Money Management

Making the decision to get a mortgage can alter your financial life forever. Here are some signs that suggest you aren’t ready to make that move. 

If you are thinking about buying a property, you probably will need a mortgage.

But, just because you dream of becoming a homeowner doesn’t mean you should rush out and get a home loan. A mortgage is a major financial commitment and you don’t want to jump into agreeing to pay thousands of dollars a month for decades until you are certain you are ready.

To make sure you aren’t moving too quickly with getting a mortgage, watch for these four huge red flags that suggest you aren’t really in a position to borrow.

1. You don’t have an emergency fund

Once you commit to a mortgage loan, you will have to pay it for many years. If you experience a job loss, medical issue, decline in income, or other financial or personal disaster, your obligation to pay your home loan doesn’t disappear.

If you don’t keep paying, you could get foreclosed on, causing you to lose your house and ruin your credit. You can’t just sell the house right away if disaster strikes, as it takes time and money to find a buyer.

So, in order to be sure you’re ready to take on this commitment, you need to make sure you have an emergency fund. Ideally, you should save enough to cover three to six months of living expenses — including your new mortgage payment. That way, you won’t have to worry about being unable to pay if something goes wrong. You’ll be able to keep making your payments from your emergency fund until your financial situation improves or until you sell.

If your emergency fund is at $0 or has a low balance, this is a big red flag and you should not borrow for a home until you’ve got some savings to fall back on.

2. Your credit is in bad shape

If your credit score isn’t very good, this is a huge red flag. That’s because you’re going to get stuck paying a whole lot more for a home loan if you don’t have great credit.

If you borrowed $300,000 at the national average interest rate as of June 4, 2023, your monthly interest rate would be 6.467% and you’d have a monthly payment of $1,890 if your credit score was 760 to 850 and you took out a 30-year loan. But if you had a score of 620 to 639, your rate would be 8.056% and your payment would be $2,213 per month.

There’s a big range of rates between a 760 and a 620 credit score, but the bottom line is, the higher your score, the lower your home loan costs will be. Try to wait until your score is at least in the 700s before borrowing if you can.

3. You have a ton of debt

Having a lot of debt is another big red flag. Having tons of debt can hurt your credit score, and, as mentioned above, that’s not a good thing when you’re borrowing.

Lenders also look at your debt-to-income ratio, which is your debt relative to earnings. Ideally, your new housing payments should not eat up more than 28% of your income and your total debt payments should be below 36%. If you have too much debt to meet these ratios, you’ll have less choice of mortgage lenders and your rates will be higher.

You may also simply want to work on paying off other high-interest consumer debt before committing to a mortgage, so you can eliminate those payments and not have to worry about them once you’ve committed to a home loan.

4. You’re worried about affording the monthly payments

Finally, the biggest red flag of all is if you don’t feel comfortable with the payments you are taking on. You don’t want to doom yourself to living in financial stress and spend the next 15 to 30 years worrying about whether you’ll be able to make the next month’s bill.

If you don’t feel completely confident you can cover your mortgage costs, either wait to purchase or scale down your expectations so you can borrow less. In fact, if you spot any of these red flags, those are the right moves to make as you don’t want to be left with regrets.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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In addition to misleading investors, the SEC alleges Binance and Binance.US traded unregistered securities. Find out why those charges could impact the whole crypto industry. 

The SEC has taken action against so many crypto platforms in the past year or two that it’s tempting to view its latest charges against Binance and its founder Changpeng Zhao as part of a wider anti-crypto crusade. That’s certainly what some senior figures in the crypto industry are saying. Viewed in the context of other SEC actions, including its latest charges against Coinbase, there’s a certain logic to that argument.

However, there are two main threads to the SEC’s accusations against Binance. One is the sale of unregistered securities, which is similar to its actions against other platforms. The other is that Zhao (aka CK) and various entities connected with Binance and Binance.US deliberately misled investors and misused customer funds.

Binance says it will “vigorously defend against any allegations” and that all user assets are safe. Nonetheless, given what we now know about FTX and the subsequent accusations of fraud, as crypto investors, we can’t ignore the SEC’s allegations.

An ‘extensive web of deception’

The SEC brought 13 charges against Binance and Zhao in a detailed 134-page complaint. “We allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” said SEC Chair Gary Gensler. Here are three of the most concerning accusations for Binance and Binance.US customers.

1. The SEC argues that Binance deliberately created Binance.US to get around American securities laws

The SEC says the resulting lack of oversight meant, “Defendants were free to and did transfer investors’ crypto and fiat assets as Defendants pleased, at times commingling and diverting them in ways that properly registered brokers, dealers, exchanges, and clearing agencies would not have been able to do.”

2. The SEC alleges that management knew wash trading was rife

The SEC says the controls to stop manipulative trading such as wash trading — a practice that artificially increases trading volume amongst other things — on Binance.US were “non-existent.” The complaint also highlights several instances where management assured the public that it had robust measures in place. For example, senior executives claimed the platform had on-chain analytics and other monitoring in place to guard against market manipulation and abusive practices. According to the SEC, these claims were misleading.

3. The SEC says Binance.US customers don’t have enough information about where their assets are stored

The SEC argues that Binance — the international company — is involved in the custody of assets belonging to Binance.US customers. It argues: “This arrangement has given and continues to give Zhao and Binance free rein to handle billions of dollars of crypto assets that customers have deposited, held, traded, and/or accrued on the Binance.US Platform with no oversight or controls to ensure that the assets are properly secured.”

The SEC says two connected companies — Sigma Chain and Merit Peak — were used in the transfer of tens of billions of U.S. dollars, including customer funds. This final point is the most concerning. If you deposit funds in a custodial wallet with a crypto exchange, it is beyond disconcerting to think those funds could be used for other purposes, particularly after the collapse of FTX.

Sale of unregistered securities

Several of the SEC’s recent crypto cases center around the question of whether or not cryptocurrencies and crypto earn programs are securities. Up until now, crypto has been treated as a commodity and comes under the remit of the CFTC. If this changes, it could have significant ramifications for crypto investors and the crypto industry.

The SEC has said repeatedly that it believes many cryptos are unregistered securities, which means they should come under its jurisdiction. If a product is a security, it needs to follow strict rules in terms of reporting and trading. The SEC argues that many cryptocurrencies fit the definition of “investment contracts” under the Howey Test. These exist when, “There is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”

In its charges against Binance and Zhao, the SEC says that Binance’s various earn products are a form of an investment contract. It also says several popular cryptos are unregistered securities. These include:

Cardano (ADA)Solana (SOL)Matic (MATIC)Axie Infinity (AXS)Cosmos (ATOM)

What it means for crypto investors

The SEC says that Binance, Binance.US, and the other entities involved should have registered as exchanges or broker-dealers. Given that those cryptos above are available from many top crypto exchanges, we may see more enforcement actions soon. As such, the charges could have ramifications for the way we buy and sell crypto.

At a practical level, if you have cryptocurrency in a custodial wallet on a centralized exchange, now is a good time to learn more about crypto wallets. Moving your assets to a non-custodial crypto wallet that you control takes a bit of technical know-how, and you need to be confident you won’t lose your seed phrase. However, it means you are in control of your assets. You won’t lose them if a platform fails, and they can’t be used in ways you haven’t agreed to.

If you’re a customer of Binance or Binance.US, take heed of the SEC’s accusations about how the companies handle deposits. This is your money, and you’d be justified in wanting to know what’s being done with it.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has positions in Cardano, Cosmos, and Solana. The Motley Fool has positions in and recommends Cardano, Cosmos, and Solana. The Motley Fool has a disclosure policy.

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How would you like to get a $20 discount on a hotel this summer? Find out how to earn a $20 statement credit on a hotel stay through Amex Offers. 

Some credit card issuers provide additional ways for consumers to save money through credit card offer programs. American Express cardholders can earn cash back when activating offers through the Amex Offers program. (Terms apply.) Here’s a current offer available to some cardholders that will provide $20 in savings when booking a hotel through Expedia this summer.

How to get $20 back on an Expedia hotel booking

A summer vacation can quickly get expensive if you’re not careful. But this Amex offer could make staying true to your vacation budget easier as you make your upcoming travel plans. When you spend $100 or more on a pre-paid hotel at Expedia.com/amex, you’ll earn a $20 statement credit. (Terms apply.) That’s like getting a $20 discount on your hotel stay!

This offer is only valid for pre-paid hotel purchases or “pay online now” properties. This offer excludes pay-at-property purchases, cruises, flights, car rentals, activities, and vacation packages. You must activate the offer and use your American Express card for payment. This one-time Amex offer expires on Aug. 27, 2023 — so don’t miss out on the savings.

Amex Offers are targeted, so not every Amex cardholder will see this deal. You can check whether the offer is available for you through the Amex mobile app. If your account is targeted for this offer, it could help you keep your trip spending to a minimum. If you don’t yet have an Amex card, check out our list of the best American Express cards to learn more.

Six ways to save on summer travel

While travel costs are high this year, there are still ways to save money. Here are a few suggestions that could help you keep more money in your checking account as you make your travel plans:

Don’t wait to book. Now is the time to act if you don’t want to overpay. The longer you wait to make your vacation plans, the more likely it is that you’ll pay higher prices. Choose a nearby destination. If you can avoid buying airfare, you can make your trip more affordable. Consider a destination within a few hours’ drive to spend less.Use a budget airline. If you need to fly and don’t mind a no-frills travel experience, flying with a low-cost airline could offer significant savings. Frontier, Spirit, and Breeze Airlines are some options. Be sure to review baggage restrictions to avoid incurring extra fees. Avoid traveling during holiday weekends. Many people plan their vacations around holiday weekends to reduce the vacation days they need to use. While doing this can offer some benefits, you’ll be traveling when there are more crowds and higher prices. Consider taking shorter trips. Instead of taking a weeklong vacation, you may want to consider planning a shorter getaway. Planning a couple of weekends away or a four or five-day weekday trip could help you keep more money in your savings account. Put your travel rewards to use. If you’re a travel rewards enthusiast, don’t let your points or miles sit unused. You may be able to book a free flight or hotel stay.

Earn rewards when you travel

As you make your travel reservations, consider paying with a travel credit card. You can earn rewards and take advantage of valuable perks that improve your travel experience. Learn more by reviewing our list of the best travel rewards credit cards.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.American Express is an advertising partner of The Ascent, a Motley Fool company. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Uber recently removed an Uber One perk that you may have used often. You’ll no longer get a discount on eligible rides. Find out what you’ll get instead. 

Rideshare services like Uber can add convenience to your life if you don’t have a car or take frequent business trips. If you use Uber often, you may even be an Uber One subscriber. The program recently went through some changes, though, and it’s good to keep abreast of changing perks. Here’s what you need to know.

The Uber One 5% discount on eligible rides is no more

One benefit that Uber One subscribers enjoyed was the 5% discount on all eligible rides. For frequent riders, the discount offered significant savings. However, this particular discount is no longer a perk. Instead, Uber One subscribers will now earn 6% Uber Cash on eligible rides. You can spend Uber Cash on Uber and Uber Eats.

While this new perk still provides value to frequent Uber riders, it may disappoint subscribers who prefer an instant ride discount. If you enjoyed this perk, you’ll need to decide if investing in an Uber One membership is still worth it. For some subscribers, the delayed satisfaction of earning cash back may no longer be worth it when considering the $9.99 monthly price tag.

Other valuable Uber One benefits wills remain the same

Many Uber One benefits that you’re used to aren’t going away. Subscribers will continue to enjoy $0 delivery fees on eligible Uber Eats orders. Additionally, the 10% discount on eligible Uber One orders from participating restaurants will remain a subscriber benefit. Uber One users will also continue to see members-only pricing on eligible rides.

You can still benefit from the program if you frequently take Uber rides or make Uber Eats orders. However, you may want to ditch your paid membership if you don’t use either service all that often or otherwise no longer find the benefits useful. By canceling your subscription, you’ll have more money left in your checking account to cover other necessary expenses.

How to become an Uber One subscriber for free

Here’s some good news: you may be eligible for a free Uber One subscription. Some credit card issuers provide free subscriptions to cardholders as a perk. In this case, you may qualify for a complimentary Uber One subscription if you have one of the best Capital One credit cards in your wallet. Review your credit card’s benefits so you don’t miss out on this free benefit, because using all available perks is an excellent way to maximize the value of your card.

Be aware of your spending to avoid wasting money

Ongoing benefit changes are an excellent reminder to stay on top of your paid subscriptions and memberships. Programs like this can change over time and may become less valuable, and you could end up paying for subscriptions that no longer serve you. By carefully reviewing your finances at least a few times each year, you can avoid overpaying for unnecessary expenses.

If life has gotten busy and you haven’t taken a closer look at your purchase habits, you may be wasting your hard-earned money. Now is an ideal time to review your finances. If you’re unsure where all your money is going, you can use budgeting apps to track your spending to see what financial changes you should make. It’s never too late to improve your personal finances.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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