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There are a bevy of mortgage lenders out there, but they come in two basic types: retail and wholesale. The difference is, while retail lenders work directly with individual borrowers, wholesale mortgage lenders don’t.
Instead, they fund mortgages and offer them through third parties, such as another financial institution, like a bank, credit union or other lender. Or, they partner with mortgage brokers, who work with individuals to find the right loan — sometimes at a discounted rate — and prepare the application.
Here’s what to know about wholesale lending and what to expect if you borrow money from a wholesale mortgage lender.
In wholesale lending, the borrower typically doesn’t have direct contact with the firm putting up the money. Instead, the borrower interacts with a third party — another financial institution or professional. This party is the one the borrower applies through; it’s also the one communicating with the applicant throughout the loan’s underwriting process. But it’s the wholesale lender that sets the mortgage options and terms.
It’s also the wholesaler who technically owns the mortgage. And, once their loans close, wholesale lenders typically sell them in the secondary mortgage market to free up capital to fund more mortgages.
Because they don’t do consumer advertising and marketing, and don’t have to employ customer reps, wholesale mortgage lenders often offer more competitive rates and more flexible loan options and requirements than retail lenders.
The major differences between wholesale and retail mortgage lenders:
If you’re interested in easy comparison shopping and having someone who can walk you through the lending process, the mortgage broker-and-wholesale lender route might be a good fit for you.
Mortgage brokers typically have existing relationships with wholesale lenders. They act as the lender’s loan officer, in a sense. You’ll work with the broker to complete each step in the application process. Once your application is ready for review, the broker will coordinate with the wholesale lender’s underwriting team for approval.
The broker’s role doesn’t stop with assisting the prospective borrower with their mortgage application. They also work to find you the best deal on a mortgage. Since they can shop your information around to their wholesale lender contacts, you could secure more competitive rates and terms than you would if shopping for a home loan independently. Often, they’ll present you with several options, and help you decide among them.
Below is an overview of what to expect if you decide to go the wholesale lender route via a mortgage broker:
If you’re considering wholesale mortgage lending, keep these pros and cons in mind to guide your decision:
Here are the 10 U.S. lenders doing the most wholesale mortgage business as of 2023. They are ranked by dollar volume of their wholesale mortgage operations (some of them also do retail).
Lender | Wholesale volume (billions) | % of business that’s wholesale |
---|---|---|
Source: The Scotsman Guide | ||
United Wholesale Mortgage | $12.29 | 100 |
Newrez LLC / Caliber Home Loans | $11 | 15 |
loanDepot | $8.23 | 12 |
Pennymac | $6.94 | 6 |
Paramount Residential Mortgage Group | $3.89 | 36 |
Angel Oak Mortgage Solutions | $3.22 | 94 |
CMG Home Loans | $3.19 | 15 |
Change Lending | $2.93 | 44 |
A&D Mortgage | $2.70 | 79 |
LoanStream Mortgage | $2.61 | 95 |
Getting a loan from a wholesale mortgage lender might be a good option if your credit history is less than stellar or unique, since a mortgage broker or other third party has a relationship with the lender and could get you approved under less strict requirements. Because they don’t have to spend a lot on advertising, loan officers and overhead, wholesale lenders might offer better terms and charge fewer or smaller closing costs.
However, since you’re not directly in touch with a wholesale lender, communication could be slower, and seem more mysterious. Most mortgage brokers work on commission but some also charge you a fee. Be sure to compare this cost to those of other lenders as you weigh your options.
Additional reporting by Mia Taylor
Source: bankrate.com
The average long-term mortgage rate has risen once again this week, with the average 30-year fixed loan now at 7.08 per cent, according to Bankrate’s latest survey of large lenders.
Another mortgage buyer, Freddie Mac, said the average rate on a 30-year mortgage rose to 6.88 per cent from 6.82 per cent last week. In comparison to a year ago, where the rate averaged 6.27%, this is having a genuine impact on American homeowners.
Average 30-year mortgage rates in the 10 largest metro areas ranged from 7.56% in Los Angeles to 6.85% in Chicago.
Rates are slightly higher now compared to the start of this year, keeping some borrowers waiting as the spring begins, which is typically known as the most popular time to buy a home.
The national median family income for 2023 was $96,300, according to the U.S. Department of Housing and Urban Development. The median price of an existing home sold in February 2024 was $384,500, according to the National Association of Realtors (NAR).
The initial impact of this change was felt in the stock market, with Wall Street sending shares sharply lower, as expectations that the Fed would be cutting rates proved to be premature.
Mortgage rates are influenced by the Fed benchmark rate, although they also reflect other factors, like bond yields and inflation. However, according to Lawrence Yun, chief economist at the NAR, rates for home loans are likely to be unchanged in the near-term due to factors like the strong job market and housing demand.
But that is no consolation for those already with mortgages. When mortgage rates rise, they can prove to be hugely damaging for families struggling to get by, as they add hundreds of dollars a month in costs for borrowers.
With this rise, based on a 20 per cent downpayment and a 7.08 per cent mortgage rate, the monthly payment of $2,063 amounts to 26 per cent of the typical family’s monthly income.
Source: marca.com
If you’re in the market for a home, here are today’s mortgage rates compared to last week’s.
Loan term | Today’s Rate | Last week | Change |
---|---|---|---|
30-year mortgage rate | 7.01% | 6.95% | +0.07 |
15-year fixed rate | 6.46% | 6.34% | +0.12 |
10-year fixed | 6.31% | 6.20% | +0.11 |
5/1 ARM | 6.33% | 6.45% | -0.12 |
30-year jumbo mortgage rate | 7.15% | 7.04% | +0.11 |
30-year mortgage refinance rate | 7.03% | 6.98% | +0.05 |
Average rates offered by lenders nationwide as of April 11, 2024. We use rates collected by Bankrate to track daily mortgage rate trends.
Mortgage rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
Over the last few years, high inflation and the Federal Reserve’s aggressive interest rate hikes pushed up mortgage rates from their record lows around the pandemic. Since last summer, the Fed has consistently kept the federal funds rate at 5.25% to 5.5%. Though the central bank doesn’t directly set the rates for mortgages, a high federal funds rate makes borrowing more expensive, including for home loans.
Mortgage rates change daily, but average rates have been moving between 6.5% and 7.5% since late last fall. Today’s homebuyers have less room in their budget to afford the cost of a home due to elevated mortgage rates and steep home prices. Limited housing inventory and low wage growth are also contributing to the affordability crisis and keeping mortgage demand down.
Mortgage forecasters base their projections on different data, but most housing market experts predict rates will move toward 6% by the end of 2024. Ultimately, a more affordable mortgage market will depend on how quickly the Fed begins cutting interest rates. Most economists predict that the Fed will start lowering interest rates later this summer.
Since mortgage rates fluctuate for many reasons — supply, demand, inflation, monetary policy and jobs data — homebuyers won’t see lower rates overnight, and it’s unlikely they’ll find rates in the 2% range again.
“We are expecting mortgage rates to fall to around 6.5% by the end of this year, but there’s still a lot of volatility I think we might see,” said Daryl Fairweather, chief economist at Redfin.
Every month brings a new set of inflation and labor data that can change how investors and the market respond and what direction mortgage rates go, said Odeta Kushi, deputy chief economist at First American Financial Corporation. “Ongoing inflation deceleration, a slowing economy and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates,” Kushi said.
Here’s a look at where some major housing authorities expect average mortgage rates to land.
When picking a mortgage, consider the loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. You’ll also need to choose between a fixed-rate mortgage, where the interest rate is set for the duration of the loan, and an adjustable-rate mortgage. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market’s current interest rate. Fixed-rate mortgages offer more stability and are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.
The average 30-year fixed mortgage interest rate is 7.01%, which is an increase of 7 basis points from seven days ago. (A basis point is equivalent to 0.01%.) A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you’ll have a lower monthly payment.
The average rate for a 15-year, fixed mortgage is 6.46%, which is an increase of 12 basis points from the same time last week. Though you’ll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.
A 5/1 adjustable-rate mortgage has an average rate of 6.33%, a decrease of 12 basis points from the same time last week. You’ll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.
While it’s important to monitor mortgage rates if you’re shopping for a home, remember that no one has a crystal ball. It’s impossible to time the mortgage market, and rates will always have some level of volatility because so many factors are at play.
“Mortgage rates tend to follow long-date Treasury yields, a function of current inflation and economic growth as well as expectations about future economic conditions,” says Orphe Divounguy, senior macroeconomist at Zillow Home Loans.
Here are the factors that influence the average rates on home loans.
Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help homebuyers prepare for monthly mortgage payments.
Though mortgage rates and home prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.
Source: cnet.com
American renters are fearful that their home-owning aspirations are increasingly getting out of reach, according to a recent survey by the real-estate platform Redfin, amid an environment of high home prices and elevated mortgage rates.
Almost 40 percent of the renters polled told surveyors they did not believe they would own a home of their own, up from 27 percent in a similar survey Redfin conducted in May and June. Part of the struggle for these Americans is that homes are beyond what they can afford. Securing a down payment can prove elusive, and high mortgage rates may discourage them from acquiring property.
Read more: How to Get a Mortgage in 2024
The Redfin survey sampled about 3,000 U.S. residents in February, and its analysis of renters’ expectations came from a 1,000 renters in the poll.
Mortgage rates in particular have stayed elevated over the past six months. After hitting a peak of 8 percent—the highest level since the turn of the century—mortgage rates declined to the mid-6 percent range at the end of the year and into 2024. In recent weeks, however, the cost of home loans have ticked up to above 7 percent, depressing activity in the mortgage market.
On April 11, the 30-year fixed rate rose to almost 7.4 percent, Mortgage News Daily reported, the highest levels since November 2023. The rise follows news that suggests borrowing costs may stay elevated for longer than economists initially anticipated.
High mortgage rates now mean that first-time buyers must earn about $76,000 to afford what the industry describes as a starter home, which is an 8 percent increase from a year ago and almost 100 percent higher than it was before the pandemic, Redfin said. It added that home prices have soared more than 40 percent since 2019, as buyers took advantage of low borrowing costs during the pandemic to acquire houses, increasing demand, escalating competition and pushing up prices.
Read more: Compare Top Mortgage Lenders
“Buying a home has become increasingly out of reach for many Americans due to the one-two punch of high home prices and high mortgage rates,” Redfin wrote.
Renters being unable to buy homes has in turn contributed to increased competition and price jumps in the rental market. The median asking rent is at $2,000 in the U.S., close to the record high it reached in 2022, Redfin said. Still, despite the elevated cost of rent, renting may be a more affordable option than homeownership.
“Housing costs are high across the board, but renting is a more affordable and realistic option for many Americans right now—especially those who have never owned a home and aren’t able to tap into equity from a previous sale,” said Daryl Fairweather, Redfin’s chief economist. “While owning a home is usually a sound long-term investment, the barriers to entry and upfront costs of buying are higher than renting.”
To purchase a house, a buyer would need about $60,000 as a down payment for a home loan, an amount that is out of reach for many Americans.
Fairweather added, “The sheer expense of purchasing a home is causing the American Dream of homeownership to lose some of its shine.”
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
When you pay off your mortgage, you may have some paperwork and account switching (such as property taxes) to take care of. And you may look forward to greater cash flow.
But is paying off a mortgage always the right move? In some cases, a person who is about to pay off a mortgage may want to consider a couple of options that could make more sense for their particular financial situation.
Learn more about the payoff path and alternatives here.
Paying off your mortgage is a fantastic milestone to reach, but it’s not without trade-offs. Here are a few considerations to help you make the best decision for your situation.
Pros of Paying Off a Mortgage | Cons of Paying Off a Mortgage |
---|---|
No monthly payment | May lose tax deduction |
No more interest paid to the lender | Your cash is all tied up in your home’s equity |
More cash in your pocket each month | If you pay extra to pay off your home, you may miss out on investment strategies |
You’ll need less income in retirement | Lost opportunity costs for other uses for your money |
Greatly reduced risk of foreclosure | No tax deduction for mortgage interest, if you’re among the few who still take the deduction |
💡 Quick Tip: Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with an online mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.
Here’s how mortgage payoff works:
• To get the amount you need to pay off your mortgage, the first thing you need to do is request a mortgage payoff letter. If you pay the amount on your last statement, you won’t have the right amount. A mortgage payoff letter will include the appropriate fees and the amount of interest through the day you’re planning to pay the loan off.
• Know that the payoff letter is only good for a set amount of time, and make sure to get your payment in on time.
• Follow the instructions you’re given about where and how to submit the payment.
• Once you’ve sent the payoff amount, your mortgage lender is responsible for sending you and the county recorder documentation to release the mortgage and lien on your home.
• You should be sent any funds remaining in escrow.
• You will want to contact your insurance company about this change if your insurance was paid along with your mortgage payment and have the bills switched over to you directly.
• If your property taxes were paid as part of your mortgage, you will want to contact your local tax collector about shifting those bills to you as well.
After paying off your mortgage, you should receive (or have access to) documents proving you paid off the mortgage and no longer have a lien attached to your home. These include:
• Satisfaction or release of mortgage. This document will be filed with the county recorder (or other applicable recording agency). It states that the mortgage has been satisfied and the lien released.
• A canceled promissory note. When you closed on your home, one of the documents you signed was called a promissory note. Now that the mortgage has been satisfied, you may receive this document back with a “canceled” or “paid in full,” though it’s also possible you may have to call and request the document.
• A statement on the paid-off loan balance. Your lender should send you a statement showing that your loan has been paid in full.
After you pay off your mortgage, you’ll need to take care of a few housekeeping items (a couple are mentioned above).
• Close your escrow account. Since you’re no longer sending a mortgage payment to a mortgage servicer, you’ll need to take care of the items in your escrow account, primarily your taxes and homeowners insurance.
• Contact your county recorder’s office to double-check that the mortgage satisfaction paperwork has been filed. Once that has been filed, you will have a clear title on the property.
• Make plans for the extra money. Whether you want to make a bigger push in your retirement account, enlarge your emergency fund, or pay off other debts, you now likely have more cash to do it with. If you don’t make plans for the extra money, it might just evaporate.
Recommended: 2024 Home Loan Help Center
Generally, paying off your mortgage early is a great idea. It reduces the principal, which in turn reduces the amount you’ll pay in interest over the life of your loan. Still, there are reasons that some homeowners consider not paying their mortgage off early.
Most lenders do not charge a prepayment penalty, but home loans signed before January 10, 2014, may include one. Nonconforming mortgage loans signed after that date may have a prepayment penalty that applies within the first three years of repayment. (The different types of mortgage loans include conforming and nonconforming conventional mortgages.)
The best way to find out if prepayment is subject to a penalty is to call your mortgage servicer. The terms of your mortgage paperwork should also outline whether or not you have a prepayment penalty.
Another option you may consider is refinancing your mortgage. There are several reasons you may want to refinance instead of paying off your mortgage.
Lower monthly payment. Getting a lower rate or different loan term may lower your monthly payment. Be sure to check out current rates, and use a calculator for mortgages to find out what a possible new payment would be.
Shorter mortgage term. Refinancing a 30-year mortgage to, say, a 15-year mortgage can keep you close to paying off your mortgage while also providing financial flexibility.
Spare cash. Whatever your need is — home renovations, college funding, paying off higher-interest debt — a cash-out refinance might be an option.
💡 Quick Tip: Compared to credit cards and other unsecured loans, you can usually get a lower interest rate with a cash-out refinance loan.
What happens when you pay off your mortgage? After doing a jig in the living room, you’ll need to take care of a few housekeeping tasks and make plans for the extra money.
An option to consider: Would a refinance to a shorter term make more sense, or pulling cash out with a cash-out refi? It can be wise to review all your options as you move toward taking this major financial step.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
The answer depends on an individual’s situation. If you have the money and you’d love to shed that monthly obligation for good, paying off a mortgage is a good idea. But if you’re worried about funding your retirement or losing opportunities to invest, paying off your mortgage may not be a good idea for you.
Ensure that you have received your canceled promissory note, and update your property tax and insurance billers on where to bill you. Since you no longer will have a mortgage servicing company, you must pay your insurance and property taxes yourself.
Paying off a mortgage could give you more money to work with in retirement. But if your retirement accounts need a boost, most financial experts contend that allocating money there is a better idea than paying off your mortgage. Paying off a mortgage when you have low cash reserves can also put you at risk.
Surprisingly, paying off your mortgage early won’t affect your credit score much. Your credit score has already taken into account the years of full, on-time payments you made each month.
Photo credit: iStock/katleho Seisa
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Source: sofi.com
California-based multichannel mortgage lender CMG Financial announced on Thursday that it acquired Norcom Mortgage’s retail assets, expanding its operations in the Northeast with the addition of 25 branches from Maryland to Maine. The financial details of the deal were not disclosed.
“Norcom Mortgage has made the strategic decision to focus on and continue to grow our wholesale platform as TPO GO,” Norcom President Phil DeFronzo said in a prepared statement.
The Nationwide Multistate Licensing System (NMLS) shows that Norcom — as well as Third Party Origination Go and TPO Go — is listed as a trade name under Norwich Commercial Group Inc., which had 142 sponsored loan officers and 41 active branches as of April 11.
Norcom Mortgage retail operations will add to the 1,813 sponsored LOs and 389 active branches currently with CMG Financial, per NMLS. The acquirer works in the retail, wholesale and correspondent channels. It also operates seven joint venture companies with builder and Realtor partners.
CMG was the 16th-largest mortgage lender in the country in 2023, with volume of $20.16 billion that was up 19.9% year over year, according to Inside Mortgage Finance (IMF) estimates. The company, however, claims it reached $21.5 billion last year, enough to make it No. 12.
Founded in 1993 by Christopher M. George, a former Mortgage Bankers Association (MBA) chairman, CMG has engaged in M&A activity and added rival teams over the past year.
In March 2023, the company struck a deal to acquire Homebridge Financial Services‘ retail division and grow its footprint in the channel. Homebridge was set to merge with Mike Cagney‘s Figure Technologies, but the deal fell apart just 10 months after the announcement was made.
CMG announced another deal in November 2023 with the integration of Shamrock Home Loans’ origination team.
Source: housingwire.com
Data experts on the mortgage team at NerdWallet dig into NerdWallet’s survey research, as well as public datasets, to identify trends and provide insights on the ever-changing U.S. housing market. On this page, you’ll find some of NerdWallet’s most-read research and commentaries on home buyers and sellers, mortgage interest rates and homeownership.
For NerdWallet statistics and data on additional topics, including credit cards, banking and student loans, head to our studies and data analysis hub.
Have questions or want to speak with a NerdWallet expert? Reach out to [email protected].
Daily mortgage interest rates
Mortgage interest rates this week
Mortgage interest rates this month
NerdWallet home and mortgages expert Holden Lewis writes a monthly column covering the near-term forecast for mortgage rates.
Every winter, NerdWallet collaborates with The Harris Poll to survey U.S. adults 18 years and older. The results provide a nationally representative snapshot of how Americans perceive the housing market.
2024 Home Buyer Report: Pessimism reigns as home buyers struggle and the goal of homeownership loses some of its luster.
2023 Home Buyer Report: Higher mortgage interest rates and apprehensions about the economy have Americans unsure about their ability to purchase homes.
2021 Home Buyer Report: Pent-up demand from would-be home buyers clashes with a limited supply of homes for sale.
2020 Home Buyer Report: Buying a home is a top priority, especially for younger generations, but some feel locked out of homeownership.
2019 Home Buyer Report: Recent buyers have had to get competitive to close their deals, and many feel stretched by the costs of homeownership.
2018 Home Buyer Report: Homeownership is a widely shared goal, but concerns about costs keep some buyers sidelined.
Each quarter, NerdWallet data analyst Elizabeth Renter analyzes information from sources including the U.S. Census, the Bureau of Labor Statistics and the National Association of Realtors to better understand the challenges facing first-time home buyers.
Q4 2023: A slight bump in inventory isn’t enough to ease affordability challenges.
Q3 2023: Higher mortgage rates outpace slight price declines seen in some metros.
Q2 2023: Seasonality appears to be returning to home prices.
Q1 2023: Banks’ tighter lending standards add to the difficult climate for first-time buyers.
Q4 2022: Higher mortgage interest rates deter buyers, easing inventory woes.
Q3 2022: Price increases slow, but rising mortgage rates eat into potential savings.
Q2 2022: Falling wages and price growth intensify affordability struggles.
Q1 2022: Two years’ worth of data highlights housing market challenges.
Q4 2021: High prices and low inventory are a double whammy in some markets.
Q3 2021: Moderate improvements may be blips, not trends.
Q2 2021: Notable year-over-year decline in affordability.
Q4 2020: Typical winter shifts in the housing market may help home buyers.
Q3 2020: Competition is hot for the limited supply of homes on the market.
Q2 2020: Real estate booms as the country comes out of quarantine.
Q1 2020: Home prices rise, even as the effects of the pandemic are unclear.
Elevated mortgage rates took a bite out of new home sales in February, as they declined slightly from the previous month. Builders continue to respond to affordability concerns; half of the homes sold in February cost under $400,000, compared with 45% in January.
March 25, 2024
Latest housing market columns from Holden Lewis
Home buyers
Home improvement
2022 study: After a boom in renovations and DIY projects, homeowners may dial back home improvement plans (Nov. 2022).
2020 study: Homeowners prioritize DIY and paying for projects with cash (Oct. 2020).
Home sellers
2023 data analysis: Why homeowners may want to sell despite higher interest rates (March 2023).
2021 study: What to expect listing a home in a seller’s market (April 2021).
2019 study: What sellers should know before listing (May 2019) .
Housing market
Mortgage denials
2022 data analysis: Higher home prices and debt contribute to home loan denials (Nov. 2023).
2021 data analysis: Competition and lack of collateral drive mortgage denials (Oct. 2022).
2020 data analysis: Tighter lending standards make some home loans harder to obtain (Nov. 2021).
2019 data analysis: Debt-to-income ratio most-cited reason for mortgage denials (Oct. 2020).
Source: nerdwallet.com
If you’re thinking about refinancing your home loan or paying off your mortgage early, you might request a mortgage payoff statement. The amount due on this document is likely to be different from your current balance because it includes interest owed until the payoff date and any fees due.
Read on to learn more about what a mortgage payoff statement or letter is and when you might need one.
Starting with mortgage basics, a mortgage is a loan used to purchase different types of real estate, including a primary home. A bank or other lender agrees to lend money, which the borrower commits to pay back monthly for a set period of time and with interest.
The different types of mortgage loans include conventional and government-insured mortgages and reverse mortgages.
There are jumbo loans, which exceed the dollar limits set by the Federal Housing Finance Agency, and home equity loans.
Say you have a mortgage and want to know exactly how much you’d need to pay to satisfy the loan. A mortgage payoff letter will tell you that magic number. Unlike your current balance, the payoff amount includes interest owed up to the day you intend to pay off the loan. It may also include fees that you’re on the hook for and haven’t paid yet.
Your monthly mortgage statement, on the other hand, only shows your loan balance and the amount due for your next monthly payment.
💡 Quick Tip: You’ve found an award-winning home. Enjoy an award-winning mortgage experience, too. SoFi has knowledgeable Mortgage Loan Officers to guide you through the process.
You can request a payoff statement from your loan servicer at any time. Note: Your mortgage servicer may be different from your lender. The company that manages your loan handles billing, accepts loan payments, keeps track of your principal and interest, and fields questions from borrowers.
You may request a payoff statement for any type of loan, including mortgages, student loans, personal loans, and auto loans. However, if you need your mortgage payoff statement, go to your mortgage servicer directly. The name and contact information of your mortgage servicer is included in your monthly statements.
When you make the request from the company that handles your mortgage servicing, you’ll need to provide the following details:
• Your name
• Address
• Phone number
• Your loan number
• The date you want your payoff to be effective if you’re seeking to pay off your mortgage early.
Asking for a payoff statement does not necessarily mean that you intend to pay off your loan immediately. You may simply be determining whether or not paying off your mortgage early is feasible, for example. The request itself does not initiate the prepayment process.
Traditional lenders, such as brick-and-mortar banks, may mail you a paper mortgage payoff statement. Online lenders may send a payoff statement online.
Recommended: 5 Tips for Finding a Mortgage Lender
All mortgage payoff letters tend to contain similar information, including:
• Payoff amount: The amount of money that would satisfy the loan.
• Expiration date: The date through which the payoff amount is valid. The letter may also include an adjusted amount should you pay before or after the expiration date.
• Payment information: The letter will also usually tell you who to make the final check out to and where to mail it.
• Additional charges: You will be alerted to any additional fees and charges that you’ll need to include.
💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.
There are a few common situations in which you might need a payoff statement.
• Refinancing a mortgage: When you refinance your mortgage, your chosen lender pays off your old home loan with a new one, preferably with a lower interest rate and possibly a new term. When you seek to refinance, your new lender may ask you to provide a payoff statement on your current loan.
• Prepaying a mortgage: It’s possible to pay off a mortgage early. A payoff statement will show you exactly how much you’d need to pay to do so. Most prepayment penalties for residential home loans that originated after January 10, 2014, are prohibited. Still, check before you decide to prepay.
• Working with a debt relief company: If you’re having trouble managing your debts, you’ve fallen behind on payments, or you otherwise need mortgage relief, you may choose to work with a debt relief company that can help negotiate with your lenders. The company will need to see payoff statements to get an idea of the scope of your debt.
• Collections and liens: A lender might send you a payoff statement if you’ve fallen behind on your payments and they are sending your debt to a collection agency. In this case, the payoff statement may tell you how much you need to pay to stop the collection action.
If your lender decides to seize your home to recoup unpaid mortgage payments, they may place a lien on the property. They may send a payoff statement that alerts you that your property will be seized if the specified amount isn’t paid in full.
There are other ways to figure out how much you owe on your mortgage loan. You can talk to your lender and ask for a verbal payoff quote. This will provide an estimate, but understand that it is not a legal agreement and isn’t binding.
If you have a home loan, you may want to request a mortgage payoff statement, especially if you’re thinking about refinancing or paying off your mortgage early. Requesting the mortgage payoff letter does not initiate any formal processes, so it’s fine to think of it as an information-gathering exercise.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
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Contact your loan servicer to request your mortgage payoff statement.
Request your mortgage payoff statement when planning to prepay your mortgage, refinance, or consolidate debt.
Generally speaking, you should receive your mortgage payoff statement within seven business days of your request.
Photo credit: iStock/Vadym Pastukh
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Source: sofi.com
UK homeowners are renting out a room in their house as a way of making some extra money amid the cost of living crisis that has pushed mortgage rates to record highs.
Over one in every 10 (12%) London homeowners have started renting out a room in their house in the past year to generate additional income, according to Barclays Consumer Spend report.
The trend is not exclusive to the capital, as some 3% of homeowners across the UK have also rented out a room in their property to make a bit more money.
UK homeowners have been particularly hit by cost of living woes, with the average rate on a two-year fixed deal currently stands at 5.74%, while for a five-year deal, rates are around 5.24%, according to figures from Uswitch.
Borrowers would need to spread their home loans over more than 70 years to be able to afford the same mortgages on offer just two years ago, banks have said.
Mortgage rates have risen substantially as the Bank of England increased interest rates to a 16-year high in a bid to tackle inflation.
The data from the Barclays report showed that one in six (16%) aren’t confident about their ability to meet their mortgage or rental payments, and 18% of those with mortgage or rent payments are adjusting their spending habits to cope with rising housing costs.
Still, consumers’ confidence in their general household finances remained steady in March, at 67%.
Jack Meaning, chief UK economist at Barclays, said: “With an expectation that the Bank of England will cut interest rates from June, and banks responding by reducing mortgage rates, our research suggests that the housing costs that have been a drag on consumers for over a year are on the cusp of a turn, and will become a boost to spending from H2 and beyond. Today’s data shows this transition happening in real time.”
Higher mortgage rates have also hit the property market, as house prices fell for the first time in six months in March amid rising mortgage rates, according to Britain’s biggest mortgage lender.
A typical home now costs £288,430, around £2,900 less than last month, said Halifax.
Household spending such as DIY and electronics fell 5.2% in March, with one in six (16%) holding off home renovations due to current economic pressures.
Consumer card spending growth flatlined in March as wet weather dampened both retail and restaurant sales.
Retail spending remained almost flat at 0.7%, brought down by falling in-store spending. Face-to-face retail (excluding groceries) was down 2.1% and clothing fell -1.8%, as spring showers deterred shoppers from visiting the high street. Meanwhile, restaurants had another challenging month, down 12.6%, consistent with the fall witnessed in February (13.4%), Barclays said.
This comes as 45% of consumers said they were continuing to rein in discretionary spending, with the majority (53%) of this group cutting back on clothing and accessory purchases, and nearly half (47%) spending less on dining out.
Britons are more concerned than ever about the cost of every day items, with concerns about general inflation shooting up to 87%.
Karen Johnson, head of retail at Barclays, said: “Retailers were braced for a more subdued start to 2024, and recent figures are in line with expectations. The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.
“However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the National Minimum Wage, and the buzz around major events such as Taylor Swift’s Eras Tour and the Paris 2024 Olympics.”
A separate report by the British Retail Consortium (BRC) and KPMG Retail showed a more optimistic view on the UK retail sector in March.
Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
Food sales increased by 6.8% year on year, driven by Easter falling unusually early and the subsequent uplift ahead of the long weekend.
Easter also boosted sales of products such as cookware and tableware, as people readied themselves to host family and friends. Home textiles such as throws and pillows were also popular as consumers sought to spruce up their homes ahead of spring.
Elsewhere, wet weather dampened sales of garden furniture, barbecues, DIY products, and clothing and footwear.
Online sales continued to slide, falling by 1.4% despite strong performances in home accessories, health, beauty, and homewares.
BRC chief executive Helen Dickinson said: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.
“A strong retail industry can boost investment across our towns and cities, and as we gear up for a general election, it is essential the next government recognises this and rethinks the burdensome costs imposed on retailers.”
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Source: finance.yahoo.com
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Fri, Apr 5 2024, 11:47 AM
I head to Central Texas today (A53 on Southwest; something about maybe seeing an eclipse); statewide Texas home ownership rate is about 64 percent. This is a shade lower than the 66 percent nationwide. (Home ownership & operational challenges facing lenders are a couple of the topics Mike Metz with Arizona’s V.I.P. Mortgage will discuss today at 2PM CT.) And a huge percentage of those homeowners have low fixed rates. People can be “locked-in” or constrained in their ability to make appropriate financial changes, such as being unable to move homes or sell assets due to tax burdens. In the U.S., nearly all 50 million active mortgages have fixed rates, and most have interest rates far below prevailing market rates, creating a disincentive to sell. These frictions, whether institutional, legislative, personal, or market-driven, are a real problem. The FHFA, Fannie & Freddie’s conservator, has a research piece on this since residential real estate exemplifies this challenge with its physical immobility, high transaction costs, and concentrated wealth. (Found here, this week’s podcasts are sponsored by Loan Vision. With Loan Vision, the mortgage banking industry’s premier mortgage accounting solution, you can take your accounting department from “cost center” to “revenue generator,” operating more efficiently and profitably. Hear an interview with HireAHelper’s Miranda Marquit on a new study that shows that as Millennials age, they’re moving less than ever.)
Customer Relationship Management
Discover Velma CRM, a plug-n-play, simple CRM solution geared especially for small to mid-size lenders, brokers, credit unions, and banks. With all the features you need and not a bunch that you don’t, Velma CRM by KensieMae offers an extremely cost-effective solution with zero implementation fees, a quick setup, and budget-friendly pre-seat pricing, yet provides powerful and trusted features, marketing engagement, and tools to drive and enhance borrower communication and engagement. Don’t wait, get Velma CRM today and start saving!
STRATMOR’s Consumer Direct Workshop
The Fed has indicated that it plans to cut rates later in the year, but even though the timing remains unclear, to remain competitive, Consumer Direct lenders will have to stay on their toes and prepare for the effect it will have on mortgage rates. The time to develop a strategy for attracting, nurturing, converting, and closing purchase business to hold or grow your market share is now. STRATMOR Group will host its semiannual virtual Consumer Direct Workshop on May 7, 8 and 9. STRATMOR experts and peer lenders will discuss how to better understand the needs of purchase borrowers, craft marketing messages that will appeal to them, tweak your processes for purchases and train LOs to close this business. Register up to three executives from your organization today.
Events, Training, and Webinars
Lending marketing, sales, and operations leaders! This is what your teams need to hear right now to increase volume and run a more efficient business. Greg Sher, Managing Director, NFM Lending, Steve Majerus, CEO, Synergy One Lending, Brian Vieaux, CEO, Finlocker, and Richard Grieser, VP of Marketing, Truv are going to share strategies and real examples of how you can fill the top of your funnel with a more informed and prepared borrower BEFORE loan application, during the application, and after closing. You’ll also hear firsthand how your technology can work with you to improve the borrower experience, as opposed to against you! Come join us on April 10 at 1 pm CT and invited your teams!
Loan officers are the lifeblood of any successful lender. Lenders who can recruit and retain talented producers will be able to ensure an active pipeline and exceed their revenue goals. Competition and compliance challenges in the current market demand that you set up a scalable recruiting function to target the right talent that aligns with your business. Join Total Expert on Wednesday, April 17 as we sit down with InGenius CEO Jeff Walton to discuss strategies for identifying, engaging, and converting loan officers who are the right fit for your business. Save your digital seat.
(A good place for longer term conference planning is to start is here, and click on “Conference List” for in-person events in the future.)
Today is the next episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. This Friday’s is co-hosted by VIP’s Mike Metz!
Angel Oak’s Non-QM webinar series will provide information on industry trends, strategies for finding non-QM borrowers, and actionable tips for growing your mortgage origination business. Join the panel of Non-QM experts on Tuesday, April 9th and take a detailed look at innovative solutions for self-employed borrowers, real estate investors, and other underserved borrowers. Non-QM Second Mortgage Options.
Join FHA Home Equity Conversion Mortgage (HECM) Policy Update Virtual Webinar sessions:
Session I will begin with an overview of the HECM section’s style and structure, followed by origination processing and credit policy. April 10th, 2-4:00 PM (Eastern).
FHA is offering In-Person, Free Underwriting Training in Denver, CO., April 10, 9:00 AM – 12:00 PM MST. Training will provide an overview of FHA underwriting procedures as outlined in FHA’s Single Family Housing Policy Handbook 4000.1 and addresses several industry-related frequently asked questions (FAQs). This training will also take an in-depth look at a variety of topics including credit, income, and asset (CIA) documentation; manual underwriting; automated underwriting systems (AUS); closing; and more.
FHA is offering In-Person, Free FHA Appraisal Training in Denver, CO., April 10, 1– 4 PM MST. Training will provide an overview of FHA appraisal protocol and updates to FHA appraisal policy as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training will also take an in-depth look at a variety of appraisal-related topics including property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements; and more.
Attend ICE’s complimentary webinar to learn all about the world of automated valuation models (AVMs). You’ll find out why AVMs are considered a credible, objective option for collateral risk management, how they can help your business (from lead generation and portfolio management to cost reduction and more), and when to use an AVM to address challenges in the current valuation landscape. The webinar hosted by ICE is “When, Why and How AVMs Drive Business Performance” and will be on Wednesday, April 10, at 2 p.m. ET. Register today.
Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT join Robbie Chrisman and Justin Demola for a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Next Wednesday features Kathy Kraninger, former director of the Consumer Financial Protection Bureau from 2018 to 2021, now CEO of the Florida Bankers Association.
Check out National MI’s upcoming April 2024 webinar sessions: Mastering LinkedIn for Mortgage Professionals – Session Four with Brynne Tillman, April 9th at 3pm E.T. P&L and Balance Sheet Analysis for Self-Employed Borrowers with Marianne Collins, April 11th at 1pm E.T. Conquering Call Reluctance for Loan Originators with Rebecca Lorenz, April 16th at 1pm E.T. Navigating Today’s Appraisal Process with Luke Tomaszewski, April 18th at 1pm E.T.
Join the MBA of NJ, in partnership with HUD for the 2024 HUD Housing Counseling Session, April 11th, 2-4PM at the Federal Reserve Bank of NY., Keys to Homeownership: Building Strategic Partnerships. Session II will cover policies for underwriting the property, closing, and endorsement requirements. April 11th, 2-4:00 PM ET.
Acquire a greater perspective from industry experts at American Mortgage Conference from April 15 – 17. Held in a new location this year at the Marriott Savannah Riverfront in Georgia. Co-hosted by ABA and the North Carolina Bankers Association, this premier conference is the only mortgage event that blends business and regulation to assure you are fully up to date and fully connected to crucial professional networks.
Capital Markets
After a quiet opening three days to the trading week, Thursday brought a couple of headlines that put some uncertainty into markets. There were geopolitical headlines pointing to ramping tensions in the Middle East with Iran warning Israel that retaliation was coming soon, and there were Fed headlines from Minneapolis Fed President Kashkari delivering hawkish remarks by saying that interest rate cuts may not be needed this year if progress on fighting inflation stalls, especially if the economy remains robust.
Both headlines triggered a flight to safety, rising bond prices and lowering yields. Traders increasingly see the Fed lagging behind other central banks when it comes to rate cuts. The latest weekly jobless claims report, up 221k for the week, showed a larger than expected number of claims.
Today brings the all-important March payrolls report. Headline payrolls (303) versus 170k expectations and 223k previously. The unemployment rate (3.8 percent) when it was seen ticking down 0.1 percent to 3.8 percent. Average hourly earnings (+.3) versus expectations of increases of 0.3 percent month-over-month and 4.1 percent year-over-year, and 0.1 percent and 4.3 percent in February. Later today brings February consumer credit and more scheduled Fed speakers. After the employment news Agency MBS prices are worse .125-.250 than Thursday’s close and the 10-year yielding 4.39 after closing yesterday at 4.31 percent; the 2-year is up to 4.71.
Jobs and Transitions
Highlands Residential Mortgage is thrilled to announce the hiring of Josh Moody as VP-Production Manager, and his team across various locations in Texas. Josh joins Highlands with an incredible reputation for driving strong production volume over the course of his 20+ year career having closed in excess of a billion dollars in mortgage loans during that time span. He has been recognized amongst the nation’s very best annually by the Scotsman Guide, Mortgage Executive Magazine, and National Mortgage News. Josh brings his extensive experience, innovative strategies, and a track record of success that aligns perfectly with Highlands’ commitment to excellence and our continued expansion efforts across the country. “Josh is a proven leader in our industry and an outstanding addition to our growing team at Highlands.” said, Brian Bennett, President. “I feel the experienced and trustworthy executive team at Highlands will enable us to offer a broader and more comprehensive product suite for our customers and allow our team to adapt rapidly to a constantly shifting mortgage environment,” said Josh Moody.
“At Evergreen Home Loans, we recognize the evolving needs of homeowners and strive to equip our Loan Officers with advanced tools and products to meet these demands.
A highlight of our offerings includes our specialized focus on innovative products and debt consolidation solutions, enabling our team to provide comprehensive financial strategies that benefit our clients. Joining Evergreen Home Loans means aligning with a team that values innovation, support, and a deep commitment to making a difference. If you are a Loan Officer or run a Branch looking to elevate your career, we invite you to explore the opportunities at Evergreen Home Loans. Visit our Careers page to learn more about how you can be part of a team that’s setting new standards in lending while fostering community growth and resilience.”
“Merchants Bank, a financial institution with $16 billion in assets and a top 5 warehouse lender, is seeking a Product Development Manager for its residential mortgage division. This position will play an instrumental role in expanding Merchants’ product offerings across the retail, wholesale, and correspondent channels. The ideal candidate has experience in developing and implementing non-Agency underwriting guidelines with an emphasis on Prime Jumbo and the Private Label Securitization market. Preferred candidates will have knowledge of the non-Agency market in areas such as underwriting guidelines, pricing, rating agency, third party review process, exception handling and credit. The candidate will be a key member of their Capital Markets team and will take the lead on building out their non-Agency prime jumbo product guidelines. This is an excellent opportunity for a self-starter with a committed and financially strong financial institution. For consideration, please send us your resume.”
Ready to scale your builder volume? Planet Home Lending lays the foundation for MLOs’ success with cutting-edge tools, exclusive offerings, and unique products tailored to new home builders and buyers. If your focus is on private builders crafting 20-300 homes annually, seize this opportunity. Reach out to SVP Doug Long at (407) 399-5505 and discover how Planet’s innovations can drive your career growth.
“AFR Wholesale® is on an exhilarating growth trajectory, and on the lookout for forward thinking Sales and Operations Leaders. Are you a modern mortgage leader with a knack for crafting strategies that turn customers into raving fans and elevate the experience beyond expectations? Then you’re exactly who we need to steer our expanding team towards unparalleled success. At AFR, we value leaders who are leveraging technology to battle the complexities of the industry but are also passionate about making homeownership dreams a reality. As an equal opportunity employer, we’re dedicated to fostering an inclusive and supportive work environment. Joining AFR means being part of a dynamic team that’s dedicated to helping families achieve their dream of homeownership. Don’t miss this exciting opportunity to be part of AFR’s growth journey and make a meaningful difference in the lives of others. Want to have a confidential discussion about your career? Email us.”
Cornerstone Home Lending, a division of Cornerstone Capital Bank (“Cornerstone”), announced the appointment of 25-year industry vet Michael A. Iorio as SVP of Strategic Partnerships where he will “spearhead the expansion of Cornerstone’s Homebuilder Partnership business across targeted builder accounts nationwide, with a focus on cultivating new relationships and enhancing service offerings.” Congratulations!
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Source: mortgagenewsdaily.com