mean tenants who should have qualified for legal protection did not receive it.”
The Republic investigation found several eviction cases that didn’t include information on whether the property was covered by the federal law, even after the courts on July 7 began requiring attorneys to do so on behalf of their clients.
The Republic also found instances where attorneys for landlords signed documents stating that a property was not covered by the CARES Act when the property did in fact have a federally backed mortgage.
“With a myriad of reasons landlords may make an eviction filing, it has always been incumbent upon them to ensure they are complying with the laws,” Davis said.
Landlord advocates say the state courts needed to take more responsibility for providing information on the CARES Act.
“Every single eviction in Arizona requires due process — a court hearing where both sides make their case. These matters always include the courts examining whether an eviction has been properly filed and comports with existing law. The courts must act as the last line of defense here, as they do with evictions on a routine basis,” LeVinus said.
But Arizona judges must rely on the information they receive from rental owners and their attorneys, Davis said.
He said the Arizona Code of Judicial Conduct prevents judges from independently researching a case before them, so “judges hearing an eviction case are not allowed to ask or go online to check if a property is/was covered by the CARES Act. That must be addressed by the parties” involved in the case, he said.
Renters who think they have been illegally or wrongfully evicted can file a Motion to Set Aside, which removes the judgment from a tenant’s court record.
Davis said 134 tenants have filed this motion since late March.
Renters can also file an Unlawful Ouster appeal that would allow them to move back into their rental home. Only one tenant has won on this type of appeal in Maricopa County since March, and the landlord is appealing it.
Neither of the legal filings will get tenants any monetary damages. That would require a civil lawsuit.
Community Legal Services recently launched a campaign to help renters who were wrongfully evicted under the CARES Act.
Bridge said the nonprofit legal group can file the two Arizona court motions on behalf of renters who also can sue to recoup attorney and late fees, as well as other costs from an eviction that shouldn’t have happened.
Where are most evictions happening?
An affordable Phoenix apartment complex with federal financial backing tried to evict the most residents during the CARES Act, according to The Republic’s analysis.
The Flats at 2030, which was bought by a Houston group with the same name last year, had 31 eviction filings during the protection timeframe. Some of the filings were immediate for other reasons, but many were for not paying rent.
The complex has 263 apartments, so almost 12% of its renters faced eviction.
And it would be difficult for renters to see if they had protection under the CARES Act because the address listed on eviction filings differs from that on the Freddie Mac and property records.
Walker, whose firm represents The Flats at 2030, said his client mistakenly believed the property was not covered by the CARES Act for the first few months that the law was in place. He said there was “substantial confusion when this law took effect and few resources available for property owners to confirm their property was backed by a federally backed loan.”
“My client in no way intended to violate the CARES Act. My client has since vacated all judgments wrongly granted by the courts,” Walker said.
A Nevada group was the next top eviction pursuer on properties covered by the federal renter protection. It filed at least 60 actions to evict tenants in three Phoenix complexes.
Groups led by Brett Heers own the complexes. The eviction filing address is also different from the property record, making it tougher for renters to find.
Maricopa County property records show the apartments are backed by Fannie Mae and Freddie Mac financing.
Hull, Holliday and Holliday, the eviction attorney for the owner of the apartments, said in a statement that initially it “verified” the properties didn’t have federal funding.
“We recently discovered that we may have received inaccurate information and that some funding may be backed by a federal mortgage,” said Hull, Holliday on behalf of the company.
“We regret any actions that made it more difficult for some residents and families. We already have begun to look into this matter and it’s our intention to remedy this very unfortunate situation if we verify that a property was covered by the CARES Act.”
Eviction makes finding housing hard
Evictions can stay on a renter’s credit record for as long as seven years, which makes a wrongful filing even more painful for people.
Metro Phoenix’s rental market remained strong during the pandemic, with rents rising and many complexes remaining nearly full. Those conditions meant landlords didn’t have to sign leases with renters with bad credit.
Donna Dale lost her job at a restaurant in mid-March and began applying for renter aid and unemployment right away.
She tried to check if her Phoenix apartment was covered by the CARES Act and couldn’t find it on any list. To qualify for Arizona’s eviction moratorium, Dale submitted documents showing how she and her boyfriend had both lost jobs because of COVID-19. Dale also applied for renter aid.
