The Consumer Financial Protection Bureau (CFPB) this week released its 2023 Consumer Response Annual Report, offering an overview of consumer complaints in a variety of industries overseen by the bureau.
While much of the report suggests “a continued increase in credit or consumer reporting complaints, with more than one million of these complaints being sent to the three nationwide consumer reporting companies,” the mortgage industry demonstrates general reactivity to the feedback, according to the report.
The CFPB received about 27,900 mortgage-related complaints in 2023 and sent 23,300 (84%) of them to companies for review and response. It referred another 10% to other regulatory agencies and found 6% to not require action. As of March 1, 2024, less than 0.1% of these complaints were pending with the consumer and less than 0.1% were pending with the bureau.
The response rate by mortgage companies to consumer complaints stands at 99%, according to the bureau, and relevant companies “closed 92% of complaints with an explanation, 2% with monetary relief, and 3% with non-monetary relief,” the report stated. Mortgage companies provided an administrative response for 2% of complaints.
The majority of consumer complaints in the mortgage arena (13,100, or 58%) were focused on conventional home loans, followed by Federal Housing Administration (FHA) loans (19%), U.S. Department of Veterans Affairs (VA) loans (9%) and home equity lines of credit, or HELOCs (6%).
Further down on the list were “other types of mortgages” (5%), reverse mortgages (2%), and negligible numbers of U.S. Department of Agriculture (USDA) loans and manufactured home loans (less than 1%).
More than 11,400 complaints dealt with “trouble during the payment process,” while more than 6,000 had to with consumers struggling to make mortgage payments.
Other common complaints included applying for a new mortgage or refinancing an existing one, closing on a mortgage, or a problem with a credit report or credit score. The company response rates in these instances was at or above 90%.
Mortgage complaints that were resolved with an explanation, however, decreased from the level observed in last year’s report, the bureau reported. HELOC-related complaints also increased by 21% compared to the monthly average observed over the prior two years.
Other product types also recorded increases in consumer complaints.
“The monthly average for [VA] mortgage complaints increased 11% compared to the monthly average for the prior two years,” the report explained. “The visible spikes in complaint volume in early 2023 appear to be related to an enforcement action announced by the CFPB against Wells Fargo.”
That enforcement action was announced in December 2022, compelling Wells Fargo to pay $3.7 billion in total to settle multiple consent orders related to auto lending, consumer deposit accounts and mortgage lending. The penalties totaled $1.7 billion and an additional $2 billion was ordered for redress to consumers.
Late last week, Indiana Sen. Mike Braun (R) submitted a letter to Ginnie Mae president Alanna McCargo asking about what he identified as recent bouts of instability in both the Home Equity Conversion Mortgage (HECM) and HECM-backed Securities (HMBS) programs, which stemmed from the collapse of a major lender and challenges that Ginnie Mae has described in maintaining a large portfolio of reverse mortgages.
To get a better idea of what prompted the letter and his interest in the reverse mortgage program, RMD reached out to Braun’s office with a series of questions about his perspectives.
‘Red flags’ and OIG inquiry
When asked about what first caused the senator to pay more attention to HECM and HMBS program issues, he explained that the late 2022 failure of Reverse Mortgage Funding (RMF) and the subsequent assumption of is reverse mortgage portfolio by Ginnie Mae were major influences toward his decision to inquire about the program’s challenges.
“RMF’s failure raised serious red flags,” Sen. Braun said in an email to RMD. “The scope of this failure is glaring, comprising 36 percent of all existing HECM loans at the time. I am seeking clarity about Ginnie Mae’s actions in dealing with this distressed issuer and their actions to fix underlying programmatic problems.”
In late 2023, the U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) announced that it was initiating an inquiry into how Ginnie Mae monitored RMF, as well as Ginnie Mae’s extinguishment of the failed lender from its HMBS program. OIG Rae Oliver Davis said at the time that the inquiry was being initiated “because extinguishing issuers and seizing their portfolios places significant stress on Ginnie Mae’s operations.”
When asked why he was not willing to wait for the OIG to finish its own inquiry before making his own overtures, Braun said that he feels like waiting may not be an option.
“The timing is important as Ginnie Mae explores improvements to the HMBS program,” he said. “The Senate Aging Committee strives to protect seniors and prioritizes oversight of aging-related issues, like reverse mortgages, and my letter highlights information that is vital to the longevity and stability of the program.”
Additional scrutiny, bipartisan potential
In his letter, Braun alluded to the potential for additional “congressional scrutiny” related to the oversight of the federally backed reverse mortgage program. When asked to expand on that thought, Braun explained that additional transparency into an important event like the RMF collapse is necessary.
“There needs to be more information on their dealings with RMF as it fell into distress,” Braun said. “It’s also important to know about the RMF assets that Ginnie Mae is now servicing, since they have never extinguished an HMBS portfolio previously. We need to have congressional oversight over their efforts to improve troubled issuers’ management practices and their proposals to improve liquidity in the HMBS program.”
With both the House of Representatives and the Senate having such narrow divides along party lines, the potential for added partisanship — especially headed into a hotly contested presidential election — remains high. RMD asked Braun if he feels this issue could descend into the same kind of pattern, but he seemed to be open to the idea of both parties coming together to address HECM and HMBS program challenges.
“It’s a nonpartisan issue,” he said. “While I sent the letter alone, there is a great opportunity to work with the other side of the aisle if further action occurs.”
He added that it’s important for the industry itself to be present during such discussions.
“Transparency is vital to the function of the HECM/HMBS program, and it’s important for Ginnie Mae to make sure Congress and industry professionals are at the table when it’s time to make decisions,” Braun stated.
Pittsburgh holds a distinct place in the heart of America. Once the backbone of the nation’s steel industry, today it’s a center for technology, education, and healthcare. The city’s resilience and ability to reinvent itself are evident in Pittsburgh’s many thriving neighborhoods, cutting-edge universities, and well-supported arts scene.
Pittsburgh’s footprint, defined by the confluence of the Allegheny, Monongahela, and Ohio rivers, provides a scenic backdrop to a city that’s as friendly as it is hardworking.
Whether you’re a diehard sports fan, a classically trained artist, or simply someone looking for the perfect place in Pittsburgh, there’s no doubt that Steel City has something for everyone.
1. The Incline
The Duquesne and Monongahela Inclines offer a unique way to view Pittsburgh’s picturesque skyline and its river confluences. These historic funicular railways provide not just a practical mode of transportation but also a step back in time. Riding the incline is a beloved tradition for many, especially during sunset. The top stations serve as gateways to the stunning houses in the Mount Washington neighborhood, where fine dining and quaint shops await.
2. The Pittsburgh Steelers
The Pittsburgh Steelers, an NFL team with a nearly psychotically passionate fan base, are integral to the city’s identity. Known for their impressive six Super Bowl championships, the Steelers have a legacy of success and resilience. Game days transform the city into a sea of black and gold, as fans from all over the state gather to support their team. The camaraderie and spirit felt in the stadium or local bars during games underscore Pittsburgh’s community-oriented nature, making Steelers games an unforgettable experience for everyone lucky enough to be there.
3. The Andy Warhol Museum
The Andy Warhol Museum, dedicated to the Pittsburgh-born pop art icon, is a must-visit. As one of the most comprehensive single-artist museums in the world, it houses an extensive collection of Warhol’s artworks, including paintings, drawings, prints, and sculptures. The museum also offers a glimpse into Warhol’s life, showcasing his personal belongings and a vast archive of documents related to his career.
4. Pittsburgh’s Tech Scene
Pittsburgh has emerged as a nucleus for technology and innovation, drawing talent and investment from around the globe. The city’s transformation from steel to silicon is propelled by world-renowned institutions like Carnegie Mellon University and the University of Pittsburgh, which collaborate with tech giants and startups alike. This surprising tech scene has fostered developments in robotics, artificial intelligence, and health tech, contributing to Pittsburgh’s reputation as a city that looks to the future while still honoring its industrial roots.
5. Carnegie Museums
The Carnegie Museums of Pittsburgh encompass a collection of four museums. Each offers a world-class experience in its field, from the extensive dinosaur exhibits at the Natural History Museum to the vast art collections at the Carnegie Museum of Art. These institutions reflect the city’s commitment to education and accessibility in the arts and sciences, providing enriching experiences for visitors of all ages.
6. Primanti Bros.
A culinary icon of Pittsburgh, Primanti Bros. is a hearty creation that embodies the city’s no-nonsense attitude toward food. Originally designed to be a complete meal for truckers on the go, this sandwich stacks grilled meat, coleslaw, tomatoes, and French fries between two slices of Italian bread. Eating a Primanti Bros. sandwich is a rite of passage for visitors, offering a taste of Pittsburgh’s creativity and its history as a blue-collar town.
7. Three Rivers
The confluence of the Allegheny, Monongahela, and Ohio Rivers is central to Pittsburgh’s identity and development. This strategic geographical feature has shaped the city’s history, from its early days as a frontier fort to its rise as an industrial powerhouse. Today, the rivers are a focal point for recreation, hosting activities like kayaking, fishing, and scenic riverboat tours. The Three Rivers also set the stage for the city’s many bridges, adding to Pittsburgh’s unique skyline and architectural beauty.
8. PNC Park
PNC Park is celebrated as one of the most beautiful baseball stadiums in the United States, offering stunning views of the Pittsburgh skyline. Home to the Pittsburgh Pirates, the park is known for its intimate setting, with the game’s action feeling closer than ever. The park’s design cleverly incorporates Pittsburgh’s history and architectural heritage. Visiting here is a home run for baseball fans and architecture aficionados alike.
9. The Cultural District
Pittsburgh’s Cultural District is a testament to the city’s thriving arts scene, with an impressive amount of theaters, galleries, and performance spaces. This area buzzes with activity, hosting Broadway shows, ballet performances, jazz concerts, and much more.
10. Pittsburgh Zoo & PPG Aquarium
The Pittsburgh Zoo & PPG Aquarium is home to over 4,000 animals representing 475 species, including many endangered, the zoo is committed to conservation and animal welfare. The unique combination of a zoo and aquarium in one location allows guests to explore the wonders of both land and sea with ease in a family-friendly setting.
Now that we are right in the middle of the spring buying season, my inventory model is simple: with higher mortgage rates, just like last year, we should be able to grow weekly active inventory between 11,000 – 17,000 on some weeks. Unfortunately, I batted a whopping zero last year since inventory growth never hit that level for even one week — even when mortgage rates hit 8%. This model was based on rates over 7.25%, which is my peak rate forecast.
Weekly inventory change (March 22-29): Inventory rose from 512,759 to 517,355
The same week last year (March 23-30): Inventory fell from 413,883 to 410,734
The all-time 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 1,012,704
New listings data
While I am thrilled that new listings data is growing year over year, something I have been anticipating for some time, the growth in 2024 has been disappointing because I had expected a bit more by now. This was my big talking point on CNBC earlier in the year. Still, new listing data is a positive story. Here are the number of new listings for last week over the last several years:
2024: 59,854
2023: 48,442
2022: 56,258
For context, new listings data at this time in 2010 ran at 326,266.
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. The price-cut percentage can grow when mortgage rates increase and demand gets hit.
As inventory and demand grow year over year, the price-cut percentage data increases year over year. So, we will keep tracking this data line to see how high it goes this year. We keep it simple: higher inventory softness in demand means price growth is weakening. As we can see below, the year-over-year data is showing a higher percentage of price cuts.
2024: 31.9%
2023: 30.5%
2022: 17.2%
10-year yield and mortgage rates
For those of you who have followed me for the last 12 months, you know how important the 4.34% level on the 10-year yield is for my economic work and therefore for the mortgage rate discussion. A break above this level would send mortgage rates toward 7.5%-8%. So far, so good here.
We had the PCE inflation report come out Friday and because some people were expecting a hotter number than estimates, it was perceived to be bullish for rate cuts. However, the markets were closed Friday, so we have to wait and see how trading goes on Monday. The 10-year yield channel is between 4.25%-3.80%, which looks correct as long as the economic data stays firm and jobless claims don’t break higher. This means mortgage rates will likely remain in the upper range of my 2024 forecast of 6.75%-7.25%.
There was not too much action in mortgage rates last week, but with jobs week coming up, we could see some movement. As you can see below, the 10-year yield has made a massive move from 2022 and has stayed above 4%, even with the progress we have made with inflation. Always remember, when it comes to discussions about rates and the Fed pivoting, it’s always labor over inflation data.
Purchase application data
Purchase application data didn’t move much last week. It was flat on a week-to-week basis and down 15% year over year.
