Costco Mortgage Review: What Don’t They Do?

Costco, the well-known mega wholesaler that runs a chain of membership warehouses internationally, rolled out it’s so-called “Mortgage Services” back in 2011.

Now known as “The Mortgage Program,” their lending partners have funded nearly 200,000 mortgages worth more than $51 billion.

Costco already offers all types of insurance, a co-branded credit card, RV and boat loans, food and drink, jewelry, electronics, not to mention gigantic tubs of mayonnaise.

So what’s the deal here? Why did Costco get into mortgages? Could it really be that profitable?

Costco Is Marketing Mortgages, Not Actually Making Them

  • Just to be clear here, there is no Costco Mortgage
  • Nor is Costco actually originating mortgages on their own (they are NOT a lender)
  • They are simply marketing home loans via their lending partners
  • Because they have a massive stable of customers who are or want to become homeowners

Let me start by saying there is no “Costco Mortgage.” It does not exist.

What Costco’s really doing is marketing a mortgage product on behalf of another company, formerly First Choice Loan Services Inc., and now CrossCountry Mortgage.

CrossCountry actually oversees a group of preferred lenders, including national depository banks and mortgage bankers, such as NASB Home Loans and Consumer Direct Mortgage.

Apparently, Costco doesn’t get paid for the loans that close or receive any sort of loan origination fee, but there’s obviously some financial agreement in place for the partnership.

Costco initially partnered with First Choice Loan Services Inc., a Berkshire Bank subsidiary, but have since switched to CrossCountry Mortgage.

The lender is essentially leveraging the warehouse chain’s loyal and enormous customer base.

That means we should be more concerned about who CrossCountry Mortgage is, which is the company that’s really doing the mortgage lending here, including taking the loan application and underwriting, processing, and funding it.

CrossCountry Mortgage is based out of Brecksville, Ohio, and has been around since 2003. They have 200 branches nationwide and are licensed in all 50 states.

Despite only being around since 2003, they’ve grown exponentially and now have a team of 3000+ employees that produce $14+ billion annually. Thanks Costco!

They are a direct lender that offers all types of home loans, including conventional stuff backed by Fannie Mae and Freddie Mac, along with government loans like FHA and VA loans.

Costco apparently oversees the company (and the other lenders in The Mortgage Program), holding them to rigorous standards to ensure they protect their good name and their own customers, though they don’t endorse them or hold themselves responsible.

Costco Lender Partners Now Offer Jumbo Mortgages

  • Early on Costco didn’t offer jumbo loans
  • Which is ironic given the company’s typically economy-sized offerings
  • But you can now get anything from a conforming loan to a jumbo loan
  • Or an FHA loan, USDA loan, VA loan, and even a renovation loan

Ironically, when the Costco Mortgage program first started they only seemed to offer conventional loans, FHA loans, and VA loans.

There was no mention of jumbo loans, despite Costco specializing in all things jumbo, like massive tubs of mayonnaise.

So if you needed a big home loan, you’d be out of luck. But times have changed and CrossCountry now advertises jumbo loans up to $5 million dollar loan amounts.

Anyway, aside from purchase money mortgages and refinance loans, they also offer renovation loans, including the popular FHA 203k loan and the Fannie Mae HomeStyle Renovation Mortgage.

And they’re all about streamline refinances, such as the FHA streamline refinance and the VA IRRRL refinance.

Older Costco members (62+ years of age) might be interested in their reverse mortgage program as well.

Current Participants in The Mortgage Program from Costco

  • CrossCountry Mortgage
  • (formerly eRates Mortgage)
  • NASB Home Loans
  • Strong Home Mortgage
  • Consumer Direct Mortgage (a division of FirstBank)
  • NBKC Bank
  • Mutual of Omaha Mortgage

Former Participants in the Costco Mortgage Program

– Bank of Internet USA
– Berkshire Bank
– CapWest Home Loans
– J.G. Wentworth Home Lending, LLC
– PennyMac Loan Services, LLC

Costco Mortgage Works More Like a Mortgage Lead Service

  • It’s more of a lead acquisition program than it is a unique home loan lending program
  • Costco is just playing matchmaker by connecting their customers with a mortgage lender
  • Similar to what they do with most of the products they sell on behalf of manufacturers
  • But they do offer some special benefits for Costco members

In a way, the Costco Mortgage program works kind of like a mortgage lead service.

Costco members enter in their personal details, including property and loan information, and are then presented with a number of mortgage rate quotes from CrossCountry Mortgage and other affiliates.

If you happen to like their rates, your lender fees will also be discounted because Costco caps them.

In terms of financing options, Costco has nothing to do with what is and isn’t offered. They don’t set the minimum down payment or get involved with any other underwriting guidelines.

The same goes for mortgage rates – Costco doesn’t set them or have anything to do with them, but they say they’re “competitive.”

As noted, they simply let CrossCountry Mortgage and other lenders advertise their loan products to their client base.

