Public Records on Credit Reports

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

If you’ve ever looked at your credit report, you’ve probably noticed a section called “public records.” These are entries that are also on file with local, county, state or federal courts. Keep reading to learn more about which public records appear on credit reports.

What Are Public Records?

Public records are documents or pieces of information that are not considered confidential. Some examples include arrest records, marriage certificates and some court records. These are records that other people or entities could look up about you, as the information isn’t private or protected.

In the context of your credit report, historically, only three types of entries were public records: tax liens, civil judgments and bankruptcies. Now, only bankruptcies should show up as a public record on an individual’s credit report.

The Public Record Entries

First, it’s essential to understand the three types of public record entries that can impact your credit report.

A tax lien is a law-imposed lien upon property for the payment of taxes. Typically, a tax lien occurs when a person fails to pay taxes owed on property (personal and other), income taxes or other forms of taxes.

A civil judgment is a legal ruling against a defendant in a court of law. It refers to a judgment on a noncriminal legal matter and often requires the defendant to pay monetary damages.

Bankruptcy is a legal process in which people or other entities who cannot repay debts to creditors try to seek relief from some or all of their debts. In most jurisdictions, bankruptcy is usually imposed by a court and is often initiated by the debtor.

Understanding the Updated Public Record Policy

In 2017, the National Consumer Assistance Plan (NCAP) went into effect and changed how data is collected for civil judgments and tax liens before these entries appear as public records on credit reports. The act was initially launched in 2015 by the three major credit bureaus to modify credit reporting rules and set stricter standards. These new standards would ensure that the data found on credit reports are more accurate and up to date.

There are two primary ways this act affects how credit bureaus obtain and report tax lien and court judgment data on consumer credit reports. First, for either of these types of entries to appear on a credit report, the public record must contain a person’s:

  • Name
  • Address
  • Social Security number or date of birth

This standard applies to both new and existing records that are already on credit reports.

Secondly, public records reported on credit reports must be checked by the credit bureaus for updates every 90 days to ensure their accuracy. If the records are not checked, they should be removed from the credit report.

Bankruptcy records already hold these strict requirements, which is why the changes don’t impact this type of public record. However, many tax liens and civil judgments do not uphold these standards, in large part due to different standards of record-keeping at various courthouses.

This higher standard for public records is estimated to have positively impacted millions of US consumers. As this change applies to public records that were already on credit reports before the NCAP, it’s essential to review your personal credit reports to see if any public records are still being shown. Generally, tax liens and civil judgments shouldn’t be on your credit reports anymore.

By 2017, almost half of all tax liens and civil judgments were removed from consumer credit reports, and by April 2018, the three credit bureaus had removed all tax liens from credit reports. Currently, the only type of public record that should be present on your credit report is a bankruptcy.

Not a Permanent Change

It’s crucial to note that tax liens and civil judgments might not stay off credit reports forever. This is because reporting on them isn’t illegal and the credit bureaus only promised to remove them for a time. This could change sometime in the future, so you still want to avoid incurring these types of public records if possible.

How Do Public Records Affect Your Credit?

Typically, when a public record is added to your report, it’s considered a negative item. That’s because most public records on credit reports stem from a debt or financial delinquency. Therefore, it will usually lower your credit score.

Bankruptcy

A bankruptcy can remain on your credit report for seven to 10 years.

If you go through a Chapter 13 bankruptcy, you must repay a portion of the money you borrowed. This type of bankruptcy has a shorter impact on your credit report (seven years) because you paid some of the money back.

Under a Chapter 7 bankruptcy, the individual doesn’t pay any of their debts back. This type of bankruptcy will remain on your credit report for up to 10 years.

Bankruptcy will have a devastating impact on your credit, lowering it by anywhere from 130 to 200 points.

It is difficult to rebuild credit after a bankruptcy filing, but not impossible. For example, while you may not be approved for a regular credit card, you can start with a secured credit card. You will still have financial options available to you.

Tax Liens and Judgments

The Consumer Data Industry Association revealed that the changes showed “only modest credit scoring impacts” on consumer reports. Still, millions of Americans had public records wiped from their reports, which was beneficial overall.

While these two types of entries may not be on reports anymore, they can still affect your finances and life in general. For example, a judgment can impact your ability to qualify for a loan or credit. Lenders may check to see if you have outstanding judgments and reject your application. Similarly, the presence of a tax lien may cause a lender to reconsider your application.

What Can You Do About Public Records on Your Credit Report?

If bankruptcy is on your credit report, and all the information is accurate, you can’t do very much to remove it from the account. However, if the bankruptcy data is incorrect, you can file a dispute.

For tax liens and civil judgments, file a dispute to remove these public records from your credit report. You can contact each of the three major credit bureaus by phone or email and ask them to remove the public records from your file.

For more detailed information on how to remove a tax lien, check out this blog post. And for step-by-step instructions on removing a civil judgment from your credit report, refer to this resource.

It’s essential you check your credit report regularly so you can note when new data appears on your report. If a negative item appears and it’s inaccurate, you should dispute it quickly, before it can significantly impact your credit score.

Your Credit Can Recover From Derogatory Marks

Having derogatory marks on your credit report is not a life sentence. With sound financial behaviors, your credit score can recover. You’ll need to make payments on time, get rid of debts and maintain a good credit utilization ratio. If you don’t know where to start, consider credit repair services.

Lexington Law knows how to spot incorrect data on your credit reports and give you helpful credit tips. Credit repair takes time, so it’s essential you start today.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

5 Reasons You Might Really Regret Moving to the Burbs

Like many parents with young children, my husband and I left New York City for the suburbs about 10 years ago dreaming of the three S’s: space (more of it), schools (better ones), and safety (fear of lobby muggings no longer a factor).

It seemed like the right thing to do, and the thing everyone was doing. One co-worker, an uncannily successful and savvy woman, described the day she moved to the suburbs as “only the best day of my life.”

“Everything is easier and better,” said a friend who raised two remarkable kids, now young adults, in another suburban town. “You move there for your kids, and then you’ll stay for the community.”

But once my kids were in college, I made a beeline back to the city—and stayed put even when the coronavirus pandemic swept through and prompted many die-hard New Yorkers to head for the hills. Why?

To be honest, the verdict is out about whether my years in the suburbs were such a great decision.

Granted, a big part of my eagerness to return to urban life was the fact that I was born and raised in the city and lacked some basic suburban life skills. I never 100% acclimated. But even taking that off the table, I felt the lifestyle wasn’t a great fit.

So in case you’re pining for the suburbs but wonder what kind of culture shock may be in store, allow me to share the ways that the burbs were a bummer for me—and might be for you, too.