Since November 2023, after making holiday adjustments, we have had 10 positive and six negative purchase application prints and one flat print. Year to date, we have had four positive prints versus six negative prints and one flat print.
What have 2022, 2023, and 2024 shown us? Purchase apps made a solid positive run up until mortgage rates started to get back over 7%. This was similar to 2023 data, when purchase apps had 12 weeks of a positive run-up until rates moved toward 7% and then 8%.
Week ahead: We’ll see trading off the inflation report and it’s jobs week
First, the trading on Monday will be exciting because of the PCE inflation report; some argue it was hot and some say it wasn’t. The market decides this, and bond trading will judge it on Monday morning.
Also, Federal Reserve Chairman Powell talked on Friday. I believe Powell’s crucial comment was that the Fed won’t overreact to significant disinflation or heated inflation reports. I think some people missed this. If you want to understand why the markets still have three rate cuts priced in, it’s this mindset.
Then it’s jobs week, with four labor reports, and, of course, for me, it’s labor over inflation data, so buckle up!
Want more context? On the PowerHouse podcast with HousingWire CEO Clayton Collins, I discussed why the data lines we look at in the Housing Market Tracker are so critical for those in the housing industry.
One of the most critical moments in any race is the very beginning. A mistake at the start can snatch away a win before the race is even underway. Any coach will tell you that springing into action the moment the shot is fired is a critical success factor for any athlete.
A race is a useful analog for the mortgage business, especially as it relates to the refinance business.
Lenders in a purchase money market, like the one we’re in now, are running a long-distance race. Starting strong is less important for a deal that takes a long time to close.
Responding to the real estate agent’s or prospective borrower’s first call is the start of this race. Data show that returning that call within a few hours will get your race off to a good start. It’s amazing how many loan officers miss this, don’t return the call quickly, and lose their race before it’s even underway.
It’s the sprint that can really set lenders apart. In our business, that’s the refinance transaction.
Anticipating the start of the refi race
When mortgage rates finally rose above their historically low levels, the mortgage refinance business started to dry up. By the time rates reached 5%, the refi business was essentially gone.
This was a crisis for many large Independent mortgage banks that had created fine-tuned systems for refinancing loans and had virtually no trained sales force to prospect for new purchase money business.
The bankers who stockpiled cash they earned during the COVID crisis have weathered this storm, those that did not have the cash have either sold out or shut down.
Now, everyone is waiting for rates to drop and the refinance business to return. Most experts believe that it’s only a matter of time before mortgage rates come down. When they fall below 5% — maybe even before that — it will be a shot from a starter’s pistol and the race will be on.
The lenders who aren’t ready will falter under the pressure, stumble out of the starter’s blocks, and lose out to lenders who have prepared in advance for the influx of new business.
Leaders are preparing now to make sure they’re not the ones who are left in the dust when the race starts.
Preparing for the next mortgage market
What should lenders be doing now to be ready for the return of the refinance business? Those of us who have been in this business more than a cycle or two know what’s coming next. There is no secret or required magic to be a frontrunner when the refi business returns.
What it will take is strong leadership to spur lethargic institutions to action when it feels less risky to stay the course and wait. That’s an illusion, a false sense of security. The reality is this race will go to the prepared.
I can think of three important actions every lender should be taking now to be prepared for the next wave of refi business.
Build the right team
Given the new technologies and expert outsourcing options available to lenders today, staffing up to handle new business doesn’t make as much sense as it did in the past. Lenders have other options for building ability into their enterprises. That’s a good thing.
Instead of going to the expense and added risk of staffing up to handle more business, now is the time for executives to think through their strategic options and evaluate their existing partnerships. It doesn’t matter what the lender’s current capacity is, everyone should be thinking about this now.
This is the time to sit down with your A and B players and make sure they’re committed to the long term, and understand your commitment to them. The time to let your C and D players go has passed now. Do it if you haven’t.
Then, start visiting with outsourcing firms. I spent a good part of my career working for lenders who originated consumer direct but also provided essential origination outsourcing services to other institutions. When they’re done right, these partnerships offer a balanced model of operational efficiency and scalability, regardless of overall loan volume.
When this work is done, the lender will have a core team of domain experts supplemented by reliable outsourcing partnerships. This provides a buffer against fluctuating demand but also affords lenders a competitive edge in workforce flexibility and cost management.
Fine-tune your tech stack
Once your team is in place, it’s time to empower them with the right technology. For the past few years, I’ve been working inside one of the mortgage industry’s leading technology providers. Lenders have never before had access to such powerful technology.
There are too many factors involved in implementing a lender’s strategy to go too deeply into the technology here, but regardless of how the lender wants to run the business, there are tools available that can make that happen. Each lender is different and so their use of these tools will differ.
Two things I will say about technology. First, a simpler tech stack is a better tech stack. Improvements in the way developers bring products to market have resulted in a flood of new tools and many lenders have invested. Now, their tech stacks are bloated with functionality that doesn’t work well with their core systems and creates more friction. Simplify. Keep what you need and discard the rest. Don’t let the “sunk costs” fallacy keep you paying for technology that doesn’t help you become excellent lenders.
Second, if the tool doesn’t provide a measurable increase in efficiency by reducing touch points and overall cycle time, it’s not a good tool. When this work is done, the lender will have all of the technology required for its team to operate at peak efficiency, and nothing more.
Perfect your process
There’s an old adage in executive management that says you should tell your people what to do, but not necessarily how to do it. In many industries, this frees people up to be great team players and there are wins all around.
In industries where the government is just waiting for someone on your team or extended team to make a mistake, this doesn’t work as well. People need to know what the process is and how to perform it to the satisfaction of the lender, their investors and government regulators.
Lenders are pretty good at this in the back office, but when it comes to front-line salespeople they often leave them free to do what they do best. The problem with this is that good salespeople are often like water, they tend to follow the path of least resistance.
When refis are pouring in, they know where to go and who to contact (or recontact) to get more business. The hard work of building and maintaining relationships with business referral partners falls by the wayside.
Alternatively, when refis are down and purchase money is high, many loan officers don’t stay in contact with past borrowers as well because they know they’re not going to refinance a low-interest-rate loan. By the time the refis come back around, those past customers have made new friends.
The lender should take an active role in all processes the institution uses to do its work, including those in the sales department. When this work is done, every salesperson will be a top salesperson, doing the work required to bring in a steady stream of business, regardless of which loan products consumers are buying.
Today, the race is a long-distance, purchase-money event, where it takes seven or eight calls over the course of 30-45 days to reach the finish line. Soon, it will be all about refinance sprints that only take a call or two and as few as seven days to win.
To get ready for those races, leaders will begin now to pull their expert teams together, both internally and externally, fine-tune their tech stacks, and double-check their processes.
When that work is done, they’ll be in the starter’s blocks. When the pistol is fired, they’ll win the bulk of the new business.
Joseph Camerieri is a former mortgage lending executive, technology system sales leader and outsourcing leader. Today, he consults in the mortgage industry.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Joseph Camerieri at [email protected]
To contact the editor of this story: Tracey Velt at [email protected]
Inside: Explore financial independence: Unveil why a debt-free life could be your path to riches, with practical strategies for lasting wealth without owing. Perfect for millennials or those new to managing money.
In an era where financial burdens weigh heavily on so many, adopting a lifestyle of debt-free living emerges as the modern epitome of wealth.
I’ve come to understand that true affluence isn’t just measured by the amount of dollars in your bank account, but by the freedom from the chains of debt. It’s not just about strict budgeting or cutting corners; it’s about the elevated sense of security and control that comes from owing nothing to anyone.
Encountering the peace of mind that accompanies a debt-free life has indeed propelled our financial well-being and moved us closer to our FI number.
But, the question for today, is being debt free the new rich, and the secret to true wealth. Let’s dig into that answer.
Debt-Free as the Gateway to Modern Affluence
In the past, wealth was often measured by the accumulation of material possessions and the perceived status they conferred.
Today, however, there’s a growing recognition that true affluence lies in financial freedom. Redefining wealth to include the absence of debt reflects a holistic understanding of prosperity in today’s economy.
Is being debt-free the new rich?
The question “Is being debt-free the new rich?” is more relevant than ever in a society enmeshed with credit and consumption.
Being debt-free signals a shift from traditional wealth, defined by material possessions, to a contemporary form of richness—one where financial stability and peace of mind take precedence.
Yes, being debt free will lead to increased wealth over time.
Debunking the Myth: Rich vs. Debt-Free
Many hinge their perceptions of wealth on income and assets without considering the crippling effects of debt. Being rich traditionally meant having substantial financial resources, but without considering debt, this view is incomplete.
Many individuals labor under misconceptions about living a debt-free life, believing it to be a goal that’s out of reach or mired in unrealistic sacrifices.
Let’s dispel these myths and highlight how a debt-free life is not only achievable but also a liberating choice that defies conventional financial norms.
Myth #1: You need a credit card to survive in today’s economy.
Many people believe a credit card is essential for building credit and making daily purchases. However, if you are unable to repay that credit card bill at the end of the month, then you shouldn’t use one.
Credit cards are helpful especially if you benefit from the credit card rewards. Many millionaires used the cash envelope system to get where they are at.
Myth #2: Student loans are the only path to higher education.
The notion that college is unaffordable without borrowing is widespread, yet there are numerous alternatives to student loans for funding education.
Learn how to get paid to go to school with scholarships, grants, work-study programs, and attending community college first. These are all viable strategies to pursue higher education without incurring massive debt.
Myth #3: Car payments are an unavoidable monthly expense.
Car payments are often accepted as a normal part of finance management, but it’s a myth that you’ll always have one. This one still makes me cringe – car payments are not considered normal.
By saving up and purchasing a reliable used vehicle, many can avoid the cycle of car loans, and even if a loan is necessary, paying it off quickly can relieve you from years of ongoing payments.
Myth #4: Debt is a necessary tool to achieve financial success.
Contrary to the belief that leveraging debt is how wealthy individuals build their empires, many successful people use debt strategically, if at all.
It’s possible to accumulate wealth through saving, investing wisely, and living within one’s means, all without relying on debt. Building wealth debt-free is slower but more stable and reduces the risks associated with borrowing.
Plus it increases the debt-to-income ratio.
Myth #5: Paying Off Debt is Too Hard and Takes Forever
Paying off debt utilizing strategies such as the debt snowball or avalanche method instead of waiting is crucial for several reasons.
Both approaches provide structured plans that create discipline, making it less overwhelming to tackle debt systematically. Paying off debts faster with these methods typically reduces the total interest paid over time, leading to significant savings.
Moreover, the quicker you become debt-free, the sooner you can redirect your income toward building wealth, saving for the future, or investing in opportunities. Finally, the psychological boost from witnessing debts disappear can be incredibly motivating, improving your financial confidence and relieving stress associated with high levels of debt.
Myth #6: Pointless to Pay Off Debt if Making More on the Money
Paying off debt can sometimes seem counterintuitive, especially if you’re making more on your money through investments or savings compared to the interest on your debt. While from a purely mathematical standpoint, it may make financial sense to keep the debt and grow your investments, the freedom from being debt-free transcends numbers.
However, the psychological benefits of not owing money—such as reduced stress, increased mental well-being, and the peace of mind that comes with financial security—often outweigh the potential financial gains from investing.
Debt can feel like a burden, and removing this can lead to a clearer mindset, freeing up mental energy and resources to focus on other aspects of life.
Myth #7: I’ll Be Broke Forever
Overcoming “I am broke” mindset to achieve debt freedom often requires a substantial shift in both behavior and perspective.
It involves breaking the cycle of living paycheck to paycheck and resisting instant gratification by prioritizing financial goals over immediate desires. Replacing impulsive spending habits with disciplined budgeting and intentional saving can be a challenging, yet empowering transition.
This transformation not only demands goal-setting but also a deep understanding that possessions do not measure true wealth but by financial security and the freedom it brings.
Myth #8 – Debt Won’t Limit Your Financial Freedom
Debt often acts as a chain that restricts monetary mobility.
Carrying debt means committing future earnings to past expenses, limiting the ability to invest in opportunities or save for unforeseen events.
True financial freedom can only be found when these chains are broken, unlocking the full potential to use your income to shape the life you desire. This is what you will learn here at Money Bliss.
Strategies for Achieving a Debt-Free Life
Achieving a debt-free life involves setting clear, attainable goals, exercising self-restraint to avoid unnecessary expenditures, and creating a focused plan of action to eliminate existing debts.
By embracing contentment and understanding that happiness isn’t tied to material possessions, one can redirect funds towards paying off debts, paving the way for a life with greater financial independence and security.
Tip #1 – From Calculating Debts to Making a Payoff Plan
Embarking on the journey to debt freedom begins with a clear assessment of your financial landscape. It’s essential to compile a comprehensive list of your debts, noting balances, interest rates, and minimum payments.
Armed with this information, constructing a tailored payoff plan becomes your blueprint to financial liberation. Taking this active step forward is where the climb back to solvency begins.
Tip #2 – Overcoming Social Pressures and Lifestyle Inflation
Social pressures and lifestyle inflation are formidable obstacles in the pursuit of debt freedom.
The urge to spend is often magnified by the fear of missing out (FOMO) and the desire to match others’ spending habits (aka Joneses). Overcoming these cultural norms is critical for individuals determined to maintain financial health and resist the lure of indebtedness.
Tip #3 – Budgeting, Saving, and Earning More
Budgeting is the roadmap to tracking and controlling your spending while saving ensuring you’re prepared for the future. Consider it carving a path to financial freedom.
Earning more, whether through advancement in your current role or side hustles, accelerates debt repayment. Balancing these pillars is key – spend wisely, save diligently, and earn aggressively to break the chains of debt.
Tip #4 – The Shift Towards Minimalism and Non-Materialism
A growing number of individuals are embracing minimalism, finding richness in life’s experiences over the accumulation of goods.
This paradigm shift from materialism to non-materialism spotlights the value of simplicity and intentional living. It’s a conscious choice to prioritize quality over quantity, creating space for financial freedom and personal growth.
Tip #5 – Investing and Saving: The Vehicles for Sustainable Wealth
Once debt is cleared, saving and investing become the twin engines driving the journey toward sustainable wealth. This is the #1 overlooked thing I see too often.
The idea of investing in stocks is overwhelming to too many; thus, you are doing nothing with your money.
A savings account offers a cushion against life’s uncertainties, while investments can grow your wealth exponentially over time. By harnessing the power of compound interest and diversification, you’re not just avoiding financial pitfalls but actively building your monetary legacy.
Tip #6 – The Necessary Sacrifices for Long-Term Gain
Achieving debt freedom often requires sacrifices that can test your resolve in the short term. I can attest to this over and over. But, then I see progress on my journey and I’m grateful.
Whether it’s forgoing a luxury purchase, downsizing your living space, or choosing a staycation over a lavish holiday, these decisions contribute to a greater financial objective. Embracing necessary sacrifices paves the road to long-term gain and a richer future, free from financial constraints.
Tip #7 – Leveraging a Debt-Free Status for Financial Growth
Living debt-free opens doors to financial opportunities previously blocked by loan repayments and high interest rates. You are focused on improving your liquid net worth.
This status can be leveraged for growth by increasing investments, acquiring assets, or starting a business without the drag of debt. It’s about transforming newfound liquidity into channels that foster wealth expansion and provide long-term financial security.
Real Stories: Transformations from Debt to Wealth
The tales of debt freedom resonate with hope and inspiration.
Imagine the relief of one less bill in the mailbox or the pride in finally owning your car outright. These personal anecdotes serve as powerful testaments to the life-altering impact of paying off debt.
Scott Alan Turner felt trapped by student loans for years, only to transform their financial narrative by dedicating extra payments to their debt and eventually questioning every single impulse purchase.
Each story underscores a unique journey of dedication, strategy, and eventual liberation that changes lives fundamentally.
The Ripple Effect on Families and Future Generations
Debt freedom not only transforms individual lives but also sends ripples through families and across generations.
Free from financial burdens, parents can invest in better education for their children, save for their own retirement, and instill the value of living within one’s means. Creating a new family legacy.
FAQ: Embracing a Debt-Free and Wealthy Outlook
Being truly debt-free means you have no outstanding financial obligations—no loans, no credit card balances, and no debts lingering over your head.
It reflects a clean slate of financial commitments, allowing for unrestricted use of your income and providing a robust platform for financial growth and security.
While happiness is subjective, studies consistently link less debt to higher levels of contentment. 1
People without debt often report a greater sense of peace and well-being, liberated from the anxieties and constraints associated with debt. Freeing oneself from financial liabilities allows for a lifestyle focused on experiences and personal fulfillment, factors known to enhance happiness.
It is generally advantageous to be completely debt-free, as it alleviates financial stress, increases disposable income, and contributes to a solid foundation for building wealth. Without the burden of debt repayments, individuals can allocate funds to savings, investments, or personal passions, enhancing their overall quality of life and financial stability.
Avoiding debt is often seen as countercultural because society promotes a credit-fueled economy, where debt is normalized for consumption and lifestyle enhancement.
Challenging this norm by rejecting debt goes against these ingrained beliefs, embracing financial independence and self-reliance over societal expectations and instant gratifications.
Freedom from Debts
Clearing up this confusion underscores the significance of being debt-free as a true indication of financial health and prosperity.
Embracing a debt-free life is not merely about financial stability—it’s about the profound sense of freedom and the joy that comes with it.
Being free from debt is your ticket to robust retirement savings, potentially leading to an earlier and more comfortable retirement.
The ultimate luxury lies in this liberty; the contentment from knowing you live within your means, free from the shackles of debt. Achieving this might require discipline, setting clear goals, and a commitment to self-restraint, but the payoff is unparalleled.
If this vision inspires you, why not start that journey to financial independence today? Each step, no matter how small, moves you closer to realizing your dreams without the weight of debt steering your course.
Now, the time is for you to become the next millionaire with no money.
Source
Motley Fool. “Study: The Psychological Cost of Debt.” https://www.fool.com/the-ascent/research/study-psychological-cost-debt/. Accessed March 14, 2024.
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The Education Department has forgiven more than $45 billion of student loans for 930,500 longtime borrowers through the one-time income-driven repayment (IDR) account adjustment. If you’ve been repaying your student loans for at least a decade, you could be next in line — but you may need to consolidate before the April 30 deadline.
These types of loans require immediate consolidation to qualify for the maximum benefits of the IDR account adjustment:
HEAL loans.
Parent PLUS loans in repayment for less than 25 years (or less than 10 years, if eligible for Public Service Loan Forgiveness).
Direct loans with different past payment counts.
If your loans aren’t on this list, you likely don’t need to take action to benefit from the IDR account adjustment.
“For those folks who are really focused on achieving forgiveness of some type, try to be as proactive as you can,” says Stacey MacPhetres, senior director of education finance for EdAssist by Bright Horizons, a workplace education benefits provider.
Here’s how to stay ahead of the curve.
Complete the consolidation application
“Consolidating your student loans means basically you take a bunch of individual loans and you turn them into a brand new single loan,” explains Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators. This new loan is called a “Direct Consolidation Loan.” There’s no application fee to consolidate.
Confirm which types of loans you have before attempting to consolidate. Log in to your StudentAid.gov account, and select “loan breakdown” from your dashboard to see what your loans are called. “Direct,” “FFEL,” “Perkins” or “HEAL” may be in the name. If your servicer starts with “Dept. of Ed” or “Default Management Collection System,” your loan is held by the government, not a commercial lender. If your servicer starts with a company or school name, you must consolidate your loans to get credit for IDR forgiveness.
To access the application, go to StudentAid.gov/loan-consolidation. The online form will automatically populate most borrowers’ contact and loan information. Confirm accuracy. Next, you’ll be prompted to:
Select which federal loans you want to consolidate.
Preview the amount of your new direct consolidation loan and its interest rate.
Choose a repayment plan, even if you’ll be eligible for forgiveness. If you aren’t eligible for forgiveness now, you’ll want to sign up for an IDR plan going forward to keep earning credit toward forgiveness. The form will direct you to the IDR application, which requires you to input or recertify your income information.
Provide contact information for two references who can be contacted if the Education Department is unable to reach you.
The entire process can take less than 30 minutes and be completed in one sitting, says the Federal Student Aid Office. For assistance or to apply for consolidation over the phone, contact the Federal Student Aid Information Center at 800-433-3243.
Generally, you can’t consolidate an existing consolidation loan unless you’re applying to PSLF or adding another loan to the mix, like a Perkins loan that you didn’t previously consolidate.
Don’t miss the deadline
You must submit a consolidation application by April 30 to get the maximum benefit. Don’t put this off — though this consolidation deadline has been moved in the past, another deadline change is unlikely, experts say.
After application submission, the Education Department says most consolidation loans are disbursed within 60 days.
“Once you submit that application, there’s a whole behind-the-scenes process happening with the [Education] Department and any lenders, where they’re kind of making payments to one another,” Desjean explains. “Basically … the Department is buying your loans from whatever bank is holding them.”
In the past, consolidation could reset your payment counts to zero for IDR and PSLF forgiveness. That’s no longer always the case.
If you meet the April 30 consolidation deadline, your consolidation loan will get credit for the oldest underlying loan. For example, if you’ve been repaying a commercially held FFELP loan for 18 years, and a direct loan for five years, your new consolidation loan would get 18 years of IDR forgiveness credit after the adjustment.
“The most common example is somebody who goes to undergraduate, gets loans for undergraduate, then they take a break and go into repayment. And then years later, they go back for their graduate degree and they take out new loans,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors.
After consolidation, your payment count may temporarily show as zero in your account. “Don’t freak out, they’re doing these adjustments in batches,” Mayotte says.
The payment recount should be reflected in your account by July 1, at the latest, per the latest Education Department guidance.
Partial payment credit is possible after April 30
You could get some credit for past payments on direct loans if you miss the April 30 consolidation deadline — but not as much. Instead of getting payment count credit for the oldest underlying loan in your new consolidation loan, you’ll get a weighted average of the payment counts of all underlying loans.
For instance, if you consolidate two $10,000 direct loans after the deadline, and one has been in repayment for eight years while the other has been in repayment for two years, your consolidation loan will get five years of credit toward IDR forgiveness. But if you apply to consolidate these loans by April 30, your consolidation loan will get eight years of credit.
For borrowers pursuing PSLF, the weighted average rule takes effect on May 1. It takes effect for all other borrowers on July 1.
Know the implications of consolidation
Consolidation is irreversible, so consider the pros and cons of consolidation before taking this action. Outside of the IDR account adjustment, consolidating certain types of loans can open the door to PSLF and IDR plans that can shrink your monthly bills. It can also simplify your payments if you have loans with multiple servicers. On the other hand, the process could lengthen your repayment period, which could increase the amount of interest you pay over time.
The following loan types require additional considerations.
Perkins loans
Think twice before consolidating your Perkins loans if you’re eligible for Perkins loan cancellation, which can forgive your debt if you work a public service job for at least four to seven years — much more quickly than PSLF or IDR.
HEAL loans
The government shuttered the Health Education Assistance Loan (HEAL) Program in 1998, but some borrowers are still repaying old HEAL debt.
If you consolidate a HEAL loan by April 30, the new consolidation loan will get credit toward IDR forgiveness for the oldest non-HEAL loan it includes.
If you have HEAL loans only, you should still consolidate them if you want to access IDR plans or PSLF. But your IDR forgiveness clock will start at zero after consolidating.
Parent PLUS loans
If you’ve been repaying parent PLUS loans for at least 25 years (or 10 years if you, the parent, are eligible for PSLF), you should automatically get forgiveness of your remaining debt under the IDR account adjustment. You don’t need to consolidate.
If you’ve been in repayment for close to 25 years, but you’re not there yet, consolidate before April 30 to get IDR credit for past periods of repayment for the oldest underlying loan. To keep making progress toward forgiveness, you must enroll in the Income-Contingent Repayment (ICR) plan, which is the only IDR option available for consolidation loans containing parent PLUS loans.
Consider consolidation carefully if you’re not near the 25-year finish line because your monthly bills can increase substantially under the ICR plan. Use the Education Department’s loan simulator to estimate the costs of different repayment scenarios.
HAMILTON, Bermuda, July 15, 2021 /PRNewswire/ — Athene Holding Ltd. (NYSE: ATH) (“Athene”), an industry-leading financial services company focused on retirement savings solutions, today announced that it has entered into a definitive agreement to acquire Foundation Home Loans (“FHL”), a specialist UK mortgage lender from funds managed by affiliates of Fortress Investment Group LLC. As of June 2021, FHL had a £3 billion portfolio of specialist buy-to-let and owner-occupied mortgages on its balance sheet. The closing of the acquisition remains subject to the satisfaction of customary conditions, including consent by the Financial Conduct Authority.
The investment in FHL will be managed by the team at Apollo Global Management, Inc. (NYSE: APO) (“Apollo”), Athene’s strategic asset management partner, and together Apollo and Athene expect that FHL will continue to be a leader in originating high-quality residential mortgage loans, providing Athene with attractive investment opportunities in high-quality yield assets.
Jim Belardi, Chairman and Chief Executive Officer of Athene, said, “This transaction continues our longstanding strategy of working with Apollo to identify and invest in attractive businesses which add direct origination asset sourcing capabilities to our alpha-generating investment portfolio. We believe our investment will help FHL achieve its full potential, while being a complementary addition to our expanding asset sourcing capabilities.”
Hans Geberbauer, Chief Executive Officer of Foundation Home Loans, commented: “We are delighted to partner with Athene and Apollo for the next phase of growth in the UK specialist lending market. Their expertise and funding capacity will greatly enhance our position in the market.”
“Apollo has developed deep expertise in the residential loan market and we are excited to partner with FHL and its management team to help scale FHL’s platform, further positioning it as a leading originator within the UK buy-to-let market,” said Kevin Crowe, Partner of Apollo. Christopher Hojlo, Partner of Apollo, added, “We expect that FHL will contribute high-quality assets to Athene’s residential mortgage portfolio of loans and structured securities, which exceeded $13 billion of net invested assets as of March 31, 2021 and exhibits a strong yield profile that is indicative of the alpha generation the asset class can offer.”
About Athene Athene, through its subsidiaries, is a leading retirement services company with total assets of $205.7 billion as of March 31, 2021 and operations in the United States, Bermuda, and Canada. Athene specializes in helping its customers achieve financial security and is a solutions provider to institutions. Founded in 2009, Athene is Driven to Do More for our policyholders, business partners, shareholders, and the communities in which we work and live. For more information, please visit www.athene.com.
About Apollo Apollo is a high-growth, global alternative asset manager. We seek to provide our clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three business strategies: yield, hybrid and opportunistic. Through our investment activity across our fully integrated platform, we serve the retirement income and financial return needs of our clients, and we offer innovative capital solutions to businesses. Our patient, creative, knowledgeable approach to investing aligns our clients, businesses we invest in, our employees and the communities we impact, to expand opportunity and achieve positive outcomes. As of March 31, 2021, Apollo had approximately $461 billion of assets under management. To learn more, please visit www.apollo.com.
Safe Harbor for Forward-Looking Statements This press release contains, and certain oral statements made by Athene’s representatives from time to time may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results, events and developments to differ materially from those set forth in, or implied by, such statements. These statements are based on the beliefs and assumptions of Athene’s management and the management of Athene’s subsidiaries. Generally, forward-looking statements include actions, events, results, strategies and expectations and are often identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,” “could,” “might,” “should,” or “continues” or similar expressions. Factors that could cause actual results, events and developments to differ include, without limitation: the accuracy of Athene’s assumptions and estimates; Athene’s ability to maintain or improve financial strength ratings; Athene’s ability to manage its business in a highly regulated industry; regulatory changes or actions; the impact of Athene’s reinsurers failing to meet their assumed obligations; the impact of interest rate fluctuations; changes in the federal income tax laws and regulations; the accuracy of Athene’s interpretation of the Tax Cuts and Jobs Act; litigation (including class action litigation), enforcement investigations or regulatory scrutiny; the performance of third parties; the loss of key personnel; telecommunication, information technology and other operational systems failures; the continued availability of capital; new accounting rules or changes to existing accounting rules; general economic conditions; Athene’s ability to protect its intellectual property; the ability to maintain or obtain approval of the Delaware Department of Insurance, the Iowa Insurance Division and other regulatory authorities as required for Athene’s operations; the delay or failure to complete or realize the expected benefits from the proposed merger with Apollo Global Management; and other factors discussed from time to time in Athene’s filings with the SEC, including its annual report on Form 10-K for the year ended December 31, 2020, its quarterly report on Form 10-Q for the quarterly period ended March 31, 2021 and its other SEC filings, which can be found at the SEC’s website www.sec.gov.
All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Athene does not undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
Apollo Safe Harbor for Forward-Looking Statements This press release may contain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, discussions related to Apollo’s expectations regarding the performance of its business, its liquidity and capital resources and the other non-historical statements in the discussion and analysis. These forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. When used in this press release, the words “believe,” “anticipate,” “estimate,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are subject to certain risks, uncertainties and assumptions, including those described under the section entitled “Risk Factors” in Apollo’s annual report on Form 10-K filed with the SEC on February 19, 2021 and quarterly report on Form 10-Q filed with the SEC on May 10, 2021, as such factors may be updated from time to time in Apollo’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. Apollo undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law. This press release does not constitute an offer of any Apollo fund.
Generally, it helps to save up to 20-25% of a house’s sales price. However, factors like geographical location, economic climate, real estate interest rates, and global events will influence how much money you’ll need to buy a house.
Key Takeaways:
An ideal down payment is 20% to 25% of a home’s value.
USDA and VA home loans traditionally don’t require down payments.
If you make a down payment below 20%, you may be required to get private mortgage insurance.
How much money do you need to buy a house? That cost depends on numerous factors like inflation and real estate trends. According to the Census, homes sold for a median price of $420,700 in January 2024.
Thankfully, you don’t need to pay off that amount all at once. A down payment that’s 20% to 25% of a home’s value can help you secure a property. Even if you don’t have the funds to make a sizeable down payment, low and no-down-payment mortgage options are available.
Below, we’ll share our expertise to help you learn all about loans and mortgage options. We’ll also answer several common questions and share helpful tools, like Credit.com’s mortgage calculator.
All Costs Associated with Buying a House
Spend enough time shopping around for houses, and you’ll learn very quickly that a property’s sales price isn’t the only expense you’ll have to pay. Below, we’ll cover down payments, earnest money deposits, and other factors that determine the real cost of a home.
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Down Payments for Different Mortgage Options
According to the United States Census Bureau, 661,000 new homes were sold in January 2023. Most homebuyers don’t pay off their properties in full from the get-go. Instead, they cover a portion of the home’s cost with a down payment, then gradually pay off the remaining value via monthly mortgage payments.
“How do home mortgage rates work?” and “What types of mortgages am I eligible for?” are common questions for first-time homebuyers.
Below, we’ll discuss four mortgage options and break down how each of them works.
1. Conventional Mortgage
A conventional loan is a mortgage option that’s offered by a private lender instead of the government. Mortgage companies, credit unions, and banks offer conventional loans, though they might require a down payment between 20% and 25% of a property’s sales price.
Lenders might request that you purchase private mortgage insurance (PMI) if your down payment is less than 20%. PMI reimburses lenders if you don’t make your mortgage payments, and borrowers will have to pay for coverage annually.
2. USDA Mortgage
The United States Department of Agriculture (USDA) offers this unique mortgage to borrowers who live in rural areas. A USDA mortgage has no down payment requirement, and its interest rate is very competitive.
To qualify for a USDA loan, you need to:
Buy an eligible property. Your potential home has to be in an eligible rural area.
Meet income guidelines. To qualify for a USDA loan, your income can’t exceed a state-specific amount.
Use the home as your primary dwelling. You have to live on the property permanently.
Be a U.S. citizen, a U.S. national, or a qualifying resident alien. Foreign nationals not authorized to remain in the United States can’t get USDA loans.
You’ll also need to meet the lender’s credit requirements. On average, a credit score of 620 or more will qualify you for a government-backed USDA loan.
3. FHA Mortgage
The Federal Housing Administration (FHA) offers this distinct government-backed mortgage. Borrowers can secure an FHA mortgage with a down payment as low as 3.5%.
Borrowers with very low credit scores might be eligible for an FHA loan, at the expense of having more strict loan limits and higher up-front costs.
To get an FHA loan, you need to meet the following requirements:
Primary residence. The house associated with your loan must be your primary residence. You can’t rent it out to others for profit.
FHA maximum limit. FHA loans can only apply to properties within a set price range. In 2024, the maximum FHA loan amount is $498,257 for single-family homes.
Debt-to-income ratio. To qualify for an FHA loan, you must spend a maximum of 43% of your income on housing costs and housing-related debt.
4. VA Home Loans
Veterans Affairs (VA) loans offer low credit requirements and come with no down payment restrictions.
Certain people qualify for VA loans, including:
Service members who’ve served for at least 90 days consecutively.
Veterans who’ve served at least 181 continuous days, depending on their deployment date.
National Guard members with six years of Active Reserve status or 90 consecutive days of active duty service.
Surviving spouses of veterans, including veterans who are missing in action or being held as a prisoner of war (POW).
Earnest Money Deposit
An earnest money deposit is a payment that buyers can place to demonstrate how serious they are about obtaining a property. Earnest money deposits are normally between 1% and 3% of a property’s sales price. This deposit is not the same as a down payment.
When you make an earnest money deposit, those funds are put into an escrow account. If the seller of a property closes on a deal with you, your earnest money deposit is then added to your down payment. If the seller doesn’t close on the deal with you, it’s possible to regain your earnest money deposit if contingencies are set in place.
Several common contingencies include:
Home inspection contingency: Buyers request to have an inspection conducted on a property. If problems are discovered, buyers can back out of a deal.
Home sale contingency: Buyers who might need to sell their current home can ask for extra time.
Insurance contingency: This is for buyers who may need time to obtain home insurance for a property.
Closing Costs
Closing costs include taxes, appraisals, home inspection costs, title costs, and attorney fees. They’re generally between 3% and 6% of your mortgage principal. Your mortgage principal is the amount you borrow—so the bigger your down payment, the less you’ll pay in closing costs.
Let’s use the $200,000 home above as an example. Consider these three 4% closing cost scenarios:
Your down payment is 10%, or $20,000, leaving a mortgage principal of $180,000. Your closing costs will roughly amount to $7,200.
You offer20%, or $40,000, as your down payment. Your mortgage principal is $160,000, and you’ll pay $6,400 in closing costs.
You apply for a mortgage with no down payment, so your mortgage principal is $200,000. Ultimately, you’ll pay $8,000 in closing costs.
Home-Buying Examples
Next, we’ll show you how to determine your down payment on a home with the previous loans as examples. Let’s imagine your dream home is on the market for $200,000.
Down payments for conventional mortgages are usually $10,000 – $40,000.
USDA mortgages normally don’t require down payments.
An FHA mortgage can cost as little as $7,000.
A VA home loan also doesn’t require a down payment.
USDA and VA home loan mortgage options have the lowest up-front costs for eligible borrowers. An FHA mortgage is less costly than a conventional loan, but interest rates will affect your total payments in the long term.
Financial Resource Ideas
Making a down payment can be challenging because you need a paper trail of your purchases. In most cases, you can’t use borrowed money for a down payment.
Conversely, we know several creative ways to come up with a down payment:
Profits earned from stock or bond sales
Filing for an IRA or 401(k) withdrawal
Paying with money from your checking or savings account
Cash earned from a money market account
Using funds from your retirement account
Monetary gifts
You can roll other funds, like your tax return or a security deposit refund, into your down payment, too.
How Much Money Should I Save Before Buying a House?
It’s important to look at the big picture when buying a house. You’ll need to pull together a down payment and closing costs, but you’ll also need to budget for removal costs, inspections, and repair fees.
A tool like a monthly budget template can put your common expenses into perspective and help you better understand how much house you can afford with your current income.
When Should I Seek Mortgage Relief?
“What happens if I miss a mortgage payment?” is another concern for new and long-time homeowners. First, know that your home won’t immediately be foreclosed on if you miss a payment. Foreclosure usually isn’t imminent unless you’ve missed two or three payments.
If your mortgage payments aren’t within reach, you can contact your lender and explain your specific situation. Seeking forbearance, which is a temporary pause on your payments, can also help you regain your bearings.
Prepare to Buy a Home with Credit.com
Knowing your credit score and understanding the elements that affect it can help you know what you need to do to prepare for loan opportunities.
Sign up for Credit.com’s ExtraCredit® subscription to check out 28 of your FICO® scores. Afterward, visit our mortgage rates page to get additional information.
In the current regime of bond market movement, traders have been running from one side of the field to the other in an attempt to get in on the action surrounding inflation data and labor market data. There hasn’t been much in between apart from Fed communications that tend to reinforce or refine an interpretation of the data. This week’s Fed reinforced the most recent ceiling in yields/rates and we’re not terribly likely to challenge the recent floor without another round of big-ticket data. For that, we’re waiting at least until next Friday (PCE), and considering bonds are closed next Friday, the focus is probably better-placed on the following week’s NFP.
The day is off to a decent start with yields down more than 5bps, but again, consider that in the context of the chart above. 3 out of the past 3 days have seen the same trading range and the same pace of “lower lows.”