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Am I crazy to buy this house?

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Basic info about me:

  • ~40 years old
  • Live in the US
  • Married, with five kids
  • Have $20k in savings.
  • Have $110k in a 401k (was more before the recent crash, but I'm assuming/hoping that will bounce back up eventually).
  • Base salary is $105k, annual bonus is usually ~$10k
  • Wife's salary is $16k (she could make more, but this is her dream job and we live comfortably)
  • Current mortgage balance $110k, on a house worth around $170k (so $60k equity).
  • Current mortgage balance $85k on an empty lot we've bought (explained below).
  • Owe $20k on our minivan.
  • No other debts (just the mortgages and the van).

We're currently living in a 1700 sq ft house. With several kids all growing up, and some hitting teen years, it's getting more cramped than we'd like. Wife and I have been looking at buying some land to build on. We found a large piece of land that we love, and purchased it, and are in conversations with a builder to build a house. The house we are considering building will cost ~$290k to build, so when combined with the cost of the land ($85k), we'll be looking at about a $375k mortgage. We plan to sell our current house as soon as we can move into the new house, and expect about a $50k profit from it, which will drop our balance down to $325k.

This has all been coming together over the last 6 months or so. I've been a bit uneasy about it, because $325k is a LOT of money to me, but always telling myself "Eh, it's the next step in life, and we can afford the payments."

Whenever I google "how much house can I afford", I find multitudes of housing/budget calculators that all tell me I "can afford" $400k – $500k of house based on income and debt/income ratio. I put "can afford" in quotes because I've always been skeptical of online budget calculators/estimates. This is partly because my wife and I have so many kids, and it feels like many "rules of thumb" go out the window for us, because we're not a typical family. But I don't know what else to base my assumptions off of. Everything I read says around 25% of gross monthly income is an acceptable limit for housing. But by that logic, we could even go up to $500k on a 30 year mortgage.

However those numbers seem absolutely insane to me. I did not grow up wealthy, but we were comfortable, probably average middle-class. My first house with my wife was $80k, which we fixed up and sold for a small profit. Our current house is worth $170. Each time we've bought a house, I remember thinking at the time "omg this is SO much money" but we've never had trouble paying our bills or putting money into my 401k. But I really wonder when is it TOO much?

We're planning on this being our "forever house". In talking to the builder and making designs for the house, we're trying to get plenty of space for the kids to finish growing up, while not having a huge excess of space after they move out (don't want to retire in a mansion).

Bottom line: Am I crazy for considering buying a $325k house with an income of ~$130k and five kids to support? The debt calculators say it's well within their "acceptable" margins, but I still can't shake the feeling that that's well over a quarter-million dollars!

Thanks for any help!

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Liveops Is Hiring 10,000 Remote Customer Service, Sales Reps

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Over the course of three months, customer-service outsourcing company Liveops is filling 10,000 part- and full-time independent contractor openings in 35 states and Washington, D.C. Positions are immediately available.

“As a Liveops agent, you can work when and where it best fits your personal schedule,” CEO Greg Hanover said in an announcement, noting that the openings are a good opportunity for those who aren’t ready to return to offices or storefronts amid the pandemic.

The hiring initiative focuses on two key remote positions: customer service agent and a licensed insurance sales agent.

To meet basic qualifications, you should have:

  • Experience handling inbound calls
  • At least one year of customer service experience
  • Computer and typing skills
  • English fluency

As a licensed insurance agent, you’re also required to have life and health insurance producer licenses in at least three states that Liveops operates.

FROM THE MAKE MONEY FORUM

Both positions are available in Alabama, Arkansas, Arizona, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Mississippi, Montana, Nebraska, New Mexico, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, Wyoming and Washington, D.C.

For the customer-service job, apply here. For the insurance sales job, apply here. Separate customer-service positions are open if you prefer nights and weekends

For the daytime positions, Liveops recommends you schedule at least 15 hours per week, between 8 a.m. and 10 p.m. Eastern on weekdays and between 9 a.m. and 6 p.m. Eastern on Saturdays.

Liveops pays a per-minute rate of talk time plus applicable commissions and incentives. The base per-minute rate for the customer service agent is 25 cents (potentially $15 an hour). For the licensed insurance agent, the per-minute rate is 30 cents (potentially $18 an hour) plus a $7 sales commission per call.

According to self-reported earnings on Glassdoor, Liveops agents tend to earn between $9 and $16 an hour, with a most commonly reported hourly rate of $14.

As an independent contractor, you’re expected to have your own equipment ready to go, including a telephone and laptop computer with a hard-wired internet connection. Your set-up must meet certain home-office requirements.

Still on the fence? Have any burning questions? Before you apply, you can talk directly with one of Liveops’ talent acquisition specialists at a live-streamed information session. The company holds the events twice a week: Mondays at 3 p.m. Eastern and Wednesdays at 6 p.m. Eastern.

