Renting

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The median sales price of a Southern California home rose year-over-year for the first time since the summer of 2007, according to DataQuick.

Last month, the median price paid for a SoCal home or condo was $289,000, up 1.4 percent from November and four percent from the $278,000 price tag seen a year earlier.

However, it remains 42.8 percent below the peak Southland median of $505,000 seen in early and mid-2007, leaving scores of homeowners underwater.

“Several forces have pulled the region’s median sale price out of its nose dive and given it lift,” said John Walsh, MDA DataQuick president, in a release. “We’ve seen the re-selling of foreclosed homes fall off its peak in newer lower-cost inland areas, while at the same time sales have started to pick up in some of the more established expensive areas.”

Foreclosure resales accounted for 39.6 percent of sales last month, down from 53.5 percent in December 2008.

“That simple shift in what’s selling, and what’s not selling, puts upward pressure on the median. That’s statistical. But we’ve also seen price floors, however temporary, form in many areas recently as the foreclosure inventory dwindled and buyers took advantage of lower prices, lower mortgage rates and tax credits. A meaningful comeback in the jumbo loan market would provide another big boost to the pricier areas.”

Jumbo financing was tied to 16.7 percent of all home purchase loans last month, the highest level since January 2008, but nowhere close to the near-40 percent share seen before the mortgage crisis got underway.

FHA loans grabbed a 39.6 percent share, while cash-buying accounted for 24.9 percent of December sales.

A total of 22,328 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, up 16.4 percent from November and 12.1 percent from the 19,926 sold in December 2008.

Source: thetruthaboutmortgage.com

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The FHA has taken a number steps to address risk and strengthen its balance sheet, including requiring larger down payments and higher mortgage insurance premiums.

The upfront mortgage insurance premium (MIP) will be raised from 1.75 percent to 2.25 percent to “build up capital reserves and bring back private lending.”

The FHA will also request legislative authority to increase the maximum annual MIP so it can shift some of the cost, as annual premiums are paid over time, proving to be less of a barrier for prospective buyers.

New FHA borrowers will also be required to come in with a 10 percent down payment if their Fico score is below 580; those with scores of 580 and above can still qualify for the 3.5 percent minimum payment.

In other words, if you have terrible credit, you can still get a mortgage with just 3.5 percent down.

Finally, the FHA will reduce allowable seller concessions from six percent to three percent, in line with industry standards.

The current level essentially exposes the FHA to excess risk by creating incentives to inflate appraised values.

The proposed changes will go into effect in either spring or summer, giving lenders time to speed applications through the system under the current rules.

The FHA said it will continue to increase enforcement on FHA mortgage lenders, while publicly reporting lender performance rankings.

“When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history,” said Commissioner David Stevens, in a statement.

Check out this chart from the FHA’s 2009 fiscal year detailing Fico score distribution (it doesn’t look like the new down payment requirement will have any impact, given very few borrowers have scores below 620, let alone 580):

(top photo: davidreece)

Source: thetruthaboutmortgage.com

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It appears the pesky down payment hurdle to homeownership is finally being swept aside.

This week, Fifth Third Bank out of Cincinnati, Ohio announced the availability of a mortgage with absolutely no down payment requirement.

Put simply, that means you no longer need to save up to buy a home, whether that’s actually a good thing or a bad thing.

This seems to have been borne out of necessity, not preference, especially as home prices reach new heights nationwide.

Fifth Third’s Down Payment Assistance Program

  • If you’re light on down payment money
  • You may want to check out Fifth Third’s DPA program
  • Which offers up to $3,600 in down payment assistance
  • Combined with Freddie Mac’s Home Possible Advantage mortgage to create a zero down home loan option

The so-called “Down Payment Assistance Program” from Fifth Third relies upon Freddie Mac’s Home Possible Advantage, which allows for loan-to-value ratios as high as 97%.

The remaining three percent of the home purchase price is covered by Fifth Third via down payment assistance.

Fifth Third will allow up to $3,600 in down payment assistance, meaning the property price can’t exceed $120,000.

That $3,600 doesn’t need to be paid back, and it can used toward the down payment or closing costs depending on product type.

So the loan program is clearly geared toward those with low or moderate income, not just anyone looking to forego the usual down payment requirement.

The property must also be located in the following states: MI, IN, IL, KY, TN, OH, WV, NC, GA, FL.

To qualify, the property must either be located in a Low Income Census Tract or the borrower must meet the low income limit threshold based on figures from the Federal Financial Institutions Examination Council (FFIEC) website.

Prospective home buyers can also utilize local and state housing programs to “take advantage of free money for their down payments.”

Fifth Third does note that the down payment assistance might be treated as taxable income and reported to the IRS, so keep that in mind when pursuing this type of loan.

You don’t need to be a first-time home buyer to take advantage of this program, and if it aligns with Freddie Mac’s guidelines, the minimum FICO score is just 620.

It turns out Fifth Third accepts credit scores as low as 600, which is pretty amazing when coupled with a no down payment loan program.

However, if you are a first-timer, you probably have to complete some form of homeowner education.

The property must be a single-unit, primary residence, though I believe both single-family homes and condos/townhouses qualify.

Loan options are probably restricted to fixed-rate offerings, with the 30-year fixed the most likely candidate for home buyers with limited means.

No Money in the Bank Might Not Be a Problem

  • Aside from not needing a down payment
  • You might be able to qualify without reverses as well
  • So having no money in the bank isn’t necessarily a roadblock here
  • You can also enjoy reduced mortgage insurance premiums

The Freddie Mac program doesn’t require asset reserves so qualifying homeowners may be able to purchase a home with absolutely no money in the bank.

Additionally, it comes with reduced mortgage insurance premiums, making monthly payments more affordable to those with limited income.

Fifth Third is the latest bank to offer a low or no-down payment mortgage option.

A couple weeks ago, Guaranteed Rate launched a 1% down mortgage that relies upon a forgivable grant as high as 7% of the purchase price.

Quicken Loans, the largest nonbank mortgage lender in the nation, also has a 1% down payment mortgage that isn’t widely publicized.

Interestingly, all of these new mortgages rely on conforming loan programs and noticeably snub government lending such as FHA, which fell out of favor recently after a number of lawsuits.

While it’s great to have another flexible mortgage option, keep in mind that it may be more difficult to get your offer accepted if you are putting little to nothing down.

Home sellers aren’t particularly keen on seemingly high-risk buyers because chances of lender fallout are higher.

Read more: 3 ways a low down payment raises your monthly mortgage payment.

Source: thetruthaboutmortgage.com

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April 3, 2018
by Carter Wessman

Mortgage rates are moving up a little this morning as we march toward the big market moving event of the week: the monthly jobs report on Friday.

Long-term rates are still expected to increase so our recommendation remains for borrowers to lock on a purchase or refinance right now. Read on for more details.

Where are mortgage rates going?                                                      

Rates rise after moving lower yesterday

Mortgage rates are moving a little higher today. Yesterday, we saw the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, move down to its lowest level since late January.

Mortgage rates typically move in the same direction as the 10-year yield so rates improved slightly to start the week. Today, we’ve seen a bit of a reversal in the market with investors moving back into stocks, pushing Treasury yields and mortgage rates higher.

Rate/Float Recommendation                            

Lock now while rates are lower 

Mortgage rates are on track to stay relatively flat this week. This is good news for anyone looking to buy a home or refinance their current mortgage. Rates are on track to move higher as the year unfolds so most borrowers will be better off locking in a rate soon.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:                                      

Fedspeak 

  • Minneapolis Fed President Neel Kashkari at 9:30am

Notable events this week:                

Monday: 

  • PMI Manufacturing Index
  • ISM Manufacturing Index
  • Construction Spending
  • Fedspeak

Tuesday:    

Wednesday:      

  • ADP Employment Report
  • Fedspeak
  • PMI Services Index
  • Factory Orders
  • FOMC Minutes
  • ISM Non-Mfg Index
  • EIA Petroleum Status Report

Thursday:        

  • Jobless Claims
  • International Trade
  • Fedspeak

Friday:       

  • Monthly Jobs Report

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Filed Under: general, homeowner-tips, how-to-2, real-estate

Source: totalmortgage.com

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US Treasury secretary Janet Yellen

Al Drago/Photographer: Al Drago/Bloomberg

(Bloomberg) –Treasury Secretary Janet Yellen reiterated her optimism about the U.S. economy, saying inflation can slow down without a slump in employment, even if growth cools.

“Our economy has proven more resilient than many had thought,” amid forecasts of recession, Yellen said in excerpts of remarks due to be delivered later Friday in New Orleans. “I continue to believe that there is a path to reducing inflation while maintaining a healthy labor market. Without downplaying the significant risks ahead, the evidence that we’ve seen so far suggests that we are on that path.”

Yellen said in an interview last week that she sees diminishing risk for the U.S. to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation.

“While there are parts of our economy that are slowing down, households are spending at a robust pace and businesses continue to invest,” Yellen said in the excerpts, released by the Treasury Department. “Going forward, I expect the current strength of the labor market and robust household and business balance sheets to serve as a source of economic strength, even if our economy does cool a bit more as inflation falls.” 

Federal Reserve officials have raised interest rates by 500 basis points in little more than a year and have signaled more tightening will be needed to rein in an inflation rate that’s running higher than the Fed’s 2% target. 

They’ve warned that returning inflation to the goal will likely require a period of below-trend growth and some softening of labor-market conditions.

Yellen touted President Joe Biden’s legislative achievements that stepped up investment in infrastructure, semiconductors and the green-energy transition.  

She is the latest administration official to do so, two days after the president delivered what the White House called a “cornerstone” address on his economic policy, “Bidenomics,” with his office seeking to improve perceptions about his job performance before the 2024 election campaign gets into full swing.  

Yellen said the policies of Bidenomics are rooted in what she laid out early last year as “modern supply-side economics.”

The idea is to “prioritize investments in our workforce and its productivity – in order to raise the ceiling for what our economy can produce,” Yellen said, highlighting how the Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act constitute “one of the most important economic investments” the U.S. has made to date. 

Source: nationalmortgagenews.com

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Bonds Crushed by Data, But Technically Still in The Range

By:
Matthew Graham

Thu, Jun 29 2023, 4:33 PM

Bonds Crushed by Data, But Technically Still in The Range

At many points in the past week, we’ve lamented the narrow, boring nature of the prevailing trading range.  The thesis has been constant: it will take data to prompt a more meaningful move as the market trades on technicals in the meantime.  Today’s data did it’s best to prompt a meaningful move with GDP revised up 0.6% and Jobless Claims falling most of the way back down to earth.  Bonds reacted with their largest sell-off in several weeks.  Ironically, because the starting point was the bottom of the range, the sell-off was only able to get yields up to the ceiling of the range.  

    • Jobless Claims 
      • 239k vs 265k f’cast, 264k prev
    • Q1 GDP
      • 2.0 vs 1.4 f’cast
    • GDP Final Sales
      • 4.2 vs 3.5 f’cast, 1.1 prev
    • Pending Home Sales
      • -2.7 vs -0.5 f’cast, -0.4 prev

09:07 AM

Weaker overnight with additional selling after econ data.  MBS down 5/8ths and 10yr up 11bps at 3.823.

11:45 AM

Snowball selling into the 10am hour and leveling off after that.  10yr up 13.2bps at 3.846 and MBS down 5/8ths.

02:42 PM

Still sideways at weaker levels, 10yr up 13.6bps at 3.85.  MBS down 3/4ths. 

04:16 PM

Off the weakest levels, but still generally flat.  10yr up 12.4bps at 3.838.  MBS down just under 3/4ths.

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com

Mortgage rates ticked slightly up, still hovering within the 6% to 7% range, but home sales show buyers are shrugging off the more expensive borrowing costs, according to Freddie Mac.

The average 30-year fixed-rate mortgage increased to 6.71% for the week ending June 29, according to Freddie Mac’s latest Primary Mortgage Market Survey. That’s up from the previous week when it averaged 6.67%. A year ago, the 30-year fixed-rate mortgage averaged 5.7%. 

The average rate for a 15-year mortgage was 6.06%, up from 6.03% last week and up from 4.83% last year.   

The slight shift marks another week that rates remain within the 6% to 7% range. However, a recovery in home sales may indicate that buyers are accepting the higher borrowing costs as the new normal, according to Freddie Mac Chief Economist Sam Khater.

“Mortgage rates have hovered in the six to seven percent range for over six months and, despite affordability headwinds, homebuyers have adjusted and driven new home sales to its highest level in more than a year,” Khater said. “New home sales have rebounded more robustly than the resale market due to a marginally greater supply of new construction. 

“The improved demand has led to a firming of prices, which have now increased for several months in a row,” Khater continued.

If you are looking to buy a home, you can take advantage of lower mortgage rates and shop for the best rate on a loan. You can visit an online marketplace like Credible to compare rates, choose your loan term and get preapproved with multiple lenders at once.

THESE TWO FACTORS COULD BE DRIVING YOUR CAR INSURANCE COSTS UP

Interest rates could move higher

Federal Reserve Chair Jerome Powell said in a recent statement that inflation remains high and the process of getting it to a 2% target rate “has a long way to go.”

The central bank has already raised rates 10 times in 2022 and 2023 to bring inflation down to a 2% target. In June, it announced a much-anticipated pause on interest rate increases following continued moderation in inflation.

The interest rate increase means the federal funds rate will remain in a targeted range of 5% to 5.25%, the highest level in 16 years.

“With the Fed taking a breather from monetary tightening until its July meeting, capital markets are assessing the outlook for the second half of 2023,” Keeping Current Matters Chief Economist George Ratiu said in a statement. “On the upside, even with interest rates more than double what they were at the start of 2022, the economy continues to expand as consumers – buoyed by jobs and rising wages – manage to spend more on goods and services.

“On the downside, the Federal Reserve has been clear that inflation is still hotter than desired, and additional rate hikes are on the table,” Ratiu continued. “Based on the central bank’s forward guidance, we can expect two more rate increases in the months ahead.”

Despite the continued pressure on interest rates, mortgage rates are still expected to drop near 6% by the end of 2023, Realtor.com Chief Economist Jiayi Xu said in a statement.

If you’re trying to find the best mortgage rate, it can help to shop around. Visit the Credible marketplace to compare options from different lenders at once without affecting your credit score.

MORE STUDENTS TURNING TO FEDERAL AND PRIVATE STUDENT LOANS TO FINANCE COLLEGE: SURVEY

Construction of more affordable homes, increasing

Demand for affordability is driving the construction of more homes priced under $300,000, according to a report by Realtor.com. Early estimates in May indicate that homes within this price range constituted approximately 17% of total sales, marking the highest share since December 2021 (18%).

“Despite this encouraging news, there remains an urgent need for more homes at the most affordable price points, where the shortage of available inventory is most severe,” Xu said.

If you are ready to shop for a mortgage, you could get a better rate by looking at several lenders. Credible can help you compare interest rates from multiple mortgage lenders and choose the one with the best rate for you.

HOMEBUYERS ARE FINDING BETTER DEALS IN THESE CITIES, SURVEY SAYS

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Source: foxbusiness.com

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Today we’ll review Axia Home Loans, an up-and-coming independent mortgage bank that’s licensed in 17 states nationwide.

In case you were wondering, Axia is a Greek word that means “value” or “worth.”

They’re based out of the Pacific Northwest, Bellevue, Washington to be exact, and have been around for just over a decade, since 2007.

But they’ve still managed to become a billion-dollar mortgage lender, funding nearly $1.4 billion via the retail channel in 2019.

Axia Home Loans Fast Facts

  • Retail mortgage lender founded in 2007
  • Headquarters in Bellevue, Washington
  • Licensed to originate home loans in 17 states
  • Nation’s first 100% employee-owned independent mortgage bank
  • Funded roughly $1.4 billion in home loans during 2019
  • Half of their loan volume comes from Nevada and Washington
  • About two-thirds of total volume was home purchase financing
  • Just launched a mortgage broker division called United Reliance Wholesale (UR Wholesale)

Axia did about 30% of total loan volume in its home state of Washington, with another 20% in nearby Nevada.

Aside from those two states, they’re also licensed in Arizona, California, Florida, Hawaii, Idaho, Minnesota, Montana, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Utah, Wisconsin, and Wyoming.

They seem to specialize in home purchase financing, likely due to strong relationships with local real estate agents. But they also do a lot of refinance volume as well.

In October 2020, they launched a wholesale lending division for mortgage brokers called Unified Reliance Wholesale (UR Wholesale), with plans to focus on the West Coast, primarily in California.

How to Apply with Axia Home Loans

  • You can get started online, in-branch, or over the phone
  • They offer a digital mortgage application known as Axia Express
  • Allows you to securely link financial accounts and scan documents
  • Axia processes, underwrites, and funds all their home loans in-house

Axia Home Loans processes, underwrites, and funds their loans in-house, allowing them to close your mortgage quickly and efficiently.

They rely on emerging technologies like a digital mortgage application and smartphone app to make it easier to finance a new home purchase or refinance an existing home loan.

Their loan application is known as “Axia Express,” a platform that gives customers the option to automatically pull in tax returns, employment history, and bank statements.

Additionally, you can securely scan and upload documents from your mobile device and chat with your loan officer if you have questions.

Once submitted, you can track loan progress and receive status updates as your home loan makes its way to the finish line.

To get started, you can visit their website and select “Start the Home Loan Process” or “Connect with a Local Advisor.”

If you choose the first option, you can select a loan officer if you’ve been referred or know who you’ll be working with. From there, you can apply for a loan.

If you don’t have a loan originator, you’ll need to fill out a basic form with contact info and wait for a loan officer to contact you.

If you choose the Connect with a Local Advisor option, it’ll show you branches nearby and local loan officers who work there. Once you click through to a specific branch, you can apply online.

Axia Home Loans Mortgage Options

  • Home purchase loans
  • Rate and term refinances
  • Cash out refinances
  • Conventional loans backed by Fannie Mae and Freddie Mac
  • Government-backed loans including FHA, USDA, and VA
  • Jumbo home loans
  • HomePath financing
  • Fixed-rate and adjustable-rate loans in various terms

Axia Home Loans offers both home purchase financing and mortgage refinances, including rate and term refinances and cash out refinances.

Those thinking of buying a home can take advantage of Axia’s Certified Homebuyer Program, which is an actual credit approval that is analyzed by their underwriting department (verified pre-approval).

You can get a home loan on a primary residence, second home, or an investment property.

They offer conventional loans backed by Fannie Mae and Freddie Mac and government home loans, including FHA, USDA, and VA loans.

Those in need of larger loan amounts can get a jumbo home loan from Axia as well.

Additionally, they provide HomePath financing on Fannie Mae-owned properties.

In terms of loan programs, you can get either a fixed-rate mortgage (such as a 15-year or 30-yer fixed) or an adjustable-rate mortgage, like a 5/1 ARM.

It’s unclear if they offer renovation or construction loans, or any home equity line/loan products.

All in all, they have loan programs to fit the needs of most customers.

Axia Home Loans Mortgage Rates

While Axia says they offer competitive rates, they don’t advertise mortgage rates on their website.

While this doesn’t indicate whether their rates are good, bad, or just plain average, it does make it a bit more difficult to get pricing.

In other words, you’ll need to get in contact with a loan officer to see what type of mortgage rate you qualify for.

The same goes for lender fees, which don’t appear to be listed on their website. Be sure to inquire about what they charge, such as underwriting, processing, and loan origination fee.

All that will factor into the mortgage APR, which is an important calculation that takes into account both the interest rate and the fees included.

Axia Home Loans Reviews

On Zillow, Axia Home Loans enjoys a 4.95-star rating out of 5 on roughly 2,000 customer reviews.

You can click on individual loan officer names as well to get their ratings if you want to work with someone highly-rated.

While they keep us in the dark regarding mortgage rates, many of the Zillow reviews indicate that both interest rates and closing costs were favorable.

On SocialSurvey, they’ve got a 4.92 rating out of 5 from more than 13,000 customer reviews.

And on BirdEye, a 4.9 rating based on more than 200 reviews. So they appear to consistently make their customers happy.

They also say they’ve got a 98% client satisfaction rating based on current surveys.

Lastly, they are accredited with the Better Business Bureau and currently have an A+ rating. There are no customer reviews on the BBB website and few complaints.

Axia Home Loans Pros and Cons

The Good

  • Can apply online, by phone, or in-branch
  • Offer free personalized mortgage consultations
  • Digital mortgage application
  • Free smartphone app
  • Free mortgage calculator on site
  • 100% employee-owned mortgage lender
  • Some of their loan officers speak Spanish and Vietnamese
  • Excellent customer reviews
  • A+ BBB rating

The Maybe Not Good

  • Only licensed in 17 states
  • Do not disclosed their mortgage rates
  • No mention of lender fees
  • Don’t offer home equity loans/lines

(photo: SounderBruce)

Source: thetruthaboutmortgage.com

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Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

Mortgage rates dropped modestly throughout June, but a spike at the end of the month put them back near where they were at the start of the month. Average 30-year mortgage rates ended June at 6.71%, just eight basis points below their June 1 level, according to Freddie Mac.

In spite of this recent volatility, rates could start trending down more permanently in July. But it all depends on how the latest economic data shakes out.

The still-overheated economy needs to slow somewhat for mortgage rates to come down. Though inflation has been decelerating for the past 11 months, it’s still above the Federal Reserve’s target rate of 2%. If inflation slows significantly this month and the labor market shows signs of cooling, mortgage rates could drop.

Current Mortgage Rates

Mortgage type Average rate today
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mortgage rates on Zillow

Real Estate on Zillow

Current Refinance Rates

Mortgage type Average rate today
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mortgage rates on Zillow

Real Estate on Zillow

Mortgage Calculator

Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.

Mortgage Calculator

$1,161
Your estimated monthly payment

Total paid$418,177
Principal paid$275,520
Interest paid$42,657
  • Paying a 25% higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Paying an additional $500 each month would reduce the loan length by 146 months

Click “More details” for tips on how to save money on your mortgage in the long run.

30-year Fixed Mortgage Rates

The current average 30-year fixed mortgage rate is 6.71%, according to Freddie Mac. This is a slight increase from the previous week.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates. 

15-year Fixed Mortgage Rates

The average 15-year fixed mortgage rate is 6.06%, up three basis points from the prior week, according to Freddie Mac data.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.

When Will Mortgage Rates Go Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Though rates had initially been trending down this year, they’ve since ticked back up. 

As inflation starts to come down, mortgage rates will recede somewhat as well. If we experience a recession, rates may drop a little faster. But average 30-year fixed rates will likely remain somewhere in the 6% to 7% range throughout 2023.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans. 

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve has been increasing the federal funds rate this year to try to slow economic growth and get inflation under control. So far, inflation has slowed, but it’s still above the Fed’s 2% target rate.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

As inflation starts to come down, mortgage rates should, too. But the Fed has indicated that it’s watching for sustained signs of slowing inflation.

Molly Grace

Mortgage Reporter

Source: businessinsider.com

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If you’ve used Zillow’s Marketplace to compare mortgage rates, you may have come across Sebonic Financial.

While they may be unfamiliar to you, they’re actually a dba of Cardinal Financial, which is a top-40 mortgage lender nationally.

So while they might not be as big or as recognizable as other mortgage lenders out there, they’re backed by one the largest mortgage lenders in the country.

You can read my Cardinal Financial review as well if you’re curious about them, but for quick reference, they’re a mortgage bank based out of Charlotte, NC that’s been around since 1987.

Sebonic Financial Quick Facts

  • Direct-to-consumer lender located in Charlotte, North Carolina
  • A dba of Cardinal Financial, a top-40 mortgage company nationally
  • Considered the digital startup division of Cardinal Financial
  • Licensed to do business in all 50 states and the District of Columbia
  • A Zillow Marketplace mortgage lender

Sebonic says it’s a digital startup fueled by tech, new ideas, and fast execution, anchored by the resources of a well-established and experienced mortgage bank.

It’s unclear how long Sebonic Financial has been around, but I recall seeing them for years now, so I would assume nearly a decade or longer despite being known as a newcomer.

I also can’t tell you what the name Sebonic means, whether it’s a made-up word or a surname. I’d like to know the origin and will keep digging on that one.

However, they do appear to be licensed in all 50 states and DC thanks to their relationship with Cardinal Financial, which is a plus.

Additionally, they seem to be the more digitally-oriented division of Cardinal that deals mainly with borrowers looking to apply for a mortgage online, remotely.

So if that’s your thing, they could be a good choice for your mortgage needs, especially if their interest rates and lender fees are low.

Applying for a Home Loan with Sebonic Financial

  • You can apply by phone or request a free rate quote on their website
  • Or use their loan officer directory, then apply via that individual’s personal webpage
  • Some applicants may start the process via the Zillow Marketplace where they seem to advertise heavily
  • They offer a digital mortgage application process known as Octane

Like Cardinal Financial, they offer a proprietary digital mortgage application known as Octane.

It allows you to start the loan process online and complete most things digitally, as opposed to having to fax or email documents.

You can also e-sign documents, scan and upload conditions, check loan progress at any time, and receive status updates as your loan makes its way to the finish line.

You’re able to call them up directly to get started as well, or alternatively request a free rate quote via their website.

Alternatively, you can use the loan officer directory on their website to select an originator to work with, then apply directly via their personal webpage.

As noted, you might also get started if using Zillow’s Marketplace to compare mortgage rates, at which point someone will contact you once you submit your loan request.

Loan Types Offered by Sebonic Financial

  • Home purchase and refinance loans (including cash out)
  • Conventional loans backed by Fannie Mae and Freddie Mac
  • Government-backed loans: FHA, USDA, and VA loans
  • Jumbo loans with loan amounts up to $3 million
  • Interest-only home loans

Sebonic Financial offers the full suite of loans programs on both home purchases and mortgage refinances.

You can also get a cash out refinance if you’re looking to tap your home equity.

You can get financing for a primary residence, second home, or investment property, including condos and townhomes and multi-unit properties.

In terms of loan type, you can get a conventional home loan backed by Fannie/Freddie, or a government-backed loan such as an FHA loan, USDA loan, or VA loan.

They also offer non-conforming stuff like jumbo loans up to $3 million loan amounts and an interest-only jumbo ARM.

You can get a fixed-rate mortgage such as a 30-year or 15-year fixed, or an adjustable-rate mortgage, such as a 5/1 or 7/1 ARM.

It’s unclear if they offer renovation or construction loans, such as the FHA 203k.

Sebonic Financial Mortgage Rates

While they don’t advertise their mortgage rates on their own website, you can often see their daily rates via the Zillow Marketplace.

They seem to be a big advertiser/partner with Zillow, so if you search for mortgage rates via that platform, they’ll often pop up alongside other lenders.

From what I’ve seen personally, their mortgage rates were pretty competitive relative to other lenders on Zillow.

While perhaps not always the very lowest listed, they often advertise their rates with $1 lender fees, compared to other lenders typically charging $1,000 – $2,000.

So while you might see a rate an eighth higher than the cheapest lender listed, don’t forget to factor in the closing costs.

Sebonic Financial Reviews

On Zillow, they’ve got a 4.49-star rating out of 5 based on more than 3,000 customer reviews.

That’s close to excellent, but there are some mixed reviews if you scroll through them.

Some past customers have complained about them not following up or communicating effectively, or even making contact to begin with.

But others have said they aren’t pushy and provide exceptionally responsive service – so your mileage may vary here.

As always, take the time to look at individual loan officer reviews to fine-tune who you ultimately work with for the absolutely best experience possible.

On SocialSurvey, they have a 4.62-star rating out of 5 based on more than 5,600 reviews, which is pretty consistent with their Zillow reviews.

While still very good, there are plenty of mortgage companies with even higher reviews on those sites.

There seems to be a consistency issue, with lots of customers very happy, and the occasional one seemingly dismayed.

This could be one of the drawbacks of working with an online mortgage lender without a physical presence.

The good news is their parent company Cardinal Financial is Better Business Bureau (BBB) accredited and has been since 2014.

They currently have an A+ BBB rating and a 4.25 out of 5-star rating based on roughly 200 customer reviews.

Sebonic Financial Pros and Cons

The Good

  • Licensed in all 50 states and DC
  • Backed by a very large and established mortgage bank
  • Provide a digital mortgage experience
  • Offer $1 lender fee options
  • Lots of loan programs to choose from
  • Mostly good reviews on both Zillow and SocialSurvey
  • A+ BBB rating
  • Free mortgage calculators on their website

The Possible Bad

  • Some mixed reviews with folks citing poor communication
  • No branch offices (you work with a loan officer remotely)
  • Don’t publish mortgage rates on their website
  • May not offer construction/renovation loans or home equity loans
  • They may not service your loan after closing

Source: thetruthaboutmortgage.com