The Making Home Affordable program may be further expanded to help more underwater homeowners refinance their mortgages.
Though mortgage rates have crept up in recent weeks, current mortgage rates are more favorable than they have been in the past few years.
However, many homeowners have been unable to take advantage of the low rates thanks to loan-to-value (LTV) constraints, among other things.
The Home Affordable Refinance program currently has a LTV ceiling of 105 percent, meaning even those with no equity or private mortgage insurance can take advantage of the program.
But many borrowers have lost so much equity over the past few years that the FHFA is considering raising that ceiling to as much as 125 percent LTV, according to a Bloomberg report.
Originally, FHFA director James B. Lockhart noted that the line was drawn at 105 percent so loans could be securitized, and also due to capacity constraints.
However, the Obama Administration seems keen to boost participation in the program by easing eligibility, though some argue that it’s too little, too late, as mortgage rates have increased about a point in the past month.
One “mortgage strategist” who spoke with Bloomberg said the enhanced LTV limits could reach another 10 percent of borrowers with Fannie Mae and Freddie Mac loans, but another four percent are even deeper underwater.
Then there are the jumbo loan holders, who still seem to be out of luck, and the private-label mortgages, which tend to carry the highest default rate.
A month ago, Fannie Mae said it received more than 233,000 eligible Home Affordable Refinance applications, with 51,000 having LTV ratios between 80 percent and 105 percent.
Mortgage applications decreased 4% for the week ending July 16, just one week after applications jumped 16% on the strength of falling mortgage rates.
The 10-year Treasury yield dropped sharply last week, in part due to investors becoming more concerned about the spread of COVID variants and their impact on global economic growth, according to the latest survey from the Mortgage Bankers Association. This, in turn, led to mixed changes in mortgage rates.
“The 30-year fixed rate increased slightly to 3.11% after two weeks of declines, and other surveyed rates moved lower, with the 15-year fixed rate loan — used by around 20% of refinance borrowers — decreasing to 2.46%,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “That’s the lowest level since January 2021.”
Kan added that, on a seasonally adjusted basis compared to the July 4th holiday week, purchase applications dipped back to near their lowest levels since May 2020.
“Limited inventory and higher prices are keeping some prospective homebuyers out of the market,” Kan said. “Refinance activity fell over the week, but because rates have stayed relatively low, the pace of applications was close to its highest level since early May 2021.”
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The refinance share of activity of total mortgage applications increased to 64.9% from 64.1% the previous week. On an unadjusted basis, the market composite index decreased 4% compared with the previous week. The seasonally adjusted purchase index decreased 6% from one week earlier, as well.
The FHA share of total mortgage applications increased to 9.6% from 9.5% the week prior, and the VA share of total mortgage applications increased to 10.5% from 10.3%.
Here is a more detailed breakdown of this week’s mortgage applications data:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.11% from 3.09%
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.13% from 3.16%
The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.08% from 3.15%
The average contract interest rate for 15-year fixed-rate mortgages also decreased to 2.46% from 2.48%
The average contract interest rate for 5/1 ARMs increased to 2.72% from 3.02%, with points decreasing to 0.19 (including the origination fee) for 80% LTV loans
Mortgage Q&A: “Does refinancing hurt your credit score?”
Consumers seem to be obsessed with their credit scores and what impact certain actions may have on them.
Perhaps the credit bureaus and credit score distributors are to blame, as they’re constantly urging us to check our scores for any changes.
Let’s cut right to the chase. When it comes to mortgage refinancing, your credit score probably won’t be negatively impacted unless you’re a serial refinancer. Like anything else, moderation is key here.
When you refinance your home loan, the bank or mortgage lender will pull your credit report and you’ll be hit with a hard credit inquiry as a result.
It’ll stay on your credit report for two years, but only affect your scores for the first 12 months.
The credit inquiry alone won’t necessarily lower your credit score, but if you’re constantly refinancing and/or applying for other types of new credit, the inquiries could add up to a point where they’re deemed unhealthy.
The credit score scientists found out long ago that individuals who apply for a ton of new credit are often more likely to default on their obligations.
But that doesn’t mean you can’t apply for mortgages and other types of credit if and when you feel it’s necessary.
You Could See a Credit Score Ding When Refinancing Your Mortgage
All 3 of your credit scores may fall temporarily
As a result of a mortgage refinance application
But the impact is usually quite minimal, say only 5-10 points
And fleeting, with score reversals happening in a month or so
Because a mortgage refinance is a new credit application, your credit score(s) could see a bit of a ding, though it probably won’t be anything substantial unless you’ve been applying anywhere and everywhere for new credit.
By a “ding,” I mean a drop of 5-10 points or so. Of course, it’s impossible to say how much your credit score will drop, or if it will at all, because each credit profile is completely unique.
Simply put, those with deeper credit histories will be less affected by any credit harm related to the mortgage refinance inquiry, while those with limited credit history may be see a bigger impact.
Think of throwing a rock in an ocean vs. a pond, respectively. The ripples will be a lot bigger in the pond.
But in either case, the ripple shouldn’t be much of a ripple at all, and nowhere close to say a late payment because it’s not a negative event in and of itself.
