Have you been wondering, “Should I move to Baltimore, MD?” Located along the Chesapeake Bay, Baltimore offers a blend of historic charm and urban experiences. Yet, like any city, it comes with its share of complexities. In this article, we’ll dive into the pros and cons to consider before making the move to Baltimore, helping you weigh its unique offerings against potential challenges to make an informed decision about your future home. Let’s get started.
Baltimore at a Glance
Walk Score: 64 | Bike Score: 53 | Transit Score: 53
Median Sale Price: $200,000 | Average Rent for 1-Bedroom Apartment: $1,400
Baltimore neighborhoods | Houses for rent in Baltimore | Apartments for rent in Baltimore | Homes for sale in Baltimore
Pro: Great historical significance
From the cobblestone streets of Fells Point to the historic ships in the Inner Harbor, Baltimore offers a unique glimpse into America’s past. For example, the city is home to the Fort McHenry National Monument. This monument is renowned for its role in the War of 1812 and was the inspiration for the writing of “The Star-Spangled Banner.” Additionally, the Baltimore and Ohio Railroad Museum preserves the legacy of America’s first common-carrier railroad. The museum showcases historic locomotives, rolling stock, and artifacts that tell the story of railroading in America. Whether exploring historic neighborhoods or visiting museums and monuments, you’re sure to find a historical treasure in this city.
Con: Concerns over infrastructure
Baltimore faces challenges with aging infrastructure, from roads and bridges to public buildings and utilities. This can lead to frequent disruptions in services and necessitates ongoing maintenance and upgrades. The impact on daily life, including potential delays and increased commuting times, is a significant concern for some residents.
Pro: Dynamic arts and culture scene
The city is a haven for art lovers and culture enthusiasts. The Baltimore Museum of Art and the American Visionary Art Museum showcase vast collections that celebrate both classical and contemporary art. Annual events like Artscape, the country’s largest free arts festival, highlight the city’s commitment to the arts. This vibrant cultural scene fosters a strong sense of community and provides endless entertainment and inspiration.
Con: High property taxes
One of the financial challenges of living in Baltimore is the high property tax rate, which is among the highest in Maryland. This can significantly increase the cost of homeownership, affecting affordability for residents. The high taxes can also deter potential homebuyers and investors which could impact the city’s housing market and overall economic growth.
Pro: Exceptional educational institutions
Baltimore is home to world-renowned institutions such as Johns Hopkins University and the University of Maryland, Baltimore. These institutions not only contribute to the city’s prestige but also attract a diverse population of people from around the globe. The presence of these educational giants fosters a vibrant intellectual community and drives innovation in various fields, including health and science.
Con: Limited green spaces
Compared to other cities, Baltimore struggles with providing ample green spaces for its residents. While there are notable exceptions like Patterson Park and Druid Hill Park, the city’s urban planning has not prioritized green areas. This scarcity affects people’s ability to easily access outdoor recreational activities and contributes to the urban heat island effect, making the city warmer during the hot summer months.
Pro: Foodie’s paradise
Baltimore’s culinary scene is a delightful exploration of flavors, with an emphasis on seafood that reflects its Chesapeake Bay location. The city’s signature dish, Maryland blue crabs seasoned with Old Bay, is a must-try. Neighborhoods like Little Italy and the emerging culinary hotspot in Hampden offer diverse dining experiences.
Con: Occasional flooding issues
Parts of Baltimore, especially those close to the water, are prone to flooding. Heavy rains can overwhelm the city’s drainage system, leading to waterlogged streets and basements. This issue not only causes immediate inconvenience but also raises concerns about long-term property damage and the costs associated with flood mitigation and insurance. It’s a significant consideration for anyone looking to live or invest in certain areas of the city.
Baltimore is known for its strong sense of community and active engagement in social and environmental issues. Neighborhood associations, community groups, and activists work tirelessly to address challenges and improve the city for all its residents. One example of this is the annual “Mayor’s Spring Cleanup,” where locals come together to clean up litter and spruce up their neighborhoods. The strong community spirit in Baltimore not only enhances the quality of life for everyone, but also contributes to the city’s resilience and sense of collective identity.
Con: Varied housing market
While Baltimore offers a diverse range of housing options, from historic row houses to modern apartments, navigating the market can be daunting. The disparity in housing quality and prices across different neighborhoods can make finding the right home challenging. This variance requires thorough research and consideration, especially for those unfamiliar with the city’s geography and real estate landscape.
Pro: Thriving nightlife and entertainment
The city’s nightlife and entertainment scene is vibrant and diverse, catering to a wide range of tastes. From live music venues in the arts district to bustling bars and clubs in the Inner Harbor, there’s always something happening after dark. This thriving nightlife enhances the city’s cultural appeal and contributes to the local economy, making Baltimore a lively place to live and visit.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
Welcome to the charming city of Akron, Ohio, where the blend of urban amenities and natural beauty creates a unique and inviting atmosphere. Nestled along the banks of the Ohio and Erie Canal, Akron boasts a rich history and a thriving arts and culture scene. Residents of Akron enjoy a close-knit community, affordable living, and a wide range of recreational activities. So whether you’re searching for the perfect apartment in Akron or eyeing a cozy home for rent, you’ve come to the right place.
In this ApartmentGuide article, we’ll cut to the chase, breaking down the pros and cons of moving to Akron. Let’s get started and see what awaits in this vibrant city of Ohio.
Pros of living in Akron
1. Affordable cost of living
Akron boasts an affordable cost of living, making it an attractive option for individuals looking to stretch their budget. The average rent for apartments in Akron, is between $799 and $1,099 in 2024. Housing prices are reasonable, and the overall expenses for groceries, transportation, and healthcare are also relatively low compared to other cities. This allows residents to enjoy a comfortable lifestyle without breaking the bank.
2. Rich cultural heritage
Akron has a rich cultural heritage, with a strong emphasis on the arts and history. The city is home to numerous museums, galleries, and theaters, offering residents a diverse range of cultural experiences. From the Akron Art Museum to the Stan Hywet Hall & Gardens, there are plenty of opportunities to immerse oneself in the city’s vibrant cultural scene.
3. Access to outdoor recreation
Residents of Akron have easy access to outdoor recreation opportunities, thanks to the city’s proximity to parks, hiking trails, and nature reserves. The Cuyahoga Valley National Park is just a short drive away, providing a picturesque setting for hiking, biking, and birdwatching. The city also offers a variety of recreational activities, including golf courses, community pools, and sports leagues, catering to outdoor enthusiasts of all ages.
4. Strong sense of community
Akron is known for its strong sense of community, with residents actively participating in local events, volunteer initiatives, and neighborhood associations. The city’s close-knit neighborhoods foster a supportive and friendly environment, where neighbors look out for one another and come together to celebrate traditions and milestones. This sense of community creates a welcoming and inclusive atmosphere for new residents.
5. Diverse culinary scene
Akron offers a diverse culinary scene, with a wide range of dining options to satisfy every palate. From cozy diners serving up classic comfort food to trendy eateries offering international cuisine, there’s no shortage of delicious meals to enjoy. The city also hosts food festivals, farmers’ markets, and culinary events, showcasing the local flavors and talents of Akron’s culinary community.
6. Educational opportunities
Akron is home to several reputable educational institutions, including the University of Akron and Kent State University’s satellite campus. This provides residents with access to quality higher education and lifelong learning opportunities. The city also has a strong public school system, with a focus on academic excellence and extracurricular activities for students of all ages.
7. Thriving job market
Akron has a thriving job market, with employment opportunities in various industries such as healthcare, manufacturing, and technology. The city’s strategic location and business-friendly environment make it an attractive destination for job seekers and entrepreneurs. Additionally, Akron’s commitment to economic development and innovation contributes to a dynamic and diverse workforce.
Cons of living in Akron
1. Harsh winters
Akron experiences harsh winters with heavy snowfall and cold temperatures, which can be challenging for residents who are not accustomed to such weather conditions. The winter months often require extra precautions for driving and outdoor activities, and the need for snow removal and maintenance can be a hassle for homeowners.
