30-Year Fixed Mortgage Rate Returns to Record Low

As of September 15, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.67%.

Abstract illustration of houses and charts

As of September 15, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.67%.

Mortgage rates remain flat, but upward movements may be on the horizon.

“Mortgage rates moved slightly lower this week, barely budging as markets await a signal for a more pronounced move in either direction,” said Zillow Senior Economist Matthew Speakman. “Rates have stayed basically flat over the past few weeks, and where they head from here is dependent on two key factors: COVID-19 cases and potential actions taken by the Federal Reserve. While COVID cases remain elevated, they are showing some early signs of plateauing – news that is undoubtedly good for the world, but could place more upward pressure on mortgage rates. The Fed, meanwhile, continues to wrestle with whether, how, and when to tighten monetary policy at a time when inflation and joblessness remain elevated. A softer-than-expected August inflation reading this week likely lowered the odds that the Fed announces any immediate moves to tighten policy at their upcoming September conference, but the fact that interest rates haven’t moved much in recent weeks indicates that investors are still waiting for more certainty. All told, there’s a good chance that mortgage rates will move notably in the coming weeks, but the jury’s still out on which direction they’ll head.”

Additionally, the 15-year fixed mortgage rate was 1.99%, and for 5/1 ARMs, the rate was 2.34%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.84% 2.9% -0.07%
20-Year Fixed 2.54% 2.62% 0%
15-Year Fixed 2.06% 2.16% -0.02%
10-Year Fixed 2.06% 2.19% -0.06%
7/1 ARM 2.4% 3.06% 0.04%
5/1 ARM 2.35% 3.18% 0.01%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.84% APR with a $75,000 down payment will have a monthly payment of $1,239. A 20-Year Fixed loan of $300,000 at 2.54% APR with a $75,000 down payment will have a monthly payment of $1,595. A 15-Year Fixed loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $1,939. A 10-Year Fixed loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $2,768. A 7/1 ARM loan of $300,000 at 2.4% APR with a $75,000 down payment will have a monthly payment of $1,169. A 5/1 ARM loan of $300,000 at 2.35% APR with a $75,000 down payment will have a monthly payment of $1,162. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.25% 2.9% 0.05%
30-Year Fixed VA 2.48% 2.74% -0.02%
15-Year Fixed FHA 1.75% 2.41% 0.22%
15-Year Fixed VA 1.89% 2.35% 0.45%
5/1 ARM FHA 3.11% 3.27% 0.08%
5/1 ARM VA 2.44% 2.41% 0.07%

A 30-Year Fixed FHA loan of $300,000 at 2.25% APR with a $75,000 down payment will have a monthly payment of $1,146. A 30-Year Fixed VA loan of $300,000 at 2.48% APR with a $75,000 down payment will have a monthly payment of $1,181. A 15-Year Fixed FHA loan of $300,000 at 1.75% APR with a $75,000 down payment will have a monthly payment of $1,896. A 15-Year Fixed VA loan of $300,000 at 1.89% APR with a $75,000 down payment will have a monthly payment of $1,915. A 5/1 ARM FHA loan of $300,000 at 3.11% APR with a $75,000 down payment will have a monthly payment of $1,282. A 5/1 ARM VA loan of $300,000 at 2.44% APR with a $75,000 down payment will have a monthly payment of $1,176. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 2.87% 2.91% 0.03%
20-Year Fixed Jumbo 3.14% 3.19% -0.05%
15-Year Fixed Jumbo 2.6% 2.68% 0.03%
10-Year Fixed Jumbo 2.78% 2.93% 0%
7/1 ARM Jumbo 2.43% 3.06% -0.02%
5/1 ARM Jumbo 2.24% 3.12% 0.05%
3/1 ARM Jumbo 0% 0% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 2.87% APR with a $150,000 down payment will have a monthly payment of $2,486. A 20-Year Fixed Jumbo loan of $600,000 at 3.14% APR with a $150,000 down payment will have a monthly payment of $3,370. A 15-Year Fixed Jumbo loan of $600,000 at 2.6% APR with a $150,000 down payment will have a monthly payment of $4,027. A 10-Year Fixed Jumbo loan of $600,000 at 2.78% APR with a $150,000 down payment will have a monthly payment of $5,733. A 7/1 ARM Jumbo loan of $600,000 at 2.43% APR with a $150,000 down payment will have a monthly payment of $2,347. A 5/1 ARM Jumbo loan of $600,000 at 2.24% APR with a $150,000 down payment will have a monthly payment of $2,291. A 3/1 ARM Jumbo loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

Contingent Offers Are Useful for Buyers, but Will They Turn Off Sellers?

Contingent offers can be a challenge for home buyers because they are in the process of selling one home while purchasing another.

When homeowners decide it’s time to move to another house, they face the quandary of deciding whether to wait until their old place sells before looking for a new home. Waiting generally makes it more financially feasible to purchase a new home, but you risk having to rush around to find a suitable place to live once your old home sells. And it’s not always possible to wait—sometimes circumstances like a job transfer or a baby on the way demand a speedier move.

What are contingent offers?

Enter the contingency offer, also known as an offer with a catch. You promise you will buy, but only if your own home sells. It’s an option that’s growing in popularity because it keeps you from being locked into a purchase you can’t afford. But it can also cause you to lose your dream home if you’re unable to find a buyer for your own home.

A seller can move on, but only if your contract says so

So, what right does a seller have to ultimately pass on your offer if it’s tied up in a contingency like selling your home? The answer lies in your contract, and each contract is different.

“Whether or not [a seller can] accept a new offer and bump you guys out completely depends on the contract that you signed. You need to go over the details in the contract to see what outs the seller has,” says Melanie Atkinson, a Realtor® with Coldwell Banker Residential Real Estate in Tampa, FL.

Some contingency clauses allow the seller to cancel the contract if you don’t provide a loan commitment within 30 days. Others stipulate that you can’t purchase another property until your home is under contract.

There’s also the 72-hour “kick-out clause,” which requires you to remove the contingency from your offer within three days of the seller receiving another offer; otherwise that seller can “kick out” your contract and move forward with the other buyer who made the better offer.

Courting other offers

If a seller—or the seller’s agent—is still marketing the property to other interested buyers, the seller is required to disclose that there’s an executed contract on the house. But continuing to show it is legal, and Atkinson says it’s in a seller’s best interest to do so. After all, courting other offers is a seller’s contingency plan, something to protect the seller if the sale of your house falls through.

“The contingency may continue until you actually close on the house, and the seller may be able to accept other offers all the way up to that time,” says Phil Lunnon, a Realtor with Lunnon Realty in Lakewood, CO.

So how do you calm your fears about losing a home? If you’re in talks with a motivated buyer for your house, Lunnon suggests removing the contingency in your offer. “If you are confident that the buyer of your home is committed to closing on your home, remove the contingency.”

Of course, that means you’ll be banking on the purchase of your house going through; however, if you’re on the same page as the buyers, removing the contingency on your offer will prove to the sellers you’re committed and improve your chances of closing on the home you really want.

Source: realtor.com

8 Tips for Lowering Your Homeowners Association Dues

Llike any budget, there could be lots of ways to reduce HOA expenses.

Whether you just bought a condo or have owned one for years, you’ve probably accepted the monthly homeowners association (HOA) dues at face value. But there are reasons why you shouldn’t.

HOA dues are money out of your pocket. They can have a huge impact on your decision to buy, or not buy, a particular condo. For example, you might have fallen in love with a condo in a big complex but decided you just can’t afford the HOA dues. Also, high HOA dues can be a deterrent to future buyers, too, when you go to sell later.

An HOA is made up of residents of the condo building or complex — volunteers who are busy with their jobs and families just like everyone else. It could be that no one on the HOA board has time to look for ways to reduce the monthly HOA dues.

But like any budget, there could be lots of ways to reduce expenses. Here’s how you can have a positive impact on your HOA dues.

1. Ask to see the HOA budget

As a condo owner, you have the right to review the HOA budget. Get a copy and check it over thoroughly. If you have questions, ask the HOA president or a board member.

2. Join the HOA board

If you’re on the board, you’ll have more opportunity and more clout to dig into the HOA’s finances — such as its contracts with the property management company, landscapers and so on.

3. Review the HOA’s contracts

An HOA often has agreements with a variety of vendors: the property management company, a landscaping/grounds maintenance company, and so on. In some cases, those agreements or contracts may have been negotiated years ago and might be renegotiated today in more favorable terms for the HOA.

For example, the recent buyer of a condo in an Atlanta complex felt like the HOA dues were too high. So he asked to join the board, and the members were happy to have him. He then performed an audit and discovered money was being wasted in several areas, such as on landscaping/gardening.

The HOA’s agreement with its gardener had been negotiated five years earlier. The gardener, by default, raised his fees every year. The Atlanta condo buyer, with the HOA’s approval, sought bids from a variety of other gardening companies and succeeded in finding a reputable gardener at a lower monthly cost.

4. Reduce landscaping costs

If finding another landscaping or gardening company isn’t an option, maybe the HOA can reduce the frequency of these services, without jeopardizing aesthetics. It’s worth asking.

5. Determine if HOA is paying too much in property management fees

In large condo developments, the property management company would likely be the one to lead the charge to reduce expenses. But they’re unlikely to advocate lowering their own fees. So you’ll need to work with your HOA directly in exploring ways to reduce the property management company’s fees.

6. Look at insurance premiums

Insurance is often a big HOA expense. Get quotes for insurance premiums and be prepared to renegotiate with your current carrier once your policy comes up for renewal.

7. Defer non-essential maintenance or other projects

Aside from HOA dues, condo owners are often hit with assessments to cover things such as roof repairs and hallway painting. Talk to the HOA board about deferring any non-essential HOA projects for a year or two.

8. Reduce reserves, if possible

Every HOA has reserve funds to cover unexpected expenses. Over time, those reserves, if not tapped, build up. Find out how much the HOA has in reserves. If it’s a healthy amount and no major improvement or repair projects are in the works, ask the HOA board to consider temporarily reducing the amount it puts into reserves every month.

Easier said than done?

Most HOAs will welcome your participation. But your belt-tightening suggestions may require a formal vote from HOA board members or the entire association before they’re enacted.

At any rate, understand that changes to the budget may not happen overnight. Finding the fat, renegotiating fees, and asking for additional bids can be extremely time consuming.

Still, it’s worth a try. Talk to your HOA president, treasurer or other board member. Tell them your goal is to simply explore possible ways to lower the association’s cost for everyone’s benefit. A little bit of legwork may save you — and your neighbors — some money every month.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

3 Ways to Protect Your Escrow Deposit

In this article:

When buying a home, you’ll probably hear your lender or real estate agent use the word escrow. The term escrow can describe a few different functions, from the time your offer is accepted to the day you close on your home — and even after you become a homeowner with a mortgage.

There are essentially two types of escrow accounts. One is used throughout the homebuying process until you close on the home. The other, commonly referred to as an impound account, is used by your mortgage servicer to manage property tax and insurance premium payments on your behalf.

Disclaimer: The information contained in this article is for informational purposes only and is not intended to be relied upon as financial or legal advice, guarantees or warranties of any kind. Reference to escrow accounts here refers to an escrow account established to facilitate the purchase transaction of a new home.

What is an escrow account?

An escrow account is a contractual arrangement in which a neutral third party, known as an escrow agent, receives and disburses funds for transacting parties (i.e., you and the seller). Typically, a selling agent opens an escrow account through a title company once you and the seller agree on a home price and sign a purchase agreement. When you’re buying a home, this escrow account serves two main purposes:

  1. To hold earnest money while you’re in escrow
  2. To handle and disburse the funds until all escrow conditions are met and escrow is closed

How does escrow work?

When you make an offer on a home, the seller may require you to pay earnest money that will be held in an escrow account until you and the seller negotiate a contract and close the deal. This earnest money gives the seller added assurance that you do not intend to back out of the deal, and it protects them in the event that you do. It also motivates the seller to pick your offer over others.

During the escrow process, the escrow agent will handle the transfer of the property, the exchange of money, and any related documents to ensure all parties receive what they are owed. This removes uncertainty over whether either party will be able to fulfill its obligations, and it helps ensure that neither party is favored over the other.

What does in escrow mean?

When you hear the phrase “in escrow”, it means that all items placed in the escrow account (e.g., earnest money, property deed, loan funds) are held with an escrow agent until all conditions of the escrow arrangement have been met. The conditions usually involve receiving an appraisal, title search and approved financing.

While the earnest money is in escrow, neither you nor the seller can touch it. Once conditions are met, the earnest money will likely be applied toward the purchase price or your down payment on the home.

What does it mean to close escrow?

To close escrow means that all of the escrow conditions have been met. You’ve received a home loan, and the title has legally passed from the seller to you. During the closing of escrow process, a closing or escrow agent (who may be an attorney, depending on the state in which the property is located) will disburse transaction funds to the appropriate parties, ensure all documents are signed and prepare a new deed naming you the homeowner.

Afterward, the escrow officer will send the deed to the county recorder for recording before escrow is officially closed. Once closed, you and the seller will receive a final closing statement and other documents in the mail. Check the statement carefully and call the closing agent immediately if you spot an error. Save the statement with your most important papers, as you will need it when you file your next income tax return.

What is an escrow payment?

After you purchase a home, you’ll be responsible for maintaining insurance on the property and paying state and local property taxes. The property tax and insurance premiums you owe are the escrow payments made to your escrow or impound account.

The impound account ensures that the funds for taxes and insurance are available and that premiums are paid on time. Your lender doesn’t want you to miss a tax payment and risk a foreclosure on the home. They also don’t want you to miss a homeowners insurance payment, or they may be forced to take out additional insurance on your behalf to cover the home in the event of property loss or severe damage.

How monthly escrow payments work

The amount of escrow due each month into the impound account is based on your estimated annual property tax and insurance obligations, which may vary throughout the life of your loan. Because of this, your mortgage servicer may collect a monthly escrow payment, along with your principal and interest, and use those collected funds to pay taxes and insurance on your behalf. 

Your lender will notify you 30 days before your next payment if the amount changes. You can also ask your mortgage servicer to walk you through the local impound account funding schedule that applies to your loan. If there are insufficient funds in your impound account to cover the taxes and insurance, your monthly mortgage payment may increase (even though your principal and interest will stay the same on fixed-rate loans).

Initial escrow payment at closing

Lenders usually require at least two months’ worth of insurance and property tax funds in the impound account at closing. The amount you have to prepay into an impound account for these costs is based on your location. Keep in mind that these funds aren’t additional closing costs. Instead, you’re prepaying extra months of home insurance and property tax bills that you would be required to pay when due. Your mortgage servicer will list the initial escrow payment amount due at closing on your loan estimate.

Your escrow analysis statement

Each month, your mortgage statement will show you how much you’ve accrued in your impound account. And each year, your mortgage servicer is required by law to send you an annual escrow account analysis showing you some of the following:

  • The amount of funds received from you
  • The amount of funds paid out for insurance and property tax
  • An estimation of how much the escrow portion of your monthly payment may increase or decrease based on the premiums owed
  • Notice if you don’t have enough funds in your account to pay the estimated tax and insurance due in the next bill (i.e., escrow shortage)
  • Notice if you have a negative balance in your account that is owed to bring your account to current (i.e., escrow deficiency)

Is an escrow account required?

An escrow account for paying property tax and homeowners insurance is generally required by lenders who originate VA, FHA and conventional loans. In some instances, lenders may allow the homeowner to pay the property tax and home insurance as a lump sum instead of setting up an escrow account. If you waive escrow, be aware that some lenders may charge you a fee or an increased interest rate.

While you may not be required to set up an escrow account, you can choose to open one voluntarily to break up insurance and property tax payments into smaller amounts, keep track of payment due dates and avoid surprise bills at the end of the tax year.

Need a home loan? Contact a pre-approval lender today to get pre-approved for a mortgage.

Source: zillow.com

Hippo Home Insurance Review

Hippo is a relatively new insurance carrier that sells home and condo insurance. The company uses a modern, technology-driven approach to offer innovative coverages and a host of available discounts. The company even offers a free smart home kit to eligible customers, with a discount built in as soon as it is activated.

With Hippo, you can get a home insurance quote in about a minute. But is Hippo’s insurance right for you? Bankrate’s insurance editorial team has reviewed the company’s coverage options, discounts and third-party rankings to help you make an educated decision about your insurance coverage.

Hippo home insurance

Hippo understands how reliant modern customers are on technology. The company offers modern coverage options, like increased limits on electronics and appliances, that might help you feel more secure in your insurance coverage.

Types of coverage

Home insurance policies are packages of numerous converges. Hippo offers several types of home insurance policies, so you have options to choose the policy that fits your needs.

In addition to the standard home insurance coverages like dwelling coverage, personal property coverage, liability coverage and loss of use coverage, Hippo offers several unique options that you may be able to add to your policy for extra protection:

  • Computer and home office coverage: Hippo offers four times the limit of other companies for your computer and home office equipment. This may be especially appealing if you work from home.
  • Water backup coverage: If water backs up in a sewer or drain line and damages your home or belongings, this coverage is designed to pay for the damages up to your policy limit.
  • Appliances and electronics coverage: Hippo knows that homes are more technologically advanced than they used to be. You may be able to get coverage for your appliance systems and electronics.
  • Enhanced rebuilding cost: If your home is destroyed, you may have the option to receive up to 25% more than your dwelling coverage amount to rebuild it.
  • Personal property replacement cost: This option is designed to pay for the full replacement cost of your belongings rather than factoring in depreciation.
  • Service line coverage: If the water, gas or sewer lines between your house and the street are damaged or worn, this coverage may help pay for the repairs.
  • Hippo Home Care: Although it is not insurance coverage, Hippo offers an exclusive Home Care program that can help you fix problems around the house, hire contractors and get recommendations for professionals in your area.

Because Hippo writes coverage in many states, options could vary depending on where you live. The best way to determine what coverages are available to you is to get a quote online or talk to a Hippo agent.

Hippo home insurance discounts

Hippo offers numerous ways for you to reduce your premium. And to help you achieve the best rate possible, Hippo calculates the discounts you qualify for during the online quote process.

Discounts include:

  • Early signing discount: If you purchase a Hippo home insurance policy at least eight days before it goes into effect, you might earn a discount.
  • HOA discount: If your home falls under the governance of an HOA, you may qualify for a discount on your home insurance policy. This is because HOA quality standards may make homes less susceptible to damage or theft.
  • New home discount: If your home is newly built or you have purchased your home within the last 12 months, you might save on your premium.
  • No mortgage discount:If you are mortgage-free, you may qualify for this discount on your home insurance.
  • Smart home discount: Hippo provides discounts for homes with smart devices such as smart alarm systems and smoke detectors. Hippo has partnered with Xfinity to offer even greater savings for its customers. Xfinity customers qualify for a special homeowners rate with Hippo and can earn discounts up to 25%, depending on the number of Xfinity smart home devices they install in their homes. If you qualify, Hippo may even send you a free smart home kit and give you a discount once it is activated.

Just like with the coverage options, available discounts may vary depending on where in the country you live.

Where does Hippo offer home insurance?

Although Hippo is expanding its reach, the company does not currently offer home and condo insurance in every state. Currently, coverage is not available in Idaho, Montana, Wyoming, North Dakota, South Dakota, Iowa, Oklahoma, Louisiana, Florida, North Carolina, West Virginia, New York, Massachusetts and Rhode Island.

The availability of products, coverages and discounts may vary by state.

In June 2020, Hippo acquired Spinnaker Insurance Company, a nationwide property insurance company licensed in all 50 states. Although Spinnaker will continue to operate independently, the insurer will underwrite some of Hippo’s policies, enabling Hippo to expand its market.

Hippo and Metromile partnership

In May 2021, Hippo and Metromile announced a partnership to provide consumers with a bundling discount. Hippo exclusively sells home and condo insurance, while Metromile sells pay-per-mile auto insurance. By purchasing your home or condo coverage from Hippo and your auto coverage from Metromile, you may qualify for a discount of up to 15% on both policies.

Hippo ratings, reviews, customer satisfaction and complaints

Hippo’s insurance policies are underwritten by Canopius U.S. Insurance, Spinnaker Insurance Company and Topa Insurance Company. All three companies have earned an A- (Excellent) financial rating with AM Best.

Of over 2,000 reviews on its website, Hippo is rated 4.9 out of 5.0. Customers say the coverage is affordable, easy to obtain and that the customer service agents are responsive and helpful.

Who is Hippo Insurance a good option for

Hippo home insurance is a great choice for people who own a smart home and folks who operate a home office. Hippo allows you to obtain increased coverage for computers, home office equipment, technology and appliances, which could be helpful for customers living in upgraded homes. Hippo’s Xfinity partnership offers significant savings by providing reduced rates for Xfinity customers and discounts for expanded smart home systems.

Frequently asked questions

Why do I get a discount for smart home devices?

Insurance premiums are based on risk. Smart home devices may serve as an early warning system for dangerous situations, like smoke, fires, water damage and home invasions. The early warning could help you to mitigate the damage, meaning that the insurance company will have less damage to pay for during a claim. Because of the reduced risk, you may qualify for a discount.

How does Hippo handle insurance claims?

To file a claim with Hippo, you can call 855-999-9746 or email [email protected] Your case will be assigned to a Claims Concierge. This person will be your sole point of contact during the claim process, so you know exactly who to go to with questions and concerns. Your Claims Concierge will explain the claim process and let you know how to proceed at each step.

Does Hippo sell auto insurance?

No, Hippo only sells home and condo insurance. However, Hippo and Metromile recently paired up to offer their customers a bundling discount. If you purchase your home or condo insurance with Hippo and your auto insurance with Metromile, you may save money on both policies.

Source: thesimpledollar.com

Reasons Not To Refinance Your Home

Refinancing has become a popular decision for homeowners in 2020, as interest rates are at historic lows. You might hear about friends or family refinancing and wonder if you should be doing the same. 

While refinancing can be an effective way to reduce your mortgage interest rate or monthly payment, there are some situations in which refinancing might be a bad idea. If you’ve been considering it, you may want to keep these situations in mind and consider whether refinancing is really the right financial move for you.

In this article

Is refinancing worth it?

Refinancing your mortgage is the process of replacing your existing home loan with a new one. This new mortgage comes with a new interest rate and new payment terms, and often a new lender. You’re probably wondering why people do it.

When is it worth it to refinance your mortgage?

One of the most popular reasons to refinance is to reduce your mortgage interest rate. Rates in 2020 are historically low, and many people are taking advantage of this to lock in lower interest rates on their mortgages.

Someone might also refinance a mortgage to lower their monthly payments. If your financial situation has changed and your current mortgage payment has become unaffordable, refinancing and extending your loan term can reduce your monthly payment.

Other reasons to refinance might include removing PMI if you’ve increased your equity in your home, changing your loan type (switching from a variable to a fixed rate, or vice versa) or accessing some cash with a cash-out refinance.

[ Read: Best Refinance Rates ]

Reasons not to refinance 

Refinancing can be an effective way to save money over the life of your mortgage. But refinancing isn’t for everyone — there are some situations where it just doesn’t make sense.

Costs behind refinancing

Refinancing your mortgage comes with a lot of additional costs, both in the short-term and long-term. Refinancing won’t save you money right away. Because of the closing costs, it’ll likely take you years to break even. Plus, if you extend the life of your mortgage or refinance when you have little equity in the house, interest and private mortgage insurance can also be costly.

Closing costs

Just like with any other mortgage closing, you’ll have to pay closing costs to finalize your refinance. Closing costs can amount to between 2% and 5% of your loan amount on average — or from thousands to tens of thousands of dollars.

Typical closing costs include:

  • Loan application fee
  • Appraisal fee
  • Inspection fee
  • Origination fee
  • Attorney fees

Most of the time, closing costs are due at the time you sign the final loan documents. If you’re thinking of refinancing to put more money in your pocket, be aware that it could be years before you break even.

Long-term costs

In addition to the closing costs you’ll pay, there are other costs to refinance your mortgage as well. First, you may actually end up paying more in interest in the long-run. Let’s say you have a 30-year mortgage that you’re currently 15 years into repayments on. You’ve already paid a considerable amount in interest.

Now let’s say that you decide to refinance into a new 30-year mortgage. The lower refinance rate may not help you in that case because you’ve doubled the amount of time it’ll take you to finish paying off your mortgage.

Refinancing can also be costly when you have less than 20% equity in your home. In that case, you’ll likely have to pay private mortgage insurance (PMI), for many years, so it may be worth waiting until you have more equity in your home.

Your credit score needs improvement

Your credit score is going to be one of the most important factors in determining whether you can get a refinance loan. Even if you can qualify for a loan with a bad score, you probably won’t be eligible for the best interest rates. At that point, the refinance might not be worth it.

If your credit score needs some improvement, you’d probably be better served spending some time boosting your score. A few ways you can increase your credit score are to:

  • Make all of your monthly payments on time
  • Reduce your credit utilization, either by paying off debt or increasing your available credit
  • Find any dispute any errors on your credit report

You aren’t in it for the long run

Because of the additional costs, it can take years to break even on your refinance. If you aren’t planning to stay in the home long enough to enjoy the perks of the lower interest rate, then a refinance might not be the best option for you. 

Run some numbers and figure out how long you would have to stay in the house to save money — and then decide whether you can commit to staying for that long.

To figure out how long it’ll take you to break even on your refinance, divide your closing costs by your total monthly savings. You can also use a mortgage refinance break-even calculator to help you do the math.

Tips for refinancing

Are you considering refinancing your mortgage? Here are a few tips you’ll want to follow as you get started.

[ Read: How to Refinance Your Mortgage ]

Decide why you want to refinance.

Are you refinancing in the hopes of getting a lower interest rate? Or is your goal to lower your monthly payment? Go into the process knowing why you really want to refinance. That way, you’ll know exactly what type of loan offer you’ll need to make a refinance worth it.

Shop around for the best rates.

Between traditional banks, credit unions and online lenders, there are plenty of options available for mortgage lenders. Spend some time shopping around to make sure you get the best rate.

Pull your credit report beforehand.

The last thing you want is to apply for a refinance loan and find there’s an unwelcome surprise on your credit report that may prevent you from getting a good deal. Pull your credit report ahead of time so you know what to expect.

Do the math and decide if it’s worth it.

Depending on the type of deal you can get on your refinance, it’s not always worth it. While you may be able to get a lower interest rate, the other associated expenses may mean you’ll still pay more over time. Do the math to ensure that you’re accomplishing your ultimate goal with the refinance.

Compare top mortgage lenders

We welcome your feedback on this article. Contact us at thesimpledollar.com

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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence. The offers that appear on this site are from companies from which TheSimpleDollar.com receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. The Simple Dollar does not include all card/financial services companies or all card/financial services offers available in the marketplace. The Simple Dollar has partnerships with issuers including, but not limited to, Capital One, Chase & Discover. View our full advertiser disclosure to learn more.

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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free – so that you can make financial decisions with confidence. The offers that appear on this site are from companies from which TheSimpleDollar.com receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. The Simple Dollar does not include all card/financial services companies or all card/financial services offers available in the marketplace. The Simple Dollar has partnerships with issuers including, but not limited to, Capital One, Chase & Discover. View our full advertiser disclosure to learn more.

Source: thesimpledollar.com

USAA Home Insurance Review

USAA, a home insurance company that caters to military members, veterans and their families, consistently ranks well for customer satisfaction, whether you look at J.D. Power’s scores or our own SimpleScore. On the downside, it does not offer in-person agents.

In this USAA home insurance review, we look at what we love about the insurance provider, what could be better and a few of its competitors. We also lay out where USAA insurance stands on our proprietary SimpleScore.

Our methodology

To compare how USAA insurance for veterans and military members compares to other carriers, we awarded the insurer with a SimpleScore after examining the factors that matter most to customers like discounts, coverage options, customer satisfaction, support and website accessibility.

We also looked at how its competitors did with SimpleScore, as well as how they did with third-party reviewers, such as J.D. Power and Consumer Reports.

Great for Customer Satisfaction – USAA

While USAA offers its products and services to a niche customer base of military members, veterans and their families, this insurance carrier’s fame for superior customer satisfaction is practically unmatched.

J.D. Power Rating

5/5

AM Best Rating

A++

Standard & Poor’s

AA+

SimpleScore

4.6 / 5.0

SimpleScore USAA 4.6

Discounts 3

Coverage Options 5

Customer Satisfaction 5

Accessibility 5

  • Highest ranking in customer satisfaction
  • Understands the needs of military policyholders
  • Affordable coverage
  • Only available to military personnel and their family members

Owning a home is a big investment. Therefore, getting financial protection that’ll help you repair or replace your major investment is a wise choice. Home insurance is the best and most affordable way to ensure that your home (and its contents) are covered in case of loss or damage. This USAA home insurance review will provide you with a comprehensive look at the insurance company, which ranks on top consistently for customer satisfaction. To compare how USAA insurance for veterans and military members compares to other carriers, we awarded the insurer with a SimpleScore after examining the factors that matter most to customers like discounts, coverage options, customer satisfaction, support and website accessibility.

America’s top-rated home insurance

  • Policies starting at just $25/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork
In this article

What we like about USAA

There’s a lot to like about USAA. If we had to keep it simple and stick to a couple of points, we’d have to say customer service and coverage are what set the insurer apart from the competition.

Stellar customer satisfaction 

J.D. Power conducts in-depth customer satisfaction surveys every year, asking policyholders what they like most about their insurance company. When members of the J.D. Power evaluate USAA reviews from customers, USAA beats out all other insurance companies every year. Even though USAA is limited to military personnel and relatives, it’s the third-largest insurance company in the country.

Vast coverage options 

USAA’s coverage is excellent. Insuring your home through USAA means you’ll be covered for nearly every peril and can also add flood insurance. Unlike many homeowners insurance companies, your home is covered in full at replacement cost, with no depreciation factored in. This means you’ll be able to purchase or rebuild with new items and materials.

Who should get this policy

Anyone who is privileged enough to qualify for coverage through military ties should put USAA on the shortlist of home insurance companies.

[ Read: How to Find Cheap Home Insurance ]

Things to consider

As with any insurance product, there are always some drawbacks you should be aware of before you buy.

Failure to maintain risk management 

USAA may shine when it comes to customer satisfaction, but it’s under a Consent Order with the U.S. Office of the Comptroller of the Currency. The insurer must comply by addressing concerns about a failure to implement and maintain appropriate risk management for its size, as well as not properly securing its IT systems.

Lack of live agents 

If you prefer to work with a local agent to help you with your homeowners insurance needs, USAA may disappoint. The insurer doesn’t have offices or a network of agents available. You’ll need to manage your coverage through the website, mobile app or by calling customer service.

Who shouldn’t get this policy

Traditional policyholders who prefer to let an agent file claims on their behalf, as well as handle other details of their home insurance should skip USAA insurance for veterans.

America’s top-rated home insurance

  • Policies starting at just $25/month
  • Sign up in seconds, claims paid in minutes
  • Zero hassle, zero paperwork

How we analyzed USAA home insurance

Here’s a closer look at the five most important elements behind this USAA home insurance review and SimpleScore.

Discounts 

  • Claims-free: Save as much as 10% off your home insurance premium when you don’t have any claims for five years or more. 
  • Firewise: Member communities of the Firewise program that have minimized their wildfire risk qualify.
  • Good payment history: Pay your bills on time and you’ll get rewarded with lower home insurance rates.
  • Home-age: Newer homes will save on home insurance coverage.
  • Impact-resistant roof: A higher-resistance roof reduces your premiums.
  • Loyalty: The longer you’ve been a member of USAA, the more you’ll save.
  • Multipolicy: USAA provides other types of insurance. When you bundle home and auto insurance, you may save up to 10% on your insurance bill.
  • Protective device: Homes equipped with theft and fire alarm systems will qualify for the discount.

[ See: What Home Insurance Discounts Are Available? ]

Coverage

  • Standard coverage: Includes replacement-cost coverage for your property and home’s structure, as well as limited liability insurance for lawsuits. In addition, your property is covered wherever in the world you’re deployed.
  • Flood insurance: Available as an add-on for areas at risk of flooding.
  • Earthquake coverage: Earthquake insurance is not included in a standard policy because not all areas are prone to earthquakes. It’s available as an add-on for at-risk areas.
  • Landlord coverage: If you rent your home, your home is covered and lost income included without the need for a separate policy.
  • Personal property riders: If you own higher-value jewelry, electronics or special items such as art, collectibles or firearms, this rider will cover you above the limits of standard home insurance.

Customer Satisfaction

USAA has been highly ranked by most rating companies. Take a look at it’s ratings below.

  • AM Best: A++
  • BBB: A-
  • J.D. Power: 889/1,000
  • Moody’s: Aaa
  • S&P: AA+

Support

USAA offers plenty of ways to get support if an issue were to arise with your policy or if you need to file a claim. You can contact them by phone, email and through the USAA Mobile App.

Accessibility

USAA doesn’t have offices available or local agents but you can file claims online or through the claims phone number. The best way to contact USAA is using the phone numbers available on its site. The insurer doesn’t provide live chat, but you can manage many basics through the mobile app. In addition, the USAA blog and resource pages provide advice on insurance.

USAA home insurance vs. the competition

Great for accessibility – Geico

Geico is not a major provider of home insurance, although we found that it ranks well in support and accessibility, according to our SimpleScore.

J.D. Power Rating

3/5

AM Best Rating

A++

Standard & Poor’s

AA+

SimpleScore

3.4 / 5.0

SimpleScore Geico 3.4

Discounts 2

Coverage Options 2

Customer Satisfaction 3

Accessibility 5

Geico got its start providing insurance coverage to government employees and provides affordable home insurance to a broader customer base than USAA. You don’t have to be a government contractor or military personnel to get coverage. The issue is, Geico doesn’t underwrite all its policies — you may have coverage from a different insurer than you expected when you choose Geico.

Great for in-person service – State Farm

One of the largest home insurance providers in the country, State Farm offers independent agents across the U.S., something you might value if you prefer to be face-to-face.

J.D. Power Rating

3/5

AM Best Rating

A++

Standard & Poor’s

AA

SimpleScore

4 / 5.0

SimpleScore State Farm 4

Discounts 2

Coverage Options 5

Customer Satisfaction 3

Accessibility 5

State Farm ranks high in customer service, but not as high as USAA. Nevertheless, if you can’t qualify for USAA membership, State Farm is a great option. The insurance carrier is the largest in the country for good reason — State Farm is known for its top-notch service, variety of coverages and user-friendly website and mobile app.

Great for customer support – Progressive

While not at the top in customer satisfaction, according to J.D. Power, Progressive scores 5 out of 5 in support and accessibility in our SimpleScore.

J.D. Power Rating

3/5

AM Best Rating

A+

Standard & Poor’s

AA

SimpleScore

4.2 / 5.0

SimpleScore Progressive 4.2

Discounts 3

Coverage Options 5

Customer Satisfaction 3

Accessibility 5

When comparing Progressive to USAA, the main thing to consider is who you’ll be dealing with. USAA writes its own policies. Progressive and Geico both partner with a variety of insurance companies, meaning you’ll ultimately need to deal with a different insurance provider. Still, Progressive is worth considering if you’re on a strict budget and the cheapest home insurance is a priority — Progressive has more homeowners insurance discounts than USAA.

Getting a USAA insurance quote

USAA homeowners insurance is lauded for being affordable. Too many factors come into play that could affect your homeowners insurance rate to ballpark one. The main factors that will determine the cost of your USAA home insurance include the declared value of your home and its contents, your claims history and the ZIP code.

Location can make a huge difference in your premiums. If you live in an area at risk for wildfires or with higher-than-average crime or theft, your home insurance premiums may be considerably higher.

[ Read: The Average Cost of Home Insurance ]

USAA online and mobile app

USAA provides policyholders with a mobile app and online access, but the insurance carrier isn’t doing anything revolutionary when it comes to the digital sphere. Still, the website and app make up for the lack of USAA local agents and offices.

A unique feature other insurance carriers don’t offer is the USAA community. The section of the USAA website includes a blog about insurance, related news and financial planning. You’ll also have access to the USAA community where you can ask other service members questions about finance, insurance services, claims and more.

USAA auto and life insurance

Besides USAA homeowners insurance, this company provides a variety of other insurance coverages and financial services so you can handle coverage and banking all in one place.

Auto insurance

USAA provides the same high level of service when it comes to car insurance. Bundle more than one policy or vehicle to maximize the savings on your insurance needs. USAA auto insurance is designed for military personnel. It’s the only insurer that provides you with coverage if you drive your car overseas. Or you can leave your car behind and receive a price reduction for storing your car while you’re away.

Life insurance

If you have loved ones who depend on you, a life insurance policy from USAA can provide them with a cash payout to cover bills and funeral expenses, pay off a home mortgage or fund college for the children you leave behind. USAA provides low-cost term life insurance or permanent coverage through its whole life insurance policy as an option.

[ Next: How to Compare Home Insurance Policies ]

Bundling discounts

When you bundle auto insurance, you may receive up to 10% on the overall cost of your home and auto insurance. Best of all, you can take advantage of multiple discounts, such as safe driver and new home discounts, in addition to the premium reduction you’ll receive when you bundle your insurance.

USAA in the news

  • USAA pays dividends to auto insurance policyholders. The insurer announced $800 million would go back to members, equivalent to 20% off premiums for three months. It recently announced another round of dividends amounting to $270 million.
  • USAA has signed a deal with Charles Schwab to provide USAA members with wealth management and financial services through the brokerage firm.
  • In light of the COVID-19 pandemic, USAA’s claim process is now nearly 100% virtual from start to finish.

We welcome your feedback on this article and would love to hear about your experience with the home insurance providers we recommend. Contact us at [email protected] with comments or questions.

Source: thesimpledollar.com

Utah Housing Market Update June 2021

The Utah real estate market continued seeing highs and lows. Here’s your monthly update on what’s happening.

Data from Utah MLS from June 1, 2021 to June 30, 2021.

Sale Price

The median home price in Utah hit $500K for the first time in June, only three months after it passed $400K. The median home price in June was $151K higher than June 2020, an increase of 43%. The median home price rose by $25K from May, a 5% monthly increase. Prices have risen rapidly, even compared to the past few years.

Days on Market (DOM)

Utah homes still sold in less than a week on average in June. The average DOM was down by 67% from last year, with homes selling 12 days faster than they did a year before. The average DOM stayed steady from May, with no change. The figure was up by one day from the all-time low in April. With supply still limited and demand at a fever pitch, Utah homes sold quickly last month.

Inventory

Inventory continued its gradual rise from March, a good sign for prospective homebuyers. There were 3,688 fewer homes on the market than in the previous year, a 54% year-over-year decrease. June saw 492 more homes on the market than May, an 18% increase. With more homes coming up for sale, the market should become less competitive for buyers hoping to get an offer accepted on the home they want.

Monthly Sales

Monthly home sales were down by 7% from the previous year, with 352 fewer homes sold. However, home sales rose by 15% from May, with 710 more homes sold. Home sales have been rising since January, following Utah’s normal seasonal real estate sales trend. The most likely explanation for the slight dip in sales year-over-year is the restricted supply of available housing. When fewer houses get listed for sale, naturally, fewer houses will sell.

Turn to a Homie

Homie has local real estate agents in all of our service areas, including Utah. These agents are pros in everything they do, including understanding the local real estate market, so they can help you regardless of market conditions. Click to start selling or buying and to get in touch with your dedicated agent.

Source: homie.com