Buying Smart: Easy Finance Hacks for Homebuyers
When it comes to buying a property, knowing is half the battle. In fact, with the right tips and tricks. You can often save serious money on your purchase and ongoing rates. Today, First Financial explores a few of the lesser-known strategies to help you save money throughout the process.
Federal Housing Loans
Depending on your background circumstances it’s sometimes possible to receive support. Sometimes from the Federal Housing Administration (FHA) in the form of a loan. Unlike traditional lenders, FHA loans allow those with credit scores of 580 or above to pay as little as 3.5 percent on their down payment. FHA-approved lenders insure mortgages on single-family homes, multifamily properties, residential care facilities, and hospitals. Before applying, be sure to carry out research and ascertain the average down payment in your target area or percentage of homes that sell under their list price.
Seller’s Assist
When it comes to purchasing a property, many buyers aren’t aware of the option to ask the seller to pay a portion of the closing cost, and this can stretch to as much as 6%. This could allow you, the buyer, to save thousands of dollars on a purchase and increase your long-term ROI. To explore the option, check the seller’s assist option against your mortgage product – this is also a great opportunity to research the mortgages themselves and determine how much you can afford and which advantage you have. Typically, lenders will compare your credit score, current income, and employment against the amount you want to borrow.
Cash-Out Refinance
If you’re looking to lower your rate, cash-out refinancing could prove to be a viable option for you. This replaces your current home loan with a bigger mortgage, thereby allowing you to take advantage of built-up equity and access the difference between mortgages. This cash can then go towards any purpose, such as home remodeling or consolidating high-interest debt.
Tax Saving
It’s often possible to save money on taxes when purchasing a home if you offer less than the advertised home appraisal price. Via this method, you can often get your taxes lowered to match the purchase price rather than the appraisal price. Although you won’t save cash on the purchase itself, you will save on taxes per year. Just remember, when filing your taxes, interest and property taxes are deductible and can be claimed for savings.
Getting a Home Warranty
You should also consider protecting your home with a home warranty, which covers the repair costs to major appliances. You might be asking yourself, “Is a home warranty worth it?” Bear in mind that the cost of repairing a broken A/C can cost upwards of $5,000! So investing in a home warranty can definitely save you money in the long run, should any such repairs become necessary, whether that’s a busted A/C in the winter or a broken down furnace in the winter.
Side Hustles
Many home buyers are unaware that, when it comes to a mortgage application, having a part-time job (or a ‘side hustle’) can help you to qualify. Typically, the borrower must show two-years of history working all jobs simultaneously and will request W2s from each employer. Make sure, however, that you do not enter into a second job too close to the date of your application, as this may be considered a risk to your monthly mortgage payments.
Credit Score Tune-Up
If you want to secure the best rate possible, it’s important to enter into the process with a good credit score – this can save you thousands of dollars over the lifetime of your loan. In the lead-up to your application, you can boost your score by paying down debts, increasing your credit limits, disputing errors, and more.
For most of us, buying a house is amongst the biggest investments we’ll make in our lifetime. Regardless of if it’s your first time, it’s important to enter into the process armed with the right information and a few handy hacks to boot, whether that pertains to investing in a home warranty or monitoring your credit score.
First Financial is committed to helping our clients do more with their money and get more out of life while helping them protect their financial futures. Call 800-315-7791.
If you have credit card debt, you are in good company. Studies show that the majority of Americans have some form of credit card debt. And 14 million Americans have five figures or more worth of debt from credit cards alone. Have you considered taking out a personal loan to pay off credit cards? Personal loans often have lower annual percentage rates (APRs), meaning you’ll pay less on the money you borrow. Yet, there are also some drawbacks to using personal loans to eliminate debt from credit cards. For example, you may not qualify for a personal loan APR that is lower than the rate you pay on your credit cards.
