gender

Surprise! There's a Gender Gap in Mortgages, Too

Dan Rafter — Tue, 29 Nov 2016 11:00:09 +0000

The gender gap in earnings is well known. According to a recent report by the Economic Policy Institute, the typical woman can expect to earn 83 cents for every dollar that the typical man earns.

But studies show another gender gap that negatively impacts women: Research published by the Urban Institute in September said that women tend to pay more for their mortgages even though they are statistically more likely to pay their loans on time than men.

The Numbers

According to the Urban Institute, about 15.6% of female borrowers have what is known as a "higher-priced mortgage." Borrowers with such mortgages are charged higher interest rates to borrow their home-loan dollars.

How high these rates are at any given time varies. The Urban Institute uses the same definition of higher-priced mortgage used by the Home Mortgage Disclosure Act: a mortgage loan with an annual percentage rate that is higher than the benchmark interest rate known as the Average Prime Offer Rate. That rate stood at 3.58% for a 30-year fixed-rate loan as of June 20 of this year.

The Consumer Financial Protection Bureau considers a first mortgage loan to be a higher-priced mortgage if its annual percentage rate is 1.5% or more higher than the Average Prime Offer Rate.

The Urban Institute found that while 15.6% of female-only borrowers are paying off higher-priced mortgages, just 15% of male-only borrowers are doing the same. The institute found that male-female borrowers who apply for loans together receive higher-priced mortgages only 7.6% of the time.

Why Are Women Paying More?

Why do single women pay more for their mortgages? It's difficult to tell. It might come down to income. The Urban Institute reported that single female borrowers tend to have lower annual incomes than single males. According to the institute, single female borrowers earned an average of $69,200 a year. Single male borrowers had an average income of $94,700. Male-female borrowers had an even higher annual income of $119,000.

Income is one of the financial factors that lenders consider when deciding who qualifies for a mortgage and what interest rates they pay. Lenders often charge higher rates as a form of financial protection when they worry that borrowers' incomes are lower, because they fear that these borrowers will be less likely to pay their loans back on time.

Borrowers with lower incomes also have less money for a down payment. When borrowers put down less for a house, they are typically charged a higher interest rate, again to make up for the extra risk that lenders take on when loaning them money. Lenders assume that borrowers who put less money down are more likely to stop paying their mortgage loan if they suffer a financial crisis.

But what about FICO credit scores? These three-digit numbers tell lenders whether borrowers have a history of paying their bills on time or if they tend to miss payments and run up credit card debt. Lenders charge higher interest rates to borrowers with low credit scores.

But from 2004 to 2014, the Urban Institute found, female-only borrowers had an average FICO credit score of 711, similar to the average 712 score of male-only borrowers. That score is significantly lower, though, than the 725 average score submitted by joint male-female borrowers.

Credit bureau Experian reported in March of this year that the average FICO credit score for all women is 675, a bit higher than the average score of 670 for men. Women also had 3.7% less average debt than men, according to Experian.

Better Record

Despite paying more for their mortgages, female-only borrowers tend to do a slightly better job of paying them on time than do male-only borrowers. According to the Urban Institute, female-only borrowers had a default rate on their loans of 9.6% from 2008 through 2010. Male-only borrowers had a slightly higher default rate of 9.7% during this same time.

What to Do?

What does all this mean for women applying for mortgage loans? If they are applying for mortgages on their own and want the lowest interest rates possible, they need to make sure that their finances are strong.

This means that their FICO credit score should be at least 740 if they want to qualify for the lowest interest rates. It also means that their monthly debts, including their estimated new mortgage payment, should be 43% or less than their gross monthly income.

Single male borrowers need to focus on the same factors, of course. But the research from the Urban Institute indicates that strong FICO scores and debt-to-income ratios are especially important for single females who want to avoid the financial burden of a higher-priced mortgage.

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Reasons Women Might Retire With More Wealth

Amanda Meadows — Thu, 31 Dec 2015 14:00:03 +0000

We hear a lot about how women might be shortchanged in terms of earnings, but there are also plenty of ways women can excel financially. From potentially stronger savings and investment habits, to longer lifespans, women enjoy some serious wealth-building advantages, as well. Here are five reasons women might retire with more wealth.

1. More Women Are Gaining Higher Education

In fact, women are handily defeating men in the college game. Because women are more likely to graduate from college than their male counterparts, they enter the workforce in better shape. Sure, women are more likely to enter lower-paid areas of the education and health sectors, but they are also breaking into business and STEM programs at an increasing rate.

While college loan debt can slow down your plans to save, the correlation between college and increased earnings is still present. The trick is to start investing as soon as you begin to see your margin of expendable income widen, ideally before age 30.

2. Women Are Living and Working Longer

That's right: Women typically live longer, and thus have more healthful years during which they may work. That means continuing to work in later years — when earnings may be higher, and more returns from compound interest on savings enjoyed. It also means a postponed retirement, which allows your investments to grow for longer.

Check out this handy guide to reaching your investing goals.

3. Women Are Better Savers at all Income Levels

The road is full of unexpected hurdles to saving, and expensive emergencies are all but inevitable. The good news for female workers is that women are better at saving than men in general. If that weren't enough, the same study showed that women are also better at managing their 401K accounts than men.

It still takes discipline, however, to work this psychology to your advantage. Make specific goals and stick to them.

4. Forgoing Children Could Mean More Savings

On the fence about starting a family? According to the 2014 census, 48% of women between the ages of 18 and 44 do not have children. Clearly, women are increasingly waiting to have kids, or deferring the option altogether.

Consider that this may mean more money for those women down the line. Delaying kids can mean more time to solidify your career and earnings, amass savings, and reduce debt before the financial pressures of kids arrive. If you are a 20- or 30-something still weighing the options, avoiding the fate of the sandwich generation might be a deciding factor in postponing or entirely forgoing children.

5. Women Are Less Likely to Make Risky Trades

In addition to being better savers, more educated, and having more working years in which to save, women are also less likely to gamble their savings in poor investments. Women are generally more risk averse than men.

That said, there is no reason not to learn how to pick more varied investments and take a slightly higher risk (hopefully for greater rewards) every now and then. Try listening to these great money podcasts to pick up tips and stay up to date with the market.

Women enjoy a variety of natural advantages when it comes to earning and managing money. The key is making full use of them to strengthen your financial roadmap.

Are you taking steps to secure your retirement?

This article is from Amanda Meadows of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways an Income Gap Can Strain Your Relationship

Amanda Meadows — Tue, 03 Nov 2015 19:15:54 +0000

Money is the leading cause of arguments in married couples. Income disparity, when one person makes much more than the other, can be a surprising source of stress. If you're one of these couples, be on the lookout for these four ways an income disparity could harm your relationship.

1. Holding on to Old Gender Roles

Women are more and more likely to have higher education and a higher paying salary than their significant other. However, in heterosexual relationships in which women are the "breadwinners," the women are actually still doing more housework than men. That doesn't sound like an equal partnership. That might also be why the divorce rate jumps 50% for couples in which the woman earns the higher income.

So much inequality comes from not being comfortable to speak up, and worse, tacitly defaulting to your parents' roles. Having a deep and meaningful conversation about gender and money is important in a relationship — find each other's biases and challenge them. Outdated and unreasonable gender expectations should not dictate what happens in your relationship.

2. Using Salary as Leverage

For many, money equals power. So when one partner earns more than the other, the higher earner can easily become the de facto decision-maker in where to vacation, what to buy for dinner, the kind of house you live in, and what kind of hobbies you partake in. This is precisely the kind of power imbalance that leads to highly toxic relationships.

Resolve to discuss medium-to-major expenditures with your partner before making them. As long as you share your household, it's always half theirs. It's also key to encourage your partner's goals. Aid them generously, in faith that s/he would do the same for you if the roles were reversed.

3. Acting Defensive Over Earning Less

Earning less than your partner can make you feel as if you don't matter, because one salary is floating most of the household. This can lead to resentment, or worse, a childlike attachment and dependency on the other to help you financially.

Just because your income accounts for a smaller percentage of the household finances doesn't mean that your role in the relationship is smaller. This comes up a lot when one person decides to stay home to take care of the kids. But remember that contribution to the household is not measured by income.

4. Letting Money Determine Your Partner's Worth

The easiest way to avoid fights is to assign financial contributions on a sliding proportion scale. Instead of letting your partner struggle to pay 50% of the utilities, find a shared budget that allows him or her to pay what they can afford. Or, agree on new terms — like one being in charge of all groceries and utilities, while the other pays the rent or mortgage.

Also, it's time to ban the word "breadwinner." Not only is it divisive, it assigns a "winner/loser" dynamic, which has no place in a loving domestic relationship. If you think less of your partner for doing the dishes, or if you think more of a partner for earning more material wealth, you have set yourself up for trouble.

It's time to stop being combative about status. Feeling more or less important is only true if you believe it.

Is there an income gap in your relationship? How do you get over it?

Like this article? Pin it!

This article is from Amanda Meadows of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Products That Cost More for Women Than for Men

Kyle James — Thu, 21 May 2015 21:00:11 +0000

Have you ever noticed that men's versions of some products are really cheap compared to the women's versions? Sometimes the price difference reaches a whopping 50%! I'm talking things like soap, deodorant, shampoos, razors, and the like. If you're female (and not a picky shopper), it just may be worth your while to consider the following men's versions of these products.

1. Razors (Disposables and Refillables)

Razors from brands like Gillette, Schick, and Bic have models for both men and women. Aside from the pink and purple packaging, there is very little difference between them, except for price. In the example below, the women's version of the Schick ST Disposable Razor costs a few cents more compared to the men's alternative, even when buying in bulk. Save a few bucks and buy the men's version of razors — your legs won't know the difference, but your wallet will.

Men's Version: Schick ST Disposable Razor, 12 Count — from $6.58 ($0.55 each)
Women's Version: Schick ST Disposable Razor, 12 Count — $6.88 ($0.57 each)

2. Shaving Cream

In terms of saving money with little noticeable effect, shaving cream is probably the best example of buying men's versions to save money. It's a product you only use for a couple minutes before washing off, with very little lingering odor. In other words, it's a highly disposable item, so if you're a female, why would you pay the huge markup associated with women's shaving cream? After examining a bunch of different brands, my example below is a fair representation of a top tier shaving cream for both sexes. Notice the women's version is several times the price — not worth it in my humble opinion.

Men's Version: NIVEA for Men Sensitive Shaving Gel, 7 oz. — $1.69 ($0.24/ounce)
Women's Version: Skintimate Skin Therapy Shave Gel, 7 oz. — $6.51 ($0.93/ounce)

3. Deodorant

Deodorant, also known as "pit putty" in my house, is another item where the women's version is noticeably higher in price than the men's equivalent. In my example, a pack of six women's Degree deodorants will cost you almost $4 more than the men's. If odor is an issue for you, and you're a female worried about saving a few bucks (but also concerned about smelling like Tom Selleck), then shop for odorless men's deodorants and antiperspirants. Besides Degree, other men's versions worth shopping for include Sure, Arrid, and Dove.

Men's Version: Degree Dry Protection Antiperspirant & Deodorant, (Pack of 6) — $16.01 ($0.99/ounce)
Women's Version: Degree Dry Protection Antiperspirant & Deodorant, (Pack of 6) — $20.30 ($1.30/ounce)

4. Shampoo and Conditioner

Women's shampoos and conditioners also have a premium price point when compared to men's versions. While not as radical a price difference as some of the other products listed here, it's still smart to consider men's hair products, or at the very least unisex shampoos and conditioners like Pert Plus and Head & Shoulders. The Dove shampoo example below showed a 20% higher price for a women's product.

Men's Version: Dove Men+Care Shampoo + Conditioner, 12 oz. — from $3.77 ($0.31/ounce)
Women's Version: Dove Pure Care Shampoo, 12 oz. — from $4.73 ($0.39/ounce)

5. Soap

Women's soap, with its higher perfume and moisturizer content, is usually significantly more expensive. As a matter of fact, it's twice as expensive in my example below. If you really don't care what your soap smells like, you should always buy a men's or unisex bar, as you'll save a big chunk of change over the course of an entire year. Let's say you use two bars per month — this would translate to just under $30 in savings in one year if you always opted for men's or unisex bars of soap. Pretty decent savings for doing very little.

Men's Version: Dial for Men Odor Armor Bar, 3 count, 4 oz. bar — $3.49 ($1.16/each)
Women's Version: Caress Beauty Bar, 4 count, 4 oz. bar — $9.28 ($2.32/each)

6. Hair Spray

Hair spray marked for men is pretty darn cheap compared to the women's version. From Amazon, you can get a men's bottle that is about twice as big as the women's for darn near the same price. The women's variety is actually marked as "unisex," but I'm calling it a female product as the bottle is bright pink. It's the same brand as well, so we really are comparing apples to apples making the men's version a much smarter buy.

Men's Version: TIGI Bed Head Hard Head Hair Spray, 10.6 oz. — $15.12 ($1.43/ounce)
Women's Version: TIGI Bed Head Head Rush Shine Mist for "Unisex," 5.07 oz. — $11.90 ($2.34/ounce)

By keeping a keen eye peeled for men's versions of products that are cheaper, and do the same thing, you can definitely save some money. In many cases, you can also find unscented or "unisex" scented items if odor is an issue for you, making this a really smart way to save.

Any other "women's" products you've discovered to be expensive when compared to the male alternative?

This article is from Kyle James of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Ways To Shatter The Glass Ceiling From Above

Margie Fishman — Sun, 07 Aug 2011 22:35:04 +0000

Link:

http://www.openforum.com/articles/6-ways-to-shatter-the-glass-ceiling-from-above

Are women banging their heads against a glass ceiling or rooted to a sticky floor? Either way, the dreaded “invisible” barrier is alive and well – and preventing many from ascending to the most prestigious, highest-grossing positions in corporate America.

While the number of women at the helm of Fortune 500 companies has grown fivefold over the last decade, women still account for less than 15 percent of executives, 16 percent of board members and 8 percent of top corporate earners, according to a 2010 study by Catalyst, a nonprofit organization focused on expanding opportunities for women and business. Worldwide, women with MBAs initially earn $4,600 less than their male counterparts and lose out on more than $400,000 in salary over a 40-year career, a Catalyst survey of more than 4,000 MBAs found.

“Women have advanced to the senior ranks, looked around and said, ‘it’s not worth it,’” says Joan Lloyd, an executive coach, syndicated columnist, and 30-year human resources veteran based in Milwaukee.

Disenchanted by the traditional path, women are increasingly striking out on their own. The number of majority women-owned businesses increased by 42 percent from 1997 to 2006, according to the nonprofit Center for Women’s Business Research. That talent drain robs companies of diverse strengths and backgrounds.

The gender gap is so pervasive that France recently instituted quotas to ensure at least 40 percent of boardroom positions are held by women, following similar legislation in Norway, Spain, and Iceland.

Looking for ways to create a more equitable, competitive workplace? Here are six.

1. Recruit and Promote Based on Talent and Potential

People like to work with people who are like them. Women may be clustered in staff jobs or in highly technical jobs with limited advancement opportunities based on preconceptions about their roles and abilities. They get passed over for plum assignments, highly visible appointments to committees or boards, or stints abroad out of a vague concern for work-life balance.

Employers “automatically assume that because there are children at home, the answer is ‘no,’” explains Lloyd.

Instead, Lloyd suggests that managers cultivate talent and offer cross-training opportunities for women to move into nontraditional sectors, such as from human resources and marketing to sales and manufacturing. The insurance, banking, and healthcare industries have successfully implemented career development programs for women, she adds, while the manufacturing sector continues to fall behind.

2. Eliminate Evaluation Bias

Many employee measurement tools developed 10 to 30 years ago could use a refresher. First, Identify the company’s goals for core competencies and leadership skills, and distribute the information widely. Then make sure you adhere to a standard assessment process that:

Delivers fair, honest feedback, particularly if there is a behavioral issue hindering an employee’s path to advancement (some employers make the mistake of going softer on women);
Includes a system of checks and balances to eliminate unconscious bias;
Actively encourages senior managers to identify and develop high-performing women – and hold both groups accountable.

3. Encourage Mentoring Relationships

Some female employees may be reluctant to trumpet their successes and advocate for advancement for fear of being perceived as overly aggressive or “not a team player.” A well-placed senior mentor can provide crucial job feedback, help female employees navigate the organizational landscape, and champion their interests to senior management.

4. Promote Gender-Neutral Networking

Social and professional networking is key to getting ahead. But some female employees may not relish a day of bonding at the firing range, pool hall, or paintball obstacle course. Make all employees feel welcome by focusing on gender-neutral activities, such as treating everyone to a nice meal or taking a field trip to a mountain retreat.

5. Adopt a Zero-Tolerance Policy

It may sound like a no-brainer, but driving out harassment and discrimination from within the organization improves productivity, boosts morale, and shows female employees that they are valued members of the team.

6. Provide Flex-Time Options for All

The intersection between work and family is perhaps the biggest challenge for women aiming for the top. Employers have responded with a host of “family-friendly” programs, including flexible scheduling, job shares, sabbaticals, and on-site early education. Yet resentment festers as single, childless colleagues may be asked to absorb the increased workload.

To ease tensions and be fair to everyone involved, employers should provide flexible scheduling to all employees, says Lloyd. At the same time, Lloyd urges women to have realistic expectations. If they decide to trim back their hours, they likely won’t advance as quickly as that colleague pulling 80-hour workweeks.

This article is from Margie Fishman of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Myths About Men and Women and the Workplace

Tom Harnish — Sat, 11 Jun 2011 18:36:29 +0000

Link:

http://www.openforum.com/articles/6-myths-about-men-and-women-in-the-workplace

He was always at work, it seemed. He was the first one there in the morning, and the last one to leave in the evening. He was usually in his office on weekends, too. Managers would point him out to subordinates, nodding approval of his work ethic. Then someone discovered all those extra hours had been devoted to starting his own competing company.

Many managers still abide by the myth that success can be measured by how many hours someone spends at their desk. Yet 25 years ago flex-time, compressed workweeks, job-sharing, and other flexible work arrangements emerged as better approaches that could make people more successful. Ten years ago the business case was proven that showed organizational practices, policies, programs, and philosophies designed to enhance work-life balance promoted success.

But barriers still exist that prevent employees from utilizing work-life options, and employers still don’t fully support them. Why? Mostly because of myths about men and women and their roles in the workplace.

Last fall WFD Consulting and WorldatWork partnered to investigate those myths and looked at business practices and attitudes in Brazil, China, India, Germany, the UK, and the USA. The results are worth reviewing if you’re trying to attract, motivate, and retain talented employees.

Men are more work-oriented than women.

A persistent stereotype exists that men identify more with their work and women with personal and family matters. It turns out there’s little difference among generations or between men and women. The real difference is between emerging and developed countries where work identification is much higher in emerging markets than in developed ones. In fact, in India and Germany women are more work-oriented than men.

Women face more family challenges than men.

Finding time to take care of the family has long been considered a working woman’s greatest challenge. But the study found that making time for family is especially challenging for men although it’s a problem for both genders – men have more difficulty finding time to spend with family, and women have more difficulty finding time for chores and errands.

Men struggle most to meet financial obligations.

No surprise, financial stress is the top work-life issue for most people regardless of nationality or gender. But women, the study found, are slightly more stressed by money concerns. And the study found that employees are spending more and more on-the-job time trying to solve their financial problems.

Employers can help by offering employee assistance and financial counseling programs, and by being as transparent as possible about the company financial situation and job security.

The ideal worker has few personal commitments.

Business leaders around the world say they accept the business case for work-life programs and policies. But 50% of managers in emerging markets and 40% in developed markets still believe the myth that the most productive employees are those without a lot of personal commitments – and that might be true if there were such a person.

Sure, every manager wants employees “with their heads in the game.” But the reality, according to the Gallup Management Journal, is that 70% of employees are not engaged, and 20% are wandering around in a fog, or worse, actively trying to undermine their co-workers' efforts. Simply ignoring that fact won’t make them more productive.

Management is committed to work-life programs.

Many execs say they’re committed to work-life integration, but that’s a myth. They’re worried that the risks associated with implementing such arrangements outweigh the benefits, according to the study. The evidence is that when companies do have programs in place, both men and women report being penalized for using those work-life benefits. In fact, according to the study, “Employees in emerging markets are almost three times more likely to experience a penalty for using flexible work arrangements and/or other work-life options than those in developed markets.”

The USA uses flex-work programs more than any other country.

In his bestselling book Drive, Dan Pink observes, “...despite four decades of scientific research on human motivation, there’s an immense mismatch between what science knows and what management does...”

One surprising finding cropped up when employees were asked about their use of flexible work arrangements, and it supports Pink’s view. Developed, and presumably enlightened, countries would use workplace flexibility more than emerging countries, one would suspect; but that wasn’t the case. A quarter of managers surveyed in developed countries said they didn’t offer any flexible work arrangements, while only 13% in emerging countries didn’t.

To summarize, then, finding time for family is especially challenging for men and financial stress is a slightly greater issue for women than men, contrary to common myths. Business leaders around the world have bought into the business case for work-life effectiveness and have programs and policies in place, but the programs are often ineffective because managers still cling to the myth that the “ideal worker” is an employee with few personal commitments, even when there are few such people. And workers are afraid (based on experience) of being punished if they take advantage of work-life programs, such as flexible work hours.

Business managers need to ignore the myths and focus on creating workplaces that support both business objectives and individual needs. Work-life effectiveness programs will do that.

This article is from Tom Harnish of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Men and Women Use Smartphones Differently

Linsey Knerl — Fri, 20 Aug 2010 12:00:05 +0000

The genders may be equal, but their smart phone usage may not be.

While there have been no readily available studies on how men and women may use their phones differently, we suspected that there had to be trends to separate the two.

Here are some of our findings on the topic, taken from our recent article at My Life Scoop. The results may surprise you!

Casual Gaming Between the Sexes

Both men and women agreed that playing games on their phones was taking up more and more of their time. Whether they were playing stand-alone games housed completely in their phones, or chose to use a mobile application that connected them to online team ventures when on the go, each gender admitted to finding gaming “addictive” when they were able to access it anytime and anywhere via the smart phone.

Silly games, like Fling! for the iphone, are popular among both genders. Word games seemed to appeal more to women (although a fair share of the men we talked to liked them, as well), and the games and apps that bordered on nasty or juvenile (iFart, for instance) held a steady younger male user audience. Men were also notoriously more open to playing games with a long-term goal in mind: Role Playing Games (RPG) and “building” modules seem to be played by a slightly higher number of males in our interviews.

For Women, by Women

There is a growing market of smart phone tools designed to reach into the more sensitive areas of a woman's life. Things that women would speak about only to one another, or to no one at all, can be tracked, learned about, or perfected via a smart phone app. Thanks to sites like LadyAppApp, gals can get the latest news on tools designed just for them, like TouchCloset, iCoolHunt, iPeriod and, of course, all those really cool pregnancy apps. . Even sites like TechCrunch and Mashable have interrupted their regularly scheduled programming to cover apps for women, exclusively.

We explore the issue of gender and technology more in our complete My Life Scoop article. Check it out, and let us know:

Do you fall into a gender stereotype with your smart phone habits?

This article is from Linsey Knerl of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: