Tag: Loans

Teachers Down Payment

How to Save for Your First Down Payment on a Teacher’s Salary

With rising real estate prices across the board, not to mention in locations with a high cost of living already, buying your first home can seem daunting. You may be planning on buying your first home in a few years, but using these tips today will help you slowly start to save for that first down payment.

Originally, most mortgage companies requested a 20% down payment, which in today’s world can seem a little out of reach. However, with a few years of planning, you may be able to grasp this goal with a teacher’s salary.

Anything under 20% for your down payment may require you to pay PMI – or private mortgage insurance – on top of your mortgage payment, home insurance, and property taxes. Also, with this down payment, you can build up enough equity so that when you do go to sell your home, the closing costs and fees don’t eat up all of your investment.

However, there are a few ways to get a lower down payment as well if the 20% isn’t feasible when you’re ready to buy.

How to Save for your First Down Payment on a Teacher's SalaryCheck out Teacher home loan programs

There are many different teacher home loan programs out there, that allow you to buy a house without a 20% down payment.
Most of them do require some sort of initial investment. FHA, for example, only requires 3%. Even if you plan on investing 20% at the start, you can get some neat perks like discounted closing costs and even donations to your school.

If you do decide on a lower down payment, you may want to continue using some of these tips to ensure you hit 20% equity before you go to sell your home. Be sure to check your mortgage loan for prepayment penalties if you do plan on making any extra principal payments.

Figure out your monthly goal

First, you’ll want to decide the price range of homes you’ll plan on looking at. Next, you’ll want to get prequalified with a lender to see what interest rates and programs you qualify for. Also, this is a good time to see if you need to do any work on your credit as well.
You can also use sites like Karl’s Mortgage Calculator to help you figure out future monthly payments depending on what you pay for your home and the down payment.

Set up an emergency fund

Even while you’re saving for a down payment, emergencies still happen. If you start out with savings that will cover three to six months of expenses, it’ll help you stay on track for your down payment when you need a sudden car repair or have a medical expense.

Planning for emergencies in advance helps you stay focused on your other goals.

Get a savings account

Open up a savings account with your bank or find one online. Make sure it’s an account that you can easily pull the money out of when needed.

You can set up an automatic deposit from your paycheck each month if your employer uses direct deposit. This is the best way because your money never touches your main spending account and eventually you’ll get used to seeing the net amount in your checking each month.

Adjust your budget

You’ll want to set your budget up so that you can reach your goal each month. You may have to change some of your spending habits or even give up some extravagances for the luxury of buying your home. Some ways to cut spending is checking with credit card companies on lowering interest rates. If you pay on time each month with the required amount, you can call in and tell them you want a lower rate.

Also, you may look at renting a moderately nice apartment instead of the three-bedroom house with a huge backyard, or you may want to trade in your car for a lower car payment if that saves you money. Anything that you can cut, even barely, will add up over time.

Use extra income wisely

Anytime you receive any large income outside of your regular salary, consider putting all or most towards your down payment savings. Tax returns are great opportunities to build up your nest egg. If you do any side jobs or summer jobs, try budgeting some of that income into the mix as well.

Your main goal is to funnel any kind of extra income into reaching your goal faster. Saving for a down payment can take a couple of years, but the equity you create will be worth it.

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teacher loan forgiveness programs

Get Rid of your Student Loan Debt Once and for All – 6 Teacher Loan Forgiveness Programs

If you are still struggling with student debt, have you looked into teacher loan forgiveness programs?

Here I outline 6 student loan forgiveness programs for teachers.  Please check them out, you may qualify to get some or all of your student loans forgiven!

1) Federal Public Service Loan Forgiveness (PSLF)

The Federal Public Service Loan Forgiveness program was initialized in 2007 with the aim of encouraging more people to work in public service, including at schools.  PSLF forgives William D. Ford Direct Loans (including direct PLUS loans, direct consolidation loans, direct subsidized loans, and direct unsubsidized loans).

However, PSLF will not start facilitating the forgiveness of any loans until October 2017.  The reason for this timeline is that a condition of this program is that you must make 120 consecutive payments on your loans.