Looking for a different gig? Browse the latest work-from-home jobs in The Penny Hoarder’s free portal. We vet each company and post new opportunities every weekday.

Adam Hardy is a staff writer at The Penny Hoarder. He covers the gig economy, entrepreneurship and unique ways to make money. Read his ​latest articles here, or say hi on Twitter @hardyjournalism.

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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Best Interest Rates on Cash – June 2020

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Another month of slight rate drops, although bank accounts can still beat out Treasury bonds and/or brokerage cash sweep options by a significant margin.

Here’s my monthly roundup of the best interest rates on cash for June 2020, roughly sorted from shortest to longest maturities. I track these rates because I keep 12 months of expenses as a cash cushion and also invest in longer-term CDs (often at lesser-known credit unions) when they yield more than bonds. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 6/2/2020.

High-yield savings accounts
While the huge megabanks make huge profits while paying you 0.01% APY, it’s easy to open a new “piggy-back” savings account and simply move some funds over from your existing checking account. The interest rates on savings accounts can drop at any time, so I list the top rates as well as competitive rates from banks with a history of competitive rates. Some banks will bait you with a temporary top rate and then lower the rates in the hopes that you are too lazy to leave.

Short-term guaranteed rates (1 year and under)
A common question is what to do with a big pile of cash that you’re waiting to deploy shortly (just sold your house, just sold your business, legal settlement, inheritance). My usual advice is to keep things simple and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a fixed interest rate that can never go down, but you can still take out your money (once) without any fees if you want to use it elsewhere. Marcus has a 7-month No Penalty CD at 1.20% APY with a $500 minimum deposit. Ally Bank has a 11-month No Penalty CD at 1.20% APY with a $25,000 minimum deposit. CIT Bank has a 11-month No Penalty CD at 1.15% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Lafayette Federal Credit Union has a 12-month CD at 1.61% APY ($500 min). Early withdrawal penalty is 180 days of interest. Anyone can join via partner organization for one-time $10 fee. Note that you will have to park $50 in a share savings account while a member.

Money market mutual funds + Ultra-short bond ETFs
If you like to keep cash in a brokerage account, beware that many brokers pay out very little interest on their default cash sweep funds (and keep the difference for themselves). The following money market and ultra-short bond funds are NOT FDIC-insured and thus come with a possibility of principal loss, but may be a good option if you have idle cash and cheap/free commissions.

  • Vanguard Prime Money Market Fund currently pays an 0.32% SEC yield. The default sweep option is the Vanguard Federal Money Market Fund which has an SEC yield of 0.20%. You can manually move the money over to Prime if you meet the $3,000 minimum investment.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 1.61% SEC yield ($3,000 min) and 1.71% SEC Yield ($50,000 min). The average duration is ~1 year, so there is more interest rate risk.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 1.87% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 1.83% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months. Note that there was a slight drop in net asset value during the recent market stress.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-bill interest is exempt from state and local income taxes. Right now, this section probably isn’t very interesting as T-Bills are yielding close to zero!

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 6/2/2020, a new 4-week T-Bill had the equivalent of 0.12% annualized interest and a 52-week T-Bill had the equivalent of 0.17% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 0.57% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a -.04% (!) SEC yield. GBIL appears to have a slightly longer average maturity than BIL. Expect that GBIL yield to drop significantly as it is updated.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. There are annual purchase limits. If you redeem them within 5 years there is a penalty of the last 3 months of interest.

  • “I Bonds” bought between May 2020 and October 2020 will earn a 1.06% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More info here.
  • In mid-October 2020, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with exceptionally high interest rates. The negatives are that balances are capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). Some folks don’t mind the extra work and attention required, while others do. There is a long list of previous offers that have already disappeared with little notice. I don’t personally recommend nor use any of these anymore.

  • The only notable card left in this category is Mango Money at 6% APY on up to $2,500, but there are many hoops to jump through. Requirements include $1,500+ in “signature” purchases and a minimum balance of $25.00 at the end of the month.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with unique risks. You have to jump through certain hoops, and if you make a mistake you won’t earn any interest for that month. Some folks don’t mind the extra work and attention required, while others do. Rates can also drop to near-zero quickly, leaving a “bait-and-switch” feeling. I don’t use any of these anymore.

  • Consumers Credit Union Free Rewards Checking (my review) still offers up to 4.09% APY on balances up to $10,000 if you make $500+ in ACH deposits, 12 debit card “signature” purchases, and spend $1,000 on their credit card each month. The Bank of Denver has a Free Kasasa Cash Checking offering 3% APY on balances up to $25,000 if you make 12 debit card “signature” purchases and at least 1 ACH credit or debit transaction per statement cycle. If you meet those qualifications, you can also link a savings account that pays 2% APY on up to $50k. Thanks to reader Bill for the tip. Find a locally-restricted rewards checking account at DepositAccounts.

Certificates of deposit (greater than 1 year)
CDs offer higher rates, but come with an early withdrawal penalty. By finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD to keep the ladder going. Some CDs also offer “add-ons” where you can deposit more funds if rates drop.

  • Lafayette Federal Credit Union has a 5-year certificate at 2.02% APY ($500 min). Beware that the early withdrawal penalty is 600 days of interest! Anyone can join via partner organization for one-time $10 fee. Note that you will have to park $50 in a share savings account while a member.
  • Pen Air Federal Credit Union has a 5-year certificate now at 1.85% APY ($500 minimum). Early withdrawal penalty is 180 days of interest. Their other terms are competitive (relatively), if you want build a CD ladder. Anyone can join this credit union via partner organization ($3 one-time fee).
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. You may need an account to see the rates. These “brokered CDs” offer FDIC insurance and easy laddering, but they don’t come with predictable early withdrawal penalties. Vanguard has a 5-year at 1.05% APY right now. Be wary of higher rates from callable CDs listed by Fidelity.

Longer-term Instruments
I’d use these with caution due to increased interest rate risk, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10 years? You can buy long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable early withdrawal penalties. Watch out for higher rates from callable CDs from Fidelity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a unique guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently a sad 0.10% rate). I view this as a huge early withdrawal penalty. But if holding for 20 years isn’t an issue, it can also serve as a hedge against prolonged deflation during that time. As of 6/2/2020, the 20-year Treasury Bond rate was 1.24%.

All rates were checked as of 6/2/2020.



“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.”

Best Interest Rates on Cash – June 2020 from My Money Blog.


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Housing Loan Terminology Decoded

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If you are in the market, looking out for a home loan, you may be having a hard time understanding the complicated home loan terms—especially if you are new in the market. To help you make an informed decision with a clear mindset, here are some of the key terminologies associated with a home loan.

1. Partial Disbursement

This refers to the case when the loan amount is released by the lender in stages. Such a case occurs when the property for which the loan is availed is under construction. [Read Also: Home Construction Loan]

2. Full Disbursement

This refers to the case when the loan provider disburses the full loan amount at one go.

3. Equated Monthly Installment (EMI)

This is the amount to be paid by the borrower every month, towards repayment of the availed home loan. EMI amount is the combination of principal amount and the applicable rate of interest.

4. Pre-EMI

In case partial disbursement of a loan, only monthly interest payments are made on the amount disbursed, before the actual EMIs begin. Such a payment is called Pre-EMI. [Check Also: Home loan EMI Calculator]

5. Margin

It is the difference between the maximum loan amount offered by the lender and the actual market value of the property. In other words, Margin may also be understood as the down payment to be made by the borrower.

6. Balance Transfer/Refinance

It is a special facility offered to existing home loan borrowers, who wish to move their home loan account to a new lender and pay off the outstanding amount with the proceeds from a new loan.

Check Also: Home Loan Balance Transfer 

7. Prepayment Penalty/Charges

This is the additional amount to be paid by the borrower while making a prepayment. It is important to note that there are no prepayment charges applicable to individual borrowers. However, standard charges, as prescribed by the lender, will be applicable to non-individual borrowers.

8. Loan to value ratio (LTV)

This is the ratio of the maximum loan amount offered by the lender to the actual market value of the property.

9. Credit Score/CIBIL Score

This score represents the evaluation of a borrower’s ability to repay the loan. The score is primarily based on the credit report and other information sourced from various credit bureaus.

10. Pre-Approved Property

Some lending institutions already have a list of pre-approved properties from authentic, trustworthy builders that are legally verified and evaluated on various parameters. Choosing a pre-approved property allows the buyer to stay assured and avoid the hassle of legal and technical evaluation.

11. Offer Letter

Once a loan has been approved/sanctioned, the lending institution releases an offer letter to the borrower, containing loan-related information such as:

It is important to note that the loan is disbursed after the completion of documentation and property verification.

12. Amortisation schedule

This refers to a detailed table of recurring loan payments that contains a bifurcation of the principal component and the interest charged in an EMI till the loan is completely repaid.

13. Security

This is the asset provided by the borrower to the lender as collateral for the availed loan. In most cases, the security required is the equitable mortgage of the property for which the loan is availed.

14. Repayment tenure

This is the time frame under which the borrower has to fully repay the loan.

15. Default

This occurs in a case when the borrower fails to timely pay the EMI amount. Certain penal interest is levied by the lending institution on subsequent EMIs in case of default.

Keeping the above terminologies in mind will definitely help you better understand the terms and conditions of any lending institution, to make a sound judgement.

The post Housing Loan Terminology Decoded appeared first on Compare & Apply Loans & Credit Cards in India- Paisabazaar.com.



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