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March 2021

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Stay away from crony loans, focus on high quality loans: CEA Subramanian

Chief Economic Advisor KV Subramanian on Tuesday urged financial institutions to avoid crony lending and focus on high-quality loans for asset creation that will help the country grow into a $ 5,000 billion economy. .

He said that the Indian banking sector since the early 1990s has faced the problem of poor quality loans, especially on large loans, and funds are not given to most creditworthy borrowers but to capitalists. friends, which caused great distress.

“When the financial sector decides to lend to a particular borrower who is more connected even though that borrower may not be the most creditworthy, it means that the capital is not provided. There is an opportunity cost because the capital is not going to a more creditworthy borrower, ”Subramanian said at an event hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI) on Tuesday.

It is the duty of the financial sector to ensure that an optimal allocation of capital occurs in the economy, he said.

“I think it’s extremely critical now that the financial sector takes on this responsibility of providing high quality loans, especially on the infrastructure side, and really avoids crony lending… I think that’s basically the mantra. the financial sector, ”he said. mentionned.

Subramanian also suggested strengthening corporate governance in the financial sector to ensure high-quality loans and link top management incentives to quality loans.

“Incentive mechanisms must be put in place to prevent crony lending, as infrastructure projects involve high gestation periods,” he added.

He said financial institutions should avoid “permanent” and “zombie” loans because they freeze capital for creditworthy borrowers.

Development finance institutions will play an important role as infrastructure finance requires very specialized expertise, he said. Finance Minister Nirmala Sitharaman in the FY22 budget proposed to set up a Rs 1 lakh crore development finance institution (DFI) to accelerate infrastructure finance activities.

The infrastructure financier, to be called the National Bank for Infrastructure and Development Finance (NaBFID), is to anchor the ambitious National Infrastructure Pipeline (NIP), under which around 7,000 infrastructure projects with an investment of Rs 111 lakh crore has been identified by the government.

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What were the 10 worst tax policy ideas of 2020?

It goes without saying that 2020 has been a terrible year. It brought the worst pandemic in a century, the nastiest presidential election campaign in modern U.S. history, and an extraordinary example of policy-making failure in the face of a historic public health and economic crisis.

Nevertheless, it is time for Vox Taxation to name the 10 worst tax policy ideas of 2020. The first three come from the states, courtesy of my colleague from the Center for Tax Policy Richard Auxier. The rest is for the 2020 presidential campaign and pandemic relief.

10. Illinois’ failed progressive income tax initiative. A more progressive income tax would have helped solve the state’s longstanding tax problems. But instead of putting something simple on the November ballot, the legislature sent voters a unnecessarily complex plan which also included a poison pill, an unpopular tax on retirement income. It’s no surprise that voters rejected the plan. Now the governor says he needs to cut spending by $ 700 million this year.

9. Proposals to abolish taxes on state income Mississippi, West Virginia, and Arkansas. Lawmakers in Republican states often look for ways to swap the income tax they hate for higher sales taxes. But why did they try to do it in the midst of a pandemic when sales tax revenue decreased with consumer spending? None of these proposals will become law, but this is a case study in tax denial.

8. Missing a tax windfall. You might think cash-strapped states would seek tax revenue wherever they can get it. Again Florida and Missouri have still not organized to collect taxes from online retailers, even though it has been more than two years since the Supreme Court Wayfair The ruling allowed states to require online sellers to collect and remit these levies. In case Florida and Missouri haven’t noticed, online sales are booming.

7. Delay required distributions from pension plans. Congress decided it did not want to force retirees to take their required 2020 Minimum Distributions (RMDs) in the face of a declining stock market, so the CARES Act allowed them to postpone mandatory withdrawals to next year . At best, the delay was little more than a gift to the wealthiest retirees. But that hasn’t done anything for the vast majority of seniors, who receive distributions because they live on it, not because the IRS requires it. Oh, and the stock market is up over 60% since the CARES law was passed in late March.