1. Chasing contractors and tradespeople becomes a big part of your life

Once you have a house and yard, all kinds of responsibilities arise. Arranging your books and throw pillows inside is the fun part. But there’s a ton of nonfun stuff to wrangle. The trees need checking to ensure a branch isn’t about to fall and crush your car pancake-flat, like in a cartoon. (It can happen and did happen to a friend.) Fences rot and begin tilting. There are gutters to be cleaned, chimneys with caked-on creosote to be scrubbed out, and all matter of masonry, drainage, and roof issues to be addressed.

And note, each often has a four- or five-figure price tag for the repair. Oh, for the days of calling the building super and getting quick, free service!

2. There’s a lack of options for going out—and with that, boredom

If you love city life and deciding between the tapas place at the corner, the pho spot midblock, or the Ethiopian eatery across the street, you are going to be in big trouble. Chances are, your dining choice will be limited and at times way pricey.

In our town, there were pizza places, Chinese takeout, a tavern or two, a taqueria, and even a white-tablecloth Italian with an unchanging menu and $25 bowls of pasta. The latter is where other couples always suggested we meet for dinner, and it got old fast.

Similarly, there was the one nearby multiplex showing blockbusters and giving off “Groundhog Day” vibes as we lined up for yet another Marvel flick.

Shopping selections were minimal, too. If you wanted to keep your drive time to under 20 minutes each way, there was exactly one megamart within striking distance. I longed for my city-life days with three supermarkets, each three blocks from my apartment, not to mention that sense of discovery, strolling in new neighborhoods to find matcha cafes and quirky bookshops.

That ability to spend an afternoon wandering is something else that’s lost with a move to the suburbs. Even the most robust downtown outside of a city gets small soon.

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Watch: 4 Times You Should Pony Up and Offer Over Asking to Land Your Dream Home

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3. Diversity isn’t a given

Part of the joy of cities is the mix of people: old people, young people, white people, people of color, singles, marrieds, people whose ancestors came over on the Mayflower, people who arrived just last week. Although I’ve heard certain suburbs can be veritable melting pots of diversity, in my experience, suburbs tend to be quite homogenous.

At the very least, you’ll notice that you don’t have many young, single folks roaming the streets. It’s often only families, plus a smattering of empty nesters who never made it to Florida. The towns are all about kids: tae kwon do studios, athletic gear stores, ice cream shops, and paint-your-own pottery places. Bars, live music venues, vintage clothes shops? Not so much.

Even though I was a parent, I still wanted those things. Even if I wasn’t patronizing them, I somehow wanted to know they were there waiting, giving me the illusion that I could have a happening life.

4. You need a dog

In the city, you can get by with the quirky space-saving pets: the gecko, the gerbil. But in the suburbs, not so fast! We were the only family on our street without a dog because someone who shall remain nameless (cough, cough) is allergic. Every other house had a golden retriever or labradoodle.

Walking the dog, talking about the dog, arranging for the van to come pick up the dog, shampoo the dog, and return the dog—this is all a big deal and a significant bonding opportunity with neighbors.

If you are not part of the canine set, you are going to be an outsider. And your children will resent you deeply for depriving them of what every other kid has.

5. If the school is a bad fit, you’re screwed

Pretty much everyone is in the burbs for the schools. Our neighborhood was big on inclusive programs (dual language, programs for children with developmental delays) and arts enrichment (fantastic visual and performing arts). Other districts are all about their legendary sports teams or science fairs.

But here’s the problem: If your child doesn’t click in the local public school, it’s not like the city where you have choices. Where we lived, the only option was to transfer to a religious school, which doesn’t suit everyone. So many parents wound up keeping their children in their designated public school, knowing it wasn’t a great situation, but feeling unable to find an alternative close enough to where they’d bought a house.

Source: realtor.com

Documents You Need to Apply for a Mortgage

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Any application for credit should be taken as a serious matter. Simply applying and allowing the lender to pull your credit report has an impact on your credit score, so it’s not a good idea to apply for things on a whim. But mortgage applications tend to be more serious than most other apps because they’re for such large amounts of money and longer terms.

When you’re borrowing hundreds of thousands of dollars for 15 to 30 years, the lender wants to ensure you’re a sound investment. They actually have an obligation to their shareholders, employees and other customers to try to take on mortgage accounts that are likely to result in a return instead of a loss.

For these reasons, you usually have to show up to the mortgage application process with a lot of documentation. Here’s a rundown of the documents needed for a mortgage application.

Mortgage Application

The first document is the mortgage application itself. Whether you complete it online or as a physical piece of paper at a broker’s office or bank, this is the document that launches the process.

Typically, mortgage applications require the same type of information. That includes:

  • What type of loan you want. You may need to check or click boxes to indicate whether you want a conventional loan, VA loan, FHA loan or other type of loan.
  • Why you need the loan. Is it a refinance or new purchase, and are you purchasing a single-unit home you plan to live in, a rental property or a business property?
  • The property itself. You must fill in the address and some other basic information about the property you want to buy.
  • Demographic information about the person or people borrowing the money, including name, address, phone number and Social Security number.
  • Employment history for all borrowers.
  • Income and assets for all borrowers.
  • Debts and other liabilities for all borrowers.

You’ll also need to sign various agreements and disclosures. That includes whether you have a bankruptcy or other issue in your financial history and an agreement that the creditor can pull your reports.

Assets

You can’t just list items like assets on your mortgage application, though. You also have to prove your statements with documents. Documents that prove your assets can include bank statements showing current cash balances, investment statements showing current values and life insurance policies. If you’re including gift funds in your assets, you’ll need letters or other documents demonstrating where the money came from.

Debts and Expenses

Most of the time, the mortgage company can see evidence of your debts and expenses on your credit report. If the underwriter has any questions or concerns during the approval process, they may reach out for additional information such as copies of credit card statements. This is especially true if you’ve recently paid down debt and that isn’t yet reflected on your credit report.

When it comes to debts, one of the major concerns is your debt-to-income ratio. If it’s too high, the lender is less likely to approve you. Calculate this ratio by adding up all your monthly debt payments along with the estimated mortgage payment and dividing it by your total monthly income.

For example, if you have a car payment of $400, credit card bills with monthly minimums of $200 and student loans of $500 a month, that’s $1,100 in debt. Add a $1,500 mortgage and you would have $2,600 in debt. If you make $7,000 a month, your debt-to-income ratio is 37 percent.

The Consumer Financial Protection Bureau notes that the preferred debt-to-income ratio for mortgage approval is 43 percent or less. This is because you can’t use all your income up on debt—you still need money for utilities, food, fuel, savings and other critical expenditures.

Income and Employment Verification

You do have to prove the income amounts you put on a mortgage application. Common ways of doing so are summarized below.

Tax Returns

Tax returns from the past few years can demonstrate that you make a certain amount per year and have done so consistently. If you’re planning to apply for a mortgage soon and don’t have copies of your tax returns, consider proactively ordering a free transcript from the IRS.