In this guide, we will tell you all the pros and cons of using loans for credit card debt. Plus, we’ll give you tips for paying down credit card balances if you don’t qualify for an affordable loan. Keep reading to learn more.
In 2023, the average interest rate on credit cards is a little bit over 20%. This is an average, so some credit cards have lower APRs, and others have higher interest rates. On average, personal loans have lower interest rates than credit cards. In 2023, the average is around 10–20%. The exact rate you will pay on a personal loan depends on various factors, including:
Other factors, such as the term period on your loan and whether you take out a secured or unsecured loan, also play into your APR.
A personal loan is one of the best solutions for paying off credit card debt in 2023. This is especially true if you can find an affordable loan (more on this later). Benefits of using loans for credit card balances include:
These last two advantages only apply if you use your personal loan to pay off all your credit cards. We don’t recommend taking out a loan to pay off one credit card if you carry debt on multiple lines of credit.
Of course, all these benefits can not come without some drawbacks. The following disadvantages of personal loans could make this option less attractive for certain borrowers:
The first two issues primarily occur when you have no credit, poor credit history, or a low credit score. The third con happens when people use loans to pay off debt but continue using their credit cards while paying on the loan. Luckily, financial institutions like First Financial offer personal loans for people with poor credit.
So, what if you do not qualify for an affordable loan? In that case, the goal is to pay down your credit cards as quickly as possible. Why? The faster you pay down your debt, the less you forfeit in interest. Here are the top ways to do just that.
The first thing you should do is stop swiping. Use credit cards for emergencies only until you pay off your debt. Also, start thinking about what you will use your credit card for once you pay off your debt. Experts recommend reserving credit for the following big-ticket purchases only:
Often, larger credit card purchases come with interest-free periods. For example, you may have six months to pay off your purchase before you’re charged interest.
As we mentioned, credit card debt is extremely common in the US. Financial experts have come up with many strategies for eliminating credit card debt quickly. Some of the most effective strategies are:
You can also come up with your own debt-canceling strategy based on your unique needs. The best strategy for you is the one that gets your balances paid down the fastest.
Another idea to consider is a balance transfer. Many credit card companies allow you to transfer all your outstanding credit card debts to a single account. Often, balance transfers also come with a preliminary grace period where you don’t have to pay any interest on your balance. However, you may have to pay a fee on the balance you transfer. So, this solution may not be best for people with significant credit card debt.
Taking out a personal loan to pay off credit cards can be a great way to get out of debt. But keep in mind that some people may not qualify for a personal loan without a good credit history. Are you searching for a personal loan you can qualify for? First Financial is on a mission to provide personal loans to borrowers just like you. Click here to get started on your loan application!
If you go back to 2013, the market cap for bitcoin was a little over $1 billion. Later on, this number would explode more than 1000-fold to a value of more than $1.2 trillion! However, the market cap as of January 2023 is closer to $300 billion.These are the kinds of huge swings up and down that the world of cryptocurrency is famous for. These swings are also one of the reasons why so many people are interested in crypto tax-loss harvesting.
The bigger the dips in the market, the bigger the opportunity to enjoy huge benefits through this strategy for lowering your overall tax liability. So what is bitcoin tax-loss harvesting, and what are the benefits that it provides? Read on to learn all about this tax strategy and how it works!
Cryptocurrency gains are classified as capital gains. When someone’s investments increase in value, they will often need to pay some percentage of those gains as part of their tax liability. However, you can sometimes avoid paying some of these taxes if you suffer capital losses.
Capital losses occur when someone makes an investment that goes down in value instead of up. Of course, if someone’s investment goes down in value, there is no gain to be taxed. However, what happens if someone invests in two things at the same time and one goes up and the other goes down in value?
In this case, you can add the capital gains and losses together. If the overall losses are bigger, then it is not necessary to pay taxes even on the one investment that went up in value.
If the capital gains are larger, then it will be necessary to pay capital gains taxes on them. However, you will only pay taxes on the portion of the gains that exceed the magnitude of the capital losses.