[What credit score is needed to buy a house?]
You Get a Special Shopping Period for Mortgages
FICO ignores mortgage-related inquiries made in the 30 days prior to scoring
And treats similar inquiries made in a short period (14-45 day window) as a single hard inquiry
Instead of counting multiple inquiries against you for the same loan
This may help you avoid any negative credit impact related to your mortgage search
First off, note that when it comes to FICO scores, mortgage-related inquiries less than 30 days old won’t count against you.
And for mortgage inquiries older than 30 days, they may be treated as a single inquiry if multiple ones take place in a small window.
For example, shopping for a refinance in a short period of time (say a month) may result in a large number of credit pulls from different lenders.
But they will only count as one credit hit because the credit bureaus know the routine when it comes to shopping for a mortgage.
And they actually want to promote shopping around, as opposed to scaring borrowers out of it.
After all, if you’re only looking to apply for one home loan, it shouldn’t count against you multiple times, even if you inquire with multiple lenders.
This differs from shopping for multiple, different credit cards in a short period of time, which could hurt your credit score more because you’re applying for different products with different card issuers.
Even if you shop for a mortgage refinance with different lenders, if it’s for the same single purpose, you shouldn’t be hit more than once.
However, note that this shopping period may be as short as 14 days for older versions of FICO and as long as 45 days for newer versions.
If you space out your refinance applications too much you could get dinged twice. Even so, it shouldn’t be too damaging, and certainly not enough to prevent you from shopping different lenders.
The potential savings from a lower mortgage rate should definitely trump any minor credit score impact, which as noted, is short-lived.
The mortgage, on the other hand, could stay with you for the next 30 years!
You Lose the Credit History Once the Account Is Closed
When you refinance it results in the closing of the old loan
That account will eventually fall off your credit report (in 10 years)
And closed accounts are less beneficial than active ones
But the new account should make up for the lost history on the old account
Another potential negative to refinancing is that you’d lose the credit history benefit of the old mortgage account, as it would be paid off via the new refinance.
So if your prior mortgage had been with you for say 10 years or more, that account would become inactive once you refinanced, which could cost you a few points in the credit department as well.
Remember, older, more established tradelines are your credit score’s best asset, so wiping them all out by replacing them with new lines of credit could do you harm in the short-term.
Additionally, it could affect the average age of all your credit accounts (credit age), which is also seen as a negative.
But the savings associated with the refi should outweigh any potential credit score ding, and as long as you practice healthy credit habits, any negative effect should be minimal.
[Does having a mortgage help your credit score?]
Cash Out Refinance Means More Debt, Possibly a Lower Credit Score
A cash out refinance could hurt even more
Because you’re taking on more debt as a result
And larger amounts of outstanding debt
Along with higher monthly payments can make you a riskier borrower
Also consider the impact of a refinance that results in a larger loan balance, such as a cash-out refinance.
For example, if your current loan balance is $350,000, and you take out an additional $50,000, you’ve now got $400,000 in outstanding debt.
The larger loan balance will increase your credit utilization, and it could result in a higher monthly payment, both of which could push your credit score lower.
In short, the more credit you’ve got outstanding, the greater risk you present to creditors, even if you never actually miss a monthly payment.
In summary, a refinance should have a compelling enough reason behind it to eclipse any credit score concerns, so focus on why you’re refinancing your mortgage first before worrying about your credit score.
Ultimately, I’d put it on the no-worry shelf because chances are the refinance won’t lower your credit score much, if at all. And score drops related to new credit typically reverse very quickly.
So even if your credit score fell 20 points, it would probably gain those points back within a few months as long as you made on-time payments on the new loan.
And most people are only concerned about their credit scores right before applying for a mortgage, so what happens shortly after your home loan funds may not matter much to you.
But to ensure you don’t get denied as a result of a credit score drop, it’s helpful to have a buffer, such as an 800 credit score in case your score does drop a bit while shopping around.
If you’re right on the cusp of a credit scoring threshold and your score dips slightly, you could wind up with a higher interest, or at worst, be denied a mortgage outright.
No two mortgages are the same, which is why comparing home loans is vital. Every home loan offer will have different fees, interest rates, features, and more. But not every lender calculates borrowing power and risk the same way, either, which means different lenders let you borrow different amounts of money.
So how can you compare your borrowing power with different mortgage lenders? And could one lender let you borrow more? Let’s dive in.
Jump to…
What is home loan borrowing power?
Borrowing power is the amount of money a home loan lender is willing to give you. If your home loan application and serviceability tests show you can meet your financial obligations, the lender will likely approve you for the sum you need to buy a property.
Every lender will estimate your borrowing capacity a little differently, but the main things they consider are your:
Income
Debts
Spending habits
Regular expenses
Savings
Share portfolio
Family situation
Credit history
Deposit size.
Each of these factors creates a risk profile for you as a borrower. If you spend too much money or have too many competing debts, then you’re a risky borrower because there’s a greater chance you’ll struggle with mortgage repayments.