W-2s and Pay Stubs

Copies of W-2 forms or a handful of pay stubs from your employer are also good ways to demonstrate your income. Start saving your paycheck stubs if you think you’ll apply for a mortgage soon.

Additional Information (Self-Employed)

If you’re self-employed or have forms of income that aren’t from an employer, you’ll need documentation. Some options can include statements from checking accounts or payment systems that show money you received. You could also provide a profit and loss statement if you’re self-employed.

Credit History

While the lender can get most of what they need from your credit report, you may need to be available to answer questions. Specifically, be ready to explain any negative items on the report. It’s a good idea to get a copy of your credit report for yourself before you apply for a mortgage so you know what might come up.

Other Documents

  • Photo IDs, such as a driver’s license or passport
  • Your rental history if you don’t already own a home, especially if you want to use it as demonstration of your payment history
  • Divorce records to prove that certain debts are no longer yours or that you don’t have access to funds from a previous spouse
  • Foreclosure or bankruptcy records, if applicable
  • Documentation of residency status if you’re applying as a noncitizen

Who Do You Give These Documents to?

You give the documents as requested to a mortgage broker you’re working with or to an underwriter with the mortgage company. You might be asked more than once for some documents, especially if you go through a preapproval process.

During preapproval, the mortgage company evaluates you as a borrower in general and lets you know what amount, terms and interest you can qualify for. Once you move to buy a home, the mortgage must go through a final approval process, and someone may need to look at your documents again or request additional documents.

Start Preparing for a Mortgage Early

A lender might ask for documents and require that you respond in a certain amount of time or it will deny the application automatically. So, you don’t want to get caught searching for documents during the process. Prepare for a mortgage app early by gathering everything that you anticipate that you might need. Another way to boost your chances for mortgage approval is to check your credit and resolve any negative items you can.

You might also be able to take actions to positively impact your credit before you apply for a mortgage—especially if your report has mistakes on it. If you want to repair your credit before making a big financial move, contact Lexington Law to find out how we can help.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

How Much Is Capital Gains Tax on Real Estate? Plus: How To Avoid It

Capital gains tax is the income tax you pay on gains from selling capital assets—including real estate. So if you have sold or are selling a house, what does this mean for you?

If you sell your home for more than what you paid for it, that’s good news. The downside, however, is that you probably have a capital gain. And you may have to pay taxes on your capital gain in the form of capital gains tax.

Just as you pay income tax and sales tax, gains from your home sale are subject to taxation.

Complicating matters is the Tax Cuts and Jobs Act, which took effect in 2018 and changed the rules somewhat. Here’s what you need to know about all things capital gains.

What is capital gains tax—and who pays it?

In a nutshell, capital gains tax is a tax levied on possessions and property—including your home—that you sell for a profit.

If you sell it in one year or less, you have a short-term capital gain.

If you sell the home after you hold it for longer than one year, you have a long-term capital gain. Unlike short-term gains, long-term gains are subject to preferential capital gains tax rates.

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Watch: How Much a Home Inspection Costs—and Why You Need One

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What about the primary residence tax exemption?

Unlike other investments, home sale profits benefit from capital gains exemptions that you might qualify for under some conditions, says Kyle White, an agent with Re/Max Advantage Plus in Minneapolis–St. Paul.

The IRS gives each person, no matter how much that person earns, a $250,000 tax-free exemption on capital gains from a primary residence. You can exclude this capital gain from your income permanently.

“So if you and your spouse buy your home for $100,000, and years later sell for up to $600,000, you won’t owe any capital gains tax,” says New York attorney Anthony S. Park. However, you do have to meet specific requirements to claim this capital gains exemption:

  • The home must be your primary residence.
  • You must have owned it for at least two years.
  • You must have lived in it for at least two of the past five years.
  • You cannot have taken this exclusion in the past two years.

If you don’t meet all of these requirements, you may be able to take a partial exclusion for capital gains tax if you meet certain exceptions (e.g., if your job forces you to move before you live in the home two years). For more information, consult a tax adviser or IRS Publication 523.

What’s my capital gains tax rate?

For capital gains over that $250,000-per-person exemption, just how much tax will Uncle Sam take out of your long-term real estate sale? Under the new tax law, long-term capital gains tax rates are based on your income (pre-2018 it was based on tax brackets), explains Park.

Let’s break it down.

For single folks, you can benefit from the 0% capital gains rate if you have an income below $40,000 in 2020. Most single people will fall into the 15% capital gains rate, which applies to incomes between $40,001 and $441,500. Single filers with incomes more than $441,500, will get hit with a 20% long-term capital gains rate.

The brackets are a little bigger for married couples filing jointly, but most will get hit with the marriage tax penalty here. Married couples with incomes of $80,000 or less remain in the 0% bracket, which is great news. However, married couples who earn between $80,001 and $496,600 will have a capital gains rate of 15%. Those with incomes above $496,600 will find themselves getting hit with a 20% long-term capital gains rate.

  • Your tax rate is 0% on long-term capital gains if you’re a single filer earning less than $40,000, married filing jointly earning less than $80,000, or head of household earning less than $53,600.
  • Your tax rate is 15% on long-term capital gains if you’re a single filer earning between $40,000 and $441,500, married filing jointly earning between $80,001 and $486,600, or head of household earning between $53,601 and $469,050.
  • Your tax rate is 20% on long-term capital gains if you’re a single filer, married filing jointly, or head of household earning more than $496,600. For those earning above $496,600, the rate tops out at 20%, says Park.

Don’t forget, your state may have its own tax on income from capital gains. And very high-income taxpayers may pay a higher effective tax rate because of an additional 3.8% net investment income tax.

If you held the property for one year or less, it’s a short-term gain. You pay ordinary income tax rates on your short-term capital gains. That’s the same income tax rates you would pay on other ordinary income such as wages.

Do home improvements reduce tax on capital gains?

You can also reduce the amount of capital gains subject to capital gains tax by the cost of home improvements you’ve made. You can add the amount of money you spent on any home improvements—such as replacing the roof, building a deck, replacing the flooring, or finishing a basement—to the initial price of your home to give you the adjusted cost basis. The higher your adjusted cost basis, the lower your capital gain when you sell the home.

For example: if you purchased your home for $200,000 in 1990 and sold it for $550,000, but over the past three decades have spent $100,000 on home improvements. That $100,000 would be subtracted from the sales price of your home this year. Instead of owing capital gains taxes on the $350,000 profit from the sale, you would owe taxes on $250,000. In that case, you’d meet the requirements for a capital gains tax exclusion and owe nothing.

Take-home lesson: Make sure to save receipts of any renovations, since they can help reduce your taxable income when you sell your home. However, keep in mind that these must be home improvements. You can’t take a deduction from income for ordinary repairs and maintenance on your house.

How the tax on capital gains works for inherited homes

What if you’re selling a home you’ve inherited from family members who’ve died? The IRS also gives a “free step-up in basis” when you inherit a family house. But what does that mean?

Let’s say Mom and Dad bought the family home years ago for $100,000, and it’s worth $1 million when it’s left to you. When you sell, your purchase price (or “basis”) is not the $100,000 your folks paid, but instead the $1 million it’s worth on the last parent’s date of death.

You pay capital gains tax only on the difference between what you sell the house for, and the amount it was worth when your last parent died.

What if I have a loss from selling real estate?

If you sell your personal residence for less money than you paid for it, you can’t take a deduction for the capital loss. It’s considered to be a personal loss, and a capital loss from the sale of your residence does not reduce your income subject to tax.

If you sell other real estate at a loss, however, you can take a tax loss on your income tax return. The amount of loss you can use to offset other taxable income in one year may be limited.

How to avoid capital gains tax as a real estate investor

If the home you’re selling is not your primary residence but rather an investment property you’ve flipped or rented out, avoiding capital gains tax is a bit more complicated. But it’s still possible. The best way to avoid a capital gains tax if you’re an investor is by swapping “like-kind” properties with a 1031 exchange. This allows you to sell your property and buy another one without recognizing any potential gain in the tax year of sale.

“In essence, you’re swapping one investment asset for another,” says Re/Max Advantage Plus’ White. He cautions, however, that there are very strict rules regarding timelines and guidelines with this transaction, so be sure to check them with an accountant.

If you’re opting out of the rental property investment business and putting your money in another venture that does not qualify for the 1031 exchange, then you’ll owe the capital gains tax on the profit.

For more smart financial news and advice, head over to MarketWatch.

Source: realtor.com

How Ruth Bader Ginsburg Helped Women Achieve Their Homeownership Dreams 

The passing of Supreme Court Justice Ruth Bader Ginsburg has left the nation remembering her incredible legacy of service. Justice Ginsburg tirelessly fought for equality, especially for women. To honor her legacy, we wanted to examine how Ginsburg helped transform the housing market into a more equitable sphere for women, allowing them to engage in the market independent of male control. 

woman moving into homewoman moving into home

A Brief History*

Until the mid-1800s, women were generally restricted from owning property or engaging in transactions like the purchase or selling of real estate. Under “common law,” a woman’s property became her husband’s upon marriage, and only the husband had legal authority over most, if not all, decisions regarding the property. In 1848, New York passed the Married Women’s Property Act, which, among other allowances, gave women the legal autonomy to maintain control over whatever property they brought into the marriage, and inspired many states to adopt similar laws.

In 1920, women were granted the right to vote in the U.S., but they still weren’t economically independent, especially if they were married. Even into the 1970s, women could not apply for credit cards, maintain employment upon pregnancy, and often could not manage their own bank accounts without a male co-signer. 

Read: The History of Women’s Homeownership 

From Progress to Freedom, Ginsburg Style

Motivated by her own experiences with sexism, Ginsburg worked for the American Civil Liberties Union (ACLU) in the 1970s. During this time, she founded the Women’s Rights Project, one of the major arms working towards national women’s equality under law. It was through this initiative she fought for the Equal Credit Opportunity Act, which passed in 1974. This law finally gave women the legal authority to apply for bank accounts, credit cards, and mortgages without a male cosigner. 

But, that was only the beginning of Ginsburg’s work. Here are some of the major cases she argued before over the course of her storied career to further women’s legal independence: 

  • 1971 – Equal Protection Clause of the US Constitution; Section 214 of IRS Code: Men and women are equally entitled to the same caregiving and Social Security benefits. 
  • 1978 – The Pregnancy Discrimination Act: Employers cannot fire or consider a woman for a job because they are pregnant or have plans to become pregnant. 
  • 1979 – Jury Duty for Women: Overturned the thought that women’s civic duty to serving on a jury should not be lessened and deemed only optional. 
  • 1996 – United States vs. Virginia: During her time on the Supreme Court, Ginsburg led the ruling decision that state-funded schools must admit women. 

The Modern-Day Woman

Thanks in part to Ginsburg’s efforts, more single women than ever before are obtaining homeownership without a partner. In fact, a 2019 survey indicated that single females accounted for 1 out of every 5 home sales. Single women have also outpaced their male counterparts in real estate purchases for almost three decades.

woman in her kitchenwoman in her kitchen

Read: The Growing Number of Female Homeowners  

Thanks to the work of Ruth Bader Ginsburg and others who tirelessly fought for female equality, the opportunity to obtain a home is more accessible than any other time in history. Feeling inspired to start your own homebuying journey? The Homes.com How-To can help you navigate the process, start to finish. 

Women still face stigma when buying a home alone, especially at a young age, according to recent homebuyer Alyssa Hanzl which Homes.com interviewed. Nevertheless, they persist and turn their dream into reality. Hanzl recently recounted her homebuying journey as a single, 23-year-old, recent college graduate. Add in the global COVID-19 pandemic and you have a recipe for disaster, yet, she still made it work.

Read: Why I Bought a Home at 23 

The next time you see a post on social media thanking Justice Ginsburg for helping women, now you truly know the history behind her support as it pertains to homeownership.

*Sourced from the Guardian, Encyclopedia of Women’s History, UPenn Law, Britannica, Bureau of Labor Statistics, History.com, Yale School of Management, and Bank of America.


Living the millennial life with my husband and Wheaten Terrier in beautiful Virginia. I document my life on Instagram and am ready to talk all things home-related at a moment’s notice.

Source: homes.com

10 Cities Where Black Americans Fare Best Economically

Where Black Americans Fare Best Economically – 2021 Study – SmartAsset

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Nationwide, when it comes to wealth and personal finance success, Black Americans generally have less. Census data from 2019 shows that the median Black household income is 33% lower than the overall median household income and the Black homeownership rate is 22 percentage points lower than the general homeownership rate. Data on wealth accumulation depicts even starker disparities: Black families’ net worth is 87% lower than that of white families and 33% lower than that of Hispanic families, according to the Federal Reserve’s 2019 Survey of Consumer Finances.