2. Limited public transportation
Akron has limited public transportation options, which can be inconvenient for residents who rely on buses or trains for their daily commute. With a transit score of 30, the city’s public transit system is not as extensive as in larger metropolitan areas. Making it necessary for many residents to own a car for their transportation needs. This can lead to traffic congestion and parking issues in certain areas.
3. Industrial landscape
Akron has an industrial landscape, with a history rooted in manufacturing and rubber production. While the city has diversified its economy over the years, some neighborhoods still bear the remnants of heavy industry, including abandoned factories and industrial sites. This can detract from the aesthetic appeal of certain areas and impact the overall environmental quality.
4. Limited nightlife options
Akron has limited nightlife options compared to larger cities, with fewer bars, clubs, and entertainment venues available for residents to enjoy. While the city has a growing arts and music scene, the nightlife may not be as vibrant or diverse as in other urban centers, leading some residents to seek entertainment options in neighboring cities.
5. Weather-related challenges
In addition to harsh winters, Akron experiences weather-related challenges such as heavy rainfall and occasional flooding. The city’s proximity to the Cuyahoga River and its tributaries can result in localized flooding during periods of intense precipitation, posing potential risks for residents living in flood-prone areas.
HELOC, home equity loan, 5/1 adjustable-rate home equity loan
APR
From 7.49%
Credit score
Undisclosed
Contact info
Visit www.thirdfederal.com or call at 800-THIRD-FED (800-844-7333)
Operating out of Cleveland, Ohio, Third Federal Savings & Loan offers home equity lines of credit (HELOCs) in 26 states and home equity loans in eight states. With Third Federal, you can borrow up to $300,000 against the equity in your home. Although the bank doesn’t lend everywhere in the US, it made our list of the best home equity loan and HELOC lenders due to its easy online application process, lowest-rate guarantee and price transparency.
Third Federal Savings & Loan: At a glance
Types of loans offered
HELOC, home equity loan, 5/1 adjustable-rate home equity loan
APR range
From 7.49%
Loan amounts
From $10,000 to $300,000
Credit score requirements
Undisclosed
Repayment terms
HELOC: 10-year draw period, 20-year repayment period Home equity loan: Five- or 10-years
Average time for approval
Undisclosed
Rates as of March 26, 2024.
Third Federal is best suited for homeowners who need a long repayment period and want the option of choosing between a fixed-rate or variable-rate loan. It also offers a $1,000 lowest-rate guarantee: If you find a lower rate from another lender, Third Federal will match the rate or pay you up to $1,000. You just need to find the lower rate 10 days before closing on your loan.
What we like
Low fees: There are no applications or prepayment fees with Third Federal, and an annual $95 fee is waived the first year. You also don’t have to pay an origination fee or closing costs, which saves you thousands of dollars upfront.
Low minimum draw requirement: Sometimes minimum withdrawal requirements can make your loan more expensive because you end up wasting money paying interest on funds you never use. But with Third Federal, there is only a $10,000 minimum withdrawal requirement.
$1,000 lowest-rate guarantee: If you find a lower interest rate with comparable terms from another lender, Third Federal says it will beat the rate or pay you $1,000 as long as you find the rate up to 10 days before closing on your loan.
What we don’t like
Limited availability: Third Federal offers home equity loans in only eight states (California, Florida, Kentucky, New Jersey, North Carolina, Ohio, Pennsylvania and Virginia) and offers HELOCs in only 26 states and the District of Columbia. Most of its brick-and-mortar locations are clustered in Ohio and Florida.
No interest-only payments: You must pay back your principal balance from the start of your draw period, which will make your monthly payments higher from the very beginning. However, if you can afford it, this can also be a benefit for homeowners who want to tackle paying down their principal balance from day one, saving themselves money in interest over the lifetime of the loan.
Undisclosed credit score requirements: Without knowing the minimum credit score or this lender’s preferred credit score to receive its best rates, it’s hard to know whether it’s worth applying or how you compare to other applicants. Completing a full application for loan preapproval will result in a hard pull on your credit.
Home equity loan products
HELOC: With a Third Federal HELOC, you can borrow up to $300,000 (depending on how much equity you’ve built up) at a variable interest rate. It has a standard 10-year draw period followed by a 20-year repayment period.
Home equity loan: You can borrow a large sum of money with a Third Federal home equity loan. The bank has loan terms of five or 10 years.
5/1 adjustable-rate home equity loan: Third Federal also offers a unique 5/1 adjustable-rate home equity loan. If you opt for this loan type, your interest rate will be fixed for five years and then adjust annually after that. 5/1 adjustable-rate loans have terms ranging from 6-30 years.
Fees
There are minimal fees with Third Federal, which is why it’s good if you need financing but don’t want to spend a lot of money upfront to obtain it. You don’t have to pay an origination fee, application fee or closing costs, which provides valuable savings from the start. However, you must pay a $95 annual fee for HELOCs (but it’s waived the first year).
How to qualify
Third Federal doesn’t disclose its minimum credit score requirements. In order to get a personalized-rate quote, you must apply and provide your specific financial details, as well as personal information like your Social Security number, address and date of birth. As with any kind of home equity loan, you must have built up enough equity in your property over the years to qualify to borrow against it.
Most lenders typically require at least 15% to 20% home equity to be approved. Additionally, you must also have current homeowners’ insurance, as well as flood insurance if you live in a flood zone that requires it.
How to apply for a home equity loan or HELOC with Third Federal
You can apply for a home equity loan online, at one of its physical branches or over the phone, and the whole process should take only about 30 minutes, according to Third Federal.
Everything you need to get started on your application is clearly laid out on its website. Third Federal wants to see the following documentation to verify that you are creditworthy and will pay back your loan on time.
Gross annual or monthly income amount
Monthly payments for property tax and homeowners insurance
List of assets
Paystub dated within at least 30 days of the application date, illustrating year-to-date earnings of at least 30 days
Tax Form W-2 from the most recent year
Customer service
For general information about Third Federal’s home equity loans and HELOCs, you can visit Third Federal’s website, call its customer care department at 800-THIRD-FED (800-844-7333) or fill out a form on the website for a loan officer to contact you directly. You can also go in person to a branch location, which is an option not all lenders provide. For HELOCs and home equity loans specifically, when you need to activate your debit card to access your funds you can call the number below.
However, Third Federal isn’t open on Sundays and has limited hours on Saturday, which are only from 8:30 a.m. to 1:30 p.m. ET. You can call Monday through Friday from 8:30 a.m. to 5 p.m. ET and until 6 p.m. on Fridays.
One of the most critical moments in any race is the very beginning. A mistake at the start can snatch away a win before the race is even underway. Any coach will tell you that springing into action the moment the shot is fired is a critical success factor for any athlete.
A race is a useful analog for the mortgage business, especially as it relates to the refinance business.
Lenders in a purchase money market, like the one we’re in now, are running a long-distance race. Starting strong is less important for a deal that takes a long time to close.
Responding to the real estate agent’s or prospective borrower’s first call is the start of this race. Data show that returning that call within a few hours will get your race off to a good start. It’s amazing how many loan officers miss this, don’t return the call quickly, and lose their race before it’s even underway.
It’s the sprint that can really set lenders apart. In our business, that’s the refinance transaction.
Anticipating the start of the refi race
When mortgage rates finally rose above their historically low levels, the mortgage refinance business started to dry up. By the time rates reached 5%, the refi business was essentially gone.
This was a crisis for many large Independent mortgage banks that had created fine-tuned systems for refinancing loans and had virtually no trained sales force to prospect for new purchase money business.
The bankers who stockpiled cash they earned during the COVID crisis have weathered this storm, those that did not have the cash have either sold out or shut down.
Now, everyone is waiting for rates to drop and the refinance business to return. Most experts believe that it’s only a matter of time before mortgage rates come down. When they fall below 5% — maybe even before that — it will be a shot from a starter’s pistol and the race will be on.
The lenders who aren’t ready will falter under the pressure, stumble out of the starter’s blocks, and lose out to lenders who have prepared in advance for the influx of new business.
Leaders are preparing now to make sure they’re not the ones who are left in the dust when the race starts.
