A home is the most expensive purchase most people will ever make, so it’s important to understand what goes into taking out a mortgage.

A mortgage is a loan you take out to buy or refinance a house. Since the loan is secured by the home, your lender can foreclose on the property if you’re unable to repay your mortgage. For many borrowers, a mortgage is a crucial part of the homebuying process.

Buying a home can feel overwhelming for first-time home buyers. It helps to understand how mortgages work and what’s included in your payments before applying. 

• What is a mortgage?
• How does a mortgage work?
• What’s included in a mortgage payment?
• Types of mortgages
• Next steps: Apply for mortgage preapproval

What is a mortgage?

A mortgage is a secured loan you take out to buy a home, and the amount you borrow is called the principal. When you take out a mortgage, you agree to repay the loan with interest in monthly installments — typically over 15 or 30 years — until the loan is paid in full. If you stop making payments, your lender has the right to foreclose on the property.

How does a mortgage work?

Banks, credit unions and online lenders are among the places you can shop for a mortgage loan. Most mortgage lenders will require a minimum down payment, though the exact amount needed will vary depending on your lender and loan type.

For example, you’ll typically need to put down at least 3% for a conventional loan. But making a larger down payment can reduce the cost of your loan. It’s also possible to buy a home without an upfront payment. If you qualify, there are certain government-sponsored loans, like VA and USDA loans, that typically don’t require a down payment.

Your down payment will affect how much you need to borrow to cover the purchase price. A smaller down payment means you’ll have to borrow more, which will increase your monthly payments.

Each month, part of your mortgage payments will go toward paying off principal and interest. Because your loan balance is higher at the beginning, you’ll owe more interest. Then, as you start paying off your mortgage, a higher percentage of your mortgage payment will go toward principal.

Once you get close to paying off your mortgage, you’ll owe very little interest, and the majority of your payment will be applied toward principal. This process is called amortization.

Beyond the basic mortgage payment, there are additional housing expenses to consider such as mortgage insurance, property taxes, homeowner’s insurance and homeowner’s association fees (if applicable).

What’s included in a mortgage payment?

There are many different costs that come with taking out a mortgage. Understanding what these costs are can help you come up with a realistic picture of what you can afford. Here are the main costs that come with buying a home:

Principal

The principal is the money you borrowed to buy the home and must repay. For example, let’s say you purchased a $400,000 home and made a 3% down payment of $12,000. That means the principal is $388,000.

Interest

The interest is what your lender charges you for borrowing the money. Putting down 20% could help you secure a lower interest rate — and help you avoid having to pay private mortgage insurance.

Property taxes

Property taxes, which are based on the value of the property, are fees typically charged by your county. Property taxes are usually bundled with your mortgage payment and managed through an escrow account. If your mortgage doesn’t have an escrow account, you’ll have to pay these taxes directly.

Homeowners insurance

Homeowners insurance pays for any damages to your property as the result of a fire or some other kind of unexpected event covered by the policy. If you take out a mortgage, your lender will require you to purchase homeowners insurance. This can also be managed through your escrow account.

Mortgage insurance

If your down payment is less than 20%, your lender will likely require you to purchase mortgage insurance. Mortgage insurance protects your lender if you stop making payments on the loan. There are two main types of mortgage insurance to know about:

• PMI: Private mortgage insurance, or PMI, is usually required for conventional loans if you make a down payment that’s less than 20%. You’ll typically pay for PMI as a monthly premium that’s added to your mortgage payment. However, you could also pay for PMI as a one-time upfront payment at closing.
• MIP: A mortgage insurance premium, or MIP, is usually required if you take out an FHA loan. MIP includes an upfront cost as well as a monthly cost that’s included in your mortgage payment. 

Types of mortgages

When you’re applying for mortgages, you have many options to choose from. Here are some of the different types of mortgages:

• Fixed-rate: If you apply for a fixed-rate loan, your interest rate will stay the same over the life of the loan.
• Adjustable-rate: If you take out an adjustable-rate mortgage, or ARM, you’ll typically receive a lower introductory interest rate than a fixed-rate loan. Once the introductory period is up, your interest rate will change depending on current market conditions.
• Conventional loans: A conventional loan is offered by a private lender and isn’t backed by a government agency. These loans can be conforming or nonconforming, which refers to the size of the loan. Conforming loans have maximum loan amounts that are set by the government. Nonconforming loans include jumbo loans and other loans that don’t meet the criteria for conforming loans.
• FHA loans: FHA loans are backed by the Federal Housing Administration and could be a good option for anyone who doesn’t qualify for a conventional loan. If your credit score is 580 or higher, you can take out a loan with a 3.5% down payment. But if your credit score falls between 500 and 579, you’ll need a 10% down payment. 
• USDA loans: USDA loans are backed by the U.S. Department of Agriculture and help low-income borrowers buy homes in rural areas. To qualify, you can’t earn more than 115% of your area’s median income. You’ll need to check the USDA’s website to ensure that you live in an eligible rural area. 
• VA loans: VA loans are backed by the Department of Veteran Affairs and are designed for veterans and active-duty service members. VA loans don’t come with any minimum credit or down payment requirements, although the lender may have its own.