Though the national picture is less than encouraging, economic outcomes for Black Americans are better in some places than others. In this study, we determined the cities where Black Americans fared best economically leading up to 2020. We compared 129 cities across six metrics: median Black household income, Black homeownership rate, Black labor force participation rate, poverty rate for Black residents, percentage of Black adults with a bachelor’s degree and percentage of business owners who are Black. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

Key Findings

  • Six of the top 10 cities are located in Texas, Florida and North Carolina. These cities are Grand Prairie and Garland, Texas; Pembroke Pines and Miramar, Florida; and Charlotte and Durham, North Carolina. In both of the Texas and Florida cities, the median Black household income is higher than $61,000 and the Black homeownership rate is 46% or higher – compared to study-wide averages of about $43,000 and 35%, respectively. Meanwhile, Charlotte and Durham rank particularly well for our education and metro area business ownership metrics. In both North Carolina locales, more than 30% of Black adults have their bachelor’s degree and at least 3% of businesses are Black-owned – compared to study-wide averages of about 23% and 2%, respectively.
  • Preliminary 2020 estimates show that Black Americans have been disproportionately affected by not only the health impacts of COVID-19, but also its corresponding economic effects. The regional economic effects of COVID-19 on Black Americans are difficult to determine due to insufficient localized data, but the available national data paints a grim picture: Bureau of Labor Statistics (BLS) data shows that as of December 2020, the Black unemployment rate was 3.9
    and 3.2 percentage points higher than the white and overall unemployment rates, respectively. Additionally, the Black labor force participation rate was about 2.0 percentage points lower than both white and overall participation rates.

1. Virginia Beach (tie)

Virginia Beach, Virginia ranks in the top 10 cities for four of the six metrics we considered. It has the seventh-highest median Black household income, at roughly $65,600, and the sixth-highest 2019 Black labor force participation rate, at 78.7%. Additionally, Census Bureau data shows that the 2019 poverty rate for Black residents in Virginia Beach is 10%, fourth-lowest in our study. In the Virginia Beach-Norfolk-Newport News metro area, more than 5% of businesses are Black-owned, the seventh-highest percentage for this metric overall.

1. Grand Prairie, TX (tie)

Grand Prairie, Texas ties with Virginia Beach, Virginia as the city where Black Americans fare best economically. It has the fourth-highest Black labor force participation rate (at 79.9%) and the lowest Black poverty rate (at less than 5%) of all 129 cities in our study. Additionally, more than a third of Black residents in Grand Prairie have their bachelor’s degree and the median Black household income is more than $63,000. The city ranks sixth and 10th out of 129 for those two metrics, respectively.

3. Aurora, IL (tie)

Aurora, Illinois ranks in the top third of all 129 cities for five of the six metrics we considered, falling behind only for its metro area’s relatively low concentration of Black-owned businesses. It has the fourth-highest Black homeownership rate (about 52%), sixth-highest median Black household income (about $65,900) and 10th-lowest Black poverty rate (11.9%). Aurora’s Black labor force participation rate is 73.5%, ranking 15th overall for this metric. Moreover, more than 29% of Black residents in the city have their bachelor’s degree, ranking 26th overall.

3. Pembroke Pines, FL (tie)

Just north of Miami, Florida’s Pembroke Pines ties for the No. 3 spot. Across all 129 cities, it has the second-highest Black homeownership rate – 60.20% – and the sixth-lowest 2019 Black poverty rate – 10.6%. Additionally, incomes for Black households are relatively high. In 2019, the median Black household income was about $61,500, the 11th-highest in our study.

5. Miramar, FL

The Black homeownership rate in Miramar, Florida is the highest in our study, at 68.07%. This is about 26 percentage points higher than the 2019 national Black homeownership rate, which is approximately 42%. Miramar additionally ranks in the top 15 cities for three other metrics: its high median Black household income (about $66,300), its high Black labor force participation rate (74.1%) and its relatively low Black poverty rate (7.9%).

6. Charlotte, NC

Though the median Black household income in Charlotte, North Carolina – at a little more than $46,300 – is relatively low, Charlotte ranks in the top third of cities for the other five metrics we considered. It has the 28th-highest Black homeownership rate (41.45%), the 18th-highest Black labor force participation rate (73.0%) and the 14th-lowest poverty rate for Black residents (13.6%). Additionally, more than 30% of Black adults have their bachelor’s degree and almost 4% of businesses in the larger Charlotte metro area are Black-owned – both of which rank within the top 25 out of all 129 cities in the study.

7. Garland, TX

The Black homeownership rate in Garland, Texas is the fifth-highest in our study, at 50.98%. This city has the 11th-highest Black labor force participation rate, at 75.8%. It also ranks in the top 15 for its median Black household income ($60,030) and the percentage of Black adults with a bachelor’s degree (32.5%). Garland falls the most behind when it comes to the poverty rate for Black residents, which was 23.7% in 2019. That’s 1.2% higher than the national average for Black Americans and the worst of any city in our top 10.

8. Durham, NC

Only about two hours northeast of Charlotte, Durham, North Carolina takes the eighth spot on our list. The city ranks particularly well for its percentage of Black adults with a bachelor’s degree (35.2%) and percentage of Black-owned businesses in the larger Durham-Chapel Hill metro area (4.7%). Additionally, the Black labor force participation rate is the 30th-highest across all 129 cities in the study, at 69.4%. The poverty rate for Black residents is 35th-lowest overall, at 18.9%.

9. Enterprise, NV

Enterprise, Nevada had the fifth-highest 2019 Black labor force participation rate (79.0%), the 16th-highest 2019 median Black household income (about $58,500) and 23rd-best 2019 Black homeownership rate (roughly 43%) of all 129 cities in our study. Enterprise falls behind, however, when it comes to the number of Black-owned businesses in the larger Las Vegas metro area, at less than 2%. The city ranks 67th out of 129 for this metric.

10. Elk Grove, CA

The median household income for Black residents in Elk Grove, California is a little more than $76,300, the second-highest in our study (ranking behind only Rancho Cucamonga, California, where the median household income is almost $92,000). Elk Grove also ranks in the top 10 cities for its relatively high Black homeownership rate (52.51%) and the relatively high percentage of Black adults with a bachelor’s degree (35.1%). But like in Enterprise, Nevada, few businesses in the Elk Grove area are Black-owned. Annual Business Survey data from 2018 shows that less than 2% of employer firms in the greater Sacramento-Roseville-Arden-Arcade metro area are Black-owned.

Data and Methodology

To find the cities where Black Americans fare best economically, SmartAsset looked at the 200 largest cities in the U.S. Only 129 of those cities had complete data available, and we compared them across six metrics:

  • Median Black household income. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
  • Black homeownership rate. This is the number of Black owner-occupied housing units divided by the number of Black occupied housing units. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
  • Black labor force participation rate. This is for the Black population 16 years and older. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
  • Poverty rate for Black residents. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
  • Percentage of Black adults with a bachelor’s degree. This is for the Black population 25 years and older. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
  • Percentage of business owners who are Black. This is the number of Black-owned businesses with paid employees divided by the number of businesses with paid employees. Data comes from the Census Bureau’s 2018 Annual Business Survey and is at the metro area level.

To determine our final list, we ranked each city in every metric, giving a full weighting to all metrics. We then found each city’s average ranking and used the average to determine a final score. The city with the highest average ranking received a score of 100. The city with the lowest average ranking received a score of 0.