Preparing for the next mortgage market
What should lenders be doing now to be ready for the return of the refinance business? Those of us who have been in this business more than a cycle or two know what’s coming next. There is no secret or required magic to be a frontrunner when the refi business returns.
What it will take is strong leadership to spur lethargic institutions to action when it feels less risky to stay the course and wait. That’s an illusion, a false sense of security. The reality is this race will go to the prepared.
I can think of three important actions every lender should be taking now to be prepared for the next wave of refi business.
Build the right team
Given the new technologies and expert outsourcing options available to lenders today, staffing up to handle new business doesn’t make as much sense as it did in the past. Lenders have other options for building ability into their enterprises. That’s a good thing.
Instead of going to the expense and added risk of staffing up to handle more business, now is the time for executives to think through their strategic options and evaluate their existing partnerships. It doesn’t matter what the lender’s current capacity is, everyone should be thinking about this now.
This is the time to sit down with your A and B players and make sure they’re committed to the long term, and understand your commitment to them. The time to let your C and D players go has passed now. Do it if you haven’t.
Then, start visiting with outsourcing firms. I spent a good part of my career working for lenders who originated consumer direct but also provided essential origination outsourcing services to other institutions. When they’re done right, these partnerships offer a balanced model of operational efficiency and scalability, regardless of overall loan volume.
When this work is done, the lender will have a core team of domain experts supplemented by reliable outsourcing partnerships. This provides a buffer against fluctuating demand but also affords lenders a competitive edge in workforce flexibility and cost management.
Fine-tune your tech stack
Once your team is in place, it’s time to empower them with the right technology. For the past few years, I’ve been working inside one of the mortgage industry’s leading technology providers. Lenders have never before had access to such powerful technology.
There are too many factors involved in implementing a lender’s strategy to go too deeply into the technology here, but regardless of how the lender wants to run the business, there are tools available that can make that happen. Each lender is different and so their use of these tools will differ.
Two things I will say about technology. First, a simpler tech stack is a better tech stack. Improvements in the way developers bring products to market have resulted in a flood of new tools and many lenders have invested. Now, their tech stacks are bloated with functionality that doesn’t work well with their core systems and creates more friction. Simplify. Keep what you need and discard the rest. Don’t let the “sunk costs” fallacy keep you paying for technology that doesn’t help you become excellent lenders.
Second, if the tool doesn’t provide a measurable increase in efficiency by reducing touch points and overall cycle time, it’s not a good tool. When this work is done, the lender will have all of the technology required for its team to operate at peak efficiency, and nothing more.
Perfect your process
There’s an old adage in executive management that says you should tell your people what to do, but not necessarily how to do it. In many industries, this frees people up to be great team players and there are wins all around.
In industries where the government is just waiting for someone on your team or extended team to make a mistake, this doesn’t work as well. People need to know what the process is and how to perform it to the satisfaction of the lender, their investors and government regulators.
Lenders are pretty good at this in the back office, but when it comes to front-line salespeople they often leave them free to do what they do best. The problem with this is that good salespeople are often like water, they tend to follow the path of least resistance.
When refis are pouring in, they know where to go and who to contact (or recontact) to get more business. The hard work of building and maintaining relationships with business referral partners falls by the wayside.
Alternatively, when refis are down and purchase money is high, many loan officers don’t stay in contact with past borrowers as well because they know they’re not going to refinance a low-interest-rate loan. By the time the refis come back around, those past customers have made new friends.
The lender should take an active role in all processes the institution uses to do its work, including those in the sales department. When this work is done, every salesperson will be a top salesperson, doing the work required to bring in a steady stream of business, regardless of which loan products consumers are buying.
Today, the race is a long-distance, purchase-money event, where it takes seven or eight calls over the course of 30-45 days to reach the finish line. Soon, it will be all about refinance sprints that only take a call or two and as few as seven days to win.
To get ready for those races, leaders will begin now to pull their expert teams together, both internally and externally, fine-tune their tech stacks, and double-check their processes.
When that work is done, they’ll be in the starter’s blocks. When the pistol is fired, they’ll win the bulk of the new business.
Joseph Camerieri is a former mortgage lending executive, technology system sales leader and outsourcing leader. Today, he consults in the mortgage industry.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Joseph Camerieri at [email protected]
To contact the editor of this story: Tracey Velt at [email protected]
While the proposed tax credit appears unlikely to get through a Republican-controlled Congress, Biden has the ability to use the CFPB to push his housing policy agenda.
An ‘unwelcome surprise’
A CFPB blog post on Friday states that families closing a mortgage “often get an unwelcome surprise: closing costs that all too often are full of junk fees.”
According to the CFPB, one measure of closing costs is total loan costs, which includes title insurance, credit report, appraisal, and origination. These costs increased by 21.8% from 2021 to 2022, reaching nearly $6,000, per the CFPB post. And, as they are fixed, they have an “outsized impact on borrowers with smaller mortgages,” it added.
The post provoked a strong reaction from the Mortgage Bankers Association (MBA). Its president and CEO, Bob Broeksmit, stated that the use of the term junk fees is “illogical” and contradicts the White House’s definition, which is “lack of disclosure of the fee being charged.”
“The fees mentioned are clearly disclosed to borrowers well before a home purchase on forms developed and prescribed by the Dodd-Frank Act and the CFPB itself,” Broeksmit said in a prepared statement.
Broeksmit added that the Bureau’s “TRID” rule in 2015 and other rules imposed in 2020 reformed mortgage disclosures and customers’ ability to read these documents.
What’s the CFPB monitoring?
The CFPB said it will closely examine three topics: discount points, lenders’ title insurance, and credit reports.
Discount points have surged in recent years as mortgage rates have risen and competition has gotten more fierce. They were used by 50.2% of home purchase borrowers in 2022, compared to 32.1% in 2021. And, despite lenders selling points to reduce rates, it “may not always save borrowers money, however, and may indeed add to borrowers’ costs,” the CFPB said.
In another criticism of housing finance practices, the CFPB said lenders force borrowers pay for their title insurance, and the amount “is often much greater than the risk.”
Regarding credit reports, HousingWire reported in December that lenders’ prices would jump in 2024. The CFPB said that the “credit reporting industry is highly concentrated” and that “these steep increases in a market that lacks competition and choice warrant further scrutiny.”
“In the coming months, the CFPB will continue working to analyze mortgage closing costs, seek public input, and, as necessary, issue rules and guidance to improve competition, choice, and affordability,” the blog post reads. “We will also continue using our supervision and enforcement tools to make it safer for people to purchase homes and to hold companies accountable.”
Broeksmit has argued for years that it’s the CFPB that has made mortgage lending more expensive for consumers. The agency announces “new legal obligations without formal process or deliberation, enforcing novel and untested legal theories, and making it very difficult for firms to understand their legal obligations,” he said in 2022. A year later he described housing policy coming from Washington, D.C. as “extreme overregulation.”
In response to the CFPB’s latest “baffling” blog post, he noted that the agency has already imposed limits on lenders’ fees. The services covered, such as appraisals and flood hazard certifications, bring efficiency to the mortgage market and benefit consumers. The Federal Housing Administration (FHA), Department of Veterans Affairs (VA), Fannie Mae, and Freddie Mac also require these services.
The MBA, according to him, is also concerned “regarding rising costs of the tri-merge credit reports” and shares the “desire to help more Americans become homeowners.”
“MBA is eager to continue working with the Biden administration in these efforts but will vigorously oppose politically motivated proposals that only increase regulatory costs, reduce competition, or otherwise make it more difficult for Americans to get the credit necessary to achieve homeownership,” Broeksmit said.