In other words, the bigger your losses in one area, the more you can use them to offset your gains in another area.
For this reason, people sometimes make a point of incurring strategic capital losses so that they can offset their capital gains and pay fewer taxes. This is the essential bitcoin tax-loss harvesting strategy, one of the more powerful advanced strategies for investing in crypto.
Someone who has capital gains in another area can sell off their cryptocurrency at a losing price. That will offset their capital gains and decrease their tax liability.
In fact, if an investor is lucky, they can do all of this and then buy their recently sold investment back again. If the cryptocurrency price has not shifted, then this allows people to lower their tax liability without any real negative side effects from selling an investment at a loss.
Based on this understanding, one of the requirements for this strategy should be clear. There is no point in using this strategy if you do not have some capital gains to offset.
On top of that, if you already have capital losses equal to or greater than your capital gains, there is also no point in using this strategy. But if your capital gains exceed your capital losses, this might be the perfect opportunity for you to apply this strategy.
However, many people who use strategies like this use them at the end of the tax year. After all, if you wait until the tax year has ended to sell some of your investments at a loss, then you cannot use those capital losses to offset your capital gains from the previous tax year.
There is another situation in which it may make sense to employ this strategy. If there is a large dip in the value of cryptocurrency, then you can incur an unusually large loss by selling during that dip. Some people take advantage of market dips to incur larger capital losses.
There is no limit to using this strategy to offset your capital gains. However, you may also be able to deduct as much as $3,000 each year from your regular income by incurring capital losses. Once you have hit that limit, there is no point in continuing this strategy for purposes of offsetting your income.
You may also want to keep in mind that if you have excess losses, you can carry them into the future to offset future capital gains and income. This is another reason why so many people prefer to incur capital losses during market dips.
If the tax year ends and you do not have any capital gains or income to offset, that does not mean that your capital losses are wasted. You can come back to them in the future to lower your tax liability.
This tax savings strategy may not always be available in the same way. Currently, you can sell an investment and then buy it right back again after decreasing your tax liability.
However, this is not legal when it comes to securities. Some people consider that this same law should apply to cryptocurrency. There is a decent chance that future lawmakers will agree.
Many people hear about Bitcoin tax-loss harvesting and assume that it is a complicated process. Although there is some truth to this, enjoying the benefits of this tax strategy can be much easier than some people might imagine. Depending on the situation, using this strategy can provide incredible value by lowering someone’s tax liability for years.
To learn more about how to take care of your financial health and future, reach out and get in touch with us here at any time!
Maybe you’re just starting a business and you are considering a high risk merchant services account? Perhaps you sell a niche product? Regardless of what the case may be, you’re having trouble obtaining traditional merchant services. Put simply, the bank finds you to be too big a risk.
Fortunately, there’s an alternative available: high risk merchant services. What do these services entail? What are their benefits?
We’re going to get into all of that and more below. Without further ado, here’s everything you need to know about high risk payment gateways and payment solutions.
To understand the concept of high risk merchant services, you must first understand the concept of traditional merchant services. Merchant services refer to the services that a bank provides so that a company can accept different types of payments.
In most cases, this refers to the acceptance of debit and credit cards. However, it also covers the realm of online payment processing.
With traditional merchant services, there’s generally a credit score requirement that must be met in order to receive such services. In addition, the provider of such services must find that your business is viable enough to justify providing such services. Therefore, if you sell a niche product, your application for such services might be denied.
Effectively, the service provider considers your business venture to be “high risk”. In other words, they’re not confident that your business is going to make enough money through their services in order to justify them giving them to you.
This is where high risk merchant services come into play. These services are available to essentially anyone, regardless of credit score, products sold, or otherwise. They ensure that you’re able to make card transactions, and thereby help to either improve the success of your business or, at the very least, keep it afloat.
We’ve discussed what high risk merchant services are. Now, let’s discuss the types of companies that might need them. In particular, there are companies that bring more risk to the table than the typical company.
They possess a variety of characteristics. Let’s discuss them in detail below.
There are low-risk products and high-risk products. Low-risk products are things like clothing, books, and office supplies. They sell on a regular basis and will almost certainly trigger regular card payments.
High-risk products are things like software, tickets, and electronics. They don’t sell quite as often, and also have a higher risk of return. This makes them riskier for payment processing companies to get behind.
Another group that might need high risk merchant services is those who sell their products to high-risk areas. This includes, in most cases, impoverished or underdeveloped countries.
If the majority of your sales come from these countries, you’re going to have trouble obtaining a standard merchant account. As such, you might have to go with a high risk account instead.
Does your company sell a product that results in a lot of chargebacks? If so, you might have to get a high risk merchant account as opposed to a standard account. This is because chargebacks can make it difficult for merchant service providers to financially justify providing their services to you.
Do you sell subscriptions? If so, there’s a decent chance that you’ll need to use high risk merchant services as opposed to standard. Subscriptions leave a high risk of missed payments which can financially hurt the service provider. Therefore, the company is forced to take on more liability.
High risk merchant services are beneficial in a number of ways. Some of their biggest benefits include the following:
The biggest benefit of high risk merchant services is that they’re available to everyone. It doesn’t matter whether you have bad credit, experience an abnormal number of product returns, sell a niche product, or otherwise, you can get your hands on high risk merchant services.
This is simply not true of traditional merchant services, which come with credit requirements and are dependent on the acceptance of banks and other rigid financial institutions.
Another big benefit of high risk merchant services is that they come with worldwide processing capabilities. As such, regardless of where your customer is located, you will be able to accept their credit cards and debit cards.
This opens you up to an endless number of clients, all of whom can contribute to keeping your business thriving.
Whether your customers pay with credit or debit cards, high risk merchant services will accommodate you. These services work with cards from a variety of brands, allowing you to accept payment from as many people as possible.
Not only are high risk merchant services worldwide in their capabilities but they’re also highly secure. Regardless of where the payment is made, it will be encrypted so as to allow for as much security as possible.
This means that there will be almost no chance of data theft. That, in turn, is good for the reputation of your company.
Are you in need of high risk merchant services? If so, look no further than First Financial. We provide such services to countless clients in countless industries.
Regardless of your credit score and regardless of the products you sell, we can provide you with high-quality merchant services at reasonable interest rates.
Contact us now to discuss details!
Cash Discount Processing is the wave of the future. According to a Federal Reserve study, people use cash for approximately one in five transactions in the United States.
Some stores and businesses offer a cash discount program. These businesses take a certain percentage off the total purchase if customers pay with cash.
Any business owner considering a cash discount program probably has questions. You might wonder how these programs work, if they’re even legal, and how much you can save.
Read on to find out everything you need to know about using a cash discount processing system!
Cash discount programs are a way to offset the cost of credit card fees. Any business or individual who accepts credit cards can offer a cash discount.
Essentially, with this kind of program, customers paying with cash can save a percentage of the total price. When customers use a credit or debit card, they cover the cost of the transaction fee.
Your processor will give you a lower rate on processing fees if customers pay with cash. Some people prefer to pay with cash, and these customers are more likely to choose your business if you offer a cash discount.
Businesses that offer a cash discount can also use it to attract new customers. Not only can you use this program to save money on your transaction fees, but you can also generate more business.
Many transactions use credit cards, especially with online sellers, but the fees can make businesses less profitable. Cash discount programs are a great way for businesses to encourage customers to pay with cash.
The simplest form of a cash discount program is something like, “If you pay with cash, you get 10% off your purchase.”
This type of program is useful for any business that accepts credit and debit cards, but some are better suited for them. Businesses with a product or service that rarely changes are good candidates for a cash discount program.