Editors’ Note: SmartAsset published this study in celebration and recognition of Black History Month. Protests for racial justice and the outsized impact of COVID-19 on people of color have highlighted the social and economic injustice that many Americans continue to face. We are aiming to raise awareness surrounding economic inequities and provide personal finance resources and information to all individuals.

Financial Tips for Black Americans

  • See if homeownership makes sense. The Black homeownership rate is 22 percentage points lower than the general homeownership rate. Deciding whether or not to buy is often difficult. SmartAsset’s rent or buy calculator can help you compare the costs to see which one makes sense for your financial situation. Additionally, if you want to figure out how much you can afford to buy a house, our home-buying calculator will help you break down the target price for your income.
  • Some kind of retirement account is better than none. The Federal Reserve says that Black Americans are less likely to have a retirement account than white Americans. According to their 2019 Survey of Consumer Finances, 65% of white middle-aged families have at least one retirement account, while only 44% of Black families in the same age group have one. Even though 401(k)s are a popular retirement plan because employers could match a percentage of your contributions, an IRA could also be another great opportunity to boost your savings. In 2021, the IRA contribution limit is $6,000 for people under 50 and $7,000 for people age 50 and older.
  • Consider a financial advisor. A financial advisor can help you make smarter financial decisions to be in better control of your money. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors, get started now.

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

Photo credits: ©iStock.com/monkeybusinessimages, ©iStock.com/LeoPatrizi

Stephanie Horan, CEPF® Stephanie Horan is a data journalist at SmartAsset. A Certified Educator of Personal Finance (CEPF®), she sources and analyzes data to write studies relating to a variety of topics including mortgage, retirement and budgeting. Before coming to SmartAsset, she worked as an analyst at an asset management firm. Stephanie graduated from Williams College with a degree in Mathematics. Originally from Philadelphia, she has always been a Yankees fan and currently lives in New York.
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Source: smartasset.com

Mortgage and refinance rates today, Feb. 27, and rate forecast for next week

Today’s mortgage and refinance rates 

Average mortgage rates fell a little or held steady yesterday (Friday). Unfortunately, it was the only glimmer of light in a gloomy week that saw rises — including a sharp one — on every other day.

Right now, there seems to be no end in sight to these rate increases. Of course, we’re almost bound to see an occasional fall, because that’s how markets work. But sustained downward movement appears unlikely, and I’m expecting that mortgage rates will keep rising next week. Read on for more details.

Find and lock a low rate (Feb 28th, 2021)

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.062% 3.065% -0.13%
Conventional 15 year fixed 2.587% 2.596% -0.11%
Conventional 20 year fixed 2.875% 2.882% -0.13%
Conventional 10 year fixed 2.474% 2.493% -0.13%
30 year fixed FHA 2.87% 3.549% -0.1%
15 year fixed FHA 2.539% 3.121% -0.16%
5 year ARM FHA 2.5% 3.213% -0.03%
30 year fixed VA 2.383% 2.555% -0.36%
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA 2.5% 2.392% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock a low rate (Feb 28th, 2021)


COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

If I were still floating, I’d lock my rate right away. Of course, there’s always a possibility of rates falling back. But that currently looks a slim one. And the chances of continuing rises seem much stronger. Read on to discover why.

So my recommendations remain:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • LOCK if closing in 30 days
  • LOCK if closing in 45 days
  • LOCK if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Compare top lenders

What’s moving current mortgage rates

The forces that are driving rates higher are the same ones we reported last week. The vaccination program and dwindling COVID-19 infection rates are creating optimism that an economic recovery will be upon us sooner than many expected. Indeed, we’re already seeing some better economic data. And a better economy goes hand-in-hand with higher rates.

But what we last week listed as a secondary factor may have now turned into the primary one. And that’s the fear of future inflation.

Unfortunately, such fears also tend to push mortgage rates higher.

Fear of inflation

And you can see why. Imagine you’re an investor who buys a mortgage bond (a mortgage-backed security or MBS) with a fixed rate of 3% for 30 years. That means your yield (income) is fixed, too.

And now imagine how sick you’d feel if next year (or in 10 years’ time) serious inflation took hold, and you were suddenly seeing inflation and interest rates soaring up to 10% or even higher — while you were still getting 3%.

This isn’t impossible fiction. Between 1978 and 1990, the average rate for a 30-year, fixed-rate mortgage never dipped below 10%, measured annually. And, in October 1982, that rate peaked at 18.45%, according to Freddie Mac’s archives.

It’s not hard to imagine how petrified investors are of having their money tied up in fixed-rate securities if there’s any likelihood of future inflation.

Still a slim possibility of falls

Of course, nothing’s certain in markets. And some disastrous news could come out of nowhere and kill both optimism and its accompanying fear of inflation.

Indeed, earlier this week, The New York Times reported on a new variant of SARS-CoV-2 (the virus that causes COVID-19) that’s currently circulating in New York City. And some scientists worry that it might prove more resistant to current vaccines than existing strains are.

That research is yet to be peer-reviewed. And it may turn out to be nothing. But it’s an example of the sort of news that could turn markets and mortgage rates around. The trouble is, the chances of such an event arising before your closing date don’t seem high.

Economic reports next week

Next Friday brings the official, monthly, employment situation report. And that’s arguably the most important economic data of all at the moment. So markets may be moved by those figures

They’re less likely to be affected by the other reports this week. However, any data can have an impact if it varies significantly from expectations.

Here are next week’s main economic reports:

  • Monday — January construction spending. Also February auto sales. Plus the February manufacturing index from the Institute for Supply Management (ISM)
  • Wednesday — February ISM services index
  • Thursday — Weekly new claims for unemployment insurance.
  • Friday — February employment situation report, including nonfarm payrolls and the unemployment rate.

Watch out, too, for top Federal Reserve officers’ speaking engagements. The Fed’s walking a fine line at the moment between keeping the recovery on the road and not stoking inflation fears. So investors are paying close attention to their remarks.

Find and lock a low rate (Feb 28th, 2021)

Mortgage interest rates forecast for next week

Unfortunately, I can only predict rising rates this week. The pace of increases may slow and we might even see some small and occasional falls. But, overall, it’s hard to imagine the recent trend reversing.

Mortgage and refinance rates usually move in tandem. But note that refinance rates are currently a little higher than those for purchase mortgages. That gap’s likely to remain constant as they change.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.

Your part

But you play a big part in determining your own mortgage rate in five ways. You can affect it significantly by:

  1. Shopping around for your best mortgage rate — They vary widely from lender to lender
  2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
  3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
  4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
  5. Choosing your mortgage carefully — Are you better off with a conventional, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, it’s not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2020

Compare top lenders

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.

Source: themortgagereports.com

9 Dumb Ways You Are Ruining Your Home Value

Men wallpapering a home
Rawpixel.com / Shutterstock.com

Your home might be your biggest asset — and yet, you could be inadvertently making it less valuable. Some updates and renovations can backfire when it comes time to sell.