Hedging, Renovation, QC, Validation, Verification Products; Investor and Correspondent News and Metrics
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Hedging, Renovation, QC, Validation, Verification Products; Investor and Correspondent News and Metrics
By: Rob Chrisman
6 Hours, 35 Min ago
“I saw a woman at Walmart with March Madness teeth… She was down to the final four.” No one is talking about 30-year mortgage interest rates heading down into the 4’s; many would be happy if they came down into the 5’s. Heck, forget about mortgage interest rates because they’re going to do what they’re going to do. Originators are equally interested in potential or existing borrowers. New data reveals that Americans are spending nearly as much on interest payments for credit cards and other kinds of consumer debt as they are on mortgage interest. But hey, if your client has their debt under control, LOs can help them by passing along Home Facts so that they can do an analysis of where they might like to live. (Found here, this week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with Lending Tree’s Jacob Channel on the rent-versus-buy debate and just how far people should stretch their finances to achieve the dream of homeownership.)
Lender and Broker Services, Products, and Software
Collecting interim servicing payments is a pain, but not with Fee Chaser. With its seamless integration into Encompass® by ICE Mortgage Technology™, Fee Chaser automates upfront fee collection and can handle those pesky interim servicing payments as well. Check out Fee Chaser by LenderLogix here.
Today’s mortgage landscape demands greater efficiency. Xactus, a leading verification innovator, makes it easy to obtain all the verifications lenders need to be more efficient and advance the modern mortgage. For example, with its ICE Mortgage Technology Encompass Partner Connect™ integration, you can streamline your consumer verifications. Encompass Partner Connect provides direct access to Xactus verification products including Credit ReportX, Flood ReportX, Undisclosed Debt VerificationX, Tax TranscriptX, Employment VerificationX, Income VerificationX, Fraud ReportX, and Social Security VerificationX. In fact, Xactus was the first third-party service provider to integrate credit with Encompass Partner Connect, and won the 2023 ICE Innovation Award for Lenders’ Choice for Innovative Service Provider. Heading to the ICE Experience in Las Vegas? Experience Xactus’ award-winning innovation. Stop by Xactus’ booth or email [email protected] to schedule a meeting. For the latest updates and news about important industry innovations, follow Xactus on LinkedIn.
If you thought McDonald’s® invented the combo meal, you’d be wrong. The honor actually belongs to defunct fast-food chain Burger Chef, which introduced the classic trio of burger, fries and a drink as one meal. Known as “The Triple Threat,” it sold for just $0.45. While that kind of pricing belongs to a bygone era, lenders using Fannie Mae’s Desktop Underwriter® (DU®) validation service can enhance their validation processes by leveraging AccountChek by Informative Research to validate income, employment and assets with a single report. By using direct deposit banking data to evaluate income and employment, lenders can streamline borrower eligibility. Additionally, current AccountChek users don’t have to change their process. The AccountChek report they have been using for years already provides the needed transaction data to DU. To get started, visit Fannie Mae’s webpage, and submit the request form to begin the activation process.
Most lenders are painfully aware of rising loan origination costs, which is a common trend in a down market. But certain costs like credit (surging by 400 percent) and verifications (up by 141 percent) have soared disproportionately, with incumbent providers exploiting their market dominance as virtual monopolies. Yet some lenders are fighting back… Like Lower, which has found a way to save as much as 80 percent on these operational line items and win more loans. Sign up for this exclusive webinar taking place on March 21 at 2pm ET, featuring Rob Chrisman, James Duncan and Donielle Geiser (Lower), and Richard Grieser (Truv), where they’ll share their take on today’s market and how they’ve reduced costs on operational line items previously thought to be beyond a lender’s control. RSVP today!
Introducing the All-New Quarterly Conversations About QC Newsletter! Get the latest quality control news delivered directly to your inbox with QC Ally’s new email newsletter. Designed to be your trusted loan quality resource, you’ll get the latest industry headlines, helpful tools designed to inspire your business, and regulatory updates each quarter. Recent features include eGuides to strengthen your QC processes, webinars discussing how to successfully implement new requirements, and industry conference takeaways. Sign up today to stay in-the-know on updates designed to spark discussion and inspire your business!
TPO, Broker, and Correspondent Product News
Renovation lending fuels loan production, boosts profits, and fortifies housing inventory in competitive markets. Explore the rising demand for renovation loans with Planet Home Lending’s Guide to Renovation lending, tailored for correspondent lenders. From seizing opportunities to fostering robust partnerships, it offers a step-by-step roadmap. Request your exclusive copy today.
Freedom Mortgage Wholesale reminded brokers that it is historically, currently, and forever wholesale, and has posted some solid numbers about its status. In 2023 Wholesale increased its sales force by 20 percent, 25 percent of whom were rehires. Wholesale increased its Ops staff by 125 percent, 70 percent of whom were rehires. Freedom doubled its production two months in a row and is still growing.
But not to be overlooked is that Freedom is very active in the philanthropic arena through Freedom Cares. Last year it donated $660,000, used a holiday toy drive to raise $60,000 to support Children’s Hospital of Philadelphia (CHOP), The Salvation Army, and Toys for Tots, has, for 11 years, donated over $100,000 and nearly 2,000 backpacks (with school supplies) to Rucksacks to Packpacks. Freedom Mortgage’s employees and vendors raised $50,000, providing 500,000 meals for people facing hunger through Feeding America’s “Freedom from Hunger, and in 2023, through Project Gratitude, sent 1045 handwritten and video thank you messages to active-duty service members. And let’s not dismiss the 2,300 logged hours of employee volunteer engagement.
The real estate investment trust affiliated with Angel Oak Companies posted a $28.6 million profit in the fourth quarter. For the full year of 2023, the REIT generated a profit of $33.7 million; all but forgotten is 2022’s reported loss of $187.8 million. Angel Oak REIT participated in four non-qualified mortgage securitizations in 2023, contributing $662 million in unpaid principal balance to the issuance. The REIT’s earnings increased after it sold off non-QMs with relatively low interest rates. Its statistics reflect the industry’s: The REIT held $380 million in whole loans at the end of the fourth quarter, up from the $284 million held at the end of the third quarter. The company increased the weighted average coupon on its whole-loan portfolio to 6.78 percent as of the end of the fourth quarter compared with an average WAC of 5.83 percent at the end of the third quarter. As of the end of February, the WAC on the REIT’s portfolio had increased to 7.14 percent.
One should know the big news from Fannie Mae: Lenders now will be able to validate assets, income, and employment with a single 12-month asset report in Desktop Underwriter®. That same asset report will also identify the borrower’s positive rent payment history and cash flow history. This could be a boon for both lenders and homebuyers: Think faster cycle times, less paperwork, and enhanced access to credit, not to mention the ability for lenders to get Day 1 Certainty®, which can help improve loan quality and reduce the risk of repurchase. “Fannie Mae is continually focused on modernizing the mortgage finance experience and exploring new ways to help our lenders open more doors for aspiring homeowners in a responsible and sustainable way. With this new update in Desktop Underwriter, we are removing a hurdle from the loan application process and bringing greater speed, simplicity, and certainty to both lenders and borrowers,” said Cyndi Danko, Fannie Mae’s SVP and Single-Family Chief Credit Officer. The enhancement goes into effect in DU on March 29. Reach out to your Fannie Mae representative for help getting started.
Capital Markets
Interested in learning more about moving from best efforts to mandatory loan sales? Maybe you’ve already moved to mandatory and are looking for even more pickup and ways to mitigate risk? Join MCT’s Moving to Mandatory Loan Sales webinar on April 4th at 11am PT to learn how mandatory loan sales is helping lenders improve profitability while reducing risk. In this webinar, MCT’s Scott Holtz, Vice President of South Regional Sales, will discuss how to leverage mandatory loan sales to improve profitability, manage risk with pipeline hedging, and operational changes needed for the transition. Register for the webinar or join MCT’s newsletter to receive the latest educational content.
Between Fed Chair Powell testifying before the House Financial Services Committee and the latest Beige Book, there was a lot of Fed news for investors to digest yesterday. A slew of stronger-than-expected economic data has raised concerns that the FOMC is preparing to walk back its anticipated 75 basis points of easing in 2024, and the Fed Chair told the House panel that he’s in no rush to lower rates, though doing so will probably be appropriate “at some point this year.” He repeatedly stated that he does not see a risk of recession right now. Powell will be back on Capitol Hill today to appear before the Senate Banking Committee, though the potential for market-moving remarks is low.