6. Loss carryovers. A third very bad idea in the CARES law. This allowed companies to use losses to offset profits, and thus reduce the taxes of previous years. If Congress had only done this for pandemic-related losses in 2020, it might have been defensible. But it has allowed companies to use losses going back to 2018 to offset profits as far back as 2013. Back to the future was a fun movie. The concept makes tax policy terrible.

5. President-elect Joe Biden’s promise not to raise taxes for those earning $ 400,000 or less. There were two things wrong with this central promise of Biden’s campaign. The first is the underlying assumption that $ 400,000 in annual income somehow defines a struggling middle-income household. Quick reminder: the median household income in the United States in 2019 was $ 68,703. Second problem: it will be really difficult for Biden to keep his promise.

4. President Trump’s fiscal black box: No presidential candidate in living memory has said less than Trump about what he would do with voter taxes if elected. Five chips is not really a campaign platform.

3. Return from lunch three martinis. Before 2017, businesses could deduct 50% of the cost of business meals and entertainment. The Tax Cuts and Jobs Act abolished the tax deduction for business entertainment and further limited the deduction for meals. But President Trump, owner of hotels and golf courses, has called on Congress to reinstate the 100% deduction for business meals. And Congress welcomed it. Let’s raise a fully tax-deductible toast to one of the worst tax provisions in the bill.

2. Trump’s payroll tax holiday. What if you had a Christmas party and no one came? In August, Trump announced a decree which allowed workers to defer paying payroll taxes in the last quarter of 2020. Trump not only called it a public holiday, he promised to “end” the tax, which supports Social Security. Except that his order only postponed the tax. This meant that workers had to offset their unpaid payroll taxes in 2020 in 2021. Fortunately, few private employers accepted his idea of ​​Trump, although federal workers had no choice.

1. The winner is: The failure of Congress and President Trump to agree on additional pandemic relief for nine months. When the pandemic first struck, Congress responded quickly and cautiously. But then a toxic combination of campaign politics and an almost complete absence of presidential leadership stalled the effort until lawmakers finally passed a bill this week. Since their last action in March, more than 310,000 Americans have died from COVID-19 and 9 million fewer are working. Tragically, this epic failure in policy making wins the Lump of Coal Award 2020.

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4 types of debt consolidation loans to avoid

Debt consolidation through a personal loan can be an effective strategy for paying off existing debt; However, these four types of debt consolidation loan options are not ideal and should be avoided. (iStock)

Many Americans face the personal finance challenge of overcoming student loan debt, credit card debt, and mortgage debt; so much so that some think they may never be able to fully pay off their debt. Even if you have a large balance on several loans, a personal loan allows you to pay off your debts in an affordable and responsible way.

Whenever you are considering taking out a personal loan, whether it’s to consolidate your debt or participate in home renovations, use Credible’s free online tools to compare rates and lenders. Taking a few extra minutes can save you time and money.

4 debt consolidation loans to avoid

Choose from consolidate debt in one personal loan is generally a smart option for those who have multiple loans outstanding. Unfortunately, not all debt consolidation loans offer the same benefits. In fact, there are four loans to avoid when consolidating debt, including:

  1. High interest rate loans
  2. Loans with high fees
  3. 401 (k) loans
  4. Home equity loans

1. Loans with high interest rates

Taking out a high interest rate loan is not recommended in most scenarios, especially when trying to consolidate debt. Although the average personal loan rates are between 11% and 14%, you can find rates as low as 3.99% if you shop around. Through compare the rates of several lenders, you can clearly identify the best rate available on the market and make sure you aren’t paying too much when paying off your debts.

There are many debt consolidation loans available for borrowers with varying financial backgrounds. Explore your personal loan options by visit Credible to compare rates and current lenders.

HOW TO GET A $ 100,000 LOAN

2. High cost loans

Before committing to a personal loan with a lower interest rate, it is important to take into account the other costs associated with the loan. Some lenders will offer personal loans with additional fees attached. One of the charges is an original charge, which can also be listed as an “underwriting”, “administrative”, or “handling” charge. These fees can reach almost 10%, unnecessarily increasing the amount of your reimbursement.

Would you like to know more about the fees charged by some lenders on personal loans? Visit Credible to get in touch with experienced loan officers who will answer all your questions about personal loans.