Examples of businesses that should consider cash discounts include:
Businesses with a more extensive inventory might have a harder time implementing a cash discount. Large retailers, for example, have a constantly changing inventory that makes it more difficult.
The reason certain businesses are better suited for cash discounts is because of how pricing works.
When you offer a cash discount, you include the cost of credit card processing in the advertised price. If a customer pays with cash, they pay a discounted price.
To cover the cost of card processing, businesses must alter their pricing structure. A business that moves a large volume of products will therefore have to work much harder changing their prices.
As a result, food vendors and businesses with a small selection of services are a better choice for this program.
Many business owners confuse cash discounts with surcharges. However, cash discounts and surcharges work in very different ways.
It’s important to understand the differences before you decide which one is right for your company. Cash discounts are easier and more common, and have fewer legal issues.
A surcharge is a fee added to the advertised price if a customer pays with a debit or credit card. With a cash discount, on the other hand, customers paying with a card pay the advertised price.
This makes cash discount programs more flexible merchant services overall. They can be implemented with minimal changes to your business model (and without any need for additional equipment).
Surcharges can also be difficult if they’re applied across multiple products or services. For example, products with varying amounts due at checkout can confuse and frustrate your customers.
Cash discounts also allow users more flexibility when planning out their purchases in advance. They also don’t require any change in customer behavior, such as making sure they know about all applicable fees.
With a cash discount, customers view your payment options as a chance at saving. With a surcharge, it seems more like a hidden fee.
When you offer different prices to customers based on their payment method, it can raise legal questions. Businesses may be hesitant to implement a cash discount because they aren’t sure if it’s entirely legal.
Businesses using a surcharge are more likely to run into legal issues. Although legal in most states, surcharges for credit cards have to be clearly displayed at the point of sale.
Some states have outright bans on surcharges for credit card transactions. Cash discount programs, however, are legal anywhere in the United States.
With a cash discount program, the vendor adjusts the price of each product or service to account for the cost of processing fees. When a customer pays cash, the vendor applies the discount at checkout.
Because the customer never pays more than the advertised price (except with regard to taxes), there are no legal issues.
A cash discount program is one of many tools available to help you save money and make your business more profitable. Unlike a surcharge, customers don’t pay an added fee when they pay with a credit card.
Instead, customers who use a card pay the advertised price, while cash-paying customers get a discount. Businesses can use their cash discount program for advertising while saving money on credit card processing.
First Financial offers merchant services with 24/7 customer support. If you need a way to accept credit cards, we can help, even if you’ve been turned down by traditional banks.
Contact us today to learn about our financial services!
Understanding DCA as it relates to Bitcoin. There are certainly some flashy, eye-catching methods of investing in bitcoin. Unfortunately, they seldom offer the rewards they promise.
You may have experienced disappointment after disappointment with these techniques. Now you’re looking for something that doesn’t overstate its potential but delivers consistent, reliable results.
What you’re looking for is dollar cost averaging or DCA. When you DCA bitcoin, you gain valuable benefits both financially and otherwise.
We’ll share seven impressive reasons investors say they found what they were looking for in DCA. Bitcoin Savings Account: 5 Important Things to Know
DCA or dollar cost averaging is an incremental approach to investing regardless of market conditions. In its most basic form, it means purchasing bitcoin at regular intervals, such as weekly, on an ongoing basis. You can easily automate the process, so you don’t have to remember to make your next purchase.
Now let’s look at DCA’s potential benefits.
Timing the market is tempting to most new investors. On the surface, it seems simple. You watch the market until prices dip significantly and buy. Next, wait until prices rise as high as they can and sell before prices start heading downward.
One of the many problems with trying to time the market is you have to be right when most other investors are wrong. That would be a challenge for even the most brilliant, well-educated investor.
You are also putting yourself in a position where you must be right not just once but twice. You have to correctly predict the bottom of the market as well as its top.
Conversely, you’re not worried about being “right” or “wrong” with DCA. You’re looking down the road.
So, how effective is the approach? Let’s look at what would have happened if you had purchased $20 of bitcoin weekly beginning on the first day of 2014 and continued until November 8, 2022.
According to a bitcoin DCA calculator, you would have converted a $9,220 investment into $160,877.02. That’s an increase of over 1,645%.
Decision fatigue is the mental state after a person is overwhelmed for an extended period with choices to make. You may have experienced this if you’ve ever had to plan a wedding or remodel a house. The decisions can seem fun initially but become increasingly burdensome as the process drags on.
That’s why you’ve heard the oft-repeated story of people in power, such as CEOs and even the President of the United States, limiting their daily wardrobe. In the mornings, they don’t face a multitude of choices for clothing. Those who have adopted this approach say that it saves them valuable mental energy.
Dollar cost averaging your bitcoin likewise saves your brain from the exertion of having to make daily buy and sell decisions. You only need to establish your investment amount and the frequency with which you’ll invest. That’s it. You’re done.
You may be a person who believes it’s not necessary to set up a budget. Perhaps, you never experience a financial shortfall at the end of the month. That’s great. But there are other reasons why a budget is still valuable.
A budget helps you set priorities. Without one, you might find other ways of spending your money. But if you use a budget, you will mentally set aside a certain amount to buy bitcoin.
This leaves you and your wallet free. You can concentrate on pastimes, hobbies, and other activities.
Any asset can be the subject of the great hype machine, but bitcoin is a favorite target. Try browsing bitcoin newsletters, blogs, and podcasts without being told you’re in danger of missing out on the next big thing.
No one’s surprised when a small child is distracted by shiny things, but we’re disappointed when supposedly mature people are. You can avoid disappointing yourself by using DCA.
You would no longer have to scrutinize each new offering for fear of missing out. Jumping from one investment strategy to another is a sure way of losing momentum. As the old saying goes, the person who chases two rabbits seldom catches either.
Market volatility frightens newcomers and even some longtime investors. Why? There’s a dread of losing money if the market tanks shortly after you enter it.
That fear is understandable for a new investor looking for somewhere to put a small inheritance. You don’t want to wake up and learn that you lost 50% of your investment overnight.
On the other hand, using DCA to invest a reasonable percentage of income regularly reduces risk. How?
You know that you’re not reliant upon the results of a one-time investment. You’re in the market for the long term.
Therefore, if your assets take a hit, you’re sure of two things: 1. history tells you the setback is only temporary, and the market will rebound, and 2. now that prices are lower, you’re going to purchase more bitcoin at a bargain as part of your regular investment routine.
One of the reasons bitcoin trading can be obsessive is its availability. There is no off time. The market is constantly changing, which is an enticement to someone whose brain is geared toward finding excitement and novelty.
Seeing what a traitor thinks are signs of a bull run can release dopamine, a brain drug of anticipation and reward. The sensation can train the brain to chase that high over and over. Progressively, the anticipation and the reward have to become greater. That usually means risking more money.
Like any addiction, bitcoin obsession can lead to financial ruin. More importantly, it can endanger families and other relationships. Even your physical health is involved.
DCA can reduce the likelihood of your heading down the path of addiction because it doesn’t matter what the market is doing at three in the morning, during your best friend’s wedding, or during your grandfather’s funeral service.
Your Investments are on a set schedule, leaving you free to focus on the more important moments of life.
Even the most hardcore bitcoin investor will likely have a well-rounded portfolio that includes other assets. However, spending all day every day concentrating on buying bitcoin leaves little room in your schedule for researching other investment opportunities.
DCA gives you that time back. Now you can delve into other avenues that require learning about promising assets with which you need to become more familiar.
Are you interested in getting off the never-stopping treadmill of timing the market? If so, you can DCA bitcoin to find the same comfort and peace of mind it’s given other investors.
Contact us today for more information about how you can get started with dollar cost averaging.
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