“What I have seen a lot of people do is rip out a closet,” says Steven Gottlieb, a licensed real estate salesperson with Warburg Realty Partnership in New York City.

Where he works, space is at a premium. That means eliminating a closet can be a costly mistake.

“I don’t know that it detracts from the [appraised] value,” he tells Money Talks News, “but it inevitably shrinks the [buying] audience.”

And with fewer people interested in a property, the chances of a quick sale or a full-price offer can decrease.

From removing closet space to painting walls garish colors, here are some dumb ways you could be dragging down your home’s resale potential.

1. Selecting the wrong color paint

Woman painting a wall
dotshock / Shutterstock.com

You may think neutral is boring, but buyers could be turned off by brightly colored walls.

That may seem silly, since it’s relatively easy to repaint. But some people don’t want the hassle, says Keri Rizzi, a real estate salesperson with HomeSmart in White Plains, New York.

“Buyers will judge based on paint alone,” she tells Money Talks News.

So, consider yourself forewarned if you decide to paint your rooms every color of the rainbow.

2. Using bold and busy designs

Living room with ugly wallpaper
ariadna de raadt / Shutterstock.com

It isn’t just colorful walls that can derail a potential sale. Busy or bright patterns on wallpaper, tiles or flooring can be a problem for some people.

“Those are much harder to change than just paint and can have more of an effect on value,” says Amanda Rogers, a Realtor with Rogers Real Estate Group in Ada, Michigan.

If you don’t have any reason to think you’ll be moving, go ahead and be creative. Otherwise, think twice about loud designs and bold colors.

“Always choose neutral options for permanent items, and add your personal style with accessories, furniture pieces, wall art, etc.,” Rogers tells Money Talks News.

3. Removing closets

Clothing rack
Pixel-Shot / Shutterstock.com

“In an urban setting, especially New York City, space is at a premium,” Gottlieb says. An apartment with minimal closets might not get a second look from buyers.

Even in a suburban or rural setting, storage space often is highly valued. Consider carefully before converting closets to living space or removing a rarely used pole barn from your property.

4. Ripping out bathrooms or laundry rooms

Older worker demolishing bathroom tiles
sima / Shutterstock.com

If you have a small household, you may be tempted to rip out a rarely used bathroom for closet or living space. Don’t do it, Gottlieb says.

“A bathroom is worth a lot,” he explains.

Even in urban areas, bathrooms and laundry hook-ups trump closet space.

5. Making trendy updates

Room with blue carpet
Artazum / Shutterstock.com

Renovating a home with the latest trends can backfire if the look becomes dated or is not the preference of a potential buyer. Rizzi has seen this happen when sellers install new wall-to-wall carpeting only to find that buyers really want hardwood flooring.

If parts of your house are looking tired and worn, consider giving buyers a credit to do their own work. Don’t sink money into updates that may not boost value.

6. Adding too much tech

Woman using a smart home control system
Andrew Angelov / Shutterstock.com

Technology changes quickly, which means an expensive smart home system may be obsolete in just a few years.

“People invest too much for the most current electronic system,” Gottlieb says. “Then, they are often disappointed in five to seven years when [buyers] are not impressed.”

Go ahead and install the latest bells and whistles for your own use and enjoyment. Just don’t expect such upgrades to boost your home’s sale price down the road.

7. Lowering ceilings

Workers plaster a ceiling
Daniel Besic / Shutterstock.com

Some people might want to lower their ceilings to accommodate lighting, but avoid that if possible, Gottlieb says. Ceilings on a main floor of 9 feet or more were among the most desirable features and design trends for 2020, according to the National Association of Home Builders.

By some estimates, high ceilings can add as much as 25% to the value of a home.

8. Failing to control landscaping

Man mowing weeds in an overgrown lawn
sherwood / Shutterstock.com

Curb appeal isn’t necessarily reflected in a home’s appraised value, but it can make or break a sale, according to real estate professionals.

“Make that first impression the best impression,” Rizzi says.

Clear out debris, trim overgrown bushes and pull weeds to create a clean exterior.

9. Letting your home fall into disarray

Plumber at work
Nor Gal / Shutterstock.com

Keep a home’s interior clean and well maintained.

“If something breaks, fix it,” Rogers says. “If you don’t know how to fix it, hire it done.”

Neglecting plumbing and electrical work could have dire consequences to your home’s value if it leads to structural damage.

Bottom line, according to Rogers: “Clean sells.”

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

My House Failed Its First Real Estate Inspection—Here’s What I Did To Get Through Escrow

When I was buying my first house, everything seemed too good to be true—at least at the start of the process. I found a home within a couple of weeks, the price was fabulously low, it was in a cute lake community with a style I loved, and funding came through quickly and easily. I even received a first-time home buyer’s bonus for tax time. Plus, I didn’t need much of a down payment.

But it turned out too good to be true. My smooth path to homeownership suddenly became rocky when the inspection report came back with a big fat failure on it. I immediately panicked. What did it mean? Was I still able to buy the house? And if I did, was it going to fall apart?

After a few calls with my real estate agent (who, at that point, had become more of a home-buying therapist), I learned that a bad inspection isn’t that rare. In fact, my new home wasn’t in as bad of shape as I initially feared. We were able to make some repairs and, after a second inspection, the house was appraised and the sale was able to go through.

During the process, though, I learned a lot more than I ever expected about home inspections. Whether you’re a first-time or repeat home buyer, here’s my advice for getting the house you want after a shaky home inspection.

Houses don’t really pass or fail

Though my home inspection appeared to be a failure, homes aren’t actually graded on a pass/fail system.

“There is no such thing as a failed inspection,” said Karen Kostiw, an agent with Warburg Realty in New York. “The inspection just points out small and potentially larger issues that you may not be aware of.”

Sure, some houses can sail through the process and others may fare poorly, but it’s not a “You can never buy this” situation if there are problems with the property.

For me, my mortgage hinged on a solid inspection—so the initial results meant I wouldn’t get the loan unless things were fixed. That being said, if I had enough cash on hand or wanted to try a different mortgage lender, I could have continued with the purchase even with a negative inspection report.

So if the house you’re set on buying ends up having issues, don’t panic. You still have options.

Most inspection issues are small

It’s important to remember every home inspection report will come back with something, according to Kate Ziegler, a real estate agent with Arborview Realty in Boston. My inspection report had noted about 40 fixes. But a lot of times, the problems aren’t as bad as you think.

Keep in mind that the inspector’s job is to call out any trouble spot. Also, all issues noted in the report aren’t equal: Some problems flagged by an inspector can wait.

“The inspector will find defects—sometimes many defects—but that does not mean buyers are not purchasing a good home,” Kostiw says. “The small leak might mean a bolt needs to be tightened, or the dishwasher is not working because the waterline was switched off by accident. These are easy fixes. However, when buyers see a laundry list of items, it can seem as if the home is falling down. This is most often not the case.”