Next steps: Apply for mortgage preapproval

Now that you understand what a mortgage is and how it works, getting mortgage preapproval could be a good next step. A mortgage preapproval helps you understand how much you may be able to borrow to buy a home. Although it’s not a guaranteed that you’ll be approved for the mortgage, it lets home sellers know that you’ll likely be approved for a certain amount of financing.

During the preapproval process, you can take stock of your credit and determine how much down payment you can afford. When you apply for a mortgage, lenders assess your credit risk by examining your income, debt, credit scores, assets, job history and other factors. Some of the documents you may need to get a home loan approval include pay stubs, W-2s, tax returns and bank statements.

You should also try to set enough money aside in case you face an unexpected home repair or other kind of emergency that could affect your ability to pay your mortgage. Creating an emergency fund that provides enough money to cover your living expenses for three to six months can offer protection against home foreclosure or having to take on more debt.

Fifth Third HELOCs at a glance

• Fixed or variable rate: Both
• How to withdraw funds: Checks, Fifth Third Equity Flexline Mastercard, online, in person, ATM
• Origination fee: None, but fixed-rate lock fee is $95; annual fee of $65 (waived for the first year)
• Loan-to-value ratio: To be eligible for the best rate, your LTV ratio should be no higher than 70%
• Time to fund: Unclear

Fifth Third Bank is a full-service bank based in Cincinnati, Ohio. It has more than 1,100 branches in 11 states. If you want to access your home equity, a Fifth Third Equity Flexline is worth a look.

The Fifth Third Equity Flexline is a revolving line of credit that offers the opportunity to earn cash-back rewards. And Fifth Third customers with an eligible checking account qualify to receive additional discounts.

Pros

• You can earn rewards points
• Fixed-rate option available
• No closing costs

Cons

• Unclear credit requirements
• Not available in all states
• Fifth Third charges some fees

4 things to know about a Fifth Third HELOC

1. Earn cash-back rewards

When you take out a Fifth Third HELOC, you can receive the funds via check, online transfer, in person, at an ATM or by using the Fifth Third Flexline Mastercard. And if you use the Flexline Mastercard, you could earn cash-back rewards. 

You’ll earn one point for every $3 you spend in purchases, and bonus points on your first qualifying purchase. But your account must be in good standing, and it’ll take six to eight weeks to receive the bonus points.

2. A fixed-rate option is available

HELOCs usually come with variable rates, which means your interest rate will go up and down over the life of the loan. If you want consistent monthly payments, Fifth Third offers an option to fix your rate. If you qualify, the fixed-rate lock comes with a one-time $95 fee.  

3. Wide range of credit lines available

A Fifth Third HELOC offers credit lines from $10,000 to $500,000, with 30-year terms. The first 10 years are a draw period where you can make interest-only payments. But if you only pay interest during the draw period, your payments likely will go up during the 20-year repayment period since you’ll pay a combination of principal and interest.

4. Limited availability for borrowers

A Fifth Third HELOC could be a good option for many borrowers, but it only serves the following 11 states:

• Florida
• Georgia
• Illinois
• Indiana
• Kentucky
• Michigan
• North Carolina
• Ohio
• South Carolina
• Tennessee
• West Virginia

Who is a Fifth Third HELOC good for?

A Fifth Third HELOC could be a good option for anyone living in one of the 11 states Fifth Third serves, but current customers will receive the biggest benefits — for instance, you’ll earn a 0.25% rate discount if you set up automatic payments from an eligible Fifth Third check account. And if you have a Fifth Third Preferred Checking account, you may be eligible for additional benefits.

The Fifth Third HELOC also could be a good choice if you’re looking to take advantage of cash-back rewards. And most HELOCs come with variable interest rates, so you may want to take advantage of it if you’re looking for a fixed rate and set monthly payments.

How to apply for a Fifth Third HELOC

If you want to apply for a Fifth Third Equity Flexline, you’ll start by filling out an online application. The online form will ask you some basic questions about your loan, including the purpose of your loan, where you live and how much you would like to borrow.

From there, you’ll enter your contact information and a loan adviser will review your information and reach out during normal business hours. At this point, Fifth Third doesn’t have a fully online application process.

Not sure if Fifth Third is right for you? Consider these alternatives.

• Bank of America HELOC: Bank of America offers HELOCs with competitive interest rates, no closing costs and no annual fee
• Figure HELOC: When you apply for a HELOC through Figure, the application process is 100% online, and you could receive the funds quickly.

The U.S. Department of the Treasury considers direct deposit to be a fast, safe and efficient way to receive your paycheck.

When you set up direct deposit, your employer deposits your paycheck electronically. This means you don’t have to pick up a paper check, deposit it into your checking account, and wait for the funds to clear — your bank takes care of all this for you. 

And now, many banks are speeding up this process by offering early direct deposit. This allows you to receive your paycheck up to two days early. If you want to take advantage of early direct deposit, here are 10 banks to consider.

• Best for overdraft protection: Chime
• Best for no fees: Axos
• Best for online and in-person banking: Capital One
• Best for a cash sign-up bonus: SoFi
• Best for reversing overdraft fees: Citizens Bank
• Best for account security: Credit Karma Money™
• Best for instant access to funds: Huntington Bank
• Best for receiving government benefits: GoBank
• Best for unlimited ATM rebates: LendingClub Bank
• Best for cash back rewards: Varo Bank
• How does early direct deposit work?
• How early can direct deposit hit?
• How we picked these banks

Best for overdraft protection: Chime

When you open a Chime checking account online and sign up for direct deposit, you can get your paycheck up to two days early. To get started, you’ll log into your account via the mobile banking app and email yourself a prefilled direct deposit form to pass on to your employer.  