Please see the PSLF eligibility requirements here. To summarize the conditions for qualifying for this program, you must:

  • Make the aforementioned 120 consecutive (10 years!), of on-time, full payments, starting no earlier than 10/1/2007
  • Work full-time in the Peace Corps, Americorps, or a public service organization (schools qualify!) for the entire time the payments were made

This is definitely a difficult program to qualify for, but if you are still going to be in debt in October 2017 (or when you have otherwise made 120 consecutive payments after that) and meet the above conditions, than this program is well worth looking into.  See the PSLF certification form here.

2) Federal Teacher Loan Forgiveness

The goal of the Federal Teacher Loan Forgiveness program is to encourage people to become (and remain) teachers. It is a generous program that allows for up to $17,500 in teacher loan forgiveness.

Here is a summary of the eligibility requirements for this program:

  • Eligible loan types include unsubsidized student loans and direct subsidized loans
  • The loans must have been established after 10/1/98, and at least one of the teaching years must be after the 1997-1998 school year.
  • You cannot be in default
  • You must work for five consecutive, full years as a teacher, at least one of the years at a qualifying school:
  • The qualifying school must be in a Title I qualified district
  • The qualifying school must have more than 30% of students qualified for Title I services
  • The qualifying school must be listed in the government’s directory of qualifying schools.
  • Teachers at a qualifying educational service agency are also eligible

In most cases, teachers are eligible to get $5,000 of their loans forgiven. “Highly qualified” math, science, and special education teachers may be eligible to receive up to the full $17,500 in teacher loan forgiveness.

Download the application for this program here.

3) Federal Perkins Loan Cancellation

With the Federal Perkins Loan Cancellation program you can get up to 100% of your Perkins loans forgiven, including any interest you have accrued! Teachers only have to teach full time for a year to receive benefits:

  • You will get 15% of your loan cancelled after years one and two.
  • For years three and four, you will get 20% more of the loan cancelled each year
  • In the fifth year, you will get the final 30% of your Federal Perkins loan cancelled.

Here’s what qualifies for the Perkins loan cancellation program. You can:

  • Teach in a school that serves students from low-income families (see if your school qualifies as “low-income” here) or;
  • Be a special education teacher (including for infants and toddlers) or;
  • Teach in a field that your state has defined as having a teacher shortage in, such as science, bilingual education, math, foreign language, etc. or;
  • Teach at a private school that is a nonprofit or;
  • Teach part-time at multiple schools, as long as you meet the other requirements or;
  • Teach preschool or pre-K, only if your state classifies them as part of elementary education

To get the application form for this program, contact the office where you went to college that administers the Federal Perkins Loan program.

4) Stafford Loan Forgiveness

The popular Stafford Loan Forgiveness program provides qualified individuals up to $17,500 in teacher loan forgiveness.

However, it is a very difficult program to qualify for. You must:

  • Work full-time for 5 consecutive years at a Title I qualified elementary or secondary school, with 30% of students who qualify for Title I services or at a school listed in the Annual Directory of Designated Low-Income Schools
  • Not be in loan default
  • Not have taken out any direct loans or FEEL Program Loans before 10/1/98.

One big plus of this program is that teachers can take advantage one of the Federal Student Loan Forbearance programs during those five years. If you are having difficulties making payments, this is a great option and could really help your short-term finances.

See the Stafford Loan Forgiveness Application form here.

5) Federal TEACH Grants

The Teacher Education Assistance for College and Higher Education (TEACH) Grant program provides up to $4,000 per year to qualifying college students who will become teachers.

TEACH Grants are unique in that they are the only type of teacher loan forgiveness provided before debt is accumulated. Other loan forgiveness programs, of course, provide forgiveness after you have taken on student debt.

These grants will provide as much as $4,000 per year to college students who:

  • Intend to teach at a school that serves primarily students from low-income families
  • Are enrolled in a teaching credential providing program
  • Plan to teach full-time for at least 4 years
  • Plan to teach in a “high-need” field

6)  State and City Sponsored Teacher Loan Forgiveness Programs

Fortunately, there are also many state and city teacher loan forgiveness programs. Rather than list them here, I will share with you an excellent resource.