Despite all her efforts and requests for rental and legal help, Dale and her family were evicted July 30. The eviction on her and her boyfriend’s credit, as well as the deposit needed to move into an apartment, made an inexpensive motel the family’s only option.
“We needed to have Wi-Fi for my son to go to school,” Dale said. “We are paying all our money to the motel and takeout because we don’t have a kitchen anymore. I don’t know what to do. It’s a nightmare.”
Because Dale has been evicted, she’s not eligible for the approximately $50 million in Arizona renter aid still available.
More renter and landlord help?
The worst is likely still to come for Arizona renters.
Although The Republic found more than 900 renters threatened with wrongful eviction under the CARES Act eviction protection, and hundreds more landlords who ignored the state and federal eviction moratoriums, the majority of landlords did halt evictions.
That is evident in the substantial decrease in eviction filings in Maricopa County beginning in March.
While the CARES Act protection and the state eviction moratorium have expired, the CDC moratorium, which halts evictions for tenants who can prove a COVID-19 impact, is still in place.
It is set to expire on Jan. 1. At that time, tenants who failed to make rent but were protected under the various laws and moratoriums will have to pay back all of the money they owe — immediately — or face eviction.
“Arizona could see 150,000 evictions by the end of 2021,” said Joan Serviss, executive director of the Arizona Housing Coalition. “We need to fix as much as we can of what’s broken with our eviction process as fast as we can. And we need a lot more renter aid.”
Housing advocates in Arizona and across the nation are asking Congress to pass a second iteration of the CARES Act with more money for rental assistance and possibly another eviction moratorium for federally backed properties. This time, however, they hope the moratorium comes with punishments for landlords who don’t comply.
LeVinus said her organization also is pushing for more rental assistance, either from the state or federal government. She warned that some property owners may slip into foreclosure because they’ve foregone rental payments for so many months.
“Nine months of no rent — and no future prospects for payment — will continue to push property owners toward foreclosure and bankruptcy,” she said.
Ducey still has about $400 million in CARES Act dollars that he could choose to allocate for rental assistance before the end of the year. So far, the state has dedicated about $17 million for landlord and tenant assistance.
A spokesperson for the Arizona governor did not directly answer a question about whether Ducey would allocate additional state funds for rental assistance but noted about $50 million of rental assistance still is available through city, county and nonprofit funds.
“We want to continue to make sure we are providing all resources necessary to protect public health and respond to the pandemic while ensuring a strong and viable social safety net,” spokesperson Patrick Ptak said.
A guide to eviction moratoriums
The state and federal government enacted multiple eviction moratoriums during the COVID-19 pandemic. They all had different rules, end dates and qualifications that made it difficult for renters and landlords to follow.
CARES Act moratorium
- Date enacted: March 26
- Expiration date: July 26, but landlords had to give 30 days’ notice before proceeding with eviction, essentially extending the protection to Aug. 26.
- Qualifications: The CARES Act eviction protection only covered renters who lived in properties with federally backed loans or received housing assistance from the government. Renters did not have to prove a COVID-19 impact to qualify. Landlords were not allowed to start the eviction process for tenants who couldn’t pay rent. Landlords could evict for other reasons, including police arrests or domestic violence situations.
Arizona eviction moratorium
- Date enacted: March 24
- Expiration date: Oct. 31
- Qualifications: Tenants had to show their landlord proof of a medical condition, quarantine order or substantial loss of income because of COVID-19. Constables were ordered not to enforce writs of restitution for renters who could demonstrate that proof. Beginning Aug. 22, renters also had to provide proof that they had applied for rental assistance.
Centers for Disease Control and Prevention moratorium
- Date enacted: Sept. 4
- Expiration date: Dec. 31
- Qualifications: Tenants must sign a declaration stating they lost income during the pandemic, can’t make full rent payments, will try to make partial rent payments, had applied for rental help and confirm that an eviction would leave them homeless or in cramped, unsafe living conditions. Renters can’t earn more than $99,000 a year to qualify. Couples, who file joint tax returns, can make twice that much and qualify.
Follow Catherine Reagor on Twitter @catherinereagor.
