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Finance Lifestyle

44 Ways to Make Money at Home (At Any Age or Skill Level) in 2021

Did you know that 3.9 million U.S. employees work remotely? It’s true. And it may sound like your dream job — making money from home (even in your PJs). You may be ready to start a full-time gig or take on a side hustle to meet your financial goals in 2021. Why not accomplish your money goals by staying home and working when you want to? Here are 44 ways to make money at home and on your own schedule.

If you’re not acclimated to working from home, this could be a whole new journey. You could fall in love with your work-from-home routine, taking it full-time, or only opt to take one-off online side hustles. Before starting this journey, jump through each section to see which jobs may suit you best:

 

Best Ways to Make Money from Home (At Any Age)

Best Ways to Make Money from Home (At Any Age)

There are various side hustles that can be done by most age groups and skill levels. For instance, entering data or selling used clothes online. To see which side gigs catch your eye, keep reading or jump through each age group.

1. Complete Online Surveys

Feedback can help companies fine-tune their products, services, and consumer interests — making them more money. To gather information, businesses will pay people to answer survey questions. You can take these surveys in your free time to earn extra money. Websites like Swagbucks, Branded Surveys, MyPoints, and LifePoints offer paid surveys from various companies. In most cases, money earned is paid through Paypal or gift cards.

  • Time: Low to high
  • Earnings: $5–35 per survey

2. Sell Your Favorite Stock Images

Have an eye for photography? Side hustle your passion and earn passive income for your favorite pictures. Post each photo on websites like iStockPhotos, Dreamstime, Shutterstock, and Getty Images to earn royalties. Each purchased photo could earn you anywhere from $0.25–0.45. If you post photos frequently, you could earn more as your online portfolio grows.

  • Time: Low
  • Earnings: $0.25–0.45 per image
  • Extra tools needed: Camera

3. Become a Virtual Assistant

As online businesses grow, so do their needs for extra help. You could lend your skills to busy-bees online. Tasks could include uploading images to ecommerce sites, scheduling appointments, or making phone calls. In most cases, these jobs pay $7–$40 an hour, depending on your skill level.

  • Time: Medium
  • Earnings: $7–$40 an hour

4. Earn Money Off Your Reviews

In an increasingly digital world, reviews play an important role in a brand’s success. For businesses to improve, they often ask for consumer feedback in exchange for cash. You can find companies that will pay you to try their product or service, or review purchases you’ve already made in exchange for discounts. For instance, Fabletics will give you extra bonus points, allowing you to build up to a paid credit, for every review you make online.

  • Time: Low
  • Earnings: $5–$30 an hour

5. Sell Household Items on eBay or Amazon

If you aren’t using something in your house, consider selling it. For example, you could have a couch or organizational bins that you don’t use anymore — sell them! Start by creating an account, take pictures of your sellables, and post them on eBay or Amazon. List each item at a price that works best for you.

  • Time: Low to high
  • Earnings: Pay varies by item
  • Extra tools: Camera or phone

6. Rent Your Gadgets by the Hour

Electronic waste increased by 21 percent between 2014 and 2019. To avoid the waste, you could make money off gadgets you don’t use while helping the planet. Websites like Aarons, Rent-A-Center, and Flexshopper find users willing to rent out various items. All you have to do is fill out your profile, post your products for rent, and earn extra monthly revenue.

  • Time: Low
  • Earnings: Up to $3,000 a month
  • Extra tools: Electronics, camera, or phone

7. Enter Data Online

Many companies need help adding files into databases. For example, a medical office may not have time to add their client documents into the database every day. To help out, you could get paid by the hour to add data to online platforms during your free time. The hourly wage varies, but in most cases, it’s between $10 and $30 an hour.

  • Time: Low to high
  • Earnings: $10–$30 an hour

8. Create and Sell Your Own Printables

Do you have an eye for design and organization? You could start up an Etsy account or build your own digital ecommerce website to sell printables. Selling digital products is a great way to earn passive income. All it takes is the initial time to create and post your favorite pieces to earn money while you sleep. Keep in mind, you may have to pay for your website, an Etsy business account, and an illustrator subscription to create the product.

9. Sell Your Unused Clothes Online

If you have unused clothes taking up space in your closet, sell them! Post them on websites like Poshmark, thredUP or The RealReal to make some cash. Each season, you can clean out your closet and earn enough to buy a few new pieces or add to your savings. Start by taking photos of the items you don’t want and post them online to see how much you could earn.

  • Time: Low to high
  • Earnings: Pay varies by item
  • Extra tools: Camera or phone

10. Become a Product Tester

New inventions normally go through countless rounds of testing. These testing stages ensure every bug is figured out before it reaches paying customers. In most cases, brands will pay you to try out these new products. Toluna, Nielsen, Vindale Research, and Pinecone Research are a few platforms that help you find products to test for some extra green.

  • Time: Low to high
  • Earnings: $10–$20 an hour

11. Bake (or Meal Prep) for Others

If you know how to make special treats and love to be in the kitchen, you could start a business based on your skills. You could earn $200–$400 a month by taking in special baking requests for up to 20 hours per week. Or, you could meal prep for neighbors that don’t have time or don’t like to cook. Companies like Snap Kitchen have capitalized on these services, yet yours could be fresher and have a small business touch.

  • Time: Medium to high
  • Earnings: Pay varies by item
  • Extra tools: Camera or phone

12. Transcribe by the Hour

With an abundance of podcasts, YouTube videos, and movies, many creators need transcribed copies of their work. In most cases, they hire out for it. Whether you’re good at typing or looking for a way to practice these skills, freelance as a transcriber. Get paid $15–30 an hour to transcribe audio.

  • Time: Medium to high
  • Earnings: $15–30 an hour

13. Start a Garden and Sell Your Produce

If you have a green thumb, get paid for it. Start your own garden and sell your produce. Start by marketing your side hustle on social media or create a web page for locals to check out. Sell your produce by food item or put together grocery boxes for those ready to stock up each week.

  • Time: High
  • Earnings: Pay varies by item
  • Extra tools: Garden space, gardening materials

14. Rent Out Your Clothes

You may have clothes you don’t use but don’t want to get rid of — maybe your old prom dress or suit? You can still keep your items, but free up some space by renting them out. StyleLend, Loanables, and RentNotBuy are a few platforms that allow you to rent out your favorite items. From costumes to dresses, you could earn a monthly profit off your unused items.

  • Time: Low to high
  • Earnings: Pay varies by item
  • Extra tools: Camera or phone

15. Play Online Games

Gaming can be a great way to relax, especially if you can get paid for it. If you have a gaming setup or a smartphone, create a side hustle off of your gaming interests. Cash Crate, Appcent, Applike, and AppNana are a few platforms that pay between $10 and $15 an hour playing video games. Just sit down, relax, and see how much you could earn by having some fun!

  • Time: Low to high
  • Earnings: $10–15 an hour
  • Extra tools: Gaming electronics, gaming supplies, and/or a smartphone

16. Make Money Off SkillShare

To showcase your skills and help others, you could share how-to videos on SkillShare similarly to YouTube. To do this, create an account and post helpful lessons on anything you’d like. For instance, how to make a digital downloadable printable could be a lesson. Each minute watched on your channel can earn you between $0.05 and $0.10.

  • Time: Low to high
  • Earnings: $0.05-0.10 per minute watched
  • Extra tools: Phone or camera, editing software

17. Earn Cashback From Everything You Buy

If you’re a frequent shopper, consider earning cash back each purchase you make. When shopping online, extensions like Honey or Gumdrop can earn you that cash back. When you’re making a trip to your local store, cash back credit cards may be more beneficial. As long as you pay off the balance on time, you could earn a profit from everyday purchases.

  • Time: Low
  • Earnings: Varies in earnings
  • Extra tools: Apps or website extensions, cash back credit cards

18. Start Investing (If You Haven’t Already)

Investing could help grow your money year after year and there are many different options depending on your risk tolerance. If you have room in your budget, why not make a profit off of it? Check out our top low-risk investments with high returns for a few investing ideas.

  • Time: Low
  • Earnings: Stocks can earn you roughly 7–10 percent, other investments vary

 

Easy Ways for Kids to Make Money at Home

Easy Ways for Kids to Make Money at Home

To learn how to budget your money, you must first learn how to make it. Before you’re legally able to start a full-time job, you may be looking for side gigs to help you save. Eating out with your friends or paying for a new toy could be your prize for all the hard work. Check out our favorite side hustles for kids below.

19. Start a Kids YouTube Toy Channel

Oddly enough, you could make hundreds, if not thousands of dollars on YouTube. Simply opening toys could bring in thousands of dollars per year. For example, JoJo Siwa made roughly $9,600 a day from her rapidly growing kids YouTube channel. Keep in mind, starting a YouTube channel does require consent from a guardian over 18.

  • Time: Medium to high
  • Earnings: $1,000–5,000 in ad revenue for every million views
  • Extra tools: Phone or camera, editing software

20. Sell Your Family Crafts Online

Have a craft night at home and then sell your artwork! You could make anything from Christmas ornaments to painted canvases. To sell your art, post your favorites on Etsy, Facebook Marketplace, or your own ecommerce website. Inform your loved ones of the sale and ask them to share on social media.

  • Time: Low to high
  • Earnings: Pay varies by item
  • Extra tools: Camera or phone, art supplies

21. Add Your Drawings to T-Shirts and Sell Online

If you have an eye for fashion and art, sell your drawings on a t-shirt. Create an Etsy account or start up your own website, with your guardian’s permission, to sell your items. Before creating your t-shirts, you will have to purchase blank ones and invest in an ecommerce store.

  • Time: Low to high
  • Earnings: Pay varies by item
  • Extra tools: Camera or phone, art materials, t-shirts

22. Craft Your Owns Stories to Sell

Do you love reading and storytelling? Work with your loved ones to curate your own story. Once it’s perfected, put it into a book. You could make each book by hand or create digital and bound books using Blurb. Sell your story to your closest loved ones or reach out to local publishers.

  • Time: Low to high
  • Earnings: Up to $10,000 (if published), plus royalties for every copy that sells
  • Extra tools: Art supplies (optional)

23. Make and Sell Candy Bouquets

For special occasions, most of us are looking for ways to indulge. To help others celebrate achievements, holidays, or special occasions, create candy bouquets. Purchase candy, a vase, small sticks, and tape to complete your bouquet. Upcharge your masterpiece by selling each one for $10–$40.

  • Time: Low to high
  • Earnings: $10–$40 for each bouquet
  • Extra tools: Candy bouquet materials, camera, or phone

24. Teach Online Music Lessons

Your loved ones may have already put you through music lessons, and if they have, help others do the same! Teach kids in your community how to play the piano, guitar, or even drums online. You could fit this side hustle into your after-school schedule and add it to your resume.

  • Time: Low
  • Earnings: Up to $50 an hour
  • Extra tools: Video software, musical instruments

 

Creative Ways for Teens to Make Money at Home

Creative Ways for Teens to Make Money at Home

As you get closer to high school graduation, you may be gearing up to start saving for the future. Before earning your diploma, having a full savings account is an important goal you can reach by side hustling.

25. Start a Blog (and Earn Money Off Ads)

Create a platform to share your passion. This passion could be fashion, career, music, reading, or even finance. Buy a domain and learn how to create your own website. Share all your favorite stories, tips, and advice on this site and add it to your resume. Place ads on your site or earn sponsorships as you make your way through school. Over time, each post could make you an extra $750.

  • Time: Low to high
  • Earnings: $25–750 a post
  • Extra tools: Illustration software, domain, website template (optional)

26. Test Out Affiliate Marketing

If you love to shop and have great taste, you could earn commissions off your purchases. Sign up for affiliate marketing programs like LikeToKnowIt, Amazon Associates, Solvid Affiliate, or eBay Partner Network. Every time a link you give out is used for a purchase, you earn a percentage of the sale. Add these links to your social media accounts and website pages, or send them directly to your loved ones.

  • Time: Low to high
  • Earnings: $100–$10,000 a month
  • Extra tools: Website or social media accounts

27. Love to Write? Proofread for Some Cash

If you love to write and read, you could be qualified to proofread copy by the hour. To find proofreading side hustles, create an account on a freelancing website like Upwork. Set your desired hourly wage and take on projects whenever you have free time. Your skills could help improve someone’s resume or research report.

  • Time: Low to high
  • Earnings: $25–50 an hour

28. Tutor

Based on your expertise, you could help tutor those in need of extra help. Create a profile on a freelancing platform or reach out to your local community. Tutor your favorite subjects: Writing, art, music, math, or science. Post your tutoring services on your social media accounts or create a profile on a freelance site like UpWork.

  • Time: Low to medium
  • Earnings: $10–$75 an hour
  • Extra tools: Video software

29. Pet Sit During Your Free Time

To make extra money and get your animal fix, pet sit during your free time or over the holidays. Apply to websites like Rover or Fetch! to connect with pet owners in your area. You’ll take care of the pet at your own home so you won’t have to worry about coordinating at someone else’s house. You could earn $15–90 an hour by watching your favorite furry friends.

  • Time: Medium to high
  • Earnings: $15–90 an hour
  • Extra tools: Camera or smartphone for pictures, a pet-friendly living arrangement

30. Start a Podcast

For those that like to chat, start a podcast. Bring on your favorite guests or go solo to talk about subjects important to you. Start by picking out a name, creating a website, and brainstorm your first 10 episodes. Before starting, consider investing in a microphone, stand, and any other electronics needed.

  • Time: High
  • Earnings: $500–900 per episode per 10,000 downloads
  • Extra tools: Podcasting equipment, editing software

 

Legitimate Ways for College Students and Young Adults to Make Money From Home

Legitimate Ways for College Students and Young Adults to Make Money From Home

College is all about building your resume and learning what you do and don’t want to do as you grow into your career. To learn new skills, take on jobs from home to learn what you want to pursue as a young adult. Not only can you discover what interests you, but you could also earn money while doing it.

31. Get an Online Internship

Get a head start in your future career and reach out to professionals about online internships. Attend virtual career fairs, contact your college career center, or reach out to your professional network for opportunities. Not only are you able to make some extra cash, but internships are a great way to build your resume.

  • Time: Medium to high
  • Earnings: $10–20 an hour

32. Freelance Your Skills

Have a passion for video editing, creating graphics, writing, or podcasting? Utilize your skills by applying to a freelancing website — add your resume, your hourly rate, and your expertise to get started. Those in need of your skills will reach out to hire you. Plus, this is a great way to earn money and find new career opportunities.

  • Time: Low to high
  • Earnings: Varies
  • Extra tools: Other tools depending on your skills

33. Become a Social Media Mogul

If you find yourself scrolling social media more than you should, you may have an eye for social media marketing — a skill many brands hire for. Reach out to local businesses or add social media marketing to your freelancing profile. Connect with those that pay $15–80 an hour to connect with their community using social media.

  • Time: Low to high
  • Earnings: $15–80 per hour
  • Extra tools: Smartphone, social media planning and management tools (optional)

34. Plan Trips for Those That Travel Frequently

While COVID-19 has slowed down travel, many still have to travel frequently. Whether these trips are for work or fun, many can’t be bothered with the planning. If you love organizing, creating schedules, and researching, plan trips for those that don’t like to. Post your skills on social media or a freelancing website to connect with those looking for your expertise.

  • Time: Medium to high
  • Earnings: Commission and earning fees vary

35. Be a Customer Service Representative

If you love to connect with strangers while running your weekly errands, you could make a great customer service representative. While many customer service professionals work in person, many others work remotely for ecommerce websites. To suit customers’ needs, work as a part-time, full-time, or freelance customer service representative. All you’ll need is a computer and maybe a phone or video software.

  • Time: Low to high
  • Earnings: $14–20 an hour
  • Extra tools: Video software and/or phone

SkillShare

36. Buy and Sell Website Domains

If you’ve ever heard of house flipping, there’s something similar called domain flipping. Instead of buying a house and renovating it, you could buy a website domain and clean it up. If you have an interest in coding, consider purchasing used domains for cheap to renovate. Not only could you earn up to $300 for each domain you resell, but you could practice your coding skills.

  • Time: High
  • Earnings: Up to $300 per domain
  • Extra tools: Coding or website building tools (optional)

37. Research For Others on TaskRabbit

Some companies need conductive research done on different industries, consumer markets, or even on their own company. To help out, you could get hired on TaskRabbit to conduct research for businesses or independent employees. You could earn anywhere from $17–$80 an hour to complete research tasks. To get hired, create an account, fill out your profile, and market yourself on social media.

  • Time: Low to high
  • Earnings: $17-80 an hour

38. Start An Online Community (That Pays)

If you have a loyal following, you could create a unique platform just for them. For instance, websites like Patreon help users create communities through a monthly subscription plan. You’re able to share exclusive content, connect with your community, and earn money. Market this idea on your social media and to your closest loved ones to show support.

  • Time: High
  • Earnings: Varies in earnings
  • Extra tools: Social media

39. Monetize Your Car with Ridesharing

You may have a car, but spend most of your time at home. While you’re spending your day without using your vehicle, rent it out using Turo. You could be able to earn up to $1,000 a month. This money could go to your gas, car insurance, or your car payment (if you have one). Plus, you could earn spare cash to invest and grow your earnings.

  • Time: Low to Medium
  • Earnings: Up to $1,000 a month
  • Extra tools: Smartphone (for app communication) and vehicle

 

Remote-Friendly Ways for Seniors to Make Money from Home

Remote-Friendly Ways for Seniors to Make Money from Home

You may have fulfilled your career and opted for retirement. Or, you may be ready to start a new venture on top of your current job. For easy ways to make money and teach others about your lessons learned, keep reading below.

40. Rent Out Your Unused Living Spaces

Having unused space could earn you a profit. Whether you have an unused guest house, spare room, or even a full apartment, consider renting it out. Depending on your location, square footage, and amenities, you could earn more than your mortgage or rent payments. Websites like Airbnb, Vrbo, and HouseTrip help connect short-term renters with landlords.

  • Time: Low to high
  • Earnings: $200–800 a month
  • Extra tools: Smartphone (for app usage and communication) and extra space

41. Try Your Hand at Entrepreneurship

Thirteen percent of Americans between 55 and 64 started a new business in 2019 — it’s never too late! You could start anything from an online store or bootstrapping your own media agency. Investing in your passions could keep you busy and earn you money on the side.

  • Time: High
  • Earnings: Varies in earnings
  • Extra tools: Other tools depending on your interest

42. Rent Your Extra Driveway Space

Your extra driveway space could be more valuable than you think. If you have a driveway in a safe area going unused, you could rent it out. Customers can park their campers, boats, four wheelers, cars, or trucks. You can make up to $320 a month on a platform like Boxcar.

  • Time: Low
  • Earnings: Up to $320 a month
  • Extra tools: Driveway, camera, or phone for pictures

43. Refurbish Furniture

Refurbishing old furniture could make you a lot of money and be a fun side project. If you frequently find used furniture to flip for your own living space, you could also start a business. Consider flipping furniture and selling it on Etsy, Facebook Marketplace, on your social media platforms, or your own website.

  • Time: High
  • Earnings: Varies in earnings
  • Extra tools: Computer, refurbishing tools, camera or smartphone

44. Help With Resume Writing

You may have already gone through your career and learned some valuable lessons. To help others get started on their own career journey, help write and edit resumes. Charge $50–$75 per resume to bring in extra side hustled profit. Taking it a step further, design resume templates to sell to your favorite customers at a premium.

  • Time: Low to high
  • Earnings: $50–75 per resume
  • Extra tools: Scripting software or illustrator (optional)

Working from home is the perfect way to earn money. You could be traveling the world or enjoying your morning coffee in your PJs while making money. Whether you’re looking to start a side gig or a full-time job, doing it from your couch is a great option. Who knows, you could uncover a new passion or pay off your credit card debt. To learn how to budget these earnings, download our app and follow our how to guide.

The post 44 Ways to Make Money at Home (At Any Age or Skill Level) in 2021 appeared first on MintLife Blog.

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Finance Lifestyle

Habit Stacking: 5 Steps to Take Charge of Your Finances

We all have mini habits we do every day that go unnoticed. For example, brushing your teeth, making your bed, or paying your credit card bills. Even though they may seem small at first, these small habits could amount to way more than just reaching a simple goal. Making your bed could be the baseline to having a more productive day at work and earning you a raise, rather than just having a clean house. Establishing and building upon these mini habits may be the ultimate trick to making your lifestyle and budget goals a reality. This trick to the trade is called habit stacking.

Created by James Clear, a writer and a personal development keynote speaker, habit stacking is the act of using simple habits to reach big goals. James highlights how habit stacking can help you get one percent better every day without experiencing burnout or overexhaustion. This habit stacking routine consists of adding actions you want to create on top of actions you already do.

For example, you may want to pay off credit card debt, but aren’t able to control your spending habits. To encourage mindful spending, make a habit of checking in on your budget each morning after you brush your teeth. This keeps your spending top of mind from the moment you start your day, and makes it easy to consistently carry out.

Interested in learning more about how habit stacking works? Keep reading, or jump to our infographic, to see how this may work for you and your goals.

What is a Habit Stacking Routine

What Is Habit Stacking?

Habit stacking is the art of combining your current habits with ones you want to start. Essentially, you take a habit you already do every day, and pair it with a simple one you want to do every day. For example, you may already make coffee every morning, and you also want to work out more. With this stacking routine, you could immediately do a few stretches while your coffee brews.

Once you’ve mastered the art of stacking one habit upon another, you build upon each habit until you have a full routine. This may turn your two-step stack into something like this: make coffee, do two push ups, make your bed, drink a full glass of water, and check in on your budget.

Stacking your habits is a great way to build routines you’re able to show up for, even when you feel unmotivated. Once you’ve proven your ability to show up for yourself consistently, you could grow your habits. Instead of doing two pushups after brushing your teeth, you may feel like doing 20. These simple changes help you establish your dream life, career, or budget.

What Is Habit Stacking?

5 Steps to Stack Your Habits to Improve Your Finances

Setting up a habit roadmap at the beginning of your journey will help you stay on top of your goals. Here’s our five-step approach to building, and sticking to, your ideal habit routine.

Step 1: List Out Your Current Habits

First, list out simple habits you already do when you wake up. Common morning habits include making coffee, brushing your teeth, checking emails, and working out. Note which habits you do every day, and which habits you only do occasionally. For example, if you only work out some mornings, you may want to habit stack on your daily cup of coffee instead.

Step 2: Brainstorm Money Habits You Want to Implement

Now, write out financial habits you want to create. Do you want to save more this year? Would you like to be more mindful with your spending habits? List out goals you’d like to reach and what habits could get you there. Here are some examples of attainable mini goals to stack onto your current routines:

  • Read one page of a finance newsletter after turning on your coffee machine
  • Check in on your budget after you brush your teeth

Step 3: Make Your New Routines Foolproof

Once you understand what habits will help you reach your money goals, make them as simple as possible. Your goal could be to spend money more mindfully. To do that, establish a habit of checking your budget every morning after getting out of the shower. Doing this could help you be mindful of your purchasing decisions. Plus, taking a minute to check in on your budget could feel too simple not to do every day.

Step 4: Attach a New Money Habit to a Current Habit

It’s time to habit stack to curate your perfect daily routines. Start by taking a habit you do every day and pair it with a habit you want to do every day. This may look like this:

  • “When I make my morning coffee, I will check in on my budget.”
  • “After I brush my teeth every morning, I will add a penny to my savings jar.”

While mapping out your habit stacks, use this model:

Step 4- Attach a New Money Habit to a Current Habit

Step 5: Stay Positive and Consistent With Your Money Goals

When the goals and habits you want to create are broken up into mini goals, it can be easier to complete them. But, there will still be times you feel unmotivated — that’s completely normal! When you’re feeling unambitious, remember the goals you’re working towards. Checking in on your budget daily may motivate you to make your coffee at home over ordering takeout.

Habit stacking may be the perfect recipe for establishing self-care financial habits. To see how this strategy may look like in other avenues of your lifestyle, check out our infographic below. Before you know it, you may have stuck to your budget or saved more than you ever thought you would.

Habit Stacking: How to Build Successful Daily Routines

The post Habit Stacking: 5 Steps to Take Charge of Your Finances appeared first on MintLife Blog.

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Finance Lifestyle

FHA vs. Conventional Loans: Which Is Better?

When it comes to affording a new home, you have a few types of home loans to choose from. Prospective homebuyers often compare the FHA vs. the conventional loan when researching loans. Each loan type has certain stereotypes associated with them, but we are here to give you the facts about both FHA and conventional loans. This post will help you understand what each loan is, familiarize you with the differences between them, and provide some guidelines for how to pick which one is best for you.

What Is An FHA Loan?

An FHA loan is insured by the Federal Housing Administration (FHA). These loans are issued by private lenders, but lenders are protected from losses by the FHA if the homeowner fails to repay. FHA loans are generally used to refinance or buy a home.

What Is A Conventional Loan?

A conventional loan is supplied by a private lender and isn’t federally insured. Requirements for obtaining a conventional loan vary depending on the lender. When used to buy property, conventional loans are typically known as mortgages.

What Is A Conventional Loan?

Differences Between FHA and Conventional Loans

The main difference between FHA and conventional loans is whether or not they are insured by the federal government. Conventional loans aren’t federally backed, so it’s riskier for the lender to loan money. On the other hand, FHA loans are protected by the government, and as a result of less risk, they can typically offer better deals.

This difference in federal insurance is the reason why FHA and conventional loans vary when it comes to the details of the loan. Keep reading to learn the differences regarding credit requirements, minimum down payments, debt-to-income ratios, loan limits, mortgage insurance, and closing costs.

FHA Loan Conventional Loan
Minimum Credit Score 500 620
Minimum Down Payment 3.5% 3%
Maximum Debt-to-Income Ratio Credit score of 500: 43%
Credit score of 580+: 43-50%
Credit score of 620: 33-36%
Credit score of 740+: 36-45%
Loan Limits Low-cost counties: $356,362
High-cost counties: $822,375
Contiguous US: $548,250
High-cost counties, AK, HI, and US territories: $822,375
Mortgage Insurance Mortgage insurance premiums required. Private mortgage insurance required with down payments less than 20%.
Property Standards Stricter standards, property purchased must be a primary residence. Flexible standards, property purchased doesn’t have to be a primary residence.

Sources: FHA Single Family Housing Policy Handbook | Fannie Mae 1 2 | Federal Housing Finance Agency | Freddie Mac | HUD 1 2 | Consumer Financial Protection Bureau 1 2

Credit Score

Your credit score is a determining factor in your loan eligibility. Your credit score is measured on a scale of 300 (poor credit) to 850 (excellent credit). Good credit helps you get approved for loans more easily and at better rates. FHA and conventional loans differ in their credit score requirements and represent financial options for individuals at either end of the credit spectrum.

Minimum Credit Score for FHA Loan: 500

  • Accepts a credit score as low as 500, but usually with a 10% down payment
  • These loans accept lower credit scores because they are insured
  • Note: Some lenders may only issue FHA loans with higher credit scores

Minimum Credit Score for Conventional Loan: 620

  • Accepted score may vary from lender to lender
  • These loans are usually offered to individuals with strong credit because they present less risk to lenders

Minimum Down Payment

A down payment is the sum of money that is paid as a percentage of your purchase up-front.

Minimum Down Payment on an FHA loan:

  • 10% of your purchase with 500 credit score
  • 3.5% of your purchase with 580+ credit score

Minimum Down Payment on a Conventional Loan:

  • 3% of your purchase can be put down with good credit
  • 5% to 20% of your purchase price is typical

Debt-to-Income Ratio

Your debt-to-income ratio is the amount of money paid toward debt each month divided by your total monthly income. To be eligible for a loan, you must be at or below the maximum debt-to-income (DTI) ratio.

Maximum DTI Ratio Guidelines for FHA loans:

  • 43% with a credit score of 500
  • 43–50% with a credit score of 580

Maximum DTI Ratio Guidelines For Conventional Loans:

  • 33-36% with a credit score lower than 740
  • 36-45% with a credit score of 740 or higher
  • 50% highest allowed through Fannie Mae

Loan Limits

Both FHA and conventional loans have limits on the amount that you can borrow. Loan limits vary based on your location and the year your loan is borrowed. Find 2021 loan limits specific to your county through the Federal Housing Finance Agency.

2021 FHA Loan Limits

  • High-cost counties: $822,375
  • Low-cost counties: $356,362

2021 Conventional Loan Limits

  • Contiguous US (excluding high-cost counties): $548,250
  • Alaska, Hawaii, US territories, and high-cost counties: $822,375

Mortgage Insurance

Mortgage insurance is taken out to protect the lender from losses in case you fail to repay your loan. Whether you will pay private mortgage insurance or mortgage insurance premiums is based on your loan type and down payment percentage.

FHA Loan

  • Mortgage insurance is required for all FHA loans.
  • It is paid to the FHA in the form of mortgage insurance premiums and includes an up-front and monthly premium.
  • MIP payments last the entire life of your FHA loan.
  • To get rid of MIPs after paying 20% of your loan, you can choose to refinance into a conventional loan.

Conventional Loan

  • Private mortgage insurance (PMI) is only required when a down payment below 20% is made.
  • PMI comes in different forms: monthly premium, up-front premium, and split premiums.
  • PMI requirements stop once you have met one of three requirements:
    1. Principal loan amount is reduced to 80% before the loan term ends.
    2. At least 78% of the principal balance is scheduled to be paid down.
    3. The halfway point of your loan term has passed.

Property Standards

There are different property standards that must be met to use each loan. FHA loans have stricter requirements, while conventional loans have more flexibility.

FHA Loan

  • Property purchased with FHA loans must be your principal residence, meaning the borrower has to occupy the residence
  • FHA loans can’t be used to invest in property (e.g., renting out or flipping)
  • Title must be in the borrower’s name or name of a living trust

Conventional Loan

  • Property purchased with a conventional loan doesn’t have to be a principal residence — second or third residences are allowed
  • Conventional loans can be used to purchase investment properties

Pros and Cons of FHA vs. Conventional Loans

As a result of the various differences between FHA and conventional loans, each type has its respective pros and cons.

FHA Loan

Conventional Loan

Pros

  • Qualify with low credit and high DTI
  • Smaller down payments overall
  • More affordable with low credit
  • Lowest option for down payments with good credit
  • PMI cancellable
  • More affordable with good credit
  • Property doesn’t have to be your main home

Cons

  • Mortgage insurance premiums required for life of loan
  • Property purchased must be your main home
  • Need higher credit and lower DTI to qualify
  • Typically has larger down payments
  • PMI required with a down payment less than 20%

Pros and Cons of FHA Loans

FHA loans are government-regulated and insured to extend flexible opportunities for homeownership. They’re flexible regarding credit and DTI, but stricter about insurance and property standards.

Pros

  • Flexible qualification with low credit and high DTI
  • Smaller down payments overall
  • More affordable with low credit

Cons

  • Mortgage insurance premiums required for life of loan
  • Property purchased must be your primary residence

Pros and Cons of Conventional Loans

Conventional loans can also offer flexibility, but generally only if you have good credit and demonstrate reduced risk to the lender. These loans have stricter qualifications, but flexibility in other areas.

Pros

  • Lowest option for down payments (3% with good credit)
  • Private mortgage insurance can be canceled (must meet requirements)
  • More affordable with good credit
  • Property purchased doesn’t have to be a primary residence

Cons

  • Strict qualifications require higher credit and lower DTI
  • Larger down payments are typical
  • Private mortgage insurance required with a down payment less than 20%

Which Loan Is Better For You?

Both FHA and conventional loans have their advantages and disadvantages. Here are some general guidelines for when to use an FHA loan or a conventional loan.

When To Use an FHA Loan

  • You have a low credit score (500–619)
  • Your DTI ratio is on the higher side (between 45–50%)
  • You can only afford a small down payment
  • You plan to use the property as your primary residence

When To Use an FHA Loan

When To Use a Conventional Loan

  • Your credit score is fairly good (620 or above)
  • Your DTI ratio is on the lower side (33–36%)
  • You can afford a larger down payment
  • You want flexibility with insurance and repaying your loan

When To Use a Conventional Loan

It’s important to thoroughly research your options before choosing a loan. A key takeaway when comparing FHA vs. conventional loans is that FHA loans are federally insured and conventional loans aren’t. This distinction results in different qualification and payment requirements for each loan.

Use the information in this post to carefully compare the differences in accepted credit scores, minimum down payments, loan limits, maximum debt-to-income ratios, mortgage insurance and property standards. In doing so, choose the loan that works for your circumstances and helps you best afford the home of your dreams.

Sources: FHA Single Family Housing Policy Handbook | US Dept. of Housing and Urban Development | Federal Housing Finance Agency | Freddie Mac

The post FHA vs. Conventional Loans: Which Is Better? appeared first on MintLife Blog.

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Finance Lifestyle

5 Ways to Stick to Your Financial Goals in 2021

You might have already identified your financial goals to start in 2021, but a couple weeks into the New Year, how you’re going to stick to your financial goals is probably already creeping into your thoughts. It is a sad truth that many New Year’s resolutions fade by the time the calendar turns over to February, if not before. While setting goals is not something that can or should only happen in January, it’s also true that turning over a new year also helps inspire many people to turn over a new leaf in their life. So if that describes you, here are 5 ways to help you stick to your financial goals for 2021.

Know what is a goal and what is a task

The very first thing to do is to know what makes a good goal. You’ve probably heard of SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound). Along with sticking to the SMART strategy, it’s good to set goals that aren’t just tasks.

To give you an idea, here’s an example of a task masquerading as a goal regarding physical fitness. A task might be to exercise for 30 minutes, 4 days a week. That is nice and good, but without a bigger meaning behind it, it’s hard to stick to it when it gets hard (which it always does). It’s best to set a bigger goal, like preparing for a particular race, or something specific about your overall health, and then set out the tasks that will help you accomplish that (like exercising). Just like improving your physical fitness, the same thing holds true for setting goals to increase your financial fitness.

When you only compile a list of tasks that you want to do, it makes it harder to stick with them when things get challenging. It’s best to set goals (financial or otherwise) that fit into your mission, vision, and where you want to be in the future. Then, you can come up with the tasks that will help you achieve your goals.

Be honest about what’s realistic

You may have incorporated some of the items on our list of money moves to make in the new year, but it’s also important to stay realistic. If you have $100,000 of debt and an income of $40,000 / year, it may not be realistic to set a goal to pay off all of your debt this year. In addition to being realistic about the content of your goals, it’s also a good idea to be realistic about how many goals you can tackle at one time. Start with one or two goals. Once you turn those into solid habits, then turn your attention to additional goals.

Don’t be afraid to give yourself a day off

On January 1, everyone is so optimistic about all of the things that they are going to accomplish in the new year. Everyone is exercising, counting their calories, and sticking to their budgets. But by January 15, many people have fallen back into their pre-existing routines. There are a variety of reasons for this, but one reason is that it can be difficult or impossible to be perfect all day, every day.

Along with staying realistic about the number and content of your goals, a great way to keep you on track with your financial goals is to understand that slip-ups happen. So instead of letting one day off or one mistake sabotage your goal completely, consider how you could plan for them and what you’ll do if (when!) it happens. Don’t be afraid to plan an off day for your goals, financial or otherwise so you can be more sustainable in the long run.

Write it down

Goals that are not written down are more likely to become just wishful thinking. If you have a goal that you’ve been thinking about, make sure that it is written down. According to a study performed at Domincan University in California, “You are 42 percent more likely to achieve your goals if you write them down.” One of the best strategies in sticking to your financial goals is to write them down, post them where you can see them, and even better, share them with trusted friends and family (see the next section).

Find an accountability partner

Another great way to stick to your financial goals is to find an accountability partner. This can be a spouse, partner, family member, or other trusted friend. With an accountability partner, you can set regular check-ins where you can each report progress on your financial goals, and talk about any struggles. Knowing that you have someone that will be asking about your progress can be a great way to help you stick to your goals.

If you can’t find or don’t want to have an accountability partner, create your accountability in some other way. You can also consider why it is that you don’t want to have an accountability partner. Spending some time understanding this resistance can go a long way to helping you stick to your financial goals.

The post 5 Ways to Stick to Your Financial Goals in 2021 appeared first on MintLife Blog.

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Finance Lifestyle

How a CFP Celebrates Her Money Wins

People may often imagine that when they reach their milestones, there will be fireworks and party buses along with a huge celebration. And while sometimes there are, most wins are simply small steps you take every day until one day you wake up where you visualized you would be. That is why it is important to celebrate it all — the ups, the downs, the wins, the steps forward, and sometimes even backward. Without awareness and reflection, you might miss out on celebrating how much progress you have made in your financial life. By acknowledging even the so-called small things, you can keep the momentum alive and feel good about yourself.

Here are some ways I celebrate my money wins, no matter how big or small:

Tell my family and friends.

By sharing my money wins and even challenges with my closest friends and family, it opens me up to receive the love and support that is needed to sustain the financial journey. I think because money is still a topic most do not feel comfortable talking about, getting vulnerable with close family and friends allows them to do so with me in return. That kind of give and receive is part of living an open, abundant life. If you’re comfortable, you can even share on social media about your wins, which could inspire others. Sharing your money goals and personal finance journey also helps you stay out of the “I am all alone” mindset, which is not true and can actually hold you back from receiving more in your financial life.

Pause and feel proud of myself.

There are so many specific times in my life where I felt my money wins viscerally and just paused to take a moment to feel proud of myself for doing it. Whether it was saving a certain amount of money, negotiating a specific compensation package, or changing a mindset pattern holding me back from living abundantly, I can recall the memories specifically and feel great about them and myself. I remember years ago when I sold my first business and received the payment in my bank account, I felt amazing to know that I actually did it. I had finally reached my financial goal. It was just a regular workday and I was alone doing my weekly money date. And I distinctly remember feeling all the excitement and joy knowing I had accomplished something I worked on for years. The irony is when we reach our financial goals such as buying a home, paying off our student debts, or reaching our cash cushion goal, there aren’t actually big fireworks. Instead, you feel a deep understanding within yourself that you finally reached a goal you may have been striving toward for years.

Remember I can keep doing what it takes.

When celebrating my money wins, it also reminds me that I have the power to do and create what I want in life. By using my real-life experiences of achieving something I have worked for, I am reminded that I can continue doing so to achieve whatever next financial goal I have. When I reached my cash cushion goal years ago, I remembered that I have the power to keep creating my financial life as I desire and have the discipline to save for my goals. These reminders are key because no matter where we start financially, we all have the power to create our lives as we want, and choose how we show up, behave, think and act with our money. We are not victims. When I feel that and know that in my being, I feel anything is possible and am able to stay in the positive, “I can,” mindset.

Buy something memorable to acknowledge my hard work and effort.

This does not always have to be something major but can even be something that you have been wanting for a significant amount of time. When I reached my own financial goal last year of making a certain amount of business revenue for the year, I decided with one of my larger incoming checks to my business, I would take a portion and buy myself a designer handbag I had wanted for a few years. It was a gift to myself that I could enjoy and remember my hard work to achieve it. But you don’t always have to spend a lot. I also treat myself to smaller things like a massage or treating my family or friends out to a nice dinner. I just try to take time to celebrate by enjoying something nice whether it is a material item or a nice experience with my loved ones.

Journaling my accomplishments.

Every year, I take time to reflect on my total accomplishments for the year by journaling them out. This activity is solely for me to remember all I have achieved and to feel good about my accomplishments. By reflecting, I am able to connect to the positive aspects and blessings in my life to acknowledge how incredible I am. We tend to focus on what we are lacking or what we are not. By doing this activity, you are shifting your mindset and balancing the scales in a sense.

It’s common to look internally and criticize ourselves. Our mind jumps to comparing, thinking, “I don’t have this or that or I didn’t do this or that” or even feeling like a failure. With that mindset, you can get stuck only focusing on what you are not and have not, instead of embracing all that you are and all that you have. Having an attitude of gratitude goes a long way, especially with money. So take time to celebrate and feel grateful for what you have and all that you have accomplished. I truly believe this will also help you continue to attract more in your life.

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