The American Federation of Teachers (AFT) has put together a searchable database of state and city loan forgiveness programs, classroom donation programs, as well as various awards and grants.

In addition, your district school board should be able to point you in the direction of any city or county funded loan forgiveness programs.

Save Money on Your Student Loans and Get $100!

If you cannot get all of your loans forgiven with teacher loan forgiveness programs, please also consider student loan refinancing. One great company that you can reduce the cost of your student loans with is Sofi. Fixed rates start at 3.50% and variable rates start as low as 2.13% APR (with utoPay). Sofi members save an average of $14,000! Apply here and you will receive a $100 bonus when you refinance.

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5 Years to Debt Free

5 Years to Debt Free: Two Married Teachers Make the Journey

One second. That’s all it takes for the student debt in the United States to increase by $3000.

After graduation, that monthly payment makes the list, plus any credit card debt, an auto loan, and potentially a mortgage.

As students leave school and enter the never ending cycle of debt, a newly married couple, both with teaching degrees, decided to break out and make their own way.

Over the course of 5 years, Bobby and Susan got rid of $40,000 in student loans while starting at a $37,000 household salary. This doesn’t include the master’s degree, a few cars, and home improvement repairs on their home paid for with cash.

Talk Goals

There’s a fine line between dreams and goals.

Many people will talk about getting out of debt, but they never talk about how.

Bobby and Susan decided that they needed to actually sit down and map out what they wanted to do. They even created a list of things they couldn’t do in order to hit some of their financial goals and posted it on their fridge for the daily reminder.

Without talking through and even writing down goals, they become arbitrary. When working as a team especially, it is important to be on the same page as your partner.

The first easy step is dividing your loan up by the years you want to pay it off in.

Double Check That Budget

Make sure your budget is helping you win.

By adjusting their expenses, they were able to funnel that money into savings, paying off debt, or paying cash for their more expensive purchases.

Start thinking about what you can live without. Try writing a needs and wants list. And then rewrite it.

You will be surprised with what gets marked off the second time.

It is critical to financial success to have a working budget. Remember that tip on writing down your goals? This is the ultimate solution. Having a specific category for that loan payment is vital to hitting that monthly goal.

Be Willing to Make Sacrifices

There is an overwhelming amount of people who are house poor or have extremely expensive cars while balancing student loans.

Hitting that debt free goal may include making some big sacrifices.

How many times do we hear the thought “I am so tired of working hard and feeling like I have nothing to show for it?”

As Bobby and Susan kept feeling that exact same way even while they both had jobs, two cars, and a house, they decided to make a change. This included covering big purchases with cash, but more importantly it included their mortgage.

They had bought a foreclosure, flipped it while living there, and sold it at a profit. From there, they used the extra cash to pay off all of their student debt and start an emergency savings fund while moving into an affordable apartment.

Whether it’s downsizing or getting rid of that $500 car payment each month, some temporary changes will need to be made. As debt-free becomes more realistic, those sacrifices are going to become the cornerstone of the journey there.

Find what makes sense for your financials goals to let go of temporarily.

Use the Momentum to Start an Emergency Fund

One of the best things to do after being debt-free is to keep the same budget.

Starting to save now to decrease the chances of future debt is a sure way to keep that peace-of-mind that was just created.

It’ll be easier to keep stockpiling the loan payments into savings after the loan is paid off than starting anew all over again a year later to cover a new car payment or emergency repair on the house.

Bobby and Susan decided to create a fund that would cover 6 months of unemployment if one of them were to leave their job. If any unexpected car repairs or medical bills popped up, they were set. They had paid off all of their debt, moved in to the new apartment, and stuck to the plan.

Not only does this ensure some financial peace, but now, they get to enjoy that extra income guilt-free.

Creating wealth and eliminating debt is going to look different for everyone, but creating a budget, cutting some big expenses, and planning for the future is going to help make the journey less stressful.

With careful planning and a determined mindset, debt free may just be down the road.

Debt Free Inspirational Quote

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Teacher Home Loans – 3 Top Programs

If you are a teacher looking to buy a home and need help with financing, please consider some of the special mortgage programs that cater specifically to educators. Here we cover three of the top programs that offer teacher home loans.

Why Should you Explore Teacher Home Loans?

First off, these programs were created with educators in mind.  They may offer some perks and/or discounts that you may not get from traditional financing options.  Whether it’s a donation to your school, discounted closing costs or lower interest rates, teacher home loans might very well be what you are looking for when you wish to finance the purchase of a home.

Here are 3 of the best teacher mortgage programs for professional educators:

Educator Mortgage Program

Teacher Home LoansThis is a really interesting program from Supreme Lending that anyone in the education industry is eligible to apply for.  The highlights of the Educator Mortgage Program include:

  • Discounted Closing Costs – Supreme Lending is offering up to $800 in reduced closing costs to educators.  If you qualify, you will receive a credit on your HUD-1 settlement statement for up to $800.
  • Discounted Real Estate Agent Fees – The Educator Mortgage Program looks to work with real estate agents who want to give back. As an educator, you will receive a credit on your HUD-1 settlement statement up to $800 from participating Real Estate Agents. These funds can be used for any fees, prepaids, seller fees, or new escrow account set up for your new loan.
  • Fast Loan Process – Supreme Lending emphasizes that educator clients are given highest priority. Educator loans are handled expeditiously so as to ensure “a smoother and more enjoyable experience.”
  • Donation to Your School – With the Educator Mortgage Program, a donation of to $200 will be made to the school program of your choice. If you work with a participating real estate agent, an additional $200 will be donated, for a total of $400, to the school program of your choice!

Visit the Educator Mortgage Program’s website for more info on their teacher home loans.  They offer various home buyer mortgage programs for educators, including FHA loans, Fannie Mae, Freddie Mac, VA, USDA, Jumbo and many more (see descriptions of some these programs below).

Teacher Home Advantage

American Pacific Mortgage Teacher Home Advantage LoansThe Teacher Home Advantage program by Pacific Home Mortgage offers various options for teacher home loans.   These range from:

  • FHA Loans – Federally backed loans with a low fixed rate, great for the educator who is a first time home buyer.
  • Conventional Loans – These are not backed by the government and usually  require a larger down payment.  However, one advantage of these loans for teachers is that monthly mortgage insurance is not generally required.
  • USDA Loans – 0% down loans that are insured by the government.  These loans are only offered in “rural” areas.  The fact that these loans require no down payment puts home ownership within the reach of many teachers and other educators.
  • VA Loans – If you are a veteran, this could be a great option for you.  Like the USDA loan, it does not require a down payment.
  • Home Path Program – This program is only available for the purchase of Fannie Mae owned homes.  It offers educator borrowers low down payment options, flexible terms, no mortgage insurance and no appraisal fees.
  • “Making Home Affordable” Program – Teacher Home Advantage works directly with this program.  Basically, it includes opportunities to help borrowers make their monthly payments more affordable.  In other words, it allows homeowners the chance to decrease their current mortgage payments, even if they’re “upside down” in their home.
  • Teacher Next Door – This program (more specifically HUD’s Good Neighbor Next Door Sales Program) offers Pre-K through 12th grade teachers the opportunity to make a contribution to community revitalization while receiving a substantial 50% discount on the list price of a home.  The limitations of this program include that you must commit to live in the property for 3 years, and the qualifying homes are located in HUD-designated revitalization areas only.

Learn more about these different programs and what the Teacher Home Advantage offers educator clients here.

NEA Home Financing Program®

NEA Home Financing Teacher Home LoansOffered through Wells Fargo Home Mortgage, the The NEA Home Financing Program® is offered as a benefit of the NEA Member Benefits program.

Some of the features of this program include:

  • Competitive interest rates & fees
  • Low down payment options
  • A wide variety of home financing choices
  • Conventional and jumbo loans, with both purchase and refinance programs available
  • As an NEA Member bonus, you’ll receive a $500 award card when you close a purchase or refinance

Learn more about the NEA Home Financing Program® here.

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