Follow Jessica Boehm on Twitter @jboehm_NEWS.
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How to Buy a House With Bad Credit: Guide for 2021
Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”
Having bad credit makes it harder to get a mortgage. A low credit score makes you look riskier to lenders; it suggests you might be financially unstable or unwilling to repay your debts.
A poor score, however, can also simply be the result of not knowing how the scoring process works or having gone through a brief rough patch that required you to take on debt.
If you think you’re ready for homeownership despite your bad credit, here’s what you need to know:
What counts as a bad credit score?
How do you know if your credit is bad? Once you know your score, see where it falls in the ranges below:
- Poor (less than 640): Lenders consider borrowers in this credit score range to be high risk. Having poor credit means you probably won’t qualify for a conventional mortgage, but you might be able to get a government-backed home loan.
- Fair (640 to 699): Lenders see borrowers in this credit score range as less risky. You might have less debt or a stronger payment history than borrowers with poor credit. You can qualify for a conventional mortgage with fair credit, but you might need to be stronger in other areas to make up for it, and you could be saddled with a higher mortgage rate.
- Good (700 to 749): With good credit, you’ll have a much easier time qualifying for a mortgage and getting a low interest rate. You’ll probably secure offers from more than one lender.
- Excellent (750 and above): An excellent credit score demonstrates your ability to manage debt. You consistently make your payments on time and don’t use too much of your available credit. Combined with a steady income, you’ll qualify for a mortgage from multiple lenders and have the luxury of choosing the least expensive option.
While potential borrowers with poor credit will find it challenging to get a home loan, it can be done. You just need to learn about the options available and how lenders will look at your application.
Credit score needed to get a mortgage
While your credit score is an important factor in your home loan eligibility, it’s not the only one. Here’s what else lenders care about:
- Down payment: Depending on the loan and the lender, you’ll need a minimum of 0% to 5% down.
- Debt-to-income ratio: Typically, you want a debt-to-income ratio of 36% or less when applying for a mortgage. In most instances, it can’t total more than 45% to 50% of your income.
- Cash reserves: You might need up to six months’ worth of mortgage payments in the bank with a low credit score and/or low down payment.
Minimum credit score by loan type
|Loan type||Min. credit score|
|Conventional||A home loan not insured by the federal government||620|
|FHA||Government-insured mortgage for borrowers with low credit scores||580 |
(with 3.5% down; 500 with 10% down)
|VA||Government-backed mortgage for military service members (including qualified reservists) who meet length and character of service requirements, and their unmarried surviving spouses||None|
(though individual lenders might impose limits)
|USDA||Government-insured home loan for low- and very-low-income applicants in eligible rural areas||None|
What having bad credit means for your mortgage rate
The lower your credit score, the higher your mortgage rate, all else being equal. If you have poor credit, expect to pay at least 1.5% more than someone with excellent credit.
The result will be a higher monthly mortgage payment and a higher long-term borrowing cost.
Assuming you’re able to secure a loan with bad credit, you won’t necessarily be stuck with the same rate forever. It might be possible to refinance to a better rate after improving your credit score.
Learn More: What Is a Mortgage Rate and How Do They Work?
How to get a mortgage with bad credit
You might already be able to get a mortgage despite your bad credit. For example, if your score is at least 580, you can put down just 3.5% and get an FHA loan.
However, working to improve your score and other aspects of your finances gives you more options and can save you money. Follow the steps below to increase your chances of getting a mortgage:
1. Keep an eye on your credit
It’s never been easier to get a free copy of your credit report. You can receive a free copy of your credit report from each of the three national credit reporting agencies at AnnualCreditReport.com.
Analyze your reports to make sure all the information is accurate. If you find a mistake that could be weighing down your score, dispute it with the credit bureau or with the company that reported the incorrect data.
Check your score weekly as well. This allows you to see how your financial activity is affecting your score. If it’s moving in the wrong direction, frequent checks will help you take quick corrective action.
2. Pay your bills on time
Payment history is the most important factor that determines your credit score, making up about 35% of it.
Make sure all your credit card, auto loan, and other debt payments post to your account by the due date to boost this part of your score.
3. Work on paying down debt
How much you owe makes up 30% of your credit score. Specifically, your credit score evaluates your balance relative to your available credit, often referred to as your credit utilization ratio. The lower that ratio, the better.
For example, your score will look better if your balance on a $5,000 credit line is $500 (10% utilization) instead of $2,500 (50% utilization).
If you rack up a high credit card balance one month, try to pay it down before your next statement is issued to keep your credit utilization down on your credit report.
4. Stay away from hard credit inquiries
Applying for a loan or credit card will usually ding your credit score if the creditor conducts a hard credit inquiry.
Credible lets prospective homebuyers shop for rates without impacting their credit scores. We’ll show you actual, prequalified rates from our partner lenders — our process is secure and simple, and it only takes a few minutes to complete.
Opening a new account — or closing an old one — will also decrease the average age of your accounts, a factor that accounts for 15% of your credit score.
There are situations, however, where the benefit of applying for new credit might outweigh the impact on your credit score.
One example of this is transferring high-interest debt to a lower-interest card, which could help you pay down debt faster.
5. Consider a rapid rescore
If you’re in a hurry to boost your credit score, a rapid rescore might help. Normally, your credit report and score get updated each billing cycle.
This means that after you pay down a credit card balance, for example, your new credit utilization rate might not be reflected in your score for up to a month.
Rapid rescoring can speed up the change to your credit score. Your lender might recommend it if you’re close to having a good enough score to qualify for a loan or better rate.
Keep Reading: Credit Score Needed to Get a Home Loan
6. Save up for a larger down payment
A larger down payment gives you more skin in the game, which makes you look less risky to lenders. It also means you won’t need to borrow as much.
If your income is too high to qualify for other low-credit-score conventional loan programs such as Fannie Mae’s HomeReady, you may still qualify for a conventional loan with a credit score of 620. You’ll need to put 25% down and your debt-to-income ratio must be 36% or less.
In this case, you won’t have to pay for private mortgage insurance. Your monthly mortgage payment will be smaller and your long-term interest expense will be lower. So, while you’ll pay more up front, you’ll pay less each month and over time.
7. Bring on a co-signer
A co-signer whose credit is better than yours could help you get approved for a mortgage or lower interest rate.
However, they will be taking on a huge responsibility: the obligation to pay your mortgage payments if you default. If they can’t, their credit score will be impacted.
In other words, a co-signer must put their savings and their credit reputation at risk to help you. That’s a big ask.
8. Consider a loan type with less stringent credit requirements
As we’ve noted, FHA loans have low credit score requirements. VA loans and USDA loans technically don’t have a minimum credit score requirement. However, these two loan types do have stricter eligibility requirements:
- VA loans: Only available to military service members who meet length and character of service requirements, and their unmarried surviving spouses
- USDA loans: Only available to low- and very-low-income applicants in eligible rural areas
9. Shop around to find the best offer
Even with poor credit, you should shop around to find a great mortgage rate. With Credible, you can check prequalified rates from multiple lenders for free, all on one platform.
You might be eligible for better rates than you think. And if you’re not, you now know the steps to get your score into better shape.
Get started today by checking out the table below, and see what rates you prequalify for from our partner lenders.
More accountability among council proposals for Akron police
Akron City Council wants more resources for the city’s only independent police auditor and more public access to police records, from use of force reports to citizen complaints and logs that track the race of everyone stopped by police.
Those are among the recommendations to be released publicly on Monday by council’s special committee on Reimagining Public Safety. Members are trying to answer a community call for a police force that better reflects the demographics and lived experiences those it serves and protects following the police killing of George Floyd in Minnesota last year.
There would be no age limit for police cadets, which the city recently upped from 35 to 40 years. A new “Pathway to Law Enforcement” would ask community and education leaders to steer young adults into careers with the city and the Akron Police Department.
More so than they do now, social workers would help police handle 911 calls involving mental health and addiction. Officers would spend more time walking or biking their beats in an effort to build trust and understanding with the neighborhoods they police.
And council would keep up with the latest in law enforcement technology as city police deploy drones or consider feeding camera footage into crime-solving software that can scan faces and license plates, which would prompt leaders to weigh public safety against personal privacy.
Council President Margo Sommerville will present the full list of recommendations and special committee findings during council’s regular public meeting Monday. The 22-page document is the culmination of 22 subcommittee meetings, each averaging about an hour.
But the report is not the end of the road to “Reimagining Public Safety,” Sommerville explained. The end goal is “more equitable” policing systems and stronger bonds between police and the policed.
As he searches for a new police chief, Mayor Dan Horrigan and his deputy mayor for Public Safety, Charles Brown, express agreement with council in recognizing the best elements of policing in Akron while considering improvements outlined in the listed recommendations.
Next, Sommerville said council will take its newfound knowledge of policing in Akron to the public and rank-and-file officers.
University of Akron President Gary L. Miller said he’s honored and excited that council has asked his faculty and students to develop a community engagement process of surveys and virtual town hall meetings. The information gathering process will solicit feedback from residents, officers and the police union, which as an organization was not given an opportunity to address council’s special committee.
“We know at the end of the day, when we really begin to finalize these recommendations, we’re going to need the Fraternal Order of Police (Lodge #7),” Sommerville said, pinning successful implementation of any reform or enhancement on the commitment of everyone impacted.
FOP President Clay Cozart will see the recommendations Monday. While continuing to disagree with the prominence given to police reform in the wake of Floyd’s death, Cozart said he’s watched every minute of the 22 meetings discussing the work of his members, and he appreciates Sommerville’s willingness to work with the union.
Informed by Akron police officers serving as “liaisons,” the special committee involving every member of council broke out into four working groups.
The Accountability and Transparency group, which met seven times, delved into issues of external oversight, officer discipline and public access to records, drawing on the expertise of police auditors, civilian review board members and national experts on the subject from coast to coast.
“In our society, we entrust police with the critical responsibility of protecting public safety, including by using force, if necessary,” the working group concluded. “External oversight recognizes that the seriousness of this delegated power requires particular scrutiny in order to ensure that the rights of the public are protected. On both a national and local level, historic injustices have created a trust deficit in how the public, particularly communities of color, interact with law enforcement, and government more broadly. Community trust is essential for effective policing.”
The group settled on two formal recommendations:
- Give Akron Police Auditor Phil Young, who answers to the mayor, a role codified in city law with “sufficient authority to access information, adequate staffing and funding and independence from the political process.”
- Ensure “that more police data and information is made publicly-available online and updated on a regular basis.”
The prevention working group discussed community policing and best practices around responding to mental health, addiction and other 911 calls that can end tragically for officers and citizens.
While identifying funding as the greatest barrier to more robust training, the group recommended that every officer undergo Crisis Intervention Team training. Currently, 76% of officers lack the 40-hour training.
To “help solidify stronger relationships between police officers and the communities they diligently patrol and serve,” the group also recommended more walking and biking for beat cops, something previous councils and mayors have tried to achieve.
The final recommendation recommended a shifting, or at least sharing, of the burden of solving society’s problems, which armed officers encounter daily.
There’s some appetite for the concept, even among officers. Police1, an online source of information and resources for law enforcement, surveyed 4,000 American officers for a special report called “What Cops Want in 2021.” Officers named serving their community as the top reason for becoming officers. They also ranked the types of 911 calls they’d rather see other agencies handle: housing for homeless people (93%), animal control (88%), nuisance abatement (64%), parking enforcement (61%) and dispute mediation (53%), responding to mental health crises (45%) and drug overdoses (29%).
“Throughout our working group meetings, there was a continuing discussion of whether it may be appropriate for social service agencies to respond to some 911 calls relating to mental health or other issues, the idea being that a social service-focused approach might be more effective in some cases, and could also free up APD to focus on issues that clearly need a police response,” the group concluded. “Our APD liaisons made clear that they believe there should be a police response to all calls, as situations are fluid and could endanger non-police responders.”
We also heard from the Police Chief in Alexandria, Kentucky, a small city south of Cincinnati, who described a program in which the department employs two social workers, who follow up on calls (and in some cases respond to calls where the scene is deemed safe).”
The group heard from a Kentucky police chief who sends social workers out on many calls, sometimes without an armed officer. They said Akron, as a community, should involve more social service providers on 911 calls, when “appropriate,” and expand programs where counselors and health professionals follow-up after the fact.
Personnel and culture
A third committee tackled hiring and staffing as commanders must take officers from their patrols to fill specialized units like Neighborhood Response Teams — the backbone of community policing in Akron — or Quick Response Teams that respond to overdoses.
The group recommended more ongoing training and identified potential problems with hiring like not testing for steroids in the screening process because it costs twice as much or disqualifying applicants because they have or lie about a history of bad credit or minor drug offenses.
To get a more diverse and broader pool of candidates, the group recommended abolishing the current 40-year maximum age for cadets, as other large cities have done.
They also recommended bringing back an Akron Urban League program that prepared candidates for the city’s civil service exam and the creation of a Pathway to Law Enforcement program.
The Pathway program would use neighborhood “figureheads” and public educators to recruit 18 year olds and hold their interest in becoming cops until they turn 21 and are allowed by state law to carry a firearm as a civil servant. For a couple years, they would get city jobs dealing with the public while earning criminal justice credentials through UA or Stark State.
The group added two suggestions: APD should update its mission statement “to include the need for a workforce that reflects community and the need for diversity” and bring in an outside group that would take confidential and “unvarnished opinions” of officers “that could provide constructive feedback for further institutional change.”
Technology and equipment
No formal recommendations, aside from getting a body-worn camera for every officer who interacts with the public, came out of the technology and equipment committee.
This last group learned about policing gadgets and systems like unmanned aerial vehicles (drones), “less-lethal” weapons (tear gas, pepper spray, tasers) surplus military rifles and body-worn cameras.
City information technologists informed them of existing software that allows detectives to stake out drug houses or solve crimes by accessing 277 cameras mounted around the city on buildings, lights and traffic poles. The footage is recorded 24/7 and kept for 21 days. And they discussed emergent technology like Briefcam, a program of computer algorithms that scans faces and reads license plates then automatically generates turn-by-turn video of stolen cars or suspects.
“Going forward, it will be important to gauge public opinion about how cameras in public spaces should be used,” the committee cautioned. “With Ring doorbells and other consumer camera systems becoming ubiquitous, it may be that the public is willing to accept greater surveillance by police within public spaces. Still, there should be transparency and clear rules on what is and is not permitted.”
Reach reporter Doug Livingston at firstname.lastname@example.org or 330-719-1756
Everything You Need To Know About Financing A Car In 2021
Thinking about financing a car? Depending on your job and where you live, owning a car may be the easiest way to get around. But reliable vehicles can be expensive, which is where car financing comes in.
We’ve reviewed several of the best auto loan providers and researched everything you need to know about the car financing process. This article summarizes the most important information into an easy-to-understand guide to help you find your best auto financing options.
We’ll explain why you would finance a car, how car financing typically works, tips for finding the lowest interest rates, and recommend top lenders to get you started. Read on to learn everything you need to know about financing a car in 2021, and click below to start comparing rates from multiple lenders at AutoCreditExpress.com.
In this article:
Is Financing A Car A Good Idea?
If you have the cash to purchase a new car without a loan, take this approach. Unless your annual percentage rate (APR) is zero percent (which is rare), it is cheaper in the long run to purchase a car with cash. Of course, this is not practical or possible for many people. If you need a vehicle soon and don’t have the money saved up, financing may be the only way to purchase a car.
You should finance a car if:
- You need a car and can’t afford to pay for the full value of the car in cash.
- You want a car and can’t afford to pay the full value, but you can budget for the monthly expense of your payments.
You should not finance a car if:
- You cannot afford monthly payments.
- You can afford to pay for the full value of the car in cash.
How Does Car Financing Work?
Car financing is a type of loan. A lender will pay for a certain amount when you purchase the car, which you will be required to pay back, with interest, at a predetermined monthly rate. There are several important variables to any auto loan:
- Purchase price
- Down payment
- Financing term length
The purchase price is the final agreed-upon cost of the car. Typically, the purchase price is set by a dealer but can be negotiated. On top of this price, you will also be required to pay taxes and other fees depending on the state and dealership. Taken together, these represent the total cost of the car.
Most auto loans do not pay for the entire cost of your vehicle. A typical down payment is 20 percent of the car’s total cost. The higher your down payment, the lower the amount you need to finance. The more you can pay as a down payment, the better, as you will be charged interest on the remaining amount.
APR represents the amount of interest you will pay. In the United States, there is no standard for how APR must be calculated for auto loans. This means that depending on how often the interest is compounded, the same APR for the same loan amount can result in a different total interest paid. For this reason, it is difficult to compare offers between lenders based solely on advertised APR.
Luckily, many car financing offers will clearly state your monthly payment amount. If you multiply this number by the number of installments you will pay, you can determine the total price you will pay. If you subtract this total amount from the amount that you financed, you can figure out exactly how much you will pay in interest.
For example, imagine the total cost of the car you purchase is $20,000. You place a 20-percent down payment of $4,000. This means you take out an auto loan of $16,000 to pay the remainder. If your contract requires you to pay $250 per month for 4 years, you will end up paying a total of $20,000 to your lender. This is $4,000 more than the amount you financed – $16,000 – and represents your total financing fee (how much extra you had to pay in order to get a loan).
Beware of dealerships that advertise zero percent APR. Typically, when a dealer advertises this rate, it may give you no interest on your loan but tack on other fees that increase the total amount you must pay back. For example, rather than saying you must pay $16,000 plus 4 percent APR, the dealership will add a “service fee” on top of the sticker price so that the amount you must pay back is much higher, even though your debt does not accumulate interest.
If your loan contract does not clearly indicate the total amount you will need to pay back, do not sign it. Only agree to an auto loan you fully understand. If you have trouble understanding your loan terms, you aren’t alone. Many loans are intentionally confusing so that the customer has a more difficult time realizing if they are being scammed. Consider enlisting the help of a friend or even a loan professional to review your contract’s terms and conditions before signing.
Your financing term is the length of time it will take for you to pay off your auto loan, assuming that you meet all monthly payment obligations. The longer your finance term, the more you will ultimately pay. This is because the longer your loan remains unpaid, the longer you will accumulate interest. Try to pay off your loan as quickly as possible.
How To Get Car Financing
Along with deciding on a vehicle and determining your budget, you’ll need to choose where to get your auto loan from. There are several places to request car financing from, and each has its benefits and downsides:
|Option For Financing A Car||How It Works|
|Dealership financing||Most dealerships offer vehicle financing, typically through third-party lending partners. This is the most convenient option, as you can compare multiple offers at the dealership and see if there are any special rates for certain vehicles. However, be aware that dealer loans may include high fees.|
|Bank financing||While it may be more of a hassle to visit a separate location from where you will buy your car, local banks and credit unions can help work within your budget, won’t pressure you to buy, and will likely offer some of the best terms. Credit unions in particular are likely to be less predatory.|
|Online lender financing||The easiest way to browse financing offers is online. Many online lenders partner with dealerships so that you can prequalify for a loan and shop for eligible vehicles on the same website. However, there are a lot of online auto lenders out there, so you’ll need to look for one that’s credible.|
Tips For Financing A Car
When you are financing a car, there are several best practices to keep in mind to get the lowest rates:
- Decide how much you can pay beforehand: Before even deciding which car to buy, determine how much you can afford to finance. Think about what monthly payment you can comfortably pay, and work backward from there. Cars depreciate in value, so you can quickly find yourself in debt if you take out a loan you can’t afford. After a few years, is not uncommon for the value of a car to be less than the amount you owe on your loan.
- Check your credit score: Interest rates are largely based on your credit score. You are entitled to a free copy of your own credit report at least once a year. You can request this at AnnualCreditReport.com and other websites. If you have a poor credit score, you might need a bad credit auto loan. One way to get a better APR if you have a low credit score is to have a cosigner with good credit.
- Reduce finance charges: Your goal should be to lower the total amount you will pay on top of the cost of your vehicle. This means looking for a low APR and a short payment term. Also, try to reduce the amount you must finance by making as large a down payment as possible. Twenty percent is standard for a down payment, but if you can afford to pay more upfront, you will pay less later.
- Compare offers: It’s a good idea to compare auto loan offers before you visit the dealership. When doing so, be sure to only request loan offers from lenders that offer pre-qualification that does not include a hard credit check. Hard credit checks lower your credit score, so do not agree to one unless you are ready to finalize a loan offer.
When financing a car, it can be difficult to know which lenders are credible. To help you sift through the hundreds of choices available, we’ve narrowed down the best loan providers in the industry.
Read on to learn more about some of our top picks, or read our full review of the best auto loans for a longer list of recommended lenders. If you’re ready to start comparing loan offers right away, you can do so via AutoCreditExpress.com.
PenFed Credit Union offers some of the lowest auto loan rates we have seen. However, it has stricter credit score requirements than other lenders and may not be an option for some. The company is well-regarded and has a positive reputation online.
|PenFed Credit Union Pros||PenFed Credit Union Cons|
|Offers exceptionally low interest rates||Moderate customer service reputation|
|A+ rating from the Better Business Bureau (BBB)||Does not offer loans to drivers with poor credit|
|Customer reviews describe a slow application process|
Auto Credit Express is a good choice for those with bad credit. Even if you are undergoing bankruptcy or repossession, Auto Credit Express will work with you. Plus, Auto Credit Express will help you build your credit score if it is low.
|Auto Credit Express Pros||Auto Credit Express Cons|
|Offers financing for customers with bad or no credit||Currently has a BBB alert regarding licensing issues|
|Pairs customers with loans based on credit profile||Poor customer reviews|
|Offers special rates for military members|
To learn more about this provider, read our full Auto Credit Express review.
myAutoloan.com is not a direct lender but a portal that connects lenders with customers. It’s a good way to browse loan offers and even find loans for private purchases.
|myAutoloan.com Pros||myAutoloan.com Cons|
|Offers loans for drivers with bad credit history||Not available in Alaska and Hawaii|
|Offers loans for private purchases||Not available to drivers with credit scores below 575|
|Good customer service reputation and an A+ rating from the BBB|
To learn more, read our full myAutoloan.com review.
Alternatives To Financing A Car
If you need a vehicle but do not want to take out an auto financing loan, you have a few alternatives.
- Lease: If you lease a car, you will pay a monthly fee that is likely to be lower than an auto loan payment. However, at the end of the lease term, you must return the vehicle and will be charged for excess damages. Some lease contracts have the option to buy the vehicle at the end of the lease.
- Private loan: You might ask for a loan from an individual rather than a loan provider. An individual that you know may loan you money at a much better rate than auto lenders (or with no interest at all).
- Cash payment: If you can avoid making a monthly car payment, it’s the best route to go. Cash payments are the cheapest way to purchase a vehicle in the long run, but most people do not have the funds to take advantage of this option.
Frequently Asked Questions
What happens if I miss a car payment?
If you think you are going to miss a car payment, contact your lender right away. You may be able to request an extension or have your contract terms changed. If you are able to negotiate any changes, be sure to get them in writing. If you miss too many car payments, your vehicle can be repossessed.
How long should you finance a car?
You should try to finance your car for as short a time as possible. A typical auto loan term is five to six years. Longer auto loans are not recommended because the value of your car may depreciate below the amount you have left in payments.
Can you finance any car?
Which cars you can finance depends on the lender. Many lenders will not provide auto loans unless you buy your car from a dealership, but this is not always the case. A lender will not provide a loan for an especially expensive car if the borrower has a poor credit score or low income. Likewise, if the value of the car is too low, a lender may not offer an auto loan and you’ll need to look into personal loan options.
Which bank is best for car financing?
There is not a single best bank for car financing, though we generally recommend Chase and Capital One – which are generally good banks for auto loans. Typically, a local bank or credit union is your best bet for auto financing.
What credit score do you need to get zero percent financing on a car?
Few lenders offer zero percent financing on auto loans. To be eligible for this interest rate, you would likely need a credit score above 720, as well as a stable income. Most of the time, if a dealership advertises zero percent APR, you will end up paying more in hidden fees.
Is a 72-month car loan bad?
While 72 months is long for a car loan, it’s not uncommon. If you can, try to sign up for an auto loan that does not exceed 60 months (5 years).
What car dealerships are offering zero percent financing?
Few car dealerships offer zero percent financing. Some dealerships advertise “0 percent APR,” but this is usually just a way to get people in the door and doesn’t always equal saving money on your purchase. Rather than charge an interest rate, the final contract may include additional fees that are not legally considered “finance charges.” This has been a common practice among U.S. automakers since the 1980s.
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