Costco Mortgage Lender Fees Are Capped

  • Costco provides reduced lender fees for its members
  • Which includes things like application, underwriting, and processing
  • But not third-party costs like appraisal and title/escrow fees
  • Executive members only pay lender fees of $350 or less
  • Gold star members pay lender fees of $650 or less

One plus to the program is that lender fees are capped for Costco members, with Executive Members paying $350 or less and Gold Star Members paying $650 or less.

Be sure to compare this to standard lender fees, which can range from zero to a very high number depending on the circumstances.

Also look beyond lender fees and consider the mortgage interest rate along with any closing costs charged.

While we know there are some potential savings here, it really depends what the interest rate is that goes along with those fees. Closing costs can’t be viewed in a vacuum, we need context.

Costco Mortgage Rates

Remember, Costco Mortgage doesn’t exist, so that means there aren’t “Costco Mortgage Rates.”

Instead, there are mortgage rates offered by lenders participating in The Mortgage Program for Costco.

As such, their rates will likely vary from lender to lender, and by unique loan scenario.

The good news is you should be able to get quotes from multiple lenders in one go, which is sort of like using a mortgage broker.

Then you can compare these rates and determine who to use, knowing they all cap lender fees since they’re part of the Costco program.

Just remember to consider lenders outside the Costco program as well to really see where they stand.

Costco Mortgage Reviews

On Trustpilot, The Mortgage Program for Costco Members currently has a 4.8-star rating out of 5 based on nearly 4,000 customer reviews.

That is an excellent rating, and a generally good sign that customers are happy with the lenders Costco has partnered with.

As noted, they work with a handful of lenders, so you may want to check out their reviews separately as well.

For example, CrossCountry Mortgage has a very solid rating of 4.97 out of 5 stars on Zillow based on nearly 10,000 reviews.

And NBKC Bank has a 4.93-star rating out of 5 on Zillow based on 9,600+ reviews.

Similarly, NASB Home Loans has a 4.95-star rating out of 5 on Zillow based on more than 1,000 reviews.

Be sure to check out the reviews of the lender partner you eventually consider to see where they stand.

Should You Use Costco to Get a Mortgage?

  • Costco is yet another option to consider when searching for a mortgage
  • But I wouldn’t rely on Costco alone to find the perfect home loan
  • If you don’t shop around elsewhere you won’t know if it’s a good deal or a bad one
  • Always take the time to obtain multiple quotes to ensure you properly comparison shop

Back in the day, there was one thing that stood out to me in the fine print that I didn’t love.

This is actually no longer on their website, but at one point they noted that lenders are “held to very strict pricing and fee standards which limit their ability to negotiate a lower fee or rate.”

To me, that told customers to just accept the rate they were given because it was already rock bottom.

While it’s not there anymore, and hopefully that’s no longer their position, I always recommend negotiating your mortgage rate, no matter how good or low it might be. There’s always room to go lower or to go elsewhere.

All in all, it appears as if Costco is just another avenue to go down while shopping for a mortgage, which isn’t necessarily a bad thing.

More options are generally a good thing.

I certainly wouldn’t blindly rely on Costco to find you the best mortgage out there. If you’re a Costco member, sure, give them a chance to beat other lenders.

But don’t just contact Costco and call it a day. You should also shop around beyond Costco to make sure you exhaust all lender options.

This includes checking out other online lenders, visiting a local bank or two, a credit union, and speaking with a mortgage broker or three. Don’t cut corners!

Getting a mortgage is a big deal, and even a slight change in interest rate can mean thousands in savings or costs over the life of your loan.

Pros and Cons of Costco Mortgage

The Good

  • Home loans are originated by CrossCountry Mortgage, or a similarly high-rated mortgage lender
  • Can apply online or at a brick-and-mortar branch
  • They offer a digital mortgage application powered by Blend
  • Lots of loan types to choose from including jumbos
  • Lender fees are capped at $350 for Executive Members and $650 for Gold Star Members
  • Licensed in all 50 states and the District of Columbia
  • More than 92% of Costco members rated The Mortgage Program as excellent, very good, or good

The Maybe Not Great

  • The mortgage doesn’t actually come from Costco (just their lender partner CrossCountry Mortgage or another affiliate)

Read more: What mortgage rate can I expect?

(photo: greenwenvy08)


How Lenders Determine Your Mortgage Interest Rate

Determining Your Mortgage Interest RateWith the cost of homes steadily rising, it wouldn’t be surprising if people were looking for a way to save even the smallest amount of money on their home purchase. And between the down payment, closing costs, inspections, PMI, and more, the cost of a home can quickly add up.

Paying interest on your mortgage isn’t avoidable, but you don’t have to feel like you don’t have any control over how much you pay. As you start the homebuying process, you’ll want to consider what factors into the total cost of your loan. The reason being you can improve your chances of saving some cash, especially when it comes to your interest rate.

To ensure you can get the best deal possible, it would be beneficial to understand how mortgage interest works as well as how lenders determine your mortgage interest rate.

How does mortgage interest work?

Mortgage interest, which is a fee charged by a lender for lending money to a borrower, will vary from person to person and lender to lender. Every month when you make your mortgage payment, mortgage interest will account for a portion of that payment. In fact, a majority of the payment is used to pay down interest, while only a small portion is used to pay down the principal balance, or the loan amount.

However, as you continue to make loan payments, and the principal balance decreases, your interest will also decrease. With this change in the amount of interest that is to be paid, more of your payment will go towards the principal balance. With the mortgage interest rate having an impact on the total cost of the loan and your monthly payments, a lower interest rate is better.

What factors affect my mortgage interest rate?

Your lender determines your mortgage interest rate. They do so using a variety of factors that will ultimately help them get a clear picture of your finances and your ability to repay the loan.

Lenders will use seven different factors to determine the mortgage interest rate:

  • Credit score: Number used to confirm a consumer’s creditworthiness.
  • Home location: State of home.
  • Loan type: Conventional, VA, FHA, or other special loan programs.
  • Loan amount: The total cost of the home and closing costs minus the down payment.
  • Loan term: The time borrowers have to repay their loan.
  • Down payment: A percentage of the loan amount paid at closing.
  • Type of interest rate: Fixed interest rate stays the same, while adjustable interest rate changes based on the market.

Using the abovementioned factors, lenders will be able to determine your interest rate. Every lender will offer a range of mortgage interest rates, so before applying, you may be able to confirm the rates offered to get a better idea of what the total cost of your mortgage might be.

For example, if a lender’s rates fall between 3.40% and 9.22%, your rate will be between 3.40% and 9.22%. Using a mortgage calculator, you can calculate the cost of your loan and your monthly payments. Of course, if a lender’s rates are too high, you have the option to shop around and look into other lenders who offer something more affordable for your budget.

Next to buying a car, buying a home is likely one of the largest purchases you will make in your lifetime. You might even buy more than one, but as a first-time homebuyer, you may not be 100% sure how to get the best deal. And considering how much people pay in interest, you want to be sure you are getting the best deal.


Why Joe Biden and Kamala Harris Haven’t Paid Off Their Mortgages

Posted on November 11th, 2020

You’d think presumably wealthy politicians like Joe Biden and Kamala Harris would own their homes free and clear. But that’s not the case, per their 2019 tax returns.

Both individuals disclosed their returns on the website, and each paid tens of thousands of dollars in mortgage interest last year.

But why would they pay interest if they had the means to simply pay off the loans, a luxury most other Americans can’t afford to do? The reason is simple.

Mortgage Debt Is the Cheapest Debt Out There

  • Joe and Jill Biden paid $15,796 in home mortgage interest in 2019
  • Kamala Harris and Douglas Emhoff paid $32,041 in home mortgage interest in 2019
  • There’s a good chance both parties could have paid off their mortgages in full
  • But why bother if you can earn a higher rate of return for your money elsewhere?

Why Biden and Harris and so many other rich homeowners choose to carry mortgages as opposed to paying them off has to do with how cheap they are relative to virtually everything else.

Ultimately, it doesn’t get much better than home loan debt, especially with mortgage rates in the 1-2% range at the moment. What other type of loan offers such cheap financing?

This is why I refer to mortgages as good debt, especially since you have the opportunity to write off the interest in many cases.

On top of that, the low rate of interest makes it easy for savvy homeowners to beat the rate of return on their mortgage by investing elsewhere.

Simply put, your mortgage rate is your rate of return if you choose to prepay your home loan ahead of schedule.

Any extra dollars put toward your loan essentially earn whatever your mortgage rate is, so if it’s 2.75%, you’re earning 2.75% if you choose to pay any extra each month or year.

Unfortunately, the lower mortgage rates go, the less it makes sense to prepay the mortgage because you’re earning a lower and lower rate of return.

Interestingly, we often hear feel-good stories in the news about everyday Joes paying off their mortgages in just 5-10 years. Or even less time. But why? What’s the rush exactly?

Getting Rid of the Mortgage Is a Psychological Victory

  • The obsession with paying off the mortgage is a psychological one
  • Often times there are better uses for your money than prepaying your home loan
  • An alternative might be to pay off other high-interest rate debt like credit cards
  • Or to invest any extra funds in the stock market, mutual funds, or a general retirement account

Sure, it’s great not to have to make a monthly mortgage payment, but that doesn’t mean it’s the best move financially to prepay your home loan.

Often, the desire to pay off the mortgage has more to do with human psychology than it does math.

It probably feels good to pay off any debt, especially a large sum of money such as a mortgage.

But as noted, it’s cheap debt and you might be better served putting extra dollars elsewhere.

Apparently, this is what Joe Biden and Kamala Harris do, and Obama did the same based on his old tax returns.

In the past, I reported that Joe Biden had been a refinancing machine, constantly taking advantage of cheaper financing by way of rate and term refinance to save money on his home loans.

One of the richest men in the world, Warren Buffett, has also been a proponent of carrying a mortgage for the same reasons.

You get to lock in an ultra-low mortgage rate for three decades and watch the payment become effectively cheaper over time as inflation erodes the value of the dollar.

It doesn’t get much better than that, especially when you might be able to write off the interest too.

This explains why Joe Biden, Kamala Harris, Warren Buffett, and even Facebook founder Mark Zuckerberg choose to hold mortgages when they can easily pay them off.

Read more: Should I pay off my mortgage early?

(photo: Elvert Barnes)

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.


Mortgage and refinance rates today, Feb. 27, and rate forecast for next week

Today’s mortgage and refinance rates 

Average mortgage rates fell a little or held steady yesterday (Friday). Unfortunately, it was the only glimmer of light in a gloomy week that saw rises — including a sharp one — on every other day.

Right now, there seems to be no end in sight to these rate increases. Of course, we’re almost bound to see an occasional fall, because that’s how markets work. But sustained downward movement appears unlikely, and I’m expecting that mortgage rates will keep rising next week. Read on for more details.

Find and lock a low rate (Feb 27th, 2021)

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.062% 3.065% -0.13%
Conventional 15 year fixed 2.587% 2.596% -0.11%
Conventional 20 year fixed 2.875% 2.882% -0.13%
Conventional 10 year fixed 2.474% 2.493% -0.13%
30 year fixed FHA 2.87% 3.549% -0.1%
15 year fixed FHA 2.539% 3.121% -0.16%
5 year ARM FHA 2.5% 3.213% -0.03%
30 year fixed VA 2.383% 2.555% -0.36%
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA 2.5% 2.392% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock a low rate (Feb 27th, 2021)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

If I were still floating, I’d lock my rate right away. Of course, there’s always a possibility of rates falling back. But that currently looks a slim one. And the chances of continuing rises seem much stronger. Read on to discover why.

So my recommendations remain:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • LOCK if closing in 30 days
  • LOCK if closing in 45 days
  • LOCK if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Compare top lenders

What’s moving current mortgage rates

The forces that are driving rates higher are the same ones we reported last week. The vaccination program and dwindling COVID-19 infection rates are creating optimism that an economic recovery will be upon us sooner than many expected. Indeed, we’re already seeing some better economic data. And a better economy goes hand-in-hand with higher rates.

But what we last week listed as a secondary factor may have now turned into the primary one. And that’s the fear of future inflation.

Unfortunately, such fears also tend to push mortgage rates higher.

Fear of inflation

And you can see why. Imagine you’re an investor who buys a mortgage bond (a mortgage-backed security or MBS) with a fixed rate of 3% for 30 years. That means your yield (income) is fixed, too.

And now imagine how sick you’d feel if next year (or in 10 years’ time) serious inflation took hold, and you were suddenly seeing inflation and interest rates soaring up to 10% or even higher — while you were still getting 3%.

This isn’t impossible fiction. Between 1978 and 1990, the average rate for a 30-year, fixed-rate mortgage never dipped below 10%, measured annually. And, in October 1982, that rate peaked at 18.45%, according to Freddie Mac’s archives.

It’s not hard to imagine how petrified investors are of having their money tied up in fixed-rate securities if there’s any likelihood of future inflation.

Still a slim possibility of falls

Of course, nothing’s certain in markets. And some disastrous news could come out of nowhere and kill both optimism and its accompanying fear of inflation.

Indeed, earlier this week, The New York Times reported on a new variant of SARS-CoV-2 (the virus that causes COVID-19) that’s currently circulating in New York City. And some scientists worry that it might prove more resistant to current vaccines than existing strains are.

That research is yet to be peer-reviewed. And it may turn out to be nothing. But it’s an example of the sort of news that could turn markets and mortgage rates around. The trouble is, the chances of such an event arising before your closing date don’t seem high.

Economic reports next week

Next Friday brings the official, monthly, employment situation report. And that’s arguably the most important economic data of all at the moment. So markets may be moved by those figures

They’re less likely to be affected by the other reports this week. However, any data can have an impact if it varies significantly from expectations.

Here are next week’s main economic reports:

  • Monday — January construction spending. Also February auto sales. Plus the February manufacturing index from the Institute for Supply Management (ISM)
  • Wednesday — February ISM services index
  • Thursday — Weekly new claims for unemployment insurance.
  • Friday — February employment situation report, including nonfarm payrolls and the unemployment rate.

Watch out, too, for top Federal Reserve officers’ speaking engagements. The Fed’s walking a fine line at the moment between keeping the recovery on the road and not stoking inflation fears. So investors are paying close attention to their remarks.

Find and lock a low rate (Feb 27th, 2021)

Mortgage interest rates forecast for next week

Unfortunately, I can only predict rising rates this week. The pace of increases may slow and we might even see some small and occasional falls. But, overall, it’s hard to imagine the recent trend reversing.

Mortgage and refinance rates usually move in tandem. But note that refinance rates are currently a little higher than those for purchase mortgages. That gap’s likely to remain constant as they change.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.

Your part

But you play a big part in determining your own mortgage rate in five ways. You can affect it significantly by:

  1. Shopping around for your best mortgage rate — They vary widely from lender to lender
  2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
  3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
  4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
  5. Choosing your mortgage carefully — Are you better off with a conventional, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, it’s not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2020

Compare top lenders

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.


Today’s 30 Year Mortgage Rates, February 17, 2021: Rates higher –

30-year fixed mortgage interest rates

The average rate for a 30-year fixed-rate mortgage is 2.94 percent, climbing 12 basis points over the previous seven days. One month ago, the average interest rate on a 30-year mortgage was lower, at 2.90 percent. Today’s 30-year rate is 119 bps below the average annual rate in 2019, making it a great time to get a fixed-rate mortgage.

At today’s average interest rate, you’ll pay principal and interest of $418.37 for every $100,000 you borrow. That’s up $6.41 from last Wednesday. Compared to a month ago, that’s $2.14 higher.

View today’s daily mortgage rates articles to understand how other rates moved.

30-year fixed refi rates

Today’s average 30-year fixed refinance rate is 2.99 percent, an increase of 13 basis points over the past week. A month ago, the average rate on a 30-year mortgage was 2.95 percent.

At the current average rate, you’ll pay principal and interest of $421.06 for every $100,000 you borrow. Compared to last week, that’s $6.97 higher. Compared to a month ago, that’s $2.15 higher.

Bankrate average annual 30-year fixed mortgage rate, 2008-2019

Year Average 30-Year Fixed Annual Rate
2008 6.23%
2009 5.38%
2010 4.86%
2011 4.65%
2012 3.88%
2013 4.16%
2014 4.31%
2015 3.99%
2016 3.79%
2017 4.14%
2018 4.70%
2019 4.13%

30-year fixed mortgage vs. 15-year fixed mortgage

The main downside of a 30-year fixed-rate mortgage is the amount of interest you’ll pay. Mortgage rates are typically higher for 30-year loans than 15-year loans. Although your monthly payments will be lower for a 30-year loan, you’ll pay much more interest over the life of the loan.

For example, with a 15-year fixed-rate mortgage, you’ll slash your repayment time in half and save significantly on interest in the process. Compare how much interest you’ll pay on 15-year and 30-year loans with Bankrate’s 15-year or 30-year fixed mortgage calculator.

Mortgage lock recommendations

A rate lock guarantees a lender will honor a specified interest rate at a specific cost for a set period. The benefit of a mortgage rate lock is that it protects you from market fluctuations. It also puts pressure on borrowers to make sure they close on homes before the rate-lock period expires. For example, if your lender locks in your rate at 3.75 percent for 45 days and rates jump up to 4 percent within that period, you’ll still get your loan at the lesser rate.

If they choose not to lock in your rate, you’ll have a “floating” rate. That’s not a bad strategy when interest rates are generally falling, but it could be costly in a rising rate environment. A rate lock is a must for risk-averse people who are seeking a mortgage. It’s a good idea to ask for a 45-day lock at a minimum; 60 days is even better.

Searching for a mortgage lender?

  • Accelin Loans Mortgage Review
  • Garden State Home Loans Mortgage Review
  • HomePlus Mortgage Review
  • Methodology

    The rates you see above are Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “ Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

    To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages”.


Is a Long or Short Term Mortgage Better for your Finances?

Image Source: Pexels

Choosing the right mortgage is an integral part of the home buying process, and there are many options for you to consider. One of which is choosing between a 15-year or 30-year mortgage term. Both of these options have their positives and negatives, which we’ll discuss in this article. What you choose will impact the overall price of your home throughout its lifetime.

What is a Mortgage Term?

The most significant difference between a long and short-term loan is how payments and interest add up over time. Current rates will also impact the affordability of your mortgage interest rate, but 15-year terms are typically less expensive overall because you won’t pay as much interest. For a 30-year mortgage rate, the opposite is true.

When first deciding which term is right for you, think about your budget and income prospects. For example, if you’re borrowing $200,000 towards the purchase of a $600,000 home and choose a 15-year mortgage at a rate of 5.00%, your monthly payments would be $3,163.17 a month. However, you would only pay $169,371 in interest. 

If we use the same borrowing amount on the same home but use a 30-year mortgage term at a rate of 5.50%, your monthly payments would be $2,271.16, which is significantly less. However, you would pay a total of $417,616 in interest. That’s 2.4 times as much interest.

When to Choose a 15-Year (Short Term) Mortgage Term

On average, your monthly payments will be higher on a short-term mortgage, but you’ll pay less in interest. When opting for a 15-year term, it’s essential to carefully think about your finances and ensure you can handle the higher monthly cost. 

15-year terms work better under a fixed interest rate because you’ll know exactly how much you’ll pay over the loan’s lifetime. If you choose an adjustable-rate, you could run the risk of having a mortgage beyond your means. A percentage or two could add hundreds of dollars to the loan’s monthly payment, so choose the safest route for your term.

Another thing to consider is your job situation. While we can’t predict whether we’ll be laid off or an economic downturn will occur, you can minimize your risk of unemployment by staying in one position long-term. To avoid financial trouble, you could give your lender a higher down payment or opt to save more than spend. 

When to Choose a 30-Year (Long Term) Mortgage Term

A 30-year mortgage term is often seen as the safer option because you have a little more wiggle room when it comes to saving. You’ll also receive more in tax benefits because you can claim mortgage deductions longer. Mortgage tax deductions could be beneficial for homeowners that retire while they’re still paying off their loan.

30-year mortgages have the option of prepayment, whereas 15-year terms don’t. You have the opportunity to add an extra $50 to your payments each month which will help you pay down the mortgage faster without straining your budget. Some homeowners on a 30-year term will use bi-weekly payments instead of monthly to shave off as much as they can. 

Long-term mortgages are best for families who plan to stay in their homes for an extended period. While you aren’t required to pay down your mortgage before selling, having a plan to stay for 30+ years could also impact which term you choose.

Weighing the Pros and Cons

Before choosing your mortgage term, it’s best to look beyond the financial picture. While a 15-year term will pay off your home faster, you could be sacrificing other financial goals. However, a 30-year term will cost you more in the long-run, but you have the option of paying it down faster and focusing on other investments. 

When it comes down to it, choose whichever term works for your budget and lifestyle.


Today’s mortgage rates see highest mark since June 2020 | February 26, 2021 – Fox Business

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Check out the mortgage rates for February 26, 2021, which are trending up from yesterday. (iStock)

Based on data compiled by Credible Operations, Inc., NMLS Number 1681276, mortgage rates have risen since yesterday.

  • 30-year fixed mortgage rates: 3.125%, Up from 3.000%, +0.125
  • 20-year fixed mortgage rates: 3.125%, Up from 2.875%, +0.250
  • 15-year fixed mortgage rates: 2.500%, Up from 2.250%, +0.250

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

To find the best mortgage rate, start by using Credible, which can show you current mortgage and refinance rates:

Browse rates from multiple lenders so you can make an informed decision about your home loan.

Looking at today’s mortgage refinance rates

Today’s mortgage refinance rates have risen since yesterday, with 30-year fixed mortgages jumping 375 basis points overnight. The average rates for all loan types surpassed 3%, and stopping at 3.083% after holding steady all week. If you’re considering refinancing an existing home, check out what refinance rates look like:

  • 30-year fixed-rate refinance: 3.375%, Up from 3.000%, +0.375
  • 20-year fixed-rate refinance: 3.375%, Up from 3.000%, +0.375
  • 15-year fixed-rate refinance: 2.500%, Up from 2.375%, +0.125

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

A site like Credible can be a big help when you’re ready to compare mortgage refinance loans. Credible lets you see prequalified rates for conventional mortgages from multiple lenders all within a few minutes. Visit Credible today to get started.

Current mortgage rates

Mortgage interest rates continue to soar, with the average 30-year fixed mortgage rate up to 3.125%, which surpasses highs not seen since June 2020. Averages rates across all loan types continue to push toward 3%.

Current 30-year mortgage rates

The current interest rate for a 30-year fixed-rate mortgage is 3.125%. This is up from yesterday.

Current 20-year mortgage rates

The current interest rate for a 20-year fixed-rate mortgage is 3.125%. This is up from yesterday.

Current 15-year mortgage rates

The current interest rate for a 15-year fixed-rate mortgage is 2.500%. This is up from yesterday.

You can explore your mortgage options in minutes by visiting Credible to compare current rates from various lenders who offer mortgage refinancing as well as home loans. Check out Credible and get prequalified today, and take a look at today’s refinance rates through the link below.

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

How mortgage rates have changed

Today, mortgage rates are up compared to this time last week.

  • 30-year fixed mortgage rates: 3.125%, up from 2.750% last week, +0.375 
  • 20-year fixed mortgage rates: 3.125%, up from 2.750% last week, +0.375
  • 15-year fixed mortgage rates: 2.500%, up from 2.125% last week, +0.375

Rates last updated on February 26, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

If you’re trying to find the right rate for your home mortgage or looking to refinance an existing home, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

How to get low mortgage rates

Current mortgage and refinance rates are affected by many economic factors, like unemployment numbers and inflation. But your personal financial history will also determine the rates you’re offered.

If you want to get the lowest possible monthly mortgage payment, taking the following steps can help you secure a lower rate on your home loan:

It’s also a good idea to compare rates from different lenders to find the best rate for your financial goals. According to research from Freddie Mac, borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote — and an average of $3,000 by comparing five rate quotes.

Credible can help you compare current rates from multiple mortgage lenders at once in just a few minutes. Are you looking to refinance an existing home? Use Credible’s online tools to compare rates and get prequalified today.

Mortgage interest rates by loan type

Whether you’re a first-time homebuyer shopping for a 30- or 15-year mortgage, or you’re looking to refinance an existing home, Credible can help you find the right mortgage for your financial goals.

Before you fill out your mortgage application, check out these loan rates, which you’ll be able to compare by annual percentage rate (APR) as well as interest rate:

Mortgage refinance:

Home purchase:


A Guide to Property Taxes in 2021: States With the Highest (and Lowest) Rates

With tax season upon us, it seems like a good time to check what homeowners pay in property taxes—and a new survey confirms that where you live makes a huge difference in how much you’ll have to cough up.

According to researchers at WalletHub, which analyzed tax data on all 50 states and the District of Columbia, the average American household pays $2,471 on real estate property taxes. But that can vary widely. And just in case you thought the country wasn’t polarized enough already, political leanings can often be an indicator of state tax rates: “Blue states” (defined by WalletHub as how they voted in the 2020 presidential election) generally pay higher property taxes than “red states.”

As for the state with the highest property tax rate, that’s New Jersey, where residents pay a rate of 2.49%, which means that people living in a median-priced home in the area ($335,600) will pay Uncle Sam $8,362 in property tax per year.

In fact, the five states with the highest tax rates are all east of the Mississippi.

Meanwhile, people in Hawaii are blessed with the lowest real estate tax rate of 0.28%. So even though a median-priced home in the area is expensive ($615,300), homeowners end up paying only $1,715 in taxes per year. In Alabama, the state with the second-lowest tax rate (0.41%) as well as bargain-basement median home prices ($142,700), you’ll pay even lower property taxes of just $587 per year.

Curious how your state stacks up? Below are the top 10 states with the highest—and lowest—property taxes:

States with the highest property taxes

  1. New Jersey: $8,362 (2.49%)
  2. Illinois: $4,419 (2.27%)
  3. New Hampshire: $5,701 ( 2.18%)
  4. Connecticut: $5,898 (2.14%)
  5. Vermont: $4,329 (1.90%)
  6. Wisconsin: $3,344 (1.85%)
  7. Texas: $3,099 (1.80%)
  8. Nebraska: $2,689 (1.73%)
  9. New York: $5,407 (1.72%)
  10. Rhode Island: $4,272 (1.63%)

States with the lowest property taxes

  1. Hawaii: $1,715 (0.28%)
  2. Alabama: $587 (0.41%)
  3. Colorado: $1,756 (0.51%)
  4. Louisiana: $890 (0.55%)
  5. District of Columbia: $3,378 (0.56%)
  6. South Carolina: $924 (0.57%)
  7. Delaware: $1,431 (0.57%)
  8. West Virginia: $698 (0.58%)
  9. Nevada: $1,614 (0.60%)
  10. Wyoming: $1,337 (0.61%)

Why are my property taxes so high—or low?

While property taxes may be high in some states, lower home prices may offset this tax burden. For example, Illinois—which has the second-highest tax rate, at 2.27%—has a low median home price of only $194,500, resulting in annual property taxes hovering around $4,419. That’s less than you’d pay in other states with lower tax rates (like New Hampshire and Connecticut).

So what can you do if you live in a state with high tax rates and high home prices?

“Unfortunately, living in the Northeast has become a very expensive proposition if you want to own properties,” says Ralph DiBugnara, president of Home Qualified and senior vice president at Cardinal Financial. “But homeowners should be aware of what they can write off when it comes to homeownership, especially in these high-tax areas.”

In other words, in high-tax-rate states with pricy properties, the good news is that you are allowed to write off (or deduct) up to $10,000 of your property taxes. Just remember that this may not cover all of your property taxes; it depends on how much your home is worth.

“If your home is worth $500,000 or below, you should be able to write off all of your property taxes,” says DiBugnara. “But if your home value is above $500,000 and in a state with tax rates around 2%, most of the time this is not enough of a write-off to cover all of your property taxes.”

This problem is typical in Northeast states. Still, any write-off is better than none, right?

To help with your overall tax bill, you can also write off mortgage interest as a tax deduction for a balance of up to $750,000. And if you buy or sell a home in a tax year, in most cases you will be able to write off transfer taxes—local or state taxes charged in any real estate transaction.

Green energy sources for homes that are powered by solar are also tax-deductible. You also have the right to appeal the amount of your property taxes if you think the assessed value of your home is too high.

Also weigh what your property taxes go toward when deciding where you want to live.

“People should definitely consider property taxes when they move, alongside information about the local services that those property taxes pay for,” says Stephanie Leiser, lecturer in public policy at the Ford School at the University of Michigan. “They should consider the ‘value for the dollar’ they would get from paying property taxes.”

For example, in some communities, services like trash pickup will be covered by property taxes, while in others, there will be a separate fee.

“It’s also important to keep the overall tax picture in mind when deciding where to move,” adds Leiser. “Low property taxes may sound great, but they may be offset by higher local sales taxes or other taxes and fees.”


22 Cities Where Home Appreciation Is Spiking

Couple looking at their old home
Photo by Hurst Photo /

Extreme demand for homes is pushing home values up at a rate not seen since before the Great Recession, a new Zillow report finds.

Several trends — including new millennial homebuyers, record-low interest rates, trends related to the coronavirus pandemic and the relatively small pool of homes for sale — have converged to heat up the market. The hot sellers’ market is a contrast to flat growth in rental prices nationally, as we reported in “Rent Prices Have Dropped in These 9 Formerly Hot Markets.”

The Zillow Home Value Index rose 9.1% from January 2020 to January 2021, the report says. Year-over-year home value growth hasn’t been this high since June 2006.

That rate may even pick up a bit: Zillow economists expect values to rise 10.1% from January 2021 to January 2022.

The demand has shortened the length of time that homes stay on the market, to a median of just 18 days as of mid-January. Compare that to 46 days at the same time last year and the year before.

A demographic bomb is a factor in the hot market. Millennials — defined by Zillow as Americans ages 25-34 — are entering their peak homebuying years. The number of these millennials increased by 12% — or, about 4.9 million people — between 2010 and 2020.

The generation’s size adds to the housing demand. Also, younger buyers are less likely than older ones to sell a previous home when they buy, which is expected to help keep the pool of homes for sale tight.

Government-stoked low mortgage rates — averaging 2.74% for a fixed-rate 30-year mortgage in January — are driving demand as buyers try to seize the opportunity to either pay less for a home or buy a more expensive one than they otherwise could.

Says Zillow:

“An extraordinary number of home buyers, with budgets supercharged by rock-bottom mortgage interest rates, are competing over a limited supply of homes for sale.”

The pandemic is a final factor. Many workers are now clocking in virtually instead of at the office, driving some to seek larger homes and others to move to smaller, more-affordable markets, Zillow says.

While home values increased in all of the 50 largest metro areas in the U.S. from January 2020 to January 2021, some have seen steeper growth rates than others.

Here are the 22 major markets where home values grew 10% or more, along with their typical home price and their home price growth rate:

  • Phoenix: $335,975 (up 17.1% from January 2020 to January 2021)
  • San Jose, California: $1,314,799 (up 14.2%)
  • Austin, Texas: $384,446 (up 13.7%)
  • Salt Lake City: $436,390 (up 13.7%)
  • San Diego: $689,361 (up 13.5%)
  • Seattle: $594,223 (up 12.8%)
  • Tampa, Florida: $257,499 (up 12.8%)
  • Milwaukee: $219,381 (up 12.1%)
  • Cincinnati: $208,352 (up 12%)
  • Providence, Rhode Island: $357,761 (up 12%)
  • Riverside, California: $433,226 (up 11.7%)
  • Buffalo, New York: $193,583 (up 11.4%)
  • Sacramento, California: $478,817 (up 11.3%)
  • Indianapolis: $204,141 (up 11.3%)
  • Memphis, Tennessee: $174,063 (up 11.3%)
  • Cleveland: $176,069 (up 11.1%)
  • Charlotte, North Carolina: $265,397 (up 10.9%)
  • Columbus, Ohio: $234,276 (up 10.8%)
  • Philadelphia: $277,775 (up 10.6%)
  • Kansas City, Missouri: $227,059 (up 10.6%)
  • Pittsburgh: $178,282 (up 10.4%)
  • Detroit: $198,979 (up 10.3%)

If you’re in the market for a new home or refinancing for your existing home, check out the mortgage rate comparison tools in Money Talks News’ Solutions Center.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


Mortgage rates climb higher to 2.97%

The average mortgage rate for a 30-year fixed loan is now just 3 basis points away from 3%, after a 16 basis point jump last week pushed mortgage rates to 2.97%, according to Freddie Mac’s Primary Mortgage Market Survey.

The average mortgage rate hasn’t risen this high since the end of July 2020, but Sam Khater, Freddie Mac’s chief economist, noted higher rates signals an economy slowly regaining its footing.

“Though rates continue to rise, they remain near historic lows,” said Khater. “However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.”

Rising rates didn’t slow new home sales in January though, after the U.S. censes bureau reported sales of new single-family houses in January were at a seasonally adjusted annual rate of 923,000 — 4.3% above December’s rate.

“However, recent increases in mortgage interest rates threaten to exacerbate existing affordability conditions. Builders are exercising discipline to ensure home prices do not outpace buyer budgets,” said National Association of Home Builders Chief Economist Robert Dietz.

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While purchase demand hasn’t shown any sign of decline, the refi wave is showing more vulnerability. As rates rose, refi activity fell 11% according to data from the Mortgage Bankers Association.

For many potential borrowers, the opportunity to refinance is lost before the chance even arises, while other prospective borrowers are caught in a clogged loan pipeline and don’t get the opportunity to lock in that low rate.

According to HousingWire’s lead analyst Logan Mohtashami, a one-eighth to a quarter turn in mortgage rates (high or low) can move the market substantially.

“There are people who had a 4.00% rate that refinanced to 3.25% and then said, ‘Oh well now that rates are low, I’ll refinance again to 2.75%.’ But if that rate sneaks up a quarter it’s no longer ideal and it’s lost its appeal. They are going to wait for it to come back down, right? And then it doesn’t,” Mohtashami said.