EVERYTHING YOU NEED TO KNOW ABOUT PERSONAL LOANS

3. 401 (k) loans

If you’ve spent years investing in your 401 (k), tapping into that savings account might seem like a reasonable option to pay off outstanding debt. It’s easy to see this as an opportunity to effectively borrow from yourself and eventually pay it back with the interest that goes back to your pocket.

Unfortunately, this is not as easy as it sounds. Withdraw money from your 401 (k) can be a risky decision, as it jeopardizes your financial future in several ways. You may be required to pay taxes or penalties on the borrowed amount if it is not paid back on time or if you lose / quit your job before the loan is paid off. You will also potentially reduce the overall amount matched by your business, preventing you from maximizing your retirement savings.

5 DIFFERENT TYPES OF LOANS TO CONSIDER

4. Home equity loans

As you pay off your mortgage, you build equity in your home. This equity is accessible through lump sums through a home equity loan. Many homeowners tap into that equity to renovate their homes or to cover emergency expenses.

however, home equity loans should not be used to pay off existing debt. A home equity loan ties the debt to the home itself, which means it can be foreclosed if you don’t pay off the loan.

Using Personal Loans For Debt Consolidation

There are pros and cons to using personal loans for debt consolidation. Here’s what you need to know.

Benefits

Debt consolidation through a personal loan can be beneficial when chosen responsibly.

  1. Lower cost of the loan: Consolidating multiple loans into one loan with a low interest rate and low fees can reduce the overall cost of the loan.
  2. It’s easier to maintain: Not only can you save on total expenses, but a single loan is much easier to manage and maintain.
  3. Help prevent late payments: Ultimately, this can prevent late or missed payments, which will increase your overall spending and potentially disrupt your other financial goals.

Managing multiple high interest loans can be costly. Visit Credible and use their personal loan calculator to find the best personal loan rates.

The inconvenients

However, there are also some things to be careful of.

  1. Not all borrowers enjoy the same benefits: While using a personal loan for debt consolidation can be a profitable option, not all borrowing will enjoy the same benefits.
  2. You may have trouble getting approved: Factors such as your credit rating, debt-to-income ratio, and loan size can affect the approval process, which means a personal loan may not be the ideal debt consolidation strategy. such as high credit card balances.

According to Experian data, the an average American has just over $ 6,000 in credit card debt. If you are having trouble managing your credit card debt, you should also consider opening a balance transfer card to pay your bills. A balance transfer card allows you to transfer your existing credit card debt to a new card with a lower APR.

To see if you qualify for a balance transfer card, visit an online marketplace like Credible to view multiple 0% credit card options at once.

CAN YOU GET A PERSONAL LOAN WITHOUT A CREDIT CHECK?

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Northern Andover businesses secured $ 91 million in federal P3 loans

NORTH ANDOVER, MA – Businesses in North Andover have received $ 91 million in loan approvals under the federal paycheck protection program, according to data released Tuesday by the Small Business Administration.

The loans went to 729 companies and ranged from $ 667 to almost $ 5 million. Applicants said the loans would help them protect 6,469 jobs in North Andover.

Neighbor Andover got even more, with $ 126 million going to 723 companies.

Data released this week includes all loans under the program passed in March as the coronavirus pandemic took hold and forced large-scale business closings and layoffs. The SBA released loan data in July, but that data only showed loans over $ 150,000 and did not include specific dollar amounts.

The Washington Post, Bloomberg and other media companies sued the SBA for releasing the full data set. In November, a federal judge ruled in favor of the media companies and ordered the SBA to release the data by December 1. Data released on Tuesday was current to November 24 and includes updates to data released in July.

Previously on Patch: These North Andover Companies Obtained PPP Loans Over $ 150,000

PPP loans are part of the CARES Act, a comprehensive COVID-19 relief program passed by Congress in the spring. Loans are repayable as long as a certain percentage is used for payroll. The program stopped receiving new requests in August, but business groups are lobbying federal lawmakers and the Trump administration to renew the program.

In North Andover, the loans went to:

  • FH Cann and Associates, a debt collection agency. Biggest loan in town: $ 4.904 million.
  • Bake’n Joy Foods, which makes baking mixes and pasta. Obtaining a loan of $ 3.2 million.
  • United Plastic Fabricating, a plastic manufacturer. Obtaining a loan of 2.8 million dollars.
  • Edgewood Retirement Community. Received a $ 1.8 million loan, which they said would protect 315 jobs, the most of all North Andover loans.
  • Proscape NA, a trucking company. Obtaining a loan of $ 667.
  • Hundreds more.

Statewide, there were nearly 118,000 loans totaling $ 14.27 billion. In their loan applications, the companies that received the loans said they would help protect 1.17 million jobs in Massachusetts.

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Digital lender SoFi plans IPO

Digital lender SoFi is the last company to explore an independent public offering, according to a new report.

SoFi, headquartered in San Francisco, has held talks with a number of blank check companies to go public, according to CNBC.

The lender was the last valued at $ 4.8 billion after a roundtable last year. While best known for refinancing student loans, the startup also offers a variety of other financial products, including personal loans, small business loans, home equity loans, and mortgages.

SoFi has made a big effort in recent years to go beyond a specialization in student loan refinancing. In 2016, SoFi announced a partnership with Fannie Mae, which included a new loan option that allowed homeowners to refinance their mortgage at a lower rate and pay off an existing student loan balance.

On the mortgage front, SoFi is primarily targeting the jumbo market and will fund loans of up to $ 3 million. The lender requires a minimum of 10% down payment on all mortgages, but does not require PMI on the loans. While there is no setup fee, there is a one-time loan processing fee of $ 1,495. Borrowers with an existing SoFi product can get a reduction of $ 500 on the loan processing fee.


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SoFi is not the originator of government guaranteed loans, so it will not be the best option for FHA or VA borrowers. However, SoFi offers conforming conventional mortgages (10, 15, 20 and 30 year fixed mortgages).

According to Pitchbook data, SoFi has raised more than $ 3 billion in capital. Donors include the Qatar Sovereign Fund, a private equity firm Silver Lake and technology investor Peter Thiel. If it ends up going the PSPC route, it will follow two other mortgage lenders to choose the investment vehicle: United Wholesale Mortgages and black stone-possesses America’s Finance both should be made public in the coming months.

The company said it had recently received preliminary and conditional approval from the Office of the Comptroller of the Currency to establish a national banking charter. The company has also diversified into equity trading and cash management accounts.

In June 2019, three of SoFi’s senior executives left the company amid reported struggles with profitability.

According to data Recursion companies, SoFi securitized approximately $ 1.9 billion in mortgages in 2020, with a service portfolio valued at approximately $ 2.5 billion as of December 1.

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Damage caused by Beirut explosion runs into “billions”, central bank to offer interest-free loans

The damage caused to the Lebanese capital in the explosion of the port of Beirut on Tuesday, which left more than 135 dead and displaced some 300,000 people, amounts to “billions” of dollars, the country’s central bank said on Wednesday.

Bank to approve interest-free loans for five years to individuals and businesses whose assets have been destroyed, central bank official told CNBC Hadley gamble. It will also sell dollars to all importers of aluminum, wood or glass at the rate of 3,900 Lebanese pounds per dollar, well below the black market rate of over 8,000 pounds to the dollar.

Lebanon is currently facing the worst financial crisis in its history, and it was the case before the explosion and the coronavirus pandemic. The country’s currency remains officially pegged to the dollar, but this is an artificial peg, set at 1507.5 Lebanese pounds per dollar since 1997. Years of excessive sales of dollars by the central bank to support the Lebanese pound as well that a myriad of other financial mismanagement and the surge in foreign exchange debts caused their real value to plummet and left the country virtually devoid of dollars, essential for importing goods.

A man checks the damage at this heavily damaged old Lebanese apartment building in Beirut’s trendy Mar Mikhael neighborhood on August 6, 2020 following a massive explosion in the Lebanese capital.

Patrick Baz | AFP | Getty Images

The country was already struggling to import food and basic items – and imports account for 80% of its food needs.

Lebanese banks placed restrictions on withdrawals, leaving residents stranded in their bank accounts, and those who saved in local currency saw their lifelong savings wiped out. The crisis raises the question of how Lebanon will now rebuild itself after its ability to import supplies was already threatened.

Beirut residents in shock and mourning after the huge explosion at the city’s port tore up miles of surrounding homes and businesses and injured more than 4,000 people. Hospitals are overwhelmed, some too damaged by the explosion to function.

A before (L) and after satellite image after a massive explosion in Beirut, Lebanon.

Source: Planet Labs

The explosion was originally blamed on 2,750 tonnes of ammonium nitrate stored in an unsecured warehouse for the past six years at the cargo port of Beirut. But the government later announced an investigation to determine within five days the exact cause of the explosion and “who was responsible.”

The Lebanese cabinet said on Wednesday that all port officials who have overseen storage and surveillance since 2014 have been under house arrest, Reuters reported citing ministerial sources.

Many countries have offered to help Lebanon, including France, the United States, the United Kingdom, the United Arab Emirates, Qatar, Iran, Jordan, Kuwait and, more unexpectedly, Israel – with whom Lebanon has no diplomatic relations.

—Hadley Gamble of CNBC contributed to this article.

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Average US Debt by Type, Age, and State

Personal Finance Insider writes about products, strategies, and tips to help you make informed decisions with your money. We may receive a small commission from our partners, such as American Express, but our reports and recommendations are always independent and objective.

The average American has $ 52,940 in debt for mortgages, home equity lines of credit, auto loans, credit card debt, student loans, and other debts like personal loans.

Data from Federal Reserve Bank of New York Household Debt and Credit Report breaks down the average amount of debt Americans owe by type, age, and location of borrowers. The data was collected from a random sample of approximately 5% of Americans with information on the credit report.

Here’s what the average American owes.

Average US debt by type of debt

Here is a breakdown of the total amount, according to the Federal Reserve Bank of New York Household Debt and Credit Report from the first quarter of 2021.

Mortgage debt is the most important debt of most Americans, far surpassing other types. Student loans are the second largest type of debt listed in the data.

Average U.S. Debt by State

Where a person lives tends to have a big influence on the amount of debt they accumulate.

While some parts of the country have higher house prices and the cost of living it may be lower in other states. Residents of California, for example, tend to have higher average mortgage balances than many other states with more affordable housing, such as Texas and Ohio.

Here is the average debt by type for residents of each U.S. state, according to New York Federal Reserve Board 2019 data. Scroll right to see total debt amount.

Average U.S. Debt by Age

Debt tends to peak in middle age. Overall, this suggests that Americans tend to pay off debt in retirement and tend to maintain low debt balances in retirement, especially those over 70. For those under 30, the main source of debt is student loans.

While age-separated 2019 data was not available, Insider took 2017 data from the Federal Reserve Bank of New York who specified the total debt by age group and divided it by the number of people in each age group to find the mean.

It should be noted that this calculation distributes the debt over the entire population, including those who do not have this type of debt. Debt per person can be higher if it is calculated only on the basis of the population with this type of debt.

Here’s how the average debt balance breaks down by age group. Scroll right to see more data.

In this data, it should be noted that the low average HELOC mortgage and balance rates for people 29 and under are caused by low homeownership rates. According to Census Bureau data, only 34.4% of Americans under 35 owned a home, while 60.3% of Americans aged 35 to 44 owned a home in the first quarter of 2017.

How to start paying off debt

If you want to pay off some of your debt, here’s where to start:

Choose a reimbursement method and set a goal

Whichever method you choose, the first step will be to take stock of everything you owe, the total amount you owe, and the interest rate. Then you can start prioritizing what you owe.

Two popular strategies are the avalanche of debt and the snowball of debt. Debt snowball tackles smaller debt first to build momentum, then working on larger debt, while debt avalanche first focuses on paying down debt at higher interest to reduce the amount you pay overall.

Consider consolidating or refinancing when interest rates are low

For borrowers with credit card debt and other relatively small debt with high interest rates, consolidate your debts could make them more manageable. Debt consolidation Loans consolidate all of your existing debts into one debt, with one monthly payment and one balance. You could pay less interest on a debt consolidation loan than on a credit card, especially when interest rates are low.

Refinancing might be a smart move for people with larger debts, like mortgages, private student loans, and auto loans. Refinancing replaces your current loan with a new loan and can often help lower the interest rate. With interest rates now much lower than they were in the past, refinancing could be a smart decision to reduce your interest costs and reduce your debt.

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You’ll never believe it, but the Trump and Kushner companies have secured millions in PPP loans

Almost four years later Donald trump moved into the White House, there are a number of things that we expect from the administration, of which incompetence, chaos and self-operation are actually quite predictable. The president can be expected to spend a significant portion of his day tweeting incomprehensible attacks on people deemed disloyal. We can expect that Stephen miller will be actively hatch unique ways to make immigrant life hell. And we can expect that, if the opportunity arises, Trump and his children will do everything in their power to profit from the presidency, no matter how transparent and corrupt it is.

So really, it was only a matter of time before we learned that businesses owned by Trump and his son-in-law’s family were receiving millions of dollars in pandemic relief loans. Or that despite the fact that the money was largely intended to prevent employees from being fired, only a handful of employees at companies owned by Trump and Kushner were kept on the payroll. Through NBC News:

Scanning [analysis of] data released by the Small Business Administration … revealed that properties owned by the Trump organization as well as the Kushner companies, owned by the family of Jared kushner, son-in-law and senior adviser to President Donald Trump, took advantage of the program.

More than 25 PPP loans worth more than $ 3.65 million have been made to companies with addresses in Trump and Kushner real estate properties, paying rent to those owners. Fifteen of the properties said they kept only one job, no jobs, or reported no numbers.

Trump, of course, chose not to quit his business on becoming president, and continues to profit from it – profits that have been well boosted by his insistence on accommodation foreign rulers in its properties, defraud the secret service, and impose on taxpayers for the water he drinks in Mar-a-Lago, among others. Kushner, with Ivanka, made at least $ 36 million last year, largely thanks to his stake in his family’s real estate company. (In 2017, the duo reported income of at least $ 82 million, so times are obviously tough.)

In addition to revealing loans to Trump and Kushner companies, PPP data showed ridiculous mismanagement of the program, with over 100 loans going to unnamed companies listed and other companies appearing to play with the system for loans ranging up to $ 10 million through their affiliates.

The original stated intention of the PPP programs by officials was to help payroll for small businesses struggling with the effects of coronavirus lockdowns…. But almost from the start, the programs, especially PPP, drew criticism for the way they were administered and delivered, and for their fairness. Large national banks initially only granted loans to customers with whom they had pre-existing lending relationships. Businesses owned by people of color without strong banking relationships found themselves with limited access and forced them to find other avenues of funding.

There was also the lingering question of what defined a ‘small business’, after lobbying from the hotel and restaurant industry inflated the maximum number of employees allowed to 500, even though more than 98% of small businesses in America have less than 100 employees.

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Average mortgage payment by state, city and year

Personal Finance Insider writes about products, strategies, and tips to help you make informed decisions with your money. We may receive a small commission from our partners, such as American Express, but our reports and recommendations are always independent and objective.

  • The average mortgage payment is $ 1,275 for a 30-year fixed mortgage and $ 1,751 for a 15-year fixed mortgage.
  • However, a more accurate measure of what the typical American spends each month on their mortgage would be a median: $ 1,556 in 2018, according to the US Census Bureau.
  • The typical payment varies widely between states and cities, as home values ​​and property taxes vary widely. The costs have also increased over time.
  • When to buy a house, the mortgage is not the only thing you will pay. Monthly costs also include insurance, property taxes, utilities, and HOA fees, if applicable.
  • Sign up for the Personal Finance Insider email newsletter here »

Based on Business Insider US calculations using 2018 data from the Bureau of Labor Statistics, the average mortgage payment is $ 1,275 for a 30-year fixed mortgage and $ 1,751 for a 15-year fixed mortgage. You can see the full methodology at the end of this article.

However, an average, which can be skewed by unusually low or high payments, is probably not the most accurate representation of what the typical American homeowner actually pays. A better measure of this is the median, which represents the middle number in a data set.

The median monthly cost of homeownership in the United States is $ 1,556 per month, according to the most recent data from the United States. Census Bureau U.S. Community Survey 2018. This cost includes not only the monthly mortgage payment, but also other necessary costs like insurance, HOA fees, and property taxes.

Below, we’ve broken down the median data by state, city, and year.

Mortgage payments by state

While some states have relatively low real estate values, homes in states like California, Hawaii, and New Jersey have much higher house costs, which means people are paying more for their mortgage each month. Additionally, mortgage interest rate vary by state.

Data from the 2018 American Community Survey shows that homeowners paid a median amount of $ 1,556 per month. This figure includes a mortgage payment, as well as insurance costs, property taxes, utilities and HOA fees if necessary.

Here’s how the 50 U.S. states rank:

Mortgage payments by city

Especially in coastal cities where space is limited, a monthly payment for housing can be much higher than the national average or the median payment. According to US Census Bureau data from the 2018 American Community Survey, the median monthly housing payment (including utilities, insurance, and HOA fees) was over $ 2,500 per month in Los Angeles and over $ 2,700 per month in the New York area.

But not all metropolitan areas are this expensive – in Phoenix, Arizona, the median home payment is about $ 1,500 per month and about $ 1,700 per month in Dallas. Here’s how the most populous metropolitan areas compare to the monthly cost of living according to Census Bureau data. Cities are sorted by size.

Mortgage payments per year

The median cost of homeownership has increased year over year since 2010. Between 2018 and 2010, the median selling price of a home increased by $ 56,000. However, the median monthly home payment only increased by $ 70 per month.

Here’s how costs have evolved over the past eight years, according to American community survey The data.

Fees included in a monthly mortgage payment

In the Census Bureau American Community Survey data, the monthly mortgage payment includes things like insurance and taxes. Part of that is because that’s how mortgages work: often times, you pay more than the loan principal and the interest on your monthly payment.

If your mortgage includes a escrow account, you’ll pay two fees each month in your monthly mortgage payment:

  • Property taxes: You will pay taxes on your home to your state and local government if necessary. This cost is included in your monthly payment if your mortgage includes an escrow.
  • Home Insurance: To keep your home covered, you will need to purchase a home insurance policy. the average cost of home insurance is about $ 1,200 per year.

In addition, mortgage payments can also change based on several factors. Two different people could even face very different costs of owning the same house. There are two big factors that change your monthly payment:

  • The size of your deposit: Like many other types of loans, a mortgage requires a down payment. If you don’t have 20% deposit for the home you buy, you’ll add to the cost of your monthly mortgage payment with private mortgage insurance, or PMI. The higher your down payment, the lower your mortgage will be each month.
  • Your mortgage interest rate: The amount of interest you pay on your mortgage will influence how much you pay each month. Interest rates vary depending on your credit score, where you live and the type of loan you take out.

Another monthly cost to consider should be how much you will need to save for repairs. In general, the older your home, the more you need to keep on hand for repairs. Utilities like the internet, garbage removal, and electricity will also increase your monthly homeownership costs.

Methodology: How we got our average number

We took the current median selling price of a new home in the US as reported by Zillow, then assumed a standard 20% down payment and factored in the current 15 and 30 year fixed interest rates. as reported by the

Federal Reserve
to get the average monthly mortgage payment.

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Donald Trump’s terrible stimulus package won’t go away

American workers and the elderly have had the toughest hands in decades this year. The 2019 coronavirus disease (COVID-19) ravaged the U.S. economy, sent the unemployment rate to levels not seen consistently in more than eight decades, and claimed the lives of nearly 160,000 Americans.

It was this turmoil that forced Congress to pass and President Trump to sign the CARES (Coronavirus Aid, Relief, and Economic Security) law on March 27.

President Trump standing behind the presidential podium. Image source: Official White House photo by Joyce N. Boghosian.

The CARES Act hasn’t done much for the average American

the CARES Law is an absolute monster in terms of size. At $ 2.2 trillion, that’s nearly triple the cost of the back-up plan designed to protect banks during the financial crisis. Ultimately, it provided much-needed cash to struggling industries, small businesses, hospitals, and the Unemployment Benefit program – the latter of giving the unemployed an extra $ 600 a week between April 1 and April 30. July.

However, the big draw of the CARES Act was the $ 300 billion earmarked for direct stimulus payments to the public. At their maximum, these economic impact payments could total $ 1,200 for an individual or $ 2,400 for a couple making a joint claim (depending on adjusted gross income), with dependents aged 16 and under adding $ 500 each. what a parent or guardian might receive.

While it has proven useful to throw a load of cash into businesses, it does little to help the average American who has financial difficulties. Three-quarters of stimulus recipients are estimated to have spent their payments in four weeks or less, which doesn’t help when there is no clear end in sight for the COVID-19 pandemic.

With another much-needed stimulus round, it should come as no surprise that Democrats and Republicans have relentlessly negotiated a new deal in recent days. As of the end of Thursday, August 6, no new stimulus deal had been reached.

Two social security cards placed on a W2 tax form.

Image source: Getty Images.

President Trump’s payroll tax cut proposal finds new life

The problem is that the legislative session of the Senate after the two-week recess on July 4 only lasts three weeks. After Friday August 7, the Senate will be on vacation for a full month. This means that lawmakers (at the time of writing) are driving these negotiations on the fly. Financial help is now needed for many American families, and delaying talks for another month due to the legislative recess could prove disastrous.

This inability of Democrats and Republicans to find sufficient common ground between Act on the HEROES and HEAL Take action is what is allowed Donald Trump’s terrible stimulus proposal to find new life.

As some of you may recall, President Trump was adamant, before the Senate returned from vacation on July 20, that he would not sign a new round of stimulus if he did not include a provision to temporarily suspend or reduce payroll taxes – that is, the tax paid by U.S. workers and employers who fund Social Security and Medicare programs.

The idea here is that if the payroll tax were temporarily suspended, the tax liability of workers and / or businesses would decrease. That would do put more money in the pockets of workers and businesses, thus helping to avoid a financial maelstrom.

While the Democratic-led House and Republican-led Senate remain deadlocked on a handful of key stimulus issues, President Trump has threatened to sign an executive order that would expand protections against evictions, improve unemployment benefits, provide student loan borrowers with repayment options, and. .. reduce social charges.

A visibly concerned elderly man resting his chin on his hand.

Image source: Getty Images.

Trump’s stimulus proposal would decimate social security

The concern is that if Trump gets his wish for a payroll tax cut, it would do nothing more than trade very short-term gains for long-term pain. Moreover, it is even questionable whether the short-term gains would be so noticeable.

First of all, lower payroll taxes would only bring an immediate benefit to those who are still working. Arguably, it is the people who have been forced out of the workforce who are most in need of financial assistance. A cut in payroll taxes would do nothing for the tens of millions of unemployed people who are looking from the outside.

But the biggest problem here is that the payroll tax is the main source of Social Security income. Last year, he was responsible for $ 944.5 billion (89%) of the $ 1.06 trillion raised. Reduce or stop this source of income, even for a short time would be disastrous for Social Security, which already faces around $ 16.8 trillion in unfunded bonds between 2035 and 2094, according to the latest Social Security Board report. In all likelihood, a payroll tax holiday of significant duration would bring forward the date on which Social Security should deplete its asset reserves. When these reserves are exhausted, a up to 24% overall reduction in benefits awaits retirees.

Of course, there is a viable legal question as to whether Trump has the legal power to lower taxes. The U.S. Constitution specifically authorizes Congress to impose and collect taxes, so it’s not clear whether a Trump executive order to reduce or suspend payroll taxes would have any legal merit.

The point is, drastically cutting payroll taxes is a terrible idea, and we should all hope that it doesn’t come to fruition.

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