Red flags do exist

Ziegler and Kostiw agree that though most repairs are easy fixes, some items should give you pause if you see them on your report.

Structural problems, antique electrical systems, old windows, unexplained water damage, evidence of termites or wood rot, a bad roof, asbestos, mold, radon, and lead paint are all red flags that can show up during a home inspection. If fixing these problems is impossible or way beyond the means your budget, you may want to reconsider your purchase.

“Whether or not inspection items warrant backing out entirely depends quite a bit on any individual buyer’s experience and bandwidth, as well as personal risk tolerances and financial situation,” Ziegler says. “It’s true that houses don’t stay in good repair on their own. They require maintenance and care, just like your houseplants and your sourdough starter!”

Don’t try to fix things yourself

Unless a repair is something truly minor like caulking a bathroom tub or putting a cabinet door back on its hinges, don’t try to fix anything on your own. You could make things worse or even injure yourself. Hire licensed contractors that you’ve vetted to handle any problems. And try not to leave it all up to the seller—they’re not going to be living in the home. You will be.

“Motivations in this case are not aligned,” Ziegler says. “The seller wants to spend as little as possible to meet their contractual obligations, but [a] buyer should be more concerned with the quality of the repair.”

Work the costs into the sale

At first I worried I would have to pay to fix everything that was wrong with my house. But it’s important to know you can work the cost of repairs—and how long it should take to make them—into the sale.

Say you can’t afford to fix the busted water heater but the seller can. You can raise the offer price by that cost, or you can trade off: The seller fixes one thing, and you fix another. In my case, I only had to add a banister to one stairwell. The sellers were particularly motivated to unload the home so they handled everything else.

Hopefully by the end of this process, every issue will be fixed and you’ll be ready to purchase your home. And you’ll be able to move in with a clear head, knowing everything is really as good as it seems.

Source: realtor.com

Mortgage and refinance rates today, February 25, 2021

Today’s mortgage and refinance rates 

Average mortgage rates nudged higher yet again yesterday. Of course, these rates remain exceptionally low by historical standards and are at dream levels for most. But they’re not like they were in 2020 and early January.

First thing, it was looking likely that mortgage rates will rise again today, partly because this morning’s weekly job figures were better than many expected. Read on for a fuller analysis.

Find and lock a low rate (Feb 26th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 2.982% 2.985% +0.02%
Conventional 15 year fixed 2.488% 2.497% Unchanged
Conventional 20 year fixed 2.894% 2.901% -0.03%
Conventional 10 year fixed 2.556% 2.58% -0.01%
30 year fixed FHA 2.762% 3.438% +0.02%
15 year fixed FHA 2.517% 3.099% Unchanged
5 year ARM FHA 2.5% 3.201% Unchanged
30 year fixed VA 2.372% 2.544% Unchanged
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA 2.5% 2.379% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock a low rate (Feb 26th, 2021)


COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

On the one hand, investors want to believe that the pandemic will soon be over and the economy will boom. And they like that’s looking increasingly probable. But, on the other, they fear that a boom will unleash inflation, something that very much bothers those who hold fixed-interest bonds — including mortgage-backed securities.

The trouble is, both that belief and that fear tend to push up mortgage rates. And it’s that double-whammy that’s currently driving those rates higher.

Maybe some momentous news will come along that drags mortgage rates lower again. But it’s hard to imagine what might do so quickly. But read on for something that just possibly could.

Still, my personal rate lock recommendations remain:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • LOCK if closing in 30 days
  • LOCK if closing in 45 days
  • LOCK if closing in 60 days

But, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

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Market data affecting today’s mortgage rates 

Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:

  • The yield on 10-year Treasurys edged up to 1.45% from 1.43%. (Bad for mortgage rates) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
  • Major stock indexes were mostly lower on opening. (Good for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite happens when indexes are lower
  • Oil prices rose to $63.02 from $62.25 a barrel. (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices inched higher to $1,785 from $1,784 an ounce. (Neutral for mortgage rates*.) In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower
  • CNN Business Fear & Greed index — Climbed to 69 from 57 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

Caveats about markets and rates

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. The Fed is now a huge player and some days can overwhelm investor sentiment.

So use markets only as a rough guide. Because they have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. But, with that caveat, so far mortgage rates today look likely to move higher.

Find and lock a low rate (Feb 26th, 2021)

Important notes on today’s mortgage rates

Here are some things you need to know:

  1. The Fed’s ongoing interventions in the mortgage market (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
  2. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read How mortgage rates are determined and why you should care
  3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
  4. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
  5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
  6. Refinance rates are typically close to those for purchases. But some types of refinances are higher following a regulatory change

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today and soon

I’m expecting mortgage rates to rise today. But, as always, that could change as the day progresses. Indeed, such intraday swings have become an irritating feature of markets.

Yesterday and recently, we’ve been saying that mortgage rates are unlikely to fall soon, absent some terrible news, such as a vaccine-resistant strain of SARS-CoV-2 emerging. Well, also yesterday, The New York Times reported:

A new form of the coronavirus is spreading rapidly in New York City, and it carries a worrisome mutation that may weaken the effectiveness of vaccines, two teams of researchers have found.

The new variant, called B.1.526, first appeared in samples collected in the city in November. By the middle of this month, it accounted for about one in four viral sequences appearing in a database shared by scientists.


A New Coronavirus Variant Is Spreading in New York, Researchers Report — NYT, Feb. 24, 2021

The research is yet to be peer-reviewed and may turn out to be nothing. But the report does underline the uncertainty that we all have to contend with at the moment.

If I were you, I wouldn’t delay locking just on the basis of one story. It could take months before markets take the threat seriously — and even then only if it proves accurate. In the meantime, it currently looks more likely that rates will rise or remain close to current levels between now and when you have to close.

For more background on my wider thinking, read our latest weekend edition, which is published every Saturday soon after 10 a.m. (ET).

Recently

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates then rose. And Freddie’s Feb. 25 report (today) puts that weekly average at 2.97%, up from the previous week’s 2.81%, and the highest it’s been for a year.

Expert mortgage rate forecasts

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rates forecasts for each quarter of 2021 (Q1/21, Q2/21, Q3/21 and Q4/21).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s and the MBA’s were updated on Feb. 18 and 19 respectively. But Freddie now publishes forecasts quarterly and its figures are from mid-January:

Forecaster Q1/21 Q2/21 Q3/21 Q4/21
Fannie Mae 2.8% 2.8% 2.9% 2.9%
Freddie Mac 2.9% 2.9% 3.0% 3.0%
MBA 2.8% 3.1% 3.3% 3.4%

However, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.

Find your lowest rate today

Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:

Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.

Verify your new rate (Feb 26th, 2021)

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Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.

Source: themortgagereports.com