However, if you save plenty of money, keep a clean credit history, and can demonstrate a reliable income, you look like a safer bet for a lender. As a result, they let you borrow more because the financial risk of not making back their money is lower.
Lender won’t lend what you want?
How home loan lenders calculate borrowing power
Home loan lenders calculate your borrowing power by looking at your income and expenses. Ideally, they don’t want you spending more than 30% of your monthly take-home pay on mortgage repayments, so they will see how much money comes in and how much goes out.
They then compare the money left over with the estimated size of your mortgage repayments, as well as your loan term. Can you make repayments with plenty of cash to spare? Can you make repayments consistently for 20+ years? Once the lender has these numbers, they can establish the size of the home loan you afford, i.e. your borrowing power.
Every home loan lender has different comfort levels when it comes to risk exposure. Some lenders will only lend to borrowers who have at least 80% LVR, while others may let you take out a loan with a smaller deposit. Some lenders may also have caps on the total sum they lend to customers, though this will depend on their funding.
A lender will also stress test your ability to pay your mortgage at interest rates up to 3% higher than the one you’re applying for. Variable interest rates can change, and even fixed rate home loans roll onto variable rates once your fixed term has expired. They want to know you have financial wiggle room and can absorb rising costs. You may be able to afford a 5% interest rate, but if you’ll struggle with an 8% interest rate, they’ll reduce your borrowing capacity to avoid mortgage stress.
How to find out your borrowing power with different lenders
Most home loan lenders will have a borrowing calculator available on their website. This lets you estimate how much you could borrow with them without having to apply first. That way, you can get an idea of which lenders could offer you the best value for your mortgage.
You could also talk to an expert from the lender to see how much you could borrow, or liaise through a mortgage broker to see how different lenders compare for your situation.
Can you apply to more than one home loan lender?
You can apply to more than one home loan lender, but it’s better to do it one at a time. Whenever you lodge a home loan application, it counts as a ‘hard enquiry’ on your credit report. If you make too many hard inquiries at once, it looks like you’re shopping around and sourcing too much credit, which makes lenders nervous. This could actually lower your credit score and make it harder to take out a home loan.
Instead, research and compare home loan options carefully in advance and make a tier list of your preferred lenders. Apply to your first choice first, second choice second, and so forth as needed until you successfully qualify for the loan you want.
However, too many rejected applications can also hurt your credit score, so if your second-choice lender doesn’t approve you for the home loan, speak to a financial planner and see what you can do. There might be unintended red flags in your home loan application, or maybe you’re applying for home loans you don’t have the borrowing power to service.
Ideal home loan credit score
Compare home loans in the table below.
Compare home loans – last updated 18 July 2023
Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
Featured Product
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment
5.59% p.a.variable
5.50% p.a.
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
Compare
Compare
Details Close
Unloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
interest rate
5.59% p.a.variable
comparison rate
5.50% p.a.
interest rate
5.59% p.a.variable
comparison rate
5.50% p.a.
Upfront fees
$0
Ongoing fees
$0.00
Discharge Fee
$0.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
no
Maximum loan to value ratio
80.00%
minimum borrowing amount
$10,000
maximum borrowing amount
$3,000,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment
5.74% p.a.variable
5.76% p.a.
Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
Compare
Compare
Details Close
Neat Home Loan
Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
interest rate
5.74% p.a.variable
comparison rate
5.76% p.a.
interest rate
5.74% p.a.variable
comparison rate
5.76% p.a.
Upfront fees
$250
Ongoing fees
$0.00
Discharge Fee
$300.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
no
Maximum loan to value ratio
60.00%
minimum borrowing amount
$80,000
maximum borrowing amount
$5,000,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
Featured Product
Unloan Variable
Investment, Refinance Only
interest rate
comparison rate
Initial monthly repayment
5.89% p.a.variable
5.80% p.a.
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
Compare
Compare
Details Close
Unloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
interest rate
5.89% p.a.variable
comparison rate
5.80% p.a.
interest rate
5.89% p.a.variable
comparison rate
5.80% p.a.
Upfront fees
$0
Ongoing fees
$0.00
Discharge Fee
$0.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
no
Maximum loan to value ratio
80.00%
minimum borrowing amount
$10,000
maximum borrowing amount
$3,000,000
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Investor
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
Own Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment
5.79% p.a.variable
6.03% p.a.
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
Compare
Compare
Details Close
Own Home Loan
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
interest rate
5.79% p.a.variable
comparison rate
6.03% p.a.
interest rate
5.79% p.a.variable
comparison rate
6.03% p.a.
Upfront fees
$250
Ongoing fees
$250.00 yearly
Discharge Fee
$300.00
Extra repayments
yes – free
Redraw facility
yes – free
Offset account
yes
Maximum loan to value ratio
60.00%
minimum borrowing amount
–
maximum borrowing amount
–
type of mortgage
Variable
Repayment types
Principal & Interest
Availability
Owner Occupier
Repayment options
Weekly, Fortnightly, Monthly
Special Offers
–
*
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
**
Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
^See information about the Mozo Experts Choice Home Loan Awards
Mozo provides general product information. We don’t consider your personal objectