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Helping customers like you achieve their financial goals is all we do, which is why we’re arming you with our expert insight, tips, and advice to help you get there.

APM Elevate: March 2024

As we transition into the spring season, we're excited to share valuable insights and updates from the world of home finance.

In this edition, we'll delve into important industry trends, provide helpful resources to empower you on your homeownership journey - and even share a few tips about your IRA and changes to credit card late fees that are on the horizon.

APM Elevate March 2024

Whether you're a first-time buyer, a seasoned homeowner, or simply curious about the mortgage landscape, we're here to keep you informed and equipped with the knowledge you need. Let's dive in and explore what March has in store!


Join Us in Celebrating Women's History Month

March is Women's History Month, which makes it an ideal time to look at women's role in American banking and finance, together with their achievements over the decades.

First, let's look at some historical examples of financial inequality that you may or may not be aware of.

  • Until 1974, banks could legally deny credit to women based solely on their gender or marital status. Sometimes credit was issued only if there was a co-signer, such as a husband or father.
  • During the 1960s, gender redlining was common. Women were charged higher interest rates than men, especially if they were single or divorced.
  • Both financial and other businesses often required women to quit their jobs if and when they married. This eliminated their ability to build a separate credit history.

Although 100% equality hasn't yet been achieved, the last decades have seen some major improvements.

  • In 2009, the Lily Ledbetter Fair Pay Act became law. It stated that employers were prevented from discriminatory pay rates based on sex, race, color, religion or national origin.
  • An increasing number of women have become CEOs of Fortune 500 companies during the past 24 years. Economist Janet Yellen became the first head of the Federal Reserve.
  • Women have become better savers, putting away an average of 9% of their annual earnings while men save an average of 8.6%.

Source: bankrate.com


Ready To Buy? A HomeReady® Loan May Be the Answer.

The last years have made home ownership more challenging, especially for buyers who need assistance with closing costs. Beginning earlier this year, changes to the HomeReady mortgage program were announced, including a $2,500 credit for borrowers with limited incomes.

HomeReady loans are backed by Fannie Mae, a government-sponsored entity that was created to help more working Americans buy homes. Applicants may qualify for a HomeReady mortgage or refinance if their household income falls under a certain limit.

Other guidelines, such as flexible credit scores and down payments as low as 3%, make HomeReady an option for those who may not qualify for other types of mortgages. Questions? Contact me to learn more about HomeReady and other home financing options.

Source: singlefamily.fanniemae.com


Bypass the Roth IRA's Income Limits Through the Backdoor

If you've set up a Roth IRA to help fund your retirement, you can look forward to tax-free withdrawals and additional investment options. However, you may eventually run up against the Roth IRA's income limits, which means you would no longer be able to make contributions to your account.

One strategy to bypass the income limits is by setting up a backdoor Roth IRA. This allows you to convert non-deductible, traditional IRA contributions to a Roth IRA.

What is the difference between a Roth IRA and a backdoor Roth IRA?

A Roth IRA is an account which allows tax-free withdrawals in retirement. When you have a Roth IRA, you contribute after-tax dollars—up to a certain limit every year. You'll find details of these limits online at the IRS website.

A "backdoor" Roth IRA allows high earners to sidestep the Roth IRA's income limits by converting nondeductible traditional IRA contributions to a Roth IRA. That typically requires you to pay income taxes on funds being rolled into the Roth account that have not previously been taxed. Here are the basic steps for backdoor contributions:

1. Open and make a nondeductible contribution to a new traditional IRA, or contribute to an existing traditional IRA.

2. Convert your contributions to a Roth IRA. The nondeductible contribution principal amount won't be taxable as with a normal Roth IRA conversion, but the earnings may be taxable.

One important rule relevant to the backdoor Roth conversion is the pro rata rule. If you you attempt to convert after-tax traditional IRA contributions to a Roth IRA, but there are existing pretax IRA dollars, you may be subjected to taxation on a prorated basis.*

Source: empower.com

*We're pretty smart, but we are not licensed financial planners, CPAs or tax professionals. You may want to discuss your Roth IRA strategies with someone like them.


Being Polite Goes a Long Way, Even With AI

Whether you've begun conversing with ChatGPT, Google Bard or another AI chatbot, you'll want to be nice to them, no matter what mood you're in. Here's why.

Recently, researchers at Cornell University tested six popular AI chatbots by assigning them dozens of tasks, using up to 150 different prompts each time. Out of several trends that emerged, the chatbots that received polite prompts delivered better, more accurate responses.

Researchers found that impolite prompts "may lead to a deterioration in model performance, including generations containing mistakes, stronger biases, and omission of information." This wasn't limited to English language prompts and responses, as the chatbots responded similarly when receiving prompts in Japanese and Chinese.

While they weren't hurting any chatbot feelings, they found that they mirrored certain communication traits shared by humans (well, most of us). Asking a question politely in real time generally encourages a better response, and many chatbots' language models have adopted this.

Source: axios.com


CFPB Reins In Credit Card Late Fees

Earlier this week, the Consumer Financial Protection Bureau (CFPB) issued a new ruling to reduce the typical credit card late fee from around $32 to $8. The agency said that the 45 million consumers who incur occasional late fees could save more than $10 billion (about $31 per person in the US) each year.

While some banking trade groups objected to this move, legislators see it as an effort to close a loophole in the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009.

Here's more background on this move: The CARD Act banned credit card companies from charging higher late fees than necessary to cover the costs associated with the late payment. But the Federal Reserve Board of Governors voted to include a provision in the CARD Act that allowed banks to charge up to $25 for the first late payment and $35 for other late payments. In addition, these figures were adjusted for inflation. This resulted in average late fees growing to $32 in 2022, which was $10 more than 2010 fees.

The lower fees are expected to take effect within three months, which would give card issuers time to update their disclosures and systems.

Source: nerdwallet.com


St. Patrick's Day Sugar Cookies

Not only does this recipe for traditional sugar cookies contain secrets for easier rollouts, you'll also discover how to apply icing that stays put! In addition to a shamrock-shaped cookie cutter, you can use plain rectangular cutters for Irish flags or even hat-shaped cutters for leprechaun headwear.


Smart Phone, Smart Car...Now Smart Furniture

Have you ever checked into a hotel room and spotted lamps or tables with built-in USB chargers? You may have even already bought one or more items of furniture for your home with these add-ons, especially if you're prone to losing or loaning out your phone or laptop charge cords.

If you're redecorating this spring, you may want to consider one or more of these items. They can help you relax, be more productive, or never get out of bed until you're good and ready.

Smart Tables

If your idea of a perfect game day or Netflix binge-watch is to never have to get up to grab a drink or snack, a smart table could be the solution. While these began to appear several years ago, some manufacturers have taken smart tables into genius mode. For example, LIVTAB's LT135 smart coffee table contains refrigerated drawers, wireless speakers, a charging center and lights. You can also consider a smaller bedside table/fridge combo complete with motion-detected light.

Gaming and Work Desks

While a smart desk can help you take control of the various power cords running from your computer, monitors and speakers, there are more features available. In addition to the popular standing desk option, other add-ons include monitor arms, built-in lighting and additional ways to control those pesky power cords.

Smart Beds

While the ultimate bedroom should be a relaxing place, a smart bed can offer these and plenty more. While not for smaller budgets, a smart bed may include built-in speakers, USB charging ports, integrated lighting, and more. Some of the most luxurious models come complete with an air purification system and massage chair.

Source: jubileefurniturelv.com


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