The Fed’s Beige Book for March described overall economic activity since the last report as having “expanded at a modest pace since earlier in the year.” Consumers showed more sensitivity to rising prices and spending softened in recent weeks as businesses found it harder to pass through higher costs to their customers. Leisure and hospitality sectors varied from District to District, the Fed said in its survey of regional business contacts. Manufacturing activity was little changed while residential real estate demand improved. Employment rose at a slight to modest pace while price pressures persisted. If the economy evolves broadly as expected, the Fed is likely to begin dialing back policy interest rates 25 basis points between three and four times this year.
Ahead of February payrolls this Friday, we received a couple of labor market indicators yesterday. Job openings fell slightly in January to 8.86 million, and the number of job openings per unemployed worker was little changed at 1.45. The ADP Employment Change report pointed to the addition of 140k payrolls in February, slightly less than 150k expectations, while the January increase was revised up to 111k from 107k. The JOLTS data signal that the jobs market is slowly settling down, consistent with wage inflation pressures cooling and without a troubling slowdown in net job creation and overall economic activity. The gradual softening in the labor market will likely keep the FOMC comfortable in waiting a little while longer before beginning to cut rates.
Today’s economic calendar kicked off with Challenger job cuts for February: U.S.-based employers announced 84,638 cuts in February, up 3 percent from last month and 9 percent higher than the 77,770 cuts announced in the same month in 2023. Markets have also received the latest European Central Bank decision and remarks from ECB head Lagarde in her press conference, the latest jobless claims (217k last week, unchanged from 217k), trade deficit (high at $67.4 billion, a subtraction from growth), and productivity and unit labor costs (3.2 and .4 percent respectively). Chair Powell will be back on Capitol Hill before the Senate Banking Committee to testify on the Monetary Policy Report later this morning, and other releases of note include Treasury releasing the details of the mini-Refunding consisting of $56 billion 3-years, $39 billion reopened 10-years, and $22 billion reopened 30-years, remarks from Cleveland Fed’s Mester, Freddie Mac’s Primary Mortgage Market Survey, and January consumer credit. After the initial salvo of news, we begin Thursday with Agency MBS prices better .125-.250, the 10-year yielding 4.07 after closing yesterday at 4.10 percent, and the 2-year at 4.53.
Employment and Transitions
Unlock success with PrimeLending’s East Meets West Podcast! Join EVPs Karen Blakeslee and Al Velasco, the production leaders from the Eastern and Western divisions, for a lively discussion about the pulse of the housing market. Discover how PrimeLending empowers our loan officers to compete and win. Karen and Al also discuss leveraging new products to create more opportunities. Tune in for exclusive access to the wisdom of Dallas-based Branch Manager and perennial top producer, Mark Raskin (NMLS# 176513). Mark shares invaluable insights and proven tips, providing a backstage pass to success in today’s market. Check out East Meets West to learn why PrimeLending loan officers rank our engaged, experienced leadership as a game-changer. If you’re a top producer ready to turn up the volume on your career, contact Nic Hartke today!
Landmark Bancorp, Inc. announced that it has appointed Abigail (Abby) Wendel to serve as president and chief executive officer of the Company and Landmark National Bank, its wholly owned bank subsidiary, effective March 29. Wendel also will join the respective boards of directors of the company and bank, and succeeds current President and CEO, Michael Scheopner, who will serve in a non-executive role until his retirement at the end of the year. Congratulations!
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Channel also noted that the surge in first-time buyers does not necessarily mean a flood of new entrants into the market. What this indicates is their relative comfort with entering a high-rate market, compared to repeat buyers. “First-time buyers were likely more comfortable seeking new mortgages, making them a bigger part of a smaller pool … [Read more…]
Among homeowners who have a mortgage escrow account, only 52% fully understand how the account works, according to survey results released Thursday by property tax services provider LERETA.
More than 80% of survey respondents said they know what an escrow account is and its primary purpose — to pay property taxes and other expenses, such as homeowners insurance, flood insurance and mortgage insurance premiums.
But at a time when mortgage escrow expenses across the nation are likely to experience substantial increases due to higher home prices, as well as higher property tax and insurance rates, only half of respondents indicated they “completely understand how their escrow account works.”
The survey, conducted in February, included the responses of more than 1,000 people who have purchased or refinanced a home in the past four years and have an escrow account.
“The findings reinforce what our associates are hearing every day at our tax service call centers,” John Walsh, CEO of LERETA, said in a statement. “In 2023, 60% of the calls were related to escrow accounts, specifically shortages due to rising property taxes or insurance costs.”
Property taxes across the country are expected to rise due to surging home-price appreciation over the past few years. The average U.S. home price has jumped 29% since the start of the COVID-19 pandemic in 2020, according to Zillow data, which suggests the likelihood of double-digit tax increases for many homeowners.
In addition, homeowners insurance premiums at the national level jumped 21% during the year ending in May 2023, according to insurance marketplace Policygenius.
These findings are supported by the LERETA survey, which found that 57% of respondents have experienced an increase in property taxes, while 38% have seen costs for homeowners insurance rise.
Escrow accounts also frequently handle mortgage insurance payments as conventional loan borrowers with less than 20% equity in their homes are required to have mortgage insurance. Federal Housing Administration (FHA) borrowers must pay mortgage insurance for the life of their loan regardless of equity levels. About 80% of all U.S. mortgage holders have an escrow account, LERETA reported.
The LERETA survey also found 36% of respondents with a fixed-rate mortgage believe their monthly payment cannot change, even though it can. And 28% are either “somewhat aware” or “not aware” that changes in escrow accounts can affect monthly payments.
At the national level, homeowners insurance costs jumped by 35% in the two years ending in May 2023, according to Policygenius, led by Florida with a hike of 68%. Large insurance carriers are pulling out of some states entirely and the growing lack of competition is expected to increase the cost of coverage.
“Many will be financially challenged, and some homeowners will need help to make these payments and keep their homes,” Walsh said. “Our goal is to help mortgage companies increase communications and educational outreach to customers about escrow accounts to help address this looming problem.”
In today’s volatile housing market, ensuring your home is protected against unexpected repairs and replacements is more crucial than ever. As homeowners seek peace of mind amidst the unpredictability of homeownership, home warranty companies have stepped up to offer a buffer against unforeseen expenses.
5 Best Home Warranty Companies
With so many options available, pinpointing the most reliable and value-packed home warranty company can be daunting. To help you choose, we’ve curated a list of the best home warranty companies to ensure your home’s systems and appliances receive the top-tier coverage they deserve. Take the time to discover which provider aligns best with your needs.
#1 Choice Home Warranty
There are plenty of reasons to go with Choice Home Warranty. First, they are a top-rated business according to ConsumerAffairs.com and have an average rating of 4.8 out of 5.
They have a five-star rating from Trust Pilot, and Inc. 5000 has recognized them as one of America’s fastest-growing private companies.
Choice has customer service available 365 days a year, 24 hours a day, 7 days a week. So if you’ve got a problem, don’t be afraid to pick up the phone and call them.
They are more than happy to answer any questions about your home warranty plan or, if need be, put in a request for a repair. A licensed, pre-screened, and continuously monitored technician will come to your house, usually within one or two business days.
The age of your home, its systems, and appliances is not relevant to Choice Home Warranty. They always cover items that have been properly maintained and were in well-working order when coverage was initiated.
If the item in question needs to be replaced but is no longer available on the market, they will give you a cash payment of the item’s replacement cost.
Another plus is that you don’t even have to get your home inspected before Choice Home Warranty will begin offering you coverage.
Choice also has a very reasonable $85 dollar service call, which makes them among the most competitive warranty providers for service calls.
Plan Options
1. Total Plan ($450 a year)
Includes coverage on the following —
AC
Heating
Electrical
Plumbing
Water Heater
Whirlpool
Refrigerator
Oven
Dishwasher
Microwave
Garbage Disposal
Washer and Dryer
Ductwork
Garage Door Opener
Ceiling and Exhaust Fans
2. Basic Plan ($378 a year)
Includes coverage on everything mentioned above, EXCEPT:
AC
Refrigerator
Washer and Dryer
Items that can be added at additional cost include:
Pool
Central Vacuum
Well and Sump Pump
Limited Roof Leak
Stand Alone Freezer
Second Refrigerator
Septic System
Septic Pumping
Read our full review of Choice Home Warranty
#2 Advanced Home Warranty
Advanced Home Warranty offers comprehensive coverage and a 24/7 claims hotline, making it a strong choice for anyone considering a home warranty.
Home warranties are available nationwide, so you can qualify for a plan, no matter where you live in the U.S. Plus, you can try it out without any risk by signing up to get your first month completely free of charge.
Trade service fees are reasonable at $60. If the cost of the repair is less, you’ll pay the smaller amount. This is one of the lowest service fees available among the providers on our list.
While they don’t offer a wide range of plans, you can get coverage on some of the big-ticket items associated with homeownership.
A low monthly fee can be much more manageable than paying for replacements outright every time an appliance breaks. There are also parts of even larger systems that are included in their coverage.
Here’s a breakdown of the two home warranty plans available from Advanced Home Warranty, how much you’ll pay, and what exactly they include.
1. Basic Plan ($370 a year, plus one month free)
Includes coverage on the following:
Heating System
Electrical System
Plumbing System
Dishwasher
Microwave
Garage Door Opener
2. Total Plan ($450 a year, plus one month free)
Includes coverage on everything above, PLUS:
Air Conditioning
Refrigerator
Washer/Dryers
Do read each home warranty plan for details on exactly how each specific item on the list is covered.
Read our full review of Advanced Home Warranty
#3 Liberty Home Guard
Liberty Home Guard offers a high degree of personalization for your home warranty coverage. For example, you can pick the plan and also how often you want to be billed.
You can choose monthly payments, annual payments, or for the most savings, multi-year home warranty plans.
Liberty Home Guard offers a service call fee of $60, which is a competitive service fee. You can also expect your service call to be delivered within 48 hours of making a claim.
You don’t need a home inspection to qualify for coverage with Liberty Home Guard. There’s also no limit to how many claims you can file within a year.
You can file your claims online for your ease and convenience. And with a 60-day satisfaction guarantee on service, you’re sure to be satisfied with the repair or replacement process.
If for some reason, you want to cancel your plan early, it’s entirely possible because there’s no annual contract. You’ll receive a prorated refund for any time you’ve paid for, except for a small administrative fee.
With Liberty Home Guard, there are three different coverage options you can choose from. You can also include optional add-ons in any plan.
1. Appliance Warranty for $39.99 Monthly or $399.99 Annually
Clothes washer
Clothes dryer
Refrigerator with ice maker dispenser
Built-in microwave oven
Dishwasher
Garbage disposal
Range/ oven/ cooktop
Ceiling and exhaust fans
Garage door opener
2. Systems Guard for $49.99 Monthly or $499.99 Annually
Air conditioning
Heating
Ductwork
Plumbing
Electrical
Water heaters
3. Total Home Guard for $59.99 Monthly or $599.99 Annually
This choice offers the most protection of all the plans and includes everything listed in the two plans above.
4. Optional Add-ons
Pool and spa: $17.00 monthly; $195.00 annually
Sump and pump: $3.00 monthly; $36.00 annually
Central vacuum: $3.00 monthly; $36.00 annually
Well pump: $9.00 monthly; $101.00 annually
Additional spa: $16.00 monthly; $188.00 annually
Septic system and septic sewage ejector pump: $11.00 monthly; $123.00 annually
Stand alone freezer: $4.00 monthly; $44.00 annually
Second refrigerator: $4.00 monthly; $44.00 annually
Read our full review of Liberty Home Guard
#4 Complete Protection
Complete Protection is another excellent home warranty company. Servicing all but nine states, this A+ Accredited Business is open 24/7.
Only slightly more expensive, this once small-scale, family-owned business offers some of the most comprehensive home warranties available in North America.
One of the many benefits offered by Complete Protection is their no-fee service call policy. With most quality providers charging at least $50 per service call, having no service call fee at all is a major perk.
They have five plans you can choose from:
Kitchen/Laundry: $32 a month/ $384 a year — covers your dishwasher, oven, refrigerator, and washer and dryer.
Heating/Cooling: $34 a month/ $408 a year — covers your furnace, AC, and water heater.
Basic Built-ins: $40 a month/ $400 a year — Furnace, AC, water heater, dishwasher, and oven.
Full House: $50 a month/ $600 a year — Furnace, AC, water heater, dishwasher, oven, refrigerator, and washer and dryer.
Full House Plus: $60 a month/ $720 a year — Includes everything mentioned in the first four plans, but also includes electrical wiring and in-bound water pipes.
What makes Complete Protection stand out even more:
There are a few other things that make Complete Protection stand out from its competitors. For one, their home warranties don’t have a deductible. As a result, you don’t have to pay any approved repair costs when something happens — this includes the initial service call, parts, and labor.
Secondly, CP pays for all preventative maintenance. Other home warranty companies mandate that their customers undergo preventative maintenance on items such as HVAC systems, but they won’t even pay for it. Instead, they force their customers to do so!
Thirdly, CP home warranties cover all the parts within an appliance. Most home warranty companies exclude parts like ice makers or washing racks within dishwashers. CP does not pick and choose which parts it will cover.
Lastly, Complete Protection allows you to choose your own service contract provider. So, if you have a certified contractor with whom you work, you can go to them whenever home repairs are needed.
They do this because they feel that their customers should always be comfortable with the person working in their house.
Read our full review of Complete Protection
#5: American Home Shield
The accolades American Home Shield has received are many. In addition to being a Better Business Bureau Accredited Business, they also received the Women’s Choice Award from 2014 to 2016.
On top of that, Home Warranty Reviews gave American Home Shield the Best in Service award in 2014 and ranked them as Top Rated from 2015-2017. Last but not least, they are Consumer Affairs Accredited.
Why so much recognition from the industry? For starters, they’re always open. You can always reach them regardless of what day or time it is. And, when you do, expect a local contractor to be at your home within no more than 24 hours. You don’t even have to get on the phone. You can request home repairs directly from their website.
Another reason American Home Shield is recognized as the best among the best is its versatility with its home warranty plans. They have four to choose from:
Systems Plan: Covers the replacement or repair of your home’s key systems, such as: plumbing, electrical, heating, air conditioning, and smoke detectors.
Appliances Plan: Includes coverage on common, everyday household appliances, such as refrigerators, built-in food processors, dishwashers, and washer and dryers.
Combo Plan: Get coverage on all of your primary home systems and appliances. Saves you $14 a month if you were to rather purchase the systems and appliances plans separately.
Build your own plan: Choose only what you want to be covered by selecting 10 or more items from their list of covered items. This way you get the coverage that you care about the most.
Another element of their customized service is their service fees. American Home Shield allows customers to choose from a service fees range of $75, $100 or $125 per service request. This allows you to get the plan you want without having to account for a high service call fee.
The ability to choose your own service call fee regardless of the plan you’re on separates American Home Shield from most other home warranty companies which carry a standard service call fee.
Additionally, American Home Shield can provide coverage for your pool, spa, well pump, and septic system (at additional costs) and can assist you during the moving process by covering your home while it’s listed. If the new owner decides they would like to upgrade service afterward, it’s an easy switch to do so at closing.
Read our full review of American Home Shield
Methodology: How We Chose The Best Home Warranty Companies
When researching the best home warranty companies, we analyzed over 20 of the most popular home warranty companies. Our team spent hours reviewing each home warranty company. We examined many factors, but mainly focused on the following:
Home warranty plans and options
Pricing
Reputation and trustworthiness
Customer reviews
Pros of Home Warranties
Peace of Mind
One of the major benefits of a good home warranty is peace of mind. A home warranty can bring some real financial security against unexpected home repairs. While getting your home in ideal shape can be tough, maintaining that level can be even more stressful. A good warranty coverage can cut away a big chunk of that worry.
Convenience
One of the biggest problems people can encounter when faced with unexpected breakdown at home is finding good help. But a home warranty also reduces some of that stress, as your provider can provide you with a relevant licensed expert within their network.
Potential Savings
In many cases, standard home repairs – such as a new boiler, for example – can be a lot cheaper if replaced under warranty. While home warranties can’t guarantee savings, chances are you will see the benefits speak for themselves over time.
Transferable
Many home warranties are transferable, meaning you could carry your plan to a new home if you decide to move. Be sure to check whether transferability is a feature of any warranty before signing if that’s important to you.
Cons of Home Warranties
Wait Times
Unfortunately, wait times for claims can sometimes keep you waiting. If you need a quick fix or emergency repairs at home, you may have to wait longer than you would like. One thing that can help here is looking for a provider that provides an online claims process. This is because online claims are often processed faster than those done over the phone.
Coverage Exclusions
Home warranties don’t cover everything, and it can be hard in an emergency to remember your exact coverage limits. It’s important to read the details carefully before signing up, and put a plan in place if you need work that falls outside your warranty coverage.
Cost
Home warranty coverage isn’t cheap, especially if you want to secure protection across your property. You won’t necessarily be covered by service fees, even if you choose a plan with a high service fee. And of course, some maintenance and repairs can come with further costs on top of your plan. These high costs can make it difficult to discern whether a home warranty is the right thing for you.
Other Home Warranty Companies to Consider
Here are a few other home warranty companies that didn’t make our top 5 that you may still want to look into.
Like so many things in our lives, a home warranty is something that we don’t often think about until we absolutely need it. Sure, you have home insurance, maybe even flood insurance, but that only covers certain situations.
Homeowners Insurance
Homeowners or renters insurance can cover damage to your home from things like fire, theft, storms, and some natural disasters. In addition to your homeowners insurance plan, you should choose to purchase a home warranty to protect your belongings in a way that insurance lacks.
If you’ve ever purchased a large appliance, a computer, or even a television from a retailer, then you’re probably familiar with the concept of a warranty.
However, those are warranties sold at the time of purchase and cover only one product. The benefit of home warranty protection is that it can cover every product in your home and more.
Choosing a Home Warranty Plan
What a home warranty plan covers will depend on the plan you choose, and there are many to choose from. A home warranty can cover anything from your microwave oven to your plumbing and your electrical systems.
Deciding which plan is right for you will determine what items and systems it covers and how much it will cost. Typically, home warranties charge either a small monthly or annual fee that can save you a lot of money in the long run.
How to Choose the Right Home Warranty
Choosing the right home warranty is key. Let’s run through all the details you need to consider before making your decision.
Determine Your Coverage Needs
At the very least, it’s important to get at least an idea of what sort of coverage you need. Take the time to decide which items in your home you want to protect before comparing offers. You’ll find plans that cover appliances, home systems, and plans that cover both.
Compare Quotes
It’s worthwhile to shop around. Try to acquire at least three different quotes from plans that you’re genuinely interested in. And use this time to also prioritize clearing up any questions you have about the policies you’ve been offered.
Don’t forget to pay close attention to the various prices you’ll see for service call fees. Some companies are much more competitive than others, and some even offer a service fees range which you can choose from depending on your needs and budget.
Review Sample Contracts & Liabilities
The next step is to review any sample contracts carefully. You’ll want to identify the limitations and exclusions in the contract, especially.
Furthermore, be sure to double-check cancellation policy just in case you decide your warranty isn’t working for you later on.
Check Reviews
Finding the best home warranty company for you will require some further research. You can read customer reviews online to find a company that provides great customer service as well as competitive plans.
Be sure to look out for any record of previous legal action taken against the company, too.
Home Warranty FAQ
What is a home warranty?
A home warranty is a type of service contract purchased to cover breakdowns, repairs, and replacements of home appliances and systems. Home warranties are designed to cover normal wear-and-tear damage on covered items and systems.
When a covered item breaks down or otherwise requires attention, you file a claim with your warranty provider. They then send a licensed technician to your home to assess the issue. Instead of paying for the full cost of the repair, being under warranty generally means paying only a small service fee for necessary repairs. The price of service fees varies between providers.
Home warranties are popular because they offer homeowners maintenance coverage and emergency repairs without having to rely on savings. The home warranty market today is huge and can provide terms for homes and budgets of many shapes and sizes.
What does a home warranty cover?
Home warranties can cover a whole range of systems and appliances within your home. You can decide how much you want to spend and determine what items will be covered by your home warranty.
Most home warranty companies break down their offerings into good, better, and best options. The good option, and least expensive, is one that covers most if not all of your appliances.
Major Home Systems
More expensive on an upfront basis are plans that cover major home systems. These home warranty plans cover the systems within your home. If you’re renting, this may not be of concern to you. However, if you own your home, you know that a plumber or electrician can cost a lot more than replacing your refrigerator.
If you’re less concerned with appliances and worried about what keeps your home humming along, then you may want to consider a system plan.
Appliances
Appliances like your microwave, washer and dryer, dishwasher, and often a lot more are covered by the best home warranty companies. These are great options for those who are renting or want to spend the least amount of money.
Systems & Appliances
The most expensive plans, of course, offer the most coverage. The best plans cover both systems and appliances. So while they’re the most expensive, they’re also the best value. Covering your systems and appliances together will typically save you around 20% to 30% of your total bill.
Basic plans from the best home warranty companies will cover the majority of systems and appliances in your home but don’t cover everything. If you have a pool, for instance, you may have to choose additional coverage.
Some home warranty companies even allow you to add coverage to cover your homeowners’ insurance deductible. Combining appliance and system coverage may also include these additions.
There are exclusions to what a home warranty will cover. Unfortunately, no plan is a blank check to have every item in your home replaced. These are repair plans and not replacement plans.
What is not covered by a home warranty?
The extent of your warranty coverage will vary greatly between companies and plans available. Having said that, however, here is a list of the ideas that are usually not covered by a home warranty:
Structural issues, paint and flooring
Commercial-grade equipment or systems
Pre-existing conditions
Rust, corrosion and sediment problems
Improper maintenance, installation, design, or manufacturer defect
Detection and removal of asbestos and mold
Building and zoning code violations
How much does a home warranty cost?
Home warranty pricing varies greatly depending on the coverage you choose, the home warranty company, and the area in which you live. In general, though, if you’re just covering appliances, expect to pay around $30 a month.
If you’re looking for only system coverage, you’ll probably pay around $35 a month. However, if you combine your coverage to include both systems and appliances, expect to pay around $45 per month.
Adding things not covered by a typical home warranty plan can also increase your monthly bill. If you have an atypical appliance or system, it’s possible that basic plans do not cover it. Not everyone has a swimming pool, a septic tank, a whirlpool tub, or a spa.
Check with your individual plan to ensure that all systems and appliances you want to have covered are actually included. If they aren’t, see if you can add them separately.
Service Fees
In addition to your monthly fee, you’ll also need to pay service fees for a service call. This cost can vary greatly.
The best home warranty companies offer plans that will cost you around $50 to $125 per repair. This is based on the home warranty company, the plan, and the item that needs to be fixed. While this may seem like a lot, consider the cost of the average repair without a warranty.
What can you expect to pay without a home warranty?
The average repair cost of a refrigerator is $275 to $325. The igniter on an oven or range may only cost $110 to $200 to repair, but a control board could cost you more than $260.
Replacing a rubber gasket on your washer will set you back between $200 to $300. These expenses can quickly add up compared to the fee home warranty companies charge for a visit.
Bottom line: They’ll address the issues with your current item but won’t give you a new one.
Pre-Existing Conditions
Pre-existing conditions are not covered either. Unfortunately, if one of your major appliances breaks, you can’t just sign up for coverage and expect to have it fixed.
Most home warranty companies will cover an unknown pre-existing condition. However, you can’t have an appliance covered if you or the home warranty provider knows that it’s already broken. This is why it’s a good idea to think about purchasing home warranty coverage before your appliances break.
Coverage Waiting Period
Most companies impose a 15 to 30 day waiting period before coverage can begin. There are, however, exceptions to this rule. For instance, if you have a home warranty that is ending soon, you may be able to begin on the date your coverage stops.
It’s important to read the fine print of your service contract. Each home warranty company will have very specific coverage details.
While all will most likely cover your refrigerator, not all of them will cover wear and tear on the gasket that seals it. Typically, the more expensive the plan, the more it covers, but this is not always the case.
What is the process for having an item repaired?
When something breaks, especially if you have a home warranty, you’ll want it fixed as quickly as possible.
Going without a microwave for a week or two may be acceptable, but if it’s your refrigerator, you may not be so patient. When an item malfunctions or breaks, you’ll need to contact your home warranty company’s customer service and explain the issue.
Make sure you report the problem as quickly as possible. The faster you make the call, the faster you’ll get an appointment and have your issue resolved.
Independent Contractors
The home warranty provider will most likely assign an independent contractor to inspect and repair the item. Obviously, system repairs can take longer and be more labor-intensive.
For example, replacing a part on your furnace will be a lot easier than repairing electrical wiring or plumbing inside your walls.
Depending on what is wrong, the contractor may have to order parts or return with specialized equipment. You’ll be required to pay a service fee for each item you wish to have repaired. However, the contractor should ensure that the item returns to working order.
Workmanship Guarantee
Once you’ve had an appliance or system repaired, that item is covered under a workmanship guarantee. Think of it as a warranty within your warranty.
The home warranty provider guarantees the parts and labor of that particular repair for a specified amount of time. This is usually around 90 to 180 days after the repair. So, even if you cancel your plan, they will still cover the repair during that time.
Who should pay for a home warranty?
Many times the seller will buy a home warranty to make the purchase of the home more appealing. Sometimes a real estate agent will even purchase a home warranty as a courtesy to the clients they’re representing. However, buyers, sellers, real estate agents, and current homeowners can all buy a home warranty. It’s also important to note that buying a home warranty can be done at any time, before or after closing.
What should you look for in a home warranty company?
A home warranty can save you a lot of hassle and headaches, not to mention money, down the road—as long as you do your homework and think it through.
A home warranty covers many things that homeowners insurance does not. Having peace of mind knowing that costly home repairs won’t spring up unexpectedly is a great feeling.
Choosing the right type of coverage for you is the next step. When you think about the type of coverage you want, think about the items you want to protect in your home.
Renters
If you’re just renting, then plumbing and electrical work is not a concern for you. Your homeowners insurance should cover things like theft and fire, but you still want to be covered when something breaks that you actually own. Choosing an appliance plan is probably the right option for you.
If you live in an older home that you own, a more comprehensive plan may be the right choice for you. It’s comforting to have your home inspected before purchasing, but things can still go wrong. You can avoid costly maintenance as long as you plan ahead.
Are home warranties worth it?
The answer to this question will depend largely on your unique circumstances. Two of the biggest factors are the age of your home and the quality of your appliances. In addition, your own ability and comfort with repair and maintenance is a factor.
Almost every home appliance and system will eventually require significant repair or even replacement. Depending on your own DIY skills, you might be comfortable taking responsibility for most repairs. Others might want more comprehensive coverage. But even still, there could be plenty of reasons why you would prefer to have a home warranty.
How do I cancel my home warranty?
Your first step should be to review your contract and make sure you understand the cancellation policy. Most companies will charge a cancellation fee that can range from 5% to 10% of the outstanding fee.
Thereafter, you can contact the company and tell them you’re considering cancelling your warranty. If possible, try to speak to a sales rep with whom you’re familiar.
Some companies require you to send a written notice of termination. Remember to cancel any automated payments from your credit card or bank account, if necessary. It might also be a good idea to request a written confirmation of the cancellation for your records.
Which home warranty company has the lowest service call fee?
Service call fees can vary widely between companies, but it’s important to try to find the most competitive service call fee available to you. Service fees generally range from $50 to $150 per service call.
The trick with finding a competitive service fee call is making sure you don’t sacrifice the quality of service calls. Some of the top-rated home warranty companies charge a higher service fee. However, it could be worth it to have the security and confidence of quality home service.
Final Thoughts
To find the best home warranty company, you will need to read the contract thoroughly. Every company that you investigate will have a contract. In that contract, they’ll spell out exactly what they do and do not cover.
They’ll also explain the cost, who will fix your items if they break, and more. Comparing two or more home warranty companies can give you a sense that you’ve made the right decision. Always make sure you do your homework.
Furthermore, check to see if a home inspection is required before qualifying for a home warranty with a specific company. Many don’t require this extra step, but it’s wise to be prepared in case they do. You definitely want to consider both cost and convenience as part of your ultimate decision.
Full Reviews of Home Warranty Companies
Looking for more options? Check out our other home warranty reviews below.
Intercontinental Exchange’s mortgage technology business, which grew significantly in 2023 with the September acquisition of Black Knight, posted an operating loss of $276 million for the full year and $74 million for the fourth quarter.
That compares with a third quarter operating loss of $157 million and fourth quarter 2022 operating loss of $6 million. For all of 2022, the mortgage business had an operating profit of $57 million. Lower transaction volumes contributed to GAAP losses for the business.
The parent company provided pro forma operating results for ICE Mortgage Technology, which treats Black Knight as if Intercontinental Exchange owned it since 2021.
For the fourth quarter, pro forma operating income was $193 million, an improvement versus the third quarter operating income of $172 million and fourth quarter 2022 of $180 million.
But for the full year it fell to $724 million from $868 million in 2022.
The acquisition of Black Knight — which brought together the largest mortgage servicing platform, MSP, with Encompass, the most used loan origination system — closed at the start of September following a legal battle with the Federal Trade Commission. The deal required Black Knight to sell Empower and related assets to Constellation Software and that business was rebranded to Dark Matter. In a separate deal required for regulatory approval, Constellation purchased Optimal Blue as a stand-alone business.
Intercontinental Exchange’s mortgage business added 37 new Encompass clients in the fourth quarter and four new MSP customers. That contributed “to a record for new sales on Encompass and the highest in the last five years for MSP and Encompass combined,” Ben Jackson, president of Intercontinental Exchange and chairman of ICE Mortgage Technology, said during the company’s earnings call.
Among those signing on to Encompass were Raymond James Bank and Carrington Mortgage.
Meanwhile MSP added Capital Mortgage Solutions and CapEd Credit Union (an existing
Encompass customer), to start the fourth quarter, Jackson disclosed.
This year, “a near-term opportunity to drive greater transparency and efficiency includes integrating Black Knight datasets, such as our closing fee data, tax, flood and valuation models into our Encompass and MSP systems,” he continued.
“Another near-term example is integrating our data and document automation platform into MSP, building a digital bridge from origination straight through to servicing, reducing cost, time and errors to onboard loans to the MSP system,” Jackson added.
Fourth-quarter mortgage technology revenue doubled to $502 million from $249 billion, benefiting from the ownership of Black Knight for the entire period.
The servicing business ICE Mortgage Technology acquired from Black Knight provided $219 million of revenue. Another $70 million of revenue came from data and analytics in the fourth quarter, $56 million more than the previous year, also likely due to the addition of Black Knight to ICE’s existing business.
Origination technology revenue slipped to $170 million from $181 million, while closing solutions were basically flat at $43 million versus $44 million one year prior.
Recurring revenue from all sources for ICE Mortgage Technology grew to $397 million from $164 million in the fourth quarter of 2022.
Full year revenue did not increase as much, rising to $1.32 billion from $1.13 billion in 2022.
“While, of course, those recurring revenues are important, a lot of these products are also going to have a transaction component,” Warren Gardiner, chief financial officer, said, noting that last year was the worst for origination volume since at least 1991.
“But we’ve continued to add new customers, the current customer base has continued to add additional products, and we’ve expanded that network. So that when those transactions do normalize, we’re going to be really benefiting from that, not only on the recurring side, but I think on the transaction side as well,” he said.
For this year, consistent with the near-term outlook provided during a call following the Black Knight deal closing, revenue growth for the mortgage technology segment will be in the low to mid-single-digit range on a pro forma basis.
“The low end of our range assumes only a modest improvement in application and origination volumes, while the high end underwrites a more substantial improvement in the double-digit growth range,” Gardiner said.