In addition, Chime offers overdraft protection for up to $200 with no overdraft fees. The bank will simply apply your next direct deposit toward the negative balance. Your account also comes with a free debit card, no monthly fees and access to over 60,000 ATMs.   

Best for no fees: Axos

When you sign up for an Essential Checking account from Axos, you’ll have access to direct deposit and can receive your money two days early. And Axos never charges any overdraft fees, nonsufficient funds (or NSF) fees or monthly maintenance fees. Also, there are no minimum balance requirements.

The account comes with other helpful features like peer-to-peer payments, online bill pay and unlimited ATM-fee reimbursements. Axos will also always monitor your accounts and alert you if it suspects any fraud activity. 

Best for online and in-person banking: Capital One

When you open a Capital One 360 account and enroll in direct deposit, you can get your paycheck two days early. Capital One gives you a prefilled form to give your employer to help ease the sign- up process. 

With Capital One, you can take advantage of both online and in-person banking. You can use the bank’s mobile app to monitor your account, lock and unlock your debit card, and redeem any rewards. 

But if there’s an issue you want to address in person, you can also visit one of Capital One’s branch locations. And you’ll have access to over 70,000 no-fee ATMs. 

Best for a cash sign-up bonus: SoFi

When you set up direct deposit with SoFi, you can receive your money up to two days early and your checking account will earn interest. And there’s no minimum direct deposit amount required to qualify to earn interest.

Plus, when you open your account and set up direct deposit within 25 days, you could receive a one-time sign-up bonus. The exact amount depends on your direct deposit amount.

• $1,000–$4,999 deposit = sign-up bonus of $50
• $5,000 or more deposit = sign-up bonus of $250

Best for reversing overdraft fees: Citizens Bank

When you sign up for a checking account with Citizen’s Bank, you can receive a two-day early direct deposit. To sign up, you can either log into your account and print off a prefilled form or you can ask your employer for a direct deposit form.

Citizens Bank also offers a feature called Citizens Peace of Mind, which gives you time to fund your account and refund overdraft fees. And Citizens will send you a text message or email when the account is overdrawn, so you’ll have plenty of time to take care of it.

Best for account security: Credit Karma Money™

Credit Karma Money™ offers a checking account — Credit Karma Money™ Spend — with no minimum balance requirements. And when you set up a direct deposit to your account, you’ll get access to your money up to two days early. 

This online checking account is FDIC-insured for up to $5 million through a network of banks (in comparison, the standard checking account is insured for up to $250,000 per depositor). And you can use the Credit Karma mobile app to instantly lock your debit card if there’s ever a problem, giving you peace of mind over your account’s security.

Best for instant access to funds: Huntington Bank

Huntington’s Asterisk-Free Checking account is free to open and there are no monthly maintenance fees. You can also receive your paycheck up to two days early when you sign up for direct deposit.

If you do have to deposit a check, you’ll receive instant access to up to $500 of the funds. This feature is available at no extra charge and it doesn’t matter whether you deposit the check through the mobile app, at an ATM or at a branch location. 

Best for receiving government benefits: GoBank

With GoBank, you can avoid a monthly maintenance fee by setting up direct deposit (of $500 or more), and you’ll receive the funds two days early. If you receive government benefits like Social Security or state unemployment benefits, you can receive them up to four days early. You can also use the mobile app to easily send and receive money within minutes. 

Best for unlimited ATM rebates: LendingClub Bank

LendingClub is known for its personal loans, but they also offer a rewards checking account. Not only can you receive your paycheck two days early with direct deposit, but LendingClub also offers 1% cash back on all qualified purchases made with your debit card.

Along with having no monthly maintenance, overdraft or incoming wire draft fees, LendingClub will reimburse you for any ATM fees you incur at other banks. 

Best for cash back rewards: Varo Bank

When you open a checking account at Varo Bank, there are no minimum deposit requirements or monthly fees. In addition to receiving your paycheck two days early with direct deposit, you can easily transfer money from one Varo bank account to another. 

And you can earn cash back rewards every time you use your Varo Bank debit card to shop select brands. When you reach $5 in rewards, the money is automatically deposited into your checking account. 

How does early direct deposit work?

When you sign up for direct deposit, your paycheck is automatically deposited into your account on payday. If the deposit is received during normal banking hours, the deposit should be ready by the following business day.  

But most banks make the money available immediately, and some banks offer early direct deposit so you can access your money even sooner. Early direct deposit generally means that you’ll receive your funds two days before payday. 

How early can direct deposit hit?

How soon you can receive direct deposit depends on your bank, but all the banks listed in this article offer direct deposit two days early. Without early deposit, your paycheck will usually hit your account by 9 a.m. on your designated payday. Timing can also depend on the type of payment you’re receiving — for instance, GoBank deposits government benefits four days early. 

In some cases, some banks may also put a hold on your paycheck, though they can’t hold the funds indefinitely. 

How we picked these banks

We compared 16 different banks before narrowing the list down to our picks for the 10 best banks offering direct deposit. The minimum criteria these banks had to meet was offering early direct deposit — but beyond that, we also considered …

• Fees
• Options to avoid fees 
• ATM access 
• Whether they reimburse for ATM fees 
• Mobile app availability for account monitoring

When you shop for a home, you may look in communities that are part of a homeowners association, or HOA.

These organizations govern the appearance, maintenance and upkeep of private communities like condominiums or suburban neighborhoods. HOAs are generally subject to state regulation.

Membership in an HOA usually includes regular dues or fees to pay. HOA fees help maintain common areas of the property and provide certain amenities for its members.

HOA fees are an added expense on top of your mortgage, and you may wonder if they’re worth paying. Before you buy a new home, it’s important to understand how the HOA works, what your HOA fees would be and any rules and regulations you may have to abide by as a member. 

• Why do HOAs exist?
• What are HOA fees and how do they work?
• How much are HOA fees?
• What do HOA fees cover?
• Will I need to pay additional fees?
• What happens if I don’t pay my HOA fees or follow HOA rules?
• What’s next: Questions to ask before buying into an HOA

Why do HOAs exist?

A homeowners association, or HOA, is an organization formed to maintain a common area, neighborhood or development for residents of that community. You’ll often pay a fee directly to the HOA to help maintain the community and add new amenities.

HOAs may have bylaws or rules stating what property owners can and cannot do under the agreement. It’s a good idea to review an HOA’s rules before you purchase a home in a planned community.

It’s important to understand that there’s no national standard for HOA communities. Not every neighborhood will have an HOA, but if it does, you may be required to join and pay the HOA fees. 

What is an HOA?

Image: what-is-an-HOA

What are HOA fees and how do they work?

Homeowners association fees may apply if you live in properties such as a condominium, townhouse or planned development. These are regularly paid dues — usually collected monthly or annually — charged to each homeowner to maintain the property or neighborhood for all residents.

The bottom line is that the purpose of HOA fees is to help ensure that homeowners maintain the value of their property.  

How much are HOA fees?

There are no national standards for HOA fees, but according to the latest U.S. census data, the average homeowners or condominium association fee is $191 per month. However, fees vary widely depending on location, home size and what services the HOA covers.

For example, census data shows that an HOA community in California will likely charge more than one in Alabama. Additionally, larger homes tend to pay less in monthly fees than smaller homes if adjusted for square footage.

These HOA fees are a separate cost on top of your monthly mortgage payment, so you’ll always want to factor in HOA fees before buying a house. 

How much are monthly HOA fees?

Image: how-much-are-hoa-fees

What do HOA fees cover?

HOA fees usually cover two things: the monthly expenses needed to maintain the agreed-upon areas of a building or neighborhood — and a reserve fund.    

The monthly expenses can include items like:

• Maintaining the swimming pool
• Landscaping
• Security cameras or services
• City services such as water, sewage and trash removal

The reserve fund is usually saved for special projects, such as a new pool or new playground equipment. This fund can also be used for necessary repairs in the event of vandalism or a natural disaster.

What do HOA fees cover?

Image: hoa-fees

Will I need to pay additional fees?

In addition to your monthly, quarterly or annual HOA dues, you may also need to pay special assessment fees or fines. These aren’t regular payments but may pop up from time to time.

Special assessments

HOAs should have reserve funds to cover planned or unplanned maintenance or repairs. However, when reserve funds fall short, the HOA may be able to impose special assessments to cover the remaining balance.

For example, if the community plans to replace the clubhouse roof but the cost exceeds what’s in the reserve funds, the HOA may be able to charge residents the difference. 

This power depends on what the HOA governing documents state. Some HOAs require a community vote to exercise this power, while others don’t. Check your community’s governing documents to see how your HOA may operate regarding special assessments. 

Fines

HOAs don’t just make community rules — they also enforce them. One enforcement tactic HOAs may use is imposing fines on residents who break community rules. This means if you paint your home the wrong color per community rules, you may have to pay for it.

What happens if I don’t pay my HOA fees or follow HOA rules?

In addition to paying monthly or annual fees, your HOA membership will come with certain bylaws and “covenants.” These are generally rules, guided by state law, that members must follow. They also provide rules and procedures for HOA meetings and elections.

For instance, the covenants may include guidelines about how residents should maintain their property. They may also include guidelines around whether you can rent out your property or how many people can live in your home.

What happens if you don’t pay your HOA fees?

If you stop paying your HOA fees, you can face serious repercussions. Your HOA will likely send you several letters demanding payment, and if they don’t receive your dues, your access to certain amenities could be restricted.

If enough time goes by and you still haven’t paid your fees, the HOA may file a lien on your property, which means you can’t sell your home until the HOA fees are paid. In extreme situations, they may even pursue foreclosure on your home. 

What happens if you don’t follow the HOA rules?

Occasionally, homeowners may be tempted to ignore certain HOA rules, hoping the HOA doesn’t find out or do anything about it. However, your HOA may take steps to enforce the rules if you break them.

• Issuing you a fine for violation of the bylaw
• Suspending your right to use certain amenities, like the pool or fitness center
• Placing a lien on your property
• Suing you for violating the bylaw

Consequences of not paying HOA fees

Image: consequences-of-not-paying-hoa-fees

What’s next: Questions to ask before buying into an HOA

If you’re considering buying a home within an HOA, remember you’re not just buying a home — you’re also joining a community. You should understand how community rules, finances and management may affect you.

Here are some questions you should ask before moving in.

• How much do HOA fees cost?
• What amenities and services do fees cover? What isn’t covered?
• Does the HOA have the authority to raise dues in the future? 
• Does the HOA have the authority to charge special assessments?

You can ask your HOA contact to provide you with the minutes of past HOA meetings, which might show you any past fee increases or rule changes.  

Knowing the answers to these questions can help you determine whether moving in is within your budget. You can also use Credit Karma’s home affordability calculator to help with your planning.  

American Pacific is a mortgage lender with more than 200 branches across the U.S. This lender offers a wide selection of mortgages, including conventional, jumbo and government-backed loans, as well as specialty loans for people who want to buy homes that are “outside the norm.”

If you want to get a good idea about American Pacific’s rates so you can compare them to other lenders, you’ll need to speak to a representative.

A checking account can be a helpful tool — making it easier for you to pay your bills and manage your money.

But many bank accounts come with fees and other costs that aren’t always advertised. Monthly maintenance fees, overdraft fees and nonsufficient funds (NSF) fees can eat away at your savings and make you feel less financially secure. 

Fortunately, there are an increasing number of free online checking accounts available. A free online checking account typically doesn’t charge the common fees mentioned above, or at least waives opening or minimum balance requirements. If you’re looking for a free online checking account with no minimum deposit rules, here are four options to consider.

• Ally: Best for high-interest checking
• Capital One: Best for mobile banking
• Axos: Best for account security
• Huntington National Bank: Best for overdraft relief
• What is a free online checking account with no opening deposit?
• What to consider when looking at free online checking accounts
• How we picked these free checking accounts

Ally: Best for high-interest checking

Ally’s high-interest checking account comes with a 0.25% APY, which is much higher than what you’d get with the average checking account. Ally’s interest checking account doesn’t come with many fees, and the bank is upfront about the fees it does charge. The account comes with early direct deposits, a debit card, complimentary checks and online banking.

• No minimum balance requirements — There are no minimum balance requirements to open or maintain your Ally checking account.
• Free ATM access — As an Ally customer, you have access to more than 43,000 Allpoint® ATMs nationwide. And if you need to visit another ATM, you’ll receive up to $10 in ATM reimbursements per statement cycle. 
• Few fees — Ally doesn’t charge monthly maintenance fees, overdraft fees or incoming wire transfer fees. But the bank does charge fees for returned deposit items, expedited delivery and outgoing domestic wires.
• Overdraft protection — There are no overdraft fees, but if you want to protect yourself from a possible overdraft, you can sign up for the CoverDraft service. You’ll link your checking account to an Ally savings or money market account, and the bank will automatically transfer the funds if you overdraft.
• Mobile check deposit — If you need to deposit a check, you’ll just take a photo and deposit the check right from your smartphone.

Capital One: Best for mobile banking

Capital One’s 360 Checking allows you to open and manage your account online, but you also have the option to visit one of the bank’s physical branch locations. When you sign up as a Capital One customer, you’ll have access to online and mobile banking. And you can use more than 70,000 no-fee ATMs across the country.

• Access to the mobile app — As a Capital One customer, you can use the mobile app to view your transactions, monitor your TransUnion credit score and receive alerts about your account.
• Minimal fees — The bank doesn’t charge any monthly maintenance fees or foreign transaction fees, but there may be charges for additional services including overnight check delivery or a stop-payment request.
• Get paid early — If you sign up for direct deposit, you can receive your paycheck up to two days early.
• Overdraft protection — If you want to avoid overdraft fees, you can either auto-decline transactions that would cause you to overdraft or set up an automatic transfer from a savings or money market account. You can also enable no-fee overdrafts on certain approved transactions.
• Send cash with Zelle — You can send cash for free with the Zelle app.

Axos: Best for account security

The no-fee Essential Checking from Axos Bank comes with a number of helpful features, including unlimited ATM fee reimbursements, no overdraft fees and early direct deposit.

• Robust security features — Your Axos checking account comes with security features that include two-step authentication, SSL encryption, automatic logout and account monitoring for potential fraud.
• Direct Deposit Express — With Direct Deposit Express, you can receive your paycheck up to two days early. This is an automatic feature that lets you access your funds while the bank processes your payment.
• Peer-to-peer payments — You can send payments to friends or family directly from your account with their mobile number or email address.
• Automate your bills — The automatic bill pay feature lets you auto-pay your bills directly from your account.

Huntington National Bank: Best for overdraft relief

There are no fees to open or maintain a Huntington National Bank Asterisk-Free Checking account. And you can take advantage of numerous helpful features, including early pay, overdraft relief and what the bank says is an intuitive mobile app.

• Overdraft relief — If you overdraw your account by $50 or less, you won’t be charged an overdraft fee. If you overdraw your account by more than $50, Huntington gives you a 24-hour window to take care of it and avoid the $15 overdraft fee.
• Access the mobile app — You can use the mobile app to check your balance, pay bills and transfer money between accounts.
• Check deposit availability — If you deposit a check of $500 or less, you’ll receive instant access to the funds.
• Standby cash — Huntington Bank offers a credit line for qualified customers. You may qualify for a line of credit between $100 and $1,000 that you can pay back over three months. And there’s no interest charges if you set up automatic repayments.

What is a free online checking account with no opening deposit?

A checking account is an account where you can make deposits and withdrawals. Checking accounts are usually used for daily expenses like gas and groceries.

Some banks charge fees to open a checking account and require you to maintain a minimum balance each month. A free bank account doesn’t include a monthly fee to maintain the account.

What to consider when looking at free online checking accounts

The best free checking account for you depends on your needs. Look for one that’ll fit your lifestyle and help you reach your financial goals. Here are some factors to consider:

• Which bank meets your specific needs? Your needs may differ from someone else’s, so it’s important to find a bank and checking account that works best for you.
• Does the bank have the features you need to manage your money? It can be helpful to have money management tools such as overdraft protection, early paycheck options or a handy mobile app.
• Are there other fees to worry about? While there may not be an opening deposit, are there other fees that the bank charges for the account?

How we picked these free checking accounts

To determine the best free online checking accounts, here are some of the criteria we looked for.

• No monthly maintenance, ATM, NSF or overdraft fees
• FDIC-insured up to $250,000
• A wide network of fee-free ATMs
• Physical branches available
• Available across the country
• Additional features like a mobile app, early deposit or online banking

Pros

• Simple application process
• Lets you spread out your travel purchases over time
• Offers fixed interest rates

Cons

• Mostly available for travel-related purchases
• Purchases must be made through Uplift partners
• Maximum APRs are high

What you need to know about an Uplift personal loan

Uplift is an online lender that offers vacation loans. The company does this by partnering with popular travel brands, like Southwest Airlines and Air Canada, to offer an installment payment option.

You must book airfare and hotels through Uplift’s partner’s sites, but instead of paying for it upfront, you’ll apply for a loan through Uplift. That way, you can spread out the payments over time.

In some cases, Uplift may require you to pay some amount as a down payment at the time of purchase.

Payment financing for travel

The main advantage of using a service like Uplift is that it lets you spread out your travel purchases over time. You’ll repay the loan on a fixed repayment schedule. 

You can check your balance and monitor your payment status through your online account, and you can set up auto pay. There are no prepayment penalties, so you can pay off your loan at any time without a fee.

Quick online application process

Uplift promises a fast application and approval process. To get started, you’ll visit one of the company’s partner sites and add your purchases to your cart. When you’re ready to check out, you’ll select Uplift as the payment option.

At that point, you’ll have to provide your contact info and the last four digits of your Social Security number. Uplift will let you know if you’re approved for the loan, and if so, will give you a choice of loan and repayment terms. From there, if you accept the terms and decide to proceed, you’ll continue checking out.

May come with a high APR

According to Uplift’s website, its installment loans come with APRs that range from competitive to high. The maximum is much higher than the average credit card rate as of May 2022. There is no option to apply with a co-borrower. 

And while Uplift promises the payments are spread out over time, it doesn’t provide any details about the types of payment plans people can choose from without shopping at one of the partner sites.

Depending on the situation, Uplift will sometimes issue refunds or returns. Refunds will either be credited to your accounts or issued through the Zelle platform.

Who is an Uplift loan good for?

An Uplift loan may be an option for someone who has strong enough credit to qualify for one of Uplift’s lowest APRs, and is confident they can make the monthly loan payments.

If you have weaker credit, you could end up with a higher APR, which means you’ll pay more in interest. Plus, because buy-now, pay-later companies like Uplift are so easy to use, it can be tempting to overextend yourself on purchases that saddle you with more debt than you can handle. If Uplift offers you credit, check the terms carefully before proceeding. 

It may make more sense to use a travel credit card — particularly if it has a lower interest rate than you can get with Uplift — so that you can take advantage of points programs or rewards that can help support your travels.

How to apply with Uplift

To apply, you’ll start by visiting one of Uplift’s partner sites and selecting your purchases, like airfare and a rental car.

When you go to check out, you’ll choose Uplift as your payment option and apply for the loan. You’ll need to provide your name, mobile phone number and the last four digits of your Social Security number.

Uplift should let you know within a few minutes whether you’re approved for a loan and what your options are. You will need to allow a few days between booking the trip and traveling so Uplift can process the loan.

Not sure if Uplift is right for you? Consider these alternatives.

• Affirm: Affirm offers a variety of financing options, and it gives you the option to prequalify for a loan, so you can get an idea of how much you may be approved to spend.
• Financeit: Financeit offers financing options for larger retail, home improvement, and vehicle purchases.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

Mr. Cooper, formerly Nationstar Mortgage, is a Dallas-based mortgage lender offering digital tools, a mobile app and an on-time closing day guarantee. Like many other lenders, Mr. Cooper offers conventional and government-backed mortgages.

Things to know about a Mr. Cooper mortgage loan

Tools and calculators

Mr. Cooper offers a few digital tools, including mortgage calculators, to help you work through your financial decisions.

No physical locations

There are no branch locations listed on the company’s website — if you need to get in touch with the lender, you’ll have to call customer service. Current customers can sign into the online messaging center.

Legal trouble for ‘harming’ borrowers

The Consumer Financial Protection Bureau (CFPB) filed a complaint against the lender in 2020 when it was known as Nationstar Mortgage. The CFPB alleged Nationstar Mortgage violated “multiple federal consumer financial laws,” causing “substantial harm” to borrowers, including distressed homeowners.

A proposed judgment called for Mr. Cooper to pay $73 million to some 40,000 harmed borrowers, and an additional $1.5 million penalty to the CFPB. The proposed judgment was accepted and entered by the court in December 2020.

Who is a Mr. Cooper loan good for?

Mr. Cooper offers a variety of mortgage options, including conventional loans, VA loans, FHA loans and refinancing. You can also choose between fixed-rate or adjustable rate options.

What you need to know about a Fifth Third personal loan

Fifth Third is a financial services company headquartered in Cincinnati.

Who is a Fifth Third personal loan good for?

A Fifth Third personal loan could be a good option for someone who’s already a customer of the bank and can take advantage of a loan rate discount and the bank’s online application process.

Fifth Third could also be worth considering if you want to borrow a smaller or larger sum of money, given the range of loan amounts, or if you want a relatively short loan term.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.

Before you sell a house, it’s helpful to understand how capital gains taxes work and whether you may qualify for a break.

If you recently sold or are getting ready to sell a house, you’re probably ready to move on and focus on your next home. But did you know that you may have to pay taxes on any profits earned on the sale of your last home?

The tax implications of selling a house may be minimal for some people, but not for others. You may have to pay capital gains taxes on any profits earned from the sale. Understanding how these rules work may help you minimize your overall tax bill. Remember to always consult a tax professional about the most current tax law and guidance.

• Do I have to report the sale of my home to the IRS?
• How do capital gains taxes work?
• How do I avoid capital gains tax on a property sale?
• Special circumstances to keep in mind

Do I have to report the sale of my home to the IRS?

If you’re selling a home that has significantly appreciated in value, you may be looking forward to a large payday. But depending on your situation, you could end up owing the IRS money for any profits earned on the home sale.

That’s because your home is an asset and is subject to capital gains taxes. But the IRS provides exceptions to this rule, which many sellers may qualify for.

For instance, if you’re married and filing jointly, in tax year 2021 you may be able to exclude up to $500,000 from the sale of your home. Typically, you’ll be eligible for this exclusion if the home is your primary residence, and you’ve owned and lived in it at least two of the last five years when filing 2021 taxes.

Just remember to check with a tax professional to learn what the current year’s IRS rules are before you file your taxes.

How do capital gains taxes work?

A capital gains tax is a tax placed on any profits earned when a capital asset is sold. The IRS considers almost everything you own and use for personal or investment purposes to be a capital asset. These taxes are due on the tax deadline after the asset is sold, and it applies investments  like stocks, bonds and real estate.

And the IRS classifies capital asset gains into one of two categories: short-term and long-term gains. Generally, if you’ve lived in your home for less than a year, it’s a short-term gain. If you’ve lived in the home for a year or more, it’s considered a long-term gain.

So when you sell your home, the capital gains tax depends primarily on how long you’ve owned the home and your income.

If you have a short-term gain, you’ll be taxed at whatever your normal tax bracket is. A long-term capital gain gets preferential tax treatment and is taxed at a rate of 0%, 15%, 20% or 28%. These rates vary according to your income and tax filing status.

According to the IRS, “most individuals” won’t pay more than 15% on capital gains taxes. If your net income is less than $80,000, your net capital gain may be taxed at 0%, according to IRS.gov.

And if you meet certain conditions, you can exclude the first $250,000 to $500,000 from the sale of your home and avoid paying taxes on it altogether.

How do I avoid capital gains tax on a property sale?

Whenever you sell a house, it can be subject to capital gains taxes. But fortunately, the IRS provides certain exclusions that some home-sellers qualify for.

If you meet certain requirements, you can exclude $250,000 from the sale of your home. That number increases to $500,000 if you’re married and filing jointly.

For instance, let’s say you’re married and you and your spouse bought a home 10 years ago for $300,000 — and the value of homes in your neighborhood has significantly increased since that time. When you go to sell the home, you receive an offer for $700,000.

Under the exclusion, you won’t have to pay any capital gains taxes on the sale. But to qualify for exemption, you must meet the following three criteria:

• You’ve owned the home for at least two years during the past five years prior to the sale (this doesn’t have to be continuous). If you’re married and filing jointly, only one spouse needs to meet this requirement.
• You used the home as your principal residence for at least two of the five years prior to the sale. Unlike above, if you’re married and filing jointly, both spouses need to meet this requirement.
• You haven’t sold another home during the two years before the sale, or — if you did — you didn’t take the exclusion of gain earned from it.

Special circumstances to keep in mind

If you don’t meet the IRS’ eligibility requirements, you may still be able to claim a full or partial exception under the following situations:

• You gained ownership of the home during a separation or divorce.
• Your spouse died during the period when you retained ownership of the home.
• The sale of the home involves vacant land.
• You owned what the IRS calls a “remainder interest” in the home and sold it.
• Your previous home was destroyed.
• Your previous home was condemned.
• You were a service member while you owned the home.
• You gave or released the home in what the IRS calls a “like-kind” exchange.

What’s next?

If you recently sold a home and are wondering whether you’ll have to pay capital gains taxes, the first step is to determine the profit earned from the sale. To do this, you need to determine the cost basis for the home.

The cost basis is the money you spent to buy the home, and any money you’ve spent on home improvements over the years. For instance, if you purchased a home for $300,000 and spent $50,000 on home improvements, your cost basis is $350,000.

From there, you can add up the purchase price of the home, minus certain fees you paid for things like closing costs and the services of a real estate agent. Then you can subtract your cost basis from any money you earned from the sale.

But capital gains taxes can be complex, and there are gray areas. If you’re not sure whether you qualify for the capital gains exemption, it’s a good idea to consult with a financial adviser or tax specialist who can walk you through the details.

An appraisal contingency clause is a safety net for potential homebuyers. It states that you plan to purchase the home, as long as certain conditions are met.

In particular, the terms of the contract depend on what happens during the appraisal process. An appraisal determines the fair market value of the home and can help ensure you don’t overpay for the property.

Occasionally, the appraised value may be lower than what you originally offered to pay for the home.

If you have an appraisal contingency clause, you’re generally free to walk away from the contract if the property doesn’t appraise for the amount you agreed to pay. This contingency typically ensures that you don’t lose out on your earnest money deposit. That said, it’s always a good idea to read the fine print just in case.

• What is an appraisal, and what is an appraisal contingency clause?
• What should you do if the property is appraised low?
• What is an appraisal contingency waiver?
• What are the consequences of using a contingency waiver?

What is an appraisal, and what is an appraisal contingency clause?

When you buy or refinance a home, your mortgage lender may require an appraisal. An appraisal is an analysis stating the fair market value of the home. Appraisers determine this value by looking at the property’s condition and considering similar homes and market trends in the area.

Most lenders require an appraisal to ensure they aren’t lending more than the home is actually worth. The appraisal ensures that the property is sufficient collateral for the mortgage. An appraisal also lets the borrowers know if they might be overpaying for the home if they close the deal.

If the appraisal comes back lower than what you agreed to pay for the home, you can ask the seller to renegotiate the price. But your request may have more leverage if you have an appraisal contingency in place.

An appraisal contingency clause typically states that if the appraisal value is lower than what you agreed to pay for the home, you can walk away from the contract. And most importantly, you’ll have your earnest deposit refunded if you and the seller can’t come to an agreement.

Earnest money is an escrow deposit often made after your home offer is accepted. And while the exact amount varies depending on your situation, it’s usually between 1% and 5% of the total home purchase price. That means on a $200,000 home, you can expect to put down between $2,000 and $10,000 in earnest money.

Appraisal contingency vs. financing contingency

In addition to an appraisal contingency, your real estate agent may recommend a financing contingency.

A financing contingency protects homebuyers if they’re unable to get approved for a mortgage. It usually states that if you put forth a reasonable effort to apply for financing but are unable to get approved, you won’t lose out on your earnest deposit.

A financing contingency should protect you as a homebuyer, but borrowers will occasionally forgo this option in a seller’s market. When there are multiple offers on the same house, excluding any contingencies might make your offer more competitive.

That’s because contingencies can represent more risk to sellers, so they prefer offers without them. But doing this can expose you to potential financial risk, and you could lose out on your earnest money if you’re unable to secure financing.

What should you do if the property is appraised low?

If the appraisal report shows that your potential home is worth less than what you agreed to pay for it, this may complicate your financing. In general, you have the following choices:

• You can agree to pay the difference in cash (depending on the type of loan financing, the difference may not be an option).
• You can decide to simply walk away from the deal, albeit with potential consequences.
• You can try negotiating with the seller to lower the purchase price of the home. If the seller is unwilling to lower the price and you have an appraisal contingency, you can then walk away from the home sale.

What is an appraisal contingency waiver?

If you’re really committed to a home or it’s a competitive market, you may include an appraisal contingency waiver in your offer. That means you agree to pay the full amount of the sale contract, even if the appraisal value comes in low.

In June 2020, just over 20% of winning home offers waived the appraisal contingency, according to Redfin. In some situations, an appraisal contingency waiver could make sense. For example, in a bidding war, waiving the appraisal contingency could help you emerge as the successful offer.

What are the consequences of using a contingency waiver?

If you waive the appraisal contingency and the home is appraised low, you may have less room to negotiate with the seller on the home price. If you choose to walk away from the sale altogether, you may lose out on your earnest money. Depending on the sale price, this could end up being thousands of dollars.

What’s next?

As a homebuyer, the appraisal contingency clause is an important safety net for you — it gives you more options if your appraisal value comes in low. If there’s a problem with the appraisal, start by trying to work with the seller.

See if the seller is willing to meet you in the middle on the offer price. But you should always consult with your real estate agent to find out what your other options might be.

The Brigit app is a cash advance app that provides cash advances between paychecks with no interest fees or credit checks. And Brigit offers the ability to help build up your credit.

But Brigit isn’t the only app that can help you get an advance on your paycheck or access to cash. But before choosing another app, it’s a good idea to compare their features to make sure you’re selecting the best app for your financial situation.

What to watch out for with apps like Brigit

Apps like Brigit might be able to help you make ends meet until your next payday. And unlike payday loans which come with high costs, a cash advance app could be an appealing alternative.

But even though you may be able to get access to small amounts of cash between paychecks, you could be stuck paying a monthly membership fee, depending on the app.

If you find yourself needing to borrow money frequently, it might be a good idea to take a look at your monthly budget.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.