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Dear Penny: Should We Use Our Emergency Savings to Pay for a New Roof?



Dear Unicorn,

It isn’t often that I get to mediate when two unicorns disagree. So here goes.

I’m with you about when you should spend emergency savings. Ideally, you only use your rainy-day fund for expenses that are necessary, unexpected and urgent. Yes, it’s necessary to replace the roof at some point, but it’s definitely not unexpected or particularly urgent, at least as you describe it. 

Of course, this would be a different situation if, say, the roof was already caving in, or it were in such bad shape that it could put your safety or belongings at risk.

But with the average new roof costing $7,753, according to Home Advisor, you could expect the replacement to eat up about a quarter of your emergency savings — money that’s supposed to be there for something catastrophic, like an illness or a job loss. 

Without knowing your monthly expenses, I can’t say whether that would leave you with sufficient reserves. But keep in mind that financial planners typically recommend that you have enough savings to cover at least three to six months’ worth of expenses for emergencies.

So does that mean the tie is officially broken? Well, not exactly.

In a perfect world — as in, the land inhabited by financial unicorns — you wouldn’t take out a loan or refinance to pay for an expense you know is coming. You’d estimate how much time you have and work a line item into your monthly budget to save up for it. 

So, for example, if you plan to replace your roof in two years, you could each start putting $150 to $200 per month in a separate savings account, known as a sinking fund, designated for a new roof.

But if you need to replace the roof before you can save for it, I vote for leaving your emergency funds intact and financing the cost. 

Because your credit score is, as you put it, a beautiful 836, you could probably qualify for a personal loan at just 5% or 6% interest. You mentioned the option of refinancing, but I’d advise against that. Considering that when you refinance, closing costs typically add up to 2% to 4% of your total mortgage, a loan would likely be a better way to pay for this expense.

A final thought: If you’re truly committed to keeping your finances separate, this could be a situation where you don’t really need a tiebreaker. You could simply agree that you’re each responsible for paying for half of the roof. So if the roof will cost $8,000, you could take out a $4,000 loan, while he withdraws $4,000 from his emergency fund.

But I don’t think this will be necessary. You are both financial unicorns, after all, so I think you can work out a single solution — and maybe use this as an opportunity to have a larger conversation about your philosophies surrounding money.

Ultimately, though, this is a problem where you have plenty of decent options. Better yet, you’re planning plenty in advance for this inevitable expense. That makes you a financial unicorn in Dear Penny’s eyes.

Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Send your questions about budgeting to

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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529 College Savings Plans: All 50 States Tax Benefit Comparison (Updated 2019)



Updated for 2019. When choosing a 529 college savings plan, you can open a 529 plan from any state. However, each state can vary widely in what they offer in terms of tax deductions and/or matching grants. 16 states offer no tax break on contributions and 7 states give you the same tax benefit no matter which 529 plan you pick. The remaining 27 states do offer some sort of tax benefit, so you’ll have to weigh your in-state benefits against the superior investment options from an out-of-state plan.

Morningstar has just published their 529 College-Savings Plan Landscape report for 2019, which included a state-by-state summary of the tax benefits:

They also have a new article When It Comes to 529s, How Good Is Your State’s Tax Benefit? that helps to quantify how good the tax benefit is, in terms of how many years of investment expenses it offsets for a theoretical household. More years (darker blue) is better:

These days, for the most part, if your state offers a tax benefit, it’s worth sticking with your in-state 529 plan as long as you are choosing the low-cost index fund “autopilot” options. The formerly “bad” plans have gotten closer the rest of the pack. You might still prefer another state plan for a specific investment option, I suppose.

They also updated this chart that quantifies tax benefits for a hypothetical family with a $60,000 income.

If you really like another state plan, you can look into their “recapture” rules as to what happens if you roll over your assets to another state plan later down the road after your initial contribution. Sometimes you can wait out the recapture period and then roll funds over to a better state 529 plan for free (once every rolling 12 months).

Again, if your state has no special tax break or it does “tax parity” – meaning it offers the same tax benefits for any 529 plan – then I would simply choose from this list of best nationwide 529 plans.

“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

529 College Savings Plans: All 50 States Tax Benefit Comparison (Updated 2019) from My Money Blog.

Copyright © 2019 All Rights Reserved. Do not re-syndicate without permission.

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Direct v/s Regular Mutual Funds: Know the Difference



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Mutual Funds are available in two plans – Regular and Direct. While regular mutual fund plans are commonly-known to investors, direct mutual fund plans have started becoming popular recently.

What Is a Direct Mutual Fund Plan?

The Securities and Exchange Board of India (SEBI) introduced direct mutual fund plans in January 2013, making it mandatory for all Asset Management Companies (AMCs) to provide an option to invest in mutual fund schemes directly, without the involvement of an agent, broker or distributor, which is the case with regular mutual fund plans.

What Is the Difference Between Direct And Regular Plans?

Particulars Regular Plan Direct Plan
Expense Ratio High Low
Returns Low High
Investment Advice Available Not Available
Market Research Done by distributor/agent Done by self
Convenience More Less

Regular and Direct plans are just the two options to buy the same mutual fund scheme, run by the same fund managers who invest in the same stocks and bonds. The only difference between the two is that in the case of a regular plan your AMC (Asset Management Company) or mutual fund house does pay a commission to your broker as distribution expenses or transaction fee out of your investment, whereas in case of a direct plan, no such commission is paid.

Instead, in the case of direct plans the commission is added to your investment balance, thereby reducing the expense ratio of your mutual fund scheme and increasing your return over the long term.

To understand it better, let’s take an example. For instance, Mr. X and Mr. Y invested in three mutual fund schemes, namely HDFC Equity Fund, Aditya Birla Sun Life Liquid Fund and HDFC Balanced Advantage Fund via a monthly SIP of Rs. 5,000 for each scheme on 01 April 2014. While Mr. X chose the regular plans of these schemes, Mr. Y chose to invest in the direct plans.

Value of Mr. X’s and Mr. Y’s investments after 5 years.

Particulars/Schemes HDFC Equity Fund Aditya Birla Sun Life Liquid Fund HDFC Balanced Advantage Fund
Mr. X (Regular plan) Rs. 4,00,335 Rs. 3,63,967 Rs. 4,05,544
Mr. Y (Direct plan) Rs. 4,10,115 Rs. 3,64,837 Rs. 4,14,396
Difference Rs. 9,780 Rs. 870 Rs. 8,852

Here’s a comparative analysis of the average expense ratio and average returns of the direct and regular plans of mutual funds across different fund categories.

Average Expense Ratio of Regular and Direct Mutual Fund plans

Fund Category Regular Plan Direct Plan Difference
Equity 2.02% 1.22% 0.80%
Debt 0.90% 0.42% 0.48%
Hybrid 1.96% 0.98% 0.98%

Source: Value Research, Data as on March 31, 2019.

As the table above shows, on an average, you will earn 0.50%-1% more per annum by investing in a mutual fund scheme through its direct plan rather than its regular variant.

Why Is the Direct Plan of a Mutual Fund Better Than Its Regular Plan?

  • Lower expense ratio.
  • Higher return due to reinvestment and compounding of amount which gets paid as commission in regular mutual fund plans.

How To Know If You Are Invested In Regular Plans Or Direct Ones?

The account statement/fund holding statement will clearly state whether your mutual fund plan is regular or direct. Typically, if you have invested in a mutual fund scheme through your bank, then it would be a regular plan. If you have invested via the website of the mutual fund, the plan would be direct.

Also, if you are receiving a ‘free of cost’ service from your investment agent or if he/she tells you he/she is paid by the mutual fund company then in all likelihood you have invested in a regular mutual fund plan and are paying a hidden fee.

Also Read: How To Switch From Regular To Direct Mutual Funds?

The post Direct v/s Regular Mutual Funds: Know the Difference appeared first on Compare & Apply Loans & Credit Cards in India-

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Capital One Mortgage Rate Review



Capital One began its business in 1994 in Richmond, VA. This bank offers plenty of lending options for businesses and commercial properties, such as loan syndications, multifamily property financing, SBA loans, and more.

Capital One has a BBB rating of one and a half out of five stars and a TrustPilot score of two out of five stars.

Capital One Overview

Capital One has 755 branches and 2,000 ATMs across the U.S., U.K., and Canada.

Even though this bank is primarily known for its credit card services, Capital One also has a business and commercial banking divisions, which focus on various types of lending.

Capital One announced in late 2017 that they would no longer offer mortgages on single-family homes due to the complexity of the market.

It is undetermined if Capital One will offer mortgage rates again.

Current Capital One Mortgage Rates

Today’s Best Home Mortgage Rates
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Capital One Mortgage Options

Capital One offers a wide selection of commercial and business loans, including:

Loan Syndications

Capital One offers flexible options for companies that need a credit structure that exceeds the limits set by many other banks. It works with business owners to structure a transaction that makes sense for both parties.

Syndicated loan agreements provide borrowers with efficient access to large amounts of credit, reduce the time spent negotiating credit agreements, improve financial control, and require only one request to decrease funds and create any changes to this transaction.

Business owners can use this funding as working capital, which they can use toward expenditures, acquisitions, and renovations.

Commercial Real Estate Lending

People looking to invest in a hotel, restaurant, shopping center, or other forms of commercial real estate can look into Capital One’s flexible options. This bank understands the importance of having enough working capital in commercial real estate. For this reason, it works cohesively with borrowers to create effective transactions for their specific needs.

Multifamily Property Financing

Capital One works with investors interested in purchasing multifamily real estate properties. Whether they want to be a landlord or want to go in on an investment with a group, it offers assistance and loans to help people achieve their goals.

Small Business Administration Loans

Small business owners might need to borrow some funding in order to achieve their goals. Small business loan options allow for longer payback terms and higher borrowing limits than many other conventional bank offerings. Some of their small business administration loan offerings include:

  • SBA 504 Loan Program, which works with a private, non-profit company that works to develop local communities
  • SBA 7(a) Loan Program, the most basic business loan: benefits include long-term financing, no balloon payments, and fixed maturity

Capital One Mortgage Customer Experience

Capital One offers plenty of explanations on its products on its website, whether you’re wondering about business lending or commercial loans. There is also an FAQ section, which answers the most common questions associated with these types of lending.

Capital One has received a substantial amount of recognition since its founding. It was named one of the “World’s Most Admired Companies” by FORTUNE. It is also considered one of the “Civic 50” Most Community-Minded Companies in the S&P 500.

Additionally, it was awarded several times for being “a great place to work,” especially regarding diversity and the millennial workforce.

The lender has experienced a few scandals in the credit card sector, however. One instance in 2012 caused the corporation to pay $210 million in settlement charges regarding the “deceptive” marketing of various credit card add-on products, according to Business Insider.

Capital One Lender Reputation

Founded in 1994, Capital One is a large bank that offers a variety of financial services, including commercial and business lending. Thanks partly to its 194 complaints on BBB, it has an overall score of one and a half out of five stars. It also has a TrustPilot score of two out of five stars, according to its 50 online ratings.

While these numbers may be justifiably worrying, it’s important to keep in mind that satisfied customers rarely give feedback, whereas disgruntled ones are more likely to do so. Considering Capital One’s fairly recent issues in the credit card sector, it’s surprising that the bank’s reviews aren’t worse. 

  • Date Collected: Nov. 7, 2018

Capital One Mortgage Qualifications

Generally, applying for a business or commercial loan requires borrowers to meet certain minimum qualifications. Lenders’ requirements can vary, but most typically require information on the following:

Credit Scores

Most banks, including Capital One, take borrowers’ credit scores into consideration when qualifying individuals for loans. Business owners might also consider building their business credit to apply for more flexible loan options.

Financial Documents

Many different lenders request that business owners and commercial real estate investors provide them with the following:

  • Personal and business tax returns
  • Balance sheet
  • Income statement
  • Commercial leases
  • Business licenses
  • Personal and business bank statements

Adequate Collateral

Many lenders require their borrowers to offer up some sort of asset that the lender can seize if the borrower cannot make their payments on time.

Capital One Phone Number & Additional Details

Homepage URL:
Company Phone: 703-448-3747
Headquarters Address: Capital One, 1680 Capital One Dr., McLean, VA 22102

The post Capital One Mortgage Rate Review appeared first on Good Financial Cents®.

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