President Joe Biden’s new plan to lower housing costs includes a pilot program that waives the requirement for lender’s title insurance on certain refinance transactions, according to the White House. The plan will be announced during his 2024 State of the Union address on Thursday night.
However, that’s a controversial topic for the mortgage industry and it’s already facing resistance from trade groups. Regulators believe reducing title requirements would cut closing costs, but title and mortgage companies challenge the argument and point to elevated risks.
On Thursday afternoon, the White House announced that the Federal Housing Finance Agency (FHFA) has approved policies and pilots to reduce closing costs, including the pilot to waive lender title requirements.
The program “would save thousands of homeowners up to $1500, and an average of $750,” unlocking “substantial savings for homeowners as mortgage rates continue to fall and more homeowners are able to refinance,” the White House estimates.
Regarding the risks of waiving title requirements, it also mentioned an independent analysis showing that title insurance typically pays out only 3% to 5% of premiums in claims to consumers, compared to more than 70% in other types of insurance.
Following the announcement, FHFA director Sandra Thompson clarified that the pilot only impacts lender’s title policy or legal opinions, focuses on low-risk refinance transactions and will be subject to “robust oversight.”
Government-sponsored enterprises (GSE) Fannie Mae and Freddie Mac’s attempts to launch title waiver programs, which aim to improve affordability by reducing closing costs, have faced resistance from trade groups since 2023 due to allegedly increased risks.
However, according to Thompson, the pilot “does not impact a borrower’s title risk since it only applies to certain refinance loans where the borrower has title to the property already.” The FHFA director added that these are “low-risk refinance transactions where there is confidence that the property is free and clear of any prior lien or encumbrance.”
In addition, Thompson said that lenders will “retain the option to provide evidence of clear title through other options, such as title insurance or an attorney opinion letter (AOL). Meanwhile, homeowners can always purchase their title insurance policy or AOL if they choose.
In March 2023, a report from PoliticoPro showed that Fannie Mae was considering piloting a program to bypass traditional title insurance and AOLs, which drew resistance from trade groups. The introduction of AOLs had already frustrated groups representing the title industry the previous year. In August 2023, Fannie Mae said it was no longer considering the pilot program.
Following the White House announcement, Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit said the trade group has “significant concerns that some of the proposals on closing costs and title insurance could undermine consumer protections, increase risk, and reduce competition.”
In an emailed statement, the American Land Title Association (ALTA) called the program a “purely political gesture offering a false promise of savings for homeowners while exposing consumers, lenders, and taxpayers to greater financial risk.”
“The approval of this waiver is a hollow attempt by the White House to placate Americans’ current economic frustrations,” the statement continued. “By announcing this only hours before the State of The Union address, without outreach to, or engagement with, the title insurance industry, the Administration has reduced the crucial role of the industry to nothing more than a politicized talking point.”
The trade group also noted that federal lawmakers introduced a bill in October 2023 that would require title insurance on all mortgages purchased by the GSEs.
“Since the waiver program was first reported, the FHFA has faced strong bipartisan opposition,” the statement read. “The Administration should not be playing politics with the American Dream.”
In her statement, Thompson said, “As with any pilot undertaken by an Enterprise, this effort will be subject to robust oversight by FHFA to monitor the effectiveness of the pilot in meeting its desired outcomes.”
Looking for jobs where you can bring your child with you? Yes, some jobs and companies let you bring your child to work. More and more companies are supporting parents by providing on-site childcare facilities. Plus, along with the rise of remote jobs, there are many jobs out there that let you bring your child…
Looking for jobs where you can bring your child with you? Yes, some jobs and companies let you bring your child to work.
More and more companies are supporting parents by providing on-site childcare facilities. Plus, along with the rise of remote jobs, there are many jobs out there that let you bring your child to work, eliminating the costs of paying for childcare.
In this post, we’ll explore different jobs that let you take your child to work, along with a list of remote jobs that give you the flexibility to work at home and take care of your children at the same time.
Whether you want to make extra income or if you are looking for a full-time career, many options may interest you.
Recommended reading: 25 Best Work From Home Jobs To Make $1,000+ Monthly
Best Ways To Bring Your Child To Work
Here’s a list of jobs where you can bring your child to work.
1. Nanny or babysitter
Working as a nanny or babysitter gives you the option of possibly bringing your child to work.
Before bringing your child to work, it’s important to come up with an agreement with the family you work for. Have clear communication and set expectations of what it will be like if you bring your child to work with you.
There are many ways to find nannying and babysitting jobs online, especially with websites like Care.com. I’ve found several nannying and babysitting positions with my free profile on Care.com.
You can also share your services on local Facebook groups, Indeed, and SitterCity. References from past childcare jobs are important, along with offering a background check.
2. Daycare (where you work for someone else)
You may also be able to bring your child to the daycare or preschool that you work for.
You need to consult with your employer about this first and check the daycare’s policies and employee handbook. Many daycares have it in writing whether or not you can bring your children to work with you. Some daycares allow it, while others are strictly against it.
To find a daycare job, search on websites like Indeed or call local daycares near you and see if they are hiring. Childcare work is in high demand and there are always jobs available in this field.
Your child may be in your classroom if they are in your age group, or they may be in another group of children. Typically, the cost is not free, but you may get a discounted rate to bring your kid to the same daycare that you work at if you are a childcare worker.
3. Own in-home daycare (where you run your own daycare)
If you can run your own daycare, this is going to allow more flexibility in bringing your child to work. Many daycare centers are run by parents looking for a more suitable job where they can bring their own kids with them to work.
However, there are still some things to keep in mind. You need to make sure that you are complying with local licensing regulations and requirements for running a daycare, along with maintaining professionalism at work while having your own child at the daycare.
Starting your own daycare from home requires careful planning. You need to think about things like local zoning laws to make sure you can run a daycare in your home and make sure your home is safe for children. You may need certifications and training like CPR and first aid certifications, along with early childhood education courses. Getting the proper insurance to protect your business in case of accidents on your property is important too.
You also need to think about how you’ll attract clients and what kind of marketing you’ll do. Word of mouth is huge, so make sure to always provide the best business and care (plus, these are children we are talking about – so high-quality care is always important!).
4. Drive a school bus
If your child’s school is hiring school bus drivers, this can be a great gig to not only take your child to and from school but also earn extra cash.
Bus drivers need to be 21 or older, have a valid driver’s license, and clean driving record. You may even need to obtain a CDL (Commercial Driver’s License).
The school will also require a background check, and provide school bus driver training, which is provided by the school district or a third-party organization.
The salary for a school bus driver depends on things like location, experience, and the district. The average salary for school bus drivers ranges from $30,000-$40,000, along with getting benefits like health insurance, retirement plans, and PTO.
5. Food delivery services
Working as a delivery driver may give you the option to bring your child to work with you.
Some food delivery platforms prohibit from having anyone else in the care of you on food delivery runs, so this is important to find out before bringing your child with you to work.
Getting a job as a food delivery driver is relatively easy as long as you meet the minimum age requirements and have a valid driver’s license. Each platform is going to have different benefits including pay, flexible work schedule, payout time, and sign-up process.
6. Photographer
One way to do photography and be able to bring your child with you is to take stock photos.
Stock image websites are among the most popular platforms for photographers to sell their pictures. These websites allow customers to buy royalty-free photos for personal or business use. Various entities, including websites, TV shows, books, and social media accounts, frequently use stock photos.
A significant advantage of stock photo sites is the potential for passive income. You can take pictures, upload them, and potentially earn money from an old photo for months or even years to come.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
7. House cleaner
Working as a house cleaner possibly allows you to bring your child to work depending on the policies of your employer, the nature of the job, and safety considerations. Some employers allow it, while others have strict rules against bringing a child to work.
As a house cleaner, you may be working with cleaning chemicals and heavy equipment, so you need to consider whether it’s suitable to have a child present in this kind of situation. It’s important to have a backup plan in place for times when you cannot bring your child to work.
8. Blogger
I started my blog back in college over 10 years ago and it’s still my full-time job. I’m my own boss, create my own schedule, and get to take vacations whenever I want.
As a blogger, you get to work from home and create your own schedule. This allows you to “bring your child to work” but also maintain a relatively flexible lifestyle when raising a child. This can be great for balancing work and family life.
Building a successful blog takes time and consistency, but when done right, can make income.
Bloggers make money through advertising, sponsorships, affiliate marketing, and product sales. You can even make money by offering coaching services on your blog or writing for other popular websites in your niche.
You can learn how to start a blog with the free How To Start a Blog Course (sign up by clicking here).
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9. Proofreader
Another great remote job that lets you stay at home with your child while earning money is proofreading.
A proofreader is someone who is in charge of reviewing written content to identify and correct errors in spelling, grammar, punctuation, and formatting.
Proofreaders work for all kinds of companies, including advertising agencies, media outlets, government agencies, and even bloggers and other small business owners.
Proofreaders can earn between $15-$50 an hour depending on their experience, type of project, and industry demand.
Recommended reading: 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year)
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10. Freelance writer
I’ve been a freelance writer for almost a decade and it’s one of my favorite ways to make money. This is because freelance writing can be done on my own schedule. An agency (or whoever is paying me to write the article) will send me what they want the article to be about, how many words to write, and other important information that needs to be included.
Since this job is remote, this means you can work from home and “take your child to work” with you.
So, this can be a great job to look into for a stay-at-home mom or dad of young children.
How much you earn as a freelance writer depends on your skills and experience. If you’re just starting, you may earn between $50-$75 per 500-word article. As you gain experience and get better, you can charge a lot more. The larger and more impressive your portfolio becomes, the easier it gets to land jobs and get paid higher rates.
Recommended reading: 14 Places To Find Freelance Writing Jobs
11. Transcriptionist
A transcriptionist is someone who converts spoken audio files into written text (this is what transcription is). Your tasks include listening to audio recordings and accurately transcribing them into a written format. Transcriptionists work in fields like legal, medical, academic, and business-related industries.
Starting pay for a transcriptionist is in the $15 an hour range, with that number increasing once you’ve honed in your skills and experience, and have a wider database of clients who have worked with you in the past and want to hire you again.
Many transcriptionists are stay-at-home parents, and that is because you can get started relatively easily (it is easy to meet the qualifications to become a transcriptionist) and you can work on your own time and create a flexible schedule that works for you and your children’s schedules.
Recommended reading: How To Become A Transcriptionist From Home
12. Virtual assistant
I’ve been working as a virtual assistant for years and it’s one of my favorite jobs. I get to work from home and set my own schedule. Virtual assistants usually work for a person, company, or small business owner doing administrative tasks to help the business run smoothly.
As a virtual assistant, you’re working from home which means your child can stay at home with you while you’re working.
Tasks for virtual assistants include tasks like responding to emails, social media management, customer support, and more.
Recommended reading: Best Ways To Find Virtual Assistant Jobs
13. Customer service representative (at home)
Customer service representative jobs are often remote, therefore you may be able to leave your child at home with you while you’re working.
Customer service representative tasks include assisting and supporting customers with problem resolutions, inquiries on products, order processing, and even offering technical support in some cases.
Finding a job as a customer service representative is easy. Check out job boards like Indeed and type in “Customer Service Representative” and hundreds of jobs will come up. Make sure to look for jobs that are 100% remote, as some of these jobs may be in person.
Typically, to get started, you will just need a computer, phone, and internet access.
14. Mystery shopper
As a mystery shopper, you are grading restaurants, stores, and other businesses on how well they are doing.
My sister was a mystery shopper and often brought me with her on mystery shopping outings. She made around $150 to $200 a month in extra money doing this and she also earned free items as well, like food at restaurants, makeup, and more.
Bestmark is a popular mystery shopping company that connects mystery shoppers with jobs. Mystery shoppers get reimbursed for their time via check or cash and typically get paid out 2-4 weeks after the job is completed.
Recommended reading: How To Become A Mystery Shopper
15. Newspaper deliverer
As a newspaper deliverer, you may be able to bring your child to work with you when you’re delivering newspapers. Delivery times typically range from 4 AM-6 AM, and in some cases, there are late evening deliveries and weekend deliveries.
Before bringing your child to work, make sure the newspaper company permits you to bring your child with you as some companies may not be okay with this.
16. Gym worker (many jobs have on-site daycares)
Gyms all across the country are now offering free on-site daycares for customers. This is to entice people to come to their gym and also allows parents to workout without having to pay and arrange childcare to get to the gym.
Depending on the location, gyms that offer childcare include EOS Fitness, Life Time, LA Fitness, YMCA, and even local and county gyms.
I have a friend who works part-time hours at a local county gym. She works in the daycare room and gets to bring her toddler and baby with her. This can be a good option to look into if you don’t have school-aged kids, and need to bring your young children to work with you.
17. Find a company that has onsite daycare for their employees
There are many companies out there that provide on-site daycare for their employees.
My husband’s company provides 100% employer-sponsored on-site childcare at work, so anyone who works at the company can bring their children to work and save money on childcare costs. This is a growing benefit that more and more companies are offering to employees.
When searching for new jobs, read the benefits offered at the company and see if on-site childcare is listed.
Frequently Asked Questions
Below are answers to common questions about bringing your child to work jobs.
What are the best jobs where you can bring your child to work?
The best jobs that let you bring your child to work include jobs like nannying and daycares, and remote jobs like blogging, proofreading, or working as a customer service representative. All of these jobs typically let you bring your child to work or you get the benefit of working at home, saving money on childcare costs.
Can you bring your baby to work with you?
Whether or not you can bring your baby to work with you depends on many factors, including:
Company’s policies
Nature of your job
Local regulations
Many jobs have family-friendly policies in place that allow you to bring your kids to work for a certain period, especially during the infant stage. Some employers even have designated areas to support parents who bring their children to work, including on-site childcare facilities, flexible work hours, or remote work options.
Is it acceptable to bring your child to work? Can I take my child with me to work?
Whether or not it’s acceptable to bring your child to work depends on each company and the type of job. Some jobs fully support parents to bring their children to work and even have a 100% company-sponsored childcare facility. Other companies may not allow bringing children to work if such childcare facilities do not exist at the company. It may also be dangerous to bring kids to certain jobs if you work in a field like construction.
Can you work a remote job with a baby?
One of the best ways to work and save money on childcare costs is working remotely. This method of work is becoming increasingly common thanks to technology and shifting attitudes toward flexible work arrangements.
If you do land a remote job, here are some tips for successfully working with a baby:
Establish a schedule that accommodates your work responsibilities and baby’s needs.
Set up a dedicated workspace that is quiet and comfortable where you can focus on work.
Aim to get a job that has flexible work hours, so you can take care of your child when they need it, and perhaps work during naps.
That being said, it doesn’t mean that online or remote jobs are easy, or that working from home and watching a kid at the same time will be easy. It can be hard to manage both at the same time.
Do companies still have bring your kid to work day?
Some companies do still have bring your kid to work day. Keep in mind, this is usually only one day out of the whole year.
If you work at a daycare can you bring your child for free?
If you work at a daycare, you can usually get a discounted rate if you bring your child.
How to find jobs that would welcome children and don’t require a nanny or sitter?
Some workplaces are much more welcoming than others. Finding jobs that already cater to kids (such as daycares) or working from home are two options to start with.
Bring Your Child To Work Jobs – Summary
Being able to bring your children to work is becoming more accepting and even supportive, with companies providing on-site childcare facilities.
There are many child-focused businesses, such as private preschools or daycares, where you may be able to bring your child to work with you.
Along with the rise of remote jobs, you may be able to work at home and take care of your children at the same time. If you work from home, such as by being a proofreader or virtual assistant, you may be able to work a flexible schedule and work in your spare time, such as when your child is napping or sleeping. Working around your children’s schedules is one way to work from home for stay-at-home parents.
Running her own business and deciding on her own hours is how my sister works from home with a child. She is a full-time blogger (she owns the very site that you are reading – Making Sense of Cents).
What do you think are the best kid-friendly jobs for moms and dads?
Connecticut-headquartered mortgage servicer and lender Planet Home Lendinghas hired Doug Long as senior vice president and divisional sales manager.
Long, who brings more than 20 years of experience in the mortgage industry, will be responsible for building Planet’s retail networks and will also have a focus on product development, the company said.
“Planet is pioneering the future of mortgage lending with novel products like Cash 4 Homes, 1st Year Flex, Purchase EDGE, one-time close construction loans, and bridge, renovation and manufactured home loans,” Long said.
“What sets us apart is not just these products, but how we come together, across different channels, to continuously innovate and refine them. This synergy allows Planet to offer unparalleled operational support to its sales professionals, along with no hidden overlays and some of the industry’s best turn times.”
Long was most recently the executive regional manager for Union Home Mortgage before joining Planet.
His previous positions include southeast divisional president at AmeriFirst Home Mortgage, which was acquired by Union Home Mortgage in December 2022; and president of national lending at Prospect Mortgage.
As the 12th-largest mortgage lender, Planet Home Lending posted an origination volume of $25 billion in 2023, a 5.3% decline from 2022, according to Inside Mortgage Finance. America’s top 50 lenders saw an average origination volume decline of about 41% in 2023. Its strategy has focused on acquisitions in both correspondent and retail channels.
The company’s acquisition of Homepoint‘s delegated correspondent business in 2022 boosted its correspondent market share, with about 70% of its origination coming from the correspondent channel.
In June 2023, Planet Home Lending acquired Platinum Home Mortgage Corporation, bringing over 20 branches.
Planet Home Lending has 175 sponsored mortgage loan originators in 35 active branches across the country, according to the Nationwide Multistate Licensing System.
Over the life of a $350,000 mortgage with a 7% interest rate, borrowers could expect to pay from $216,229 to $488,233 in total interest, depending on whether they opt for a 15-year or 30-year loan term. But the actual cost of a mortgage depends on several factors, including the interest rate, and whether you have to pay private mortgage insurance.
Besides interest, homebuyers need to account for a down payment, closing costs, and the long-term costs of taxes and insurances that are included in a $350,000 mortgage payment.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Cost of a $350,000 Mortgage
When you finance a home purchase, you have to pay back more than the borrowed amount, known as the loan principal. The total cost of taking out a $350,000 mortgage is $838,281 with a 30-year term at a 7% interest rate. This comes out to $488,233 worth of interest, assuming there aren’t any late monthly mortgage payments or pre-payments.
When you buy a home, there are usually some upfront costs you’ll have to pay, too. Mortgages often require a down payment, calculated as a percentage of home purchase price, that’s paid out of pocket to secure financing from a lender. The required amount varies by loan type and lender, but average down payments range from 3% – 20%.
Closing costs, including home inspections, appraisals, and attorney fees, represent another upfront cost for real estate transactions. They typically sum up to 3% to 6% of the loan principal, or $10,500 to $21,000 on a $350,000 mortgage.
The total down payment on $350,000 mortgages also impacts the total cost of taking out a home loan. Unless buyers put 20% or more down on a home purchase, they’ll have to pay private mortgage insurance (PMI) with their monthly mortgage payment. The annual cost of PMI is generally between 0.5% – 1.5% of the loan principal. Borrowers can get out of paying PMI with a mortgage refinance or when they reach 20% equity in their home. If this is your first time in the housing market, consider reading up on tips to qualify for a mortgage. 💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.
Monthly Payments for a $350,000 Mortgage
The monthly payment on a $350K mortgage won’t always be the same amount. You’ll need to factor in your down payment, interest rate, and loan term to estimate your $350,000 mortgage monthly payment.
With a 30-year loan term and 7% interest rate, borrowers can expect to pay around $2,328 a month. Whereas a 15-year term at the same rate would have a monthly payment of approximately $3,146. However, these estimates only account for the loan principal and interest. Monthly mortgage payments also include taxes and insurances, but these costs can differ considerably by location and based on a home’s assessed value.
There are also different types of mortgages to consider. Whether you opt for a fixed vs adjustable-rate mortgage, for instance, will affect your monthly payment.
To get a clearer idea of what your monthly payment might be with different down payments and loan terms, try using a mortgage calculator.
Recommended: Best Affordable Places to Live in the U.S.
Where to Get a $350,000 Mortgage
Homebuyers have many options in terms of lenders, including banks, credit unions, mortgage brokers, and online lenders.
The homebuying process can be stressful, so it may be tempting to go with the first mortgage offer you receive. However, shopping around and getting loan estimates from multiple lenders lets you choose the one that’s the most competitive and cost-effective.
Even a fraction of a percentage point difference on an interest rate can add up to thousands in savings over the life of a mortgage. Besides the interest rate, assess the fees, terms, and closing costs when comparing mortgage offers.
Recommended: Home Loan Help Center
What to Consider Before Applying for a $350,000 Mortgage
When taking out a mortgage, it’s important to consider the total cost of the loan. You’ll need cash on hand for a down payment and closing costs, plus sufficient income and funds to cover the monthly payment and other homeownership costs.
Before applying for a $350,000 mortgage, crunching the numbers in a housing affordability calculator can give a better understanding of how these costs will work with your finances.
It’s also helpful to see how $350,000 mortgage monthly payments are applied to the loan interest and principal over the life of the loan. The majority of the monthly mortgage payment goes toward interest rather than paying off the loan principal, as demonstrated by the amortization schedules below.
Here’s the mortgage amortization schedule for a 30-year $350,000 mortgage with a 7% interest rate — which would amount to $488,233 in interest. For comparison, we’ve also included the mortgage amortization schedule for a 15-year $350,000 mortgage with a 7% interest rate. A $350,000 mortgage payment, 15 years’ out, would add up to $216,229 in interest. When weighing a 30-year vs 15-year loan term, the shorter loan term carries a higher monthly payment but less than half the total interest over the life of the loan.
Amortization Schedule, 30-year Mortgage at 7%
Year
Beginning Balance
Total Interest Paid
Total Principal Paid
Remaining Balance
1
$350,000
$24,386
$3,555
$346,425
2
$346,425
$24,129
$3,812
$342,613
3
$342,613
$23,853
$4,088
$338,525
4
$338,525
$23,558
$4,383
$334,142
5
$334,142
$23,241
$4,700
$329,442
6
$329,442
$22,901
$5,040
$324,402
7
$324,402
$22,537
$5,404
$318,998
8
$318,998
$22,146
$5,795
$313,203
9
$313,203
$21,717
$6,214
$306,989
10
$306,989
$21,278
$6,663
$300,326
11
$300,326
$20,796
$7,145
$293,182
12
$293,182
$20,280
$7,661
$285,520
13
$285,520
$19,726
$8,215
$277,306
14
$277,306
$19,132
$8,809
$268,497
15
$268,497
$18,496
$9,446
$259,051
16
$259,051
$17,813
$10,128
$248,923
17
$248,923
$17,081
$10,861
$238,062
18
$238,062
$16,295
$11,646
$226,417
19
$226,417
$15,454
$12,488
$213,929
20
$213,929
$14,551
$13,390
$200,539
21
$200,539
$13,583
$14,358
$186,181
22
$186,181
$12,545
$15,396
$170,784
23
$170,784
$11,432
$16,509
$154,275
24
$154,275
$10,238
$17,703
$136,573
25
$136,573
$8,959
$18,982
$117,590
26
$117,590
$7,586
$20,355
$97,236
27
$97,236
$6,115
$21,826
$75,409
28
$75,409
$4,537
$23,404
$52,006
29
$52,006
$2,845
$25,096
$26,910
30
$26,910
$1,031
$26,910
$0
Amortization Schedule, 15-year Mortgage at 7%
Year
Beginning Balance
Total Interest Paid
Total Principal Paid
Remaining Balance
1
$350,000
$24,065
$13,684
$336,296
2
$336,296
$23,076
$14,673
$321,624
3
$321,624
$22,015
$15,733
$305,890
4
$305,890
$20,878
$16,871
$289,020
5
$289,020
$19,658
$18,090
$270,929
6
$270,929
$18,351
$19,398
$251,531
7
$251,531
$16,948
$20,800
$230,731
8
$230,731
$15,445
$22,304
$208,427
9
$208,427
$13,832
$23,916
$184,510
10
$184,510
$12,103
$25,645
$158,865
11
$158,865
$10,249
$27,499
$131,366
12
$131,366
$8,261
$29,487
$101,879/td>
13
$101,879
$6,130
$31,619
$70,260
14
$70,260
$3,844
$33,904
$36,355
15
$36,355
$1,393
$36,355
$0
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How to Get a $350,000 Mortgage
To qualify for a $350,000 mortgage, borrowers will need to meet the income, credit, and down payment requirements. It’s also important to have an adequate budget for long-term housing costs and other financial goals and obligations like savings and debt.
Using the 28/36 rule, a monthly mortgage payment shouldn’t be more than 28% of your monthly gross income and 36% of your total debt to be considered affordable. With a $2,328 monthly mortgage payment, you’d need a minimum gross monthly income of at least $8,300, or annual income of $96,600, to follow the 28% rule. Similarly, your total debt could not exceed $660 to keep housing and debt costs from surpassing 36%.
Home mortgage loans, with the exception of certain government-backed loans, require a minimum credit score of 620 to qualify. However, a higher credit score can help secure more competitive rates. If you qualify as a first-time homebuyer, you could get a FHA loan with a credit score of 500 or higher, though borrowers with a credit score below 580 will have to make a 10% down payment.
As mentioned above, it’s a good idea to compare lenders and loan types to find the most favorable rate and loan terms. From there, getting preapproved for a home loan is a logical next step to determine the loan amount and interest rate you qualify for. It also puts you in a better position to demonstrate you’re a serious buyer when making an offer on a property.
After putting in an offer, completing the mortgage application requires many of the same forms used for preapproval, plus an earnest money deposit. 💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
The Takeaway
Buying a home is the largest purchase many Americans make in their lifetime. How much you’ll end up paying for a $350,000 mortgage depends on the interest rate and loan term. On a $350,000 mortgage, the monthly payment can range from $2,328 to $3,146 based on these factors.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
How much is a $350K mortgage a month?
The cost of a $350,000 monthly mortgage payment is influenced by the loan term and interest rate. On a $350K mortgage with 7% interest, the monthly payment ranges from $2,328 to $3,146 depending on the loan term.
How much income is required for $350,000 mortgage?
Income requirements can vary by lender. But using the 28/36 rule, a borrower who isn’t burdened by lots of other debts should make $99,600 a year to afford the monthly payment on a $350,000 mortgage.
How much is a down payment on a $350,000 mortgage?
The down payment amount depends on the loan type and lender terms. FHA loans require down payments of 3.5% or 10%, while buyers could qualify for a conventional loan with as little as 3% down.
Can I afford a $350K house with a $70K salary?
It may be possible to afford a $350,000 house with a $70,000 salary, but only if you are able to make a sizable down payment to lessen the amount of money you need to borrow. Having a good credit score and minimal debt would also better your chances.
Photo credit: iStock/sturti
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SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Fannie Mae announced on Wednesday an enhancement to its desktop underwriting system, which will facilitate the asset, income, and employment verification process through a single data source.
Lenders can use a single 12-month asset verification report to identify recurring deposits in the applicant’s digital bank statement data. The solution will automatically use approved data from third-party vendors to validate income, employment, and assets in one step. It will be available effective March 29.
With the new functionality, the government-sponsored enterprise (GSE) is “exploring new ways to help our lenders open more doors for aspiring homeowners” and “removing a hurdle from the loan application process,” Cyndi Danko, senior vice president and single-family chief credit officer, said in a prepared statement.
Lenders can use the same report to check applicants’ rent payments and cash flow history. This may benefit qualified borrowers with limited or no credit history, potentially increasing the number of applicants approved, the GSE said.
Fannie Mae explained that lenders who opt into the DU validation service and leverage asset verification reports with at least 12 months of data may get “clear to close” faster and achieve Day 1 Certainty, which may reduce repurchase risk. In February, Fannie Mae also announced a “notice of potential defect” functionality in the latest version of its system Loan Quality Connect to address buybacks.
In a survey of pilot lenders, the GSE also noticed that 50% of them had some level of cost savings over their existing third-party report costs with the single asset verification report.
The enhanced verification process comes after the launching of an early assessment tool to determine buyers’ preparedness and mortgage options without the impact of a hard credit check. It also follows the announcement of an income calculator for self-employed borrowers, and a down payment assistance tool.
Do you have unwanted gift cards? Here are 7 ways to sell gift cards online instantly for cash and make extra money. Approximately $3 billion in gift cards go unused in the U.S. every year. If you’re one of those people who have gift cards and don’t plan to use them, consider selling the gift…
Do you have unwanted gift cards? Here are 7 ways to sell gift cards online instantly for cash and make extra money.
Approximately $3 billion in gift cards go unused in the U.S. every year. If you’re one of those people who have gift cards and don’t plan to use them, consider selling the gift card for cash.
There are many reasons gift cards go unused, including you don’t shop at the retailer, you need money to pay the bills, or you simply rather have cash instead of a gift card. This can be an easy way to get free money now.
The most popular gift cards people buy come from retailers like Target, Starbucks, Amazon, Best Buy, Visa, and Walmart. You’ll generally receive about 90% of the total gift card amount if you decide to sell the gift card, so keep that in mind.
Best Ways To Sell Gift Cards
Today, I’m going over the best places to sell gift cards.
1. Raise
Raise is a gift card site that lets you buy or sell used gift cards.
To sell a gift card on Raise, you need to:
Go to the “Sell” link at the top of the Raise home page.
Enter the store name of the gift card.
Enter the gift card information such as serial number, PIN, current balance, and your selling price.
Payout options: pay by check, PayPal, or ACH direct deposit. Anytime you sell a used gift card on Raise, Raise takes a 15% cut from the selling price.
2. CardCash
CardCash is a platform that buys used gift cards.
To sell your gift card to CardCash, do the following:
Enter the store name of the gift card you have.
Enter the amount on the gift card.
CardCash will offer you an amount to buy the card.
For example, I pretended I had a Target gift card to sell with a $50 balance. CardCash offered me $39.50 cash or $40.09 for a prepaid Mastercard. Seeing their instant offer with their quote tool was quick and easy!
Then I have the option to get paid either by mailed check, ACH direct deposit, or PayPal.
3. CardSell
CardSell is an app that helps you trade unwanted gift cards for cash. The mobile app works for both iOS and Android users.
To get started, download the app and enter your gift card number and PIN. CardSell will verify your card and check the balance. Once verified, CardSell will pay you within 48 hours via PayPal.
4. ClipKard
ClipKard is another popular website that buys used gift cards. The process is similar to other gift card websites.
To get started here’s what to do:
Enter the info for the gift card store and the amount on the gift card.
Receive an offer from ClipKard for your gift card.
You’ll need to ship your gift card via USPS to ClipKard.
Once the gift card is accepted, you’ll get paid either via PayPal or you can choose to have a check sent to your address.
You can also earn rewards on ClipKard for doing things like buying and selling gift cards. Reward points can be used to give you discounts on future purchases on the website.
5. Gameflip
Gameflip is a website for gamers that helps you sell unused gift cards from places like Steam, PSN, Xbox, iTunes, Google Play, and more.
To sell a gift card on Gameflip, you need to create an account and click “Start Selling”. This is where you can list your gift card in the marketplace. Once someone buys your gift card, you’ll be notified.
When the transaction goes through, the sale proceeds are immediately deposited into your Wallet. You can then withdraw the cash into your bank account, Skrill, Bitcoin, or crypto account, and more.
Recommended reading: 12 Best Places To Sell Video Games
6. GiftCash
GiftCash is a platform that buys gift cards. Selling a gift card on GiftCash is easy.
All you have to do is enter the brand’s name of the gift card into GiftCash, enter the gift card balance, and GiftCash will tell you the total payout offer instantly.
Then, you can accept payment from options like ACH direct deposit or Cryptocurrency.
7. Check Into Cash
If you rather go in person to sell your used gift card, find a local Check Into Cash store near you. There are over 300 locations in the U.S., which makes it easy to get cash immediately for your gift cards.
Bring any gift cards you haven’t used into your local Check Into Cash store and they will exchange the gift cards for cash.
Frequently Asked Questions
Below are answers to common questions about how to sell gift cards.
Why do people buy used gift cards?
People buy used gift cards because it’s a way to save money. For example, someone can buy a gift card that has a $50 balance on it and only pays $40 for the gift card (depending on the site they are buying it from). This allows people to get the same value of goods or services at a discounted rate.
What’s the best site to sell gift cards?
The best site to sell gift cards depends on what kind of gift card you’re selling. If you’re selling a gift card to a place like Target or Starbucks, Raise and CardCash are great spots to sell gift cards. They make the process easy and convenient to sell unused gift cards and get the most money for your gift card.
If you’re selling a gaming-related gift card, Gameflip is the best website to sell your used gift card.
Recommended reading: 16 Best Selling Apps For Selling Stuff Online And Locally
Does Gift Card Granny buy gift cards?
Gift Card Granny no longer buys gift cards from people. The website is a gift card marketplace and cash back website. For example, you can build and customize a gift card and send it to people, but you can’t buy discounted cards.
Gift Card Granny does have a “discounted” gift card section, but it is really just a cash back section that gives you a bonus for getting a certain gift card. For example, if I buy a Subway gift card, I may be able to get $2.50 in cash back, but I have to buy a $250 gift card to even receive that amount.
How can I sell gift cards for cash immediately? Can I sell gift cards online instantly?
You can sell gift cards online instantly and the best website to get paid immediately for your gift cards is CardCash. CardCash pays up to 92% of the gift card value and pays out within 1-2 days of gift card approval. You may need to send in the gift card to CardCash, but typically the gift card can be transferred by entering the gift card number and pin to the website.
Where can I sell gift cards for PayPal cash?
Raise and CardCash buy gift cards and both payout via PayPal.
Can I sell my gift cards anywhere in person?
Check Into Cash is a brick-and-mortar with over 300 locations. To find a store near you, go to their website and find a local store. Bring in your gift card and get a free quote. Make sure to bring your government-issued ID so they can verify your identity and process payment. If your gift card is accepted, you’ll walk out with cash immediately and have no waiting period, unlike online gift card marketplaces.
You can also sell your gift cards locally, such as on Facebook Marketplace.
Can I sell my gift card on eBay?
Another great option for selling gift cards is via eBay. You can list all kinds of gift cards on the platform and even send the gift card info to the buyer via messenger, so there’s no need to ship anything. eBay does take a portion of the sale so you also need to keep that in mind.
What if I don’t want to sell my gift card and don’t want to use it either?
If you don’t want to go through the process of selling your gift card, you have several other options. You can regift the gift card or donate the gift card to a place in need like an animal shelter or local charity. Some retailers might even take gift card returns as long as the gift card isn’t used. However, you’ll need the original receipt to do that.
Best Places To Sell Gift Cards Online – Summary
The best places to sell your gift cards are Raise, CardCash, CardSell, ClipKard, GameFlip, GiftCash, and Check Into Cash. To get the most money for your gift card, check around multiple sites and get quotes for how much you can receive.
These gift card exchange sites buy gift cards because they resell them. People then buy these used gift cards because they are sold at a discount. For example, you may be able to buy a $100 gift card but only actually pay $90 for it.
Remember, you can sell both digital and physical gift cards! If you have a physical gift card, you may have to mail it in.
Some of the gift card exchange sites do have a minimum balance (such as $10) as well as a maximum value (such as $2,000) that they will accept.
Selling gift cards is easy and a great way to make extra cash. I recommend gathering the different unused gift cards you have lying around and checking the gift card balance to see how much extra money you can make.
Did you know that you can sell your old gift cards that you don’t want?
Ahead of Friday’s national jobs report, mortgage rates have found stability after increasing for multiple weeks.
Polly’s average 30-year fixed rate for conventional loans was 7.17% on Tuesday, down from 7.24% one week earlier, according to HousingWire’s Mortgage Rates Center. At the same time one year ago, Polly’s 30-year fixed rate averaged 6.82%. Meanwhile, the 15-year fixed rate averaged 6.49% on Tuesday, down from 6.5% one week earlier.
The spread between the 30-year fixed rate and the 10-year Treasury rate has increased. According to Mike Simonsen, founder and president of Altos Research, the spread will narrow once inflation is fully under control. It will also take some competition in the mortgage markets to bring the spread down, he said.
The Mortgage Bankers Association (MBA) has registered three straight weeks of purchase loan application declines as interest rates have risen. On average, it takes 30 to 90 days for higher mortgage rates to impact demand, according to HousingWire lead analyst Logan Mohtashami.
“For rates to come down, the labor data needs to get softer,” Mohtashami said.
The forthcoming jobs report from the U.S. Bureau of Labor Statistics will provide further clarity for mortgage rate trends.
“My primary data line for rates is jobless claims; if jobless claims rise faster, mortgage rates will go lower, regardless of what the Fed does,” Mohtashami said.
Meanwhile, inventory levels have shown year-over-year growth despite the prevailing high mortgage rates. As of March 1, the available inventory of unsold homes on the market was 19% higher than it was a year earlier, according to data from Altos Reserach.
“Most home sellers are buyers of homes, so the action we are seeing this year is a healthy step in the right direction to get more balance in the housing market,” Mohtashami wrote on Saturday.
Between Feb. 23 and March 1, inventory rose from 497,608 to 498,339 (up 0.15%), according to Altos Research. Meanwhile, inventory rose year over year by nearly 19%. The most recent inventory bottom was in 2022 at 240,194 units, while the inventory peak in 2023 was 569,898. For context, active listings during the same time frame in 2015 were substantially higher at 958,304.
Investors’ focus will turn to Federal Reserve Chair Jerome Powell’s biannual monetary policy update scheduled for Thursday. Powell’s address is anticipated to be his final public statement before the Federal Open Market Committee’s next meeting on March 19-20.
Owning a home is an integral part of the American Dream, but it can often feel more like a mirage to those wrestling with bad credit. The idea of being shackled by a poor credit score might have you convinced that the dream of homeownership is unattainable.
But here’s a plot twist — a poor credit score does not necessarily slam the door to your dream house. Yes, it might add a few challenges to the journey, but the path to homeownership is far from being erased.
In this article, we’re going to simplify the process and illuminate the steps you can take to make your dream of homeownership a reality, even with bad credit. So buckle up and prepare for a deep dive into the world of credit scores, mortgages, and the surprising possibilities that await you.
10 Steps to Buy a House With Bad Credit
Bad credit doesn’t mean a ‘no’ to homeownership—it just implies a more strategic approach is required. From understanding your credit situation and improving your score, to exploring different mortgage options and considering a larger down payment, there are several actionable steps you can take.
Let’s embark on this journey together, helping you turn the dream of owning your own home into a reachable reality, irrespective of your credit score.
1. Know Your Credit Scores
How low are your credit scores? Do you know what’s causing you to have poor credit? Or are you assuming it’s bad because of past financial missteps?
What is a ‘bad’ credit score?
What constitutes a bad credit score? Generally, the ranges are as follows:
Excellent: 781 and above
Good: 661-780
Fair: 601-660
Poor: 501-600
Bad: 500 and below
So, if your credit score is 600 or lower, you’d fall into the subprime consumer category.
Check Out Our Top Picks for 2024:
Best Mortgage Loans for Bad Credit
How Your Credit Scores are Calculated
You should also have an understanding of how your credit score is calculated so you’ll know how much to improve it before applying. The five components are as follows:
Payment history (35%): Do you make timely payments to your creditors each month? If you’ve missed several payments in the past, your credit scores could be suffering. And other past-due bills that became collection accounts also negatively impact your payment history.
Amounts owed (30%): How much do you still owe creditors? If your debt-to-available credit or credit utilization ratio on revolving accounts is high, it could affect your credit scores.
Length of credit history (15%): How long have you had credit? A more established credit profile could equate to a higher FICO score.
Credit mix (10%): Do you have a healthy mix of revolving and installment credit? Lenders like to see a combination of both, and having several of one and not the other could lower your credit scores.
New credit (10%): Have you recently opened several new credit accounts? If so, prospective lenders may see you as more of a risk.
How to Check Your Credit Score
There are several free options to choose from. However, you can start by contacting your bank to see if it’s a service provided to account holders, free of charge. Or if you have credit cards, check the statement or online dashboard as it may appear there.
Did you recently apply for a mortgage and were denied? Lenders must explain their decisions in a letter and disclose that you can request a copy of the credit report used to make the decision.
In some instances, the denial letter will explain the denial and the credit score the lender used during the evaluation process. Lenders use different algorithms and credit scoring models. However, you can use this number as a starting point.
Lastly, you can use credit monitoring tools, like Identity IQ and Identity Guard, to view variations of your credit score. They also offer great identity theft protection.
2. Rectify Errors in Your Credit Report
According to the results of a study conducted by the Federal Trade Commission (FTC), 20% of credit reports contain errors. But why does this matter? Well, what’s in your report determines your credit score. And there’s a possibility that an error could result in a low credit score and prevent you from obtaining a mortgage.
So, you’ll want to get a free copy of your report and review it from top to bottom. If you spot errors, take the following steps to have them rectified:
Step 1: Print out a hard copy of your credit report and circle the items in question.
Step 2: Draft up a letter of dispute to submit to the credit bureaus. For a template, click here.
Step 3: Send the letter, the highlighted copy of your credit report, and any supporting documentation to the credit bureaus.
Step 4: Follow-up in writing with the credit bureaus after 30 days if you still haven’t received a response.
If you need additional help with credit report errors, review this comprehensive guide from the FTC.
It can take a while for credit reports to reflect updates made by disputing errors. So, prepare to fix your credit at least a few months before applying for a mortgage. That way, you can ensure any positive changes have time to improve your credit.
What if everything is accurate?
There’s a possibility that a series of financial missteps or a rough patch has left your credit in shambles and the effects are lingering. If that’s the case, reach out to the creditors and request that they remove the negative mark from your credit report in exchange for a settlement of the account in question.
This is called a pay-for-delete agreement and can do wonders for your credit if the creditor is on board. But be sure to get the agreement in writing.
If the account is showing as a paid collection item, this approach won’t work since the account has already been paid off.
However, you can write a letter to the creditor explaining your circumstances and ask that they honor a goodwill adjustment so you can get approved for a mortgage. You may not have luck with either approach right away, but consistency could pay off.
3. Run the Numbers
Mortgage loans designed for consumers with subpar credit sometimes come at a higher cost. Why so? It’s all a matter of risk.
The mortgage lender wants to be protected if you default on the loan and the home goes into foreclosure. So, if you’re adamant about getting a mortgage with bad credit, be prepared for the financial implications.
To illustrate, assume you’re seeking a 30-year fixed-rate mortgage for $250,000. Below is an example of how the figures could play out, based on your creditworthiness:
CREDIT SCORE
MONTHLY PAYMENT
INTEREST PAID OVER LIFE OF LOAN
TOTAL COST OF LOAN
Excellent Credit
4%
$179,674
$429,674
Good Credit
5%
$233,139
$483,139
Fair Credit
6%
$289,595
$539,595
Poor Credit
7%
$348,772
$598,772
And these figures don’t even factor in property taxes, homeowner’s insurance, and private mortgage insurance (if you make a down payment that’s less than 20%).
The good news is you can always refinance the loan at a later date when your credit score and financial situation improve.
4. Consider an FHA Loan
An FHA Loan is a great option for anyone who wants to buy a house with bad credit. These loans are issued by private lenders, but the loan is guaranteed by the Federal Housing Administration. This guarantee protects the mortgage lender from borrowers that eventually default on their mortgage.
FHA loans come with less stringent requirements so they are easier to apply for than a conventional mortgage. However, FHA loans tend to have higher interest rates and closing costs than conventional mortgages.
FHA Loan Requirements
That being said, there are a few requirements you’ll need to meet:
You need a minimum credit score of 580.
You must have proof of a stable monthly income.
If your credit score is 580 or higher, you’ll need a minimum down payment of at least 3.5%.
If your credit score is 500 or higher you’ll need a minimum down payment of at least 10%.
The home you’re purchasing must be your primary residence.
There are other requirements you’ll need to meet to qualify for an FHA loan. These loans are capped at a certain amount, though this will vary depending on where you live.
You’ll also have to work with an FHA approved lender and pay private mortgage insurance (PMI), which will increase your monthly payment.
See also: FHA Loan Requirements for 2024
5. Consider a VA Loan
If you’re a veteran who has bad credit, then you may be eligible to take out a VA loan. VA loans are issued through private lenders, but the mortgage is backed by the U.S. Department of Veterans Affairs.
The program is designed to help veterans get back on their feet and has served as a lifeline for many struggling veterans. And VA loans have many advantages.
There is no down payment required, and you don’t have to purchase PMI. Additionally, there is no minimum credit score requirement. The interest rates are very competitive, and it’s fairly easy to apply for a VA loan.
VA Loan Requirements
However, there are a few requirements you’ll need to meet first:
Active duty military or a veteran who was honorably discharged.
You’ve served for at least 90 consecutive days during active wartime.
You’ve served for at least 180 consecutive days during active peacetime.
More than six years in the National Guard.
If your spouse died in the line of duty you may qualify for the VA loan program as well.
See also: VA Home Loans: Everything You Need to Know
6. Consider a USDA Loan
The USDA typically offers these no-down-payment mortgage loans in rural areas and lower-density suburbs. To qualify for a USDA loan, borrowers must meet income limits based on their household size and the median income of their county. You must also have a minimum credit score of 580.
See also: Guide for First-Time Homebuyers with Bad Credit
7. Explore Other Lending Options
If you aren’t a candidate for FHA or VA loans, you might consider alternative lenders. Loan aggregators like Lending Tree are a good way to determine if you qualify for conventional loan products.
Lending Tree won’t give you a loan but will match you with mortgage lenders that are willing to work with you. It only takes a few minutes to sign up on the company’s website, and you can receive mortgage offers from multiple lenders.
If you’ve been banking with the same financial institution for an extended period of time, you might also consider applying for a mortgage there.
Banks tend to have stricter lending requirements, but they may be willing to consider you for a mortgage based on your long-standing history with the bank. At the very least, it can’t hurt to try.
8. Save Up for a Down Payment
Lenders may be reluctant to approve you for a house with bad credit. And the higher the loan amount, the more risk they’ll have to assume.
It is more likely that you’ll be approved if you put down a large down payment, since the loan amount will be lower. Plus, you’ll save a bundle on interest.
So, how much should you save for a down payment? The standard 20% required for most conventional loans is a good starting point, but the higher, the better. (Plus, you may be able to avoid mortgage insurance).
It’s also a good idea to have as much cash in your savings account as possible. This demonstrates to lenders that despite having poor credit, you can handle financial emergencies or cover unexpected financial occurrences as they arise. It’s not necessary to stow away an entire year of income in the bank, but three to six months will suffice.
Worried about your credit taking a hit if you apply with several lenders? Don’t be. According to myFICO, “inquiries for mortgage loans generated in a 30-day window count as a single inquiry.”
So, if you shop around and apply with ten separate lenders in a 30-day window, your credit will only be impacted by one inquiry since FICO scoring models recognize that you’re conducting a home loan search.
10. Sign on the Dotted Line
Congratulations! You’ve done your homework, saved up for a down payment, and shopped around to find the lowest interest rate. Despite your credit troubles, you’ve done the legwork to buy the home of your dreams.
But if you weren’t as fortunate and found that it wasn’t the right time to buy, don’t fret. Be patient while working diligently to boost your credit score and get your finances in order.
Furthermore, be sure to make all your rent payments on time to show potential lenders that you are responsible and can handle your housing obligations. That way, you’ll have more luck next time around.
First-time homebuyers made up 55% of agency purchase mortgages in 2023, according to Intercontinental Exchange (ICE) eMBS data, the highest such share in the 10 years ICE has been tracking the metric.
A record 47% of government-sponsored enterprise (GSE) purchase loans in 2023 came from first-time homebuyers, a number that’s been trending gradually higher throughout the past decade.
“Since 1995, only two quarters have seen fewer than one million first lien mortgages originated,” Andy Walden, vice president of enterprise research at ICE.
“The first was Q1 2023, and Q4 the second. Looking back, last year’s market was dominated by purchase lending, with loans to buy homes making up 82% of a historically low number of originations. While it remains a tough market for prospective purchasers, our eMBS agency securities database revealed that first-time homebuyers actually made up 55% of all agency purchase mortgages last year. That’s the highest share in the 10 years we’ve been tracking the metric.”
Counter to that trend, the first-time homebuyer share of Ginnie Mae purchase loan issuance pulled back in recent years as they have relied heavily on GSE mortgages.
“The market in which these folks purchased their first home was one of record house prices, ballooning down payments, rising rates and elevated debt-to-income ratios (DTIs). Given record exposure to first-time homebuyer loans, it’ll be worth watching the performance of this cohort very closely moving forward, particularly for those invested in 2023 agency MBS,” said Walden.
First-time homebuyers averaged higher front-end DTIs for all products, but particularly for conventional mortgages, where the DTI for first-time homebuyers at 31.2% is more than 4 percentage points higher than for repeat buyers in recent months.
Back-end DTIs vary less between first-time and repeat buyers, as first-time homebuyers who spend more of their income on housing spend less on other debt, according to ICE market trends data.
Interest rates and origination trends
While purchase lending will continue to dominate 2024 originations, a 19% month-over-month jump in refi activity on improved rates highlighted the potential for a rebound in refinance lending if rates move lower, ICE noted.
In January, ICE’s conforming 30-year fixed mortgage rate lock index showed rates averaging 6.6%. Mortgage rates have averaged close to the 7% mark as of Feb. 29 following a series of positive economic data.
In turn, rate/term refis, which have effectively been nonexistent for some time, made up 24% of all refinance activity to mark a two-year high.
“We noted last month that if industry rate projections hold firm, we could see a mini-surge of refi activity around the 2023 vintage by the end of 2024,” Walden continued.
“Even the relatively slight rate pullbacks of December and January spurred a growing number of homeowners to refinance. Demand is clearly there when rates cross certain thresholds and, if current rate forecasts hold true, we expect that demand to increase throughout the year.”
When it comes to retaining the business of refinancing homeowners, the industry has a lot of ground to make up.
Servicers retained just one of every five such borrowers in Q4 2024, a 17-year low. Non-bank servicers did a better job, retaining a little over one in four refinancing borrowers, while bank lenders retained only one in 10.
“Providing an exemplary servicing experience is critical to reversing this trend, as is effectively identifying and engaging with customers likely to refinance. And when they have the opportunity to serve that customer, lenders need to be sure the front-end of the process is smooth as well,” Walden noted.
Mortgage rates are still above 7% and haven’t been able to break below 6.50% for some time now. With mortgage rates higher, will this stop inventory from growing year over year? Some would say yes, on a year-over-year basis, of course.
Inventory is very seasonal, and we are about to start our seasonal increase in inventory. But even before that seasonal boost, we are showing year over year growth in inventory despite higher rates. Most home sellers are buyers of homes, so the action we are seeing this year is a healthy step in the right direction to get more balance in the housing market.
Here is a look at inventory last week:
Weekly inventory change (Feb. 23-March 1): Inventory rose from 497,608 to 498,339
The same week the previous year (Feb. 24-March): Inventory fell from 430,395 to 419,419
The recent inventory bottom was in 2022 at 240,194
The inventory peak for 2023 was 569,898
For some context, active listings for this week in 2015 were 958,304
New listings data
New listings data is growing yearly, but it’s still a bit too low for my liking in 2024; I had hoped for more by this point. Now that we are entering the spring selling season when active inventory typically grows, we should get a boost over the next few months on the new listings data to match the spring season in previous years — and certainly above 2023 levels.
Weekly new listing data for the last week over several previous years:
2024: 52,189
2023: 48,156
2022: 49,019
As we head into the seasonal inventory increase, we will watch how higher rates impact inventory data. Last year, I was looking for inventory to grow between 11,000 and 17,000 per week if mortgage rates exceeded 7.25%. I will still look for inventory to grow at this level this year with higher rates. Also, if mortgage rates head lower again, then we need to track how this impacts the new listings and inventory as well. I have a simple inventory growth model: as mortgage rates head higher, this can lead to weakness in demand, which means it takes longer to sell a home and inventory can grow.
Price-cut percentage
Every year, one-third of all homes take a price cut before selling — this is regular housing activity, and this data line is very seasonal. When mortgage rates move higher and demand gets hit, the price-cut percentage can grow. When rates fall, they can head lower than an average year.
Inventory is higher than last year and we might have found the bottom already in inventory, so as the year moves on, the price cut percentage data should be rising. We will keep an eye out on this to see if any actual aggressive trends happen either way.
Here is the price cut percentage for the last week over the past several years
2024: 30.5%
2023: 31%
2022: 17.2 %
Mortgage rates and the 10-year yield
The 10-year yield is the key for housing in 2024. In my 2024 forecast, I put the 10-year yield range between 3.21%-4.25%, with a critical line in the sand at 3.37%. If the economic data stays firm, we shouldn’t break below 3.21%, but if the labor data gets weaker, that line in the sand will be tested. This means mortgage rates should stay between 5.75%-7.25% with a baseline assumption that the spreads will be bad for most of the year. The 10-year yield has traded above 4.25%, but mortgage rates never got to 7.25%, so the spreads have acted better than I thought they would.
We dodged a bullet last week as the PCE inflation data was muted. Headline PCE inflation for 12 months is running at 2.4%. We were very close to breaking over the critical line in the sand I have been talking about at 4.34%, but it didn’t break and we ended the week at 4.18%. We had some softer economic data come out on Friday and commentary from Fed presidents, so the 10-year yield was having a Friday block party, as you can see below.
As we have discussed, the 3.80% level for the 10-year yield is crucial, and the 4.34% level is critical. We haven’t broken either yet. We don’t want to break over 4.34% because we would see some more market drama and mortgage rates could head much higher. With the negative purchase application data we have had recently, the last thing we want is for the 10-year yield to get above 4.34%, which would mean dealing with mortgage rates between 7.25%-8% in a marketplace that is already slowing down with higher rates.
Mortgage rates didn’t move much last week and we haven’t hit my peak mortgage rate call of 7.25% yet with bond yields this high. We have jobs Friday coming up this week, so that will be interesting. The 10-year yield and mortgage rates have been wild since March 2022.
Purchase application data
Since mortgage rates have been rising toward 7% and above, the purchase application data has been trending negative on a weekly basis this year. We have had five weeks of negative data, which broke our positive streak of eight weeks when rates were falling. While this marketplace isn’t the crashing home sales marketplace of 2022, it’s not growing, so we will be hovering around this 4 million mark for a while until we see lower rates.
Since November 2023, we have had eight positive and five negative purchase application prints after making holiday adjustments. Year to date, we have had two positive prints versus five negative prints. This is a carbon copy of what happened in 2023 when rates went higher. However, we worked from a lower bar in home sales until 2024. So, don’t expect a massive existing home sales print in the next NAR existing home sales report like we did last year.
Week ahead: Buckle up for jobs week!
Here comes the jobs report with the 10-year yield still close enough to the critical technical level, making this week very interesting. This week we will get job openings, ADP, jobless claims and the BLS jobs Friday report. Since I am a labor-over-inflation guy, this week means a lot to my work for housing because I believe the housing market moves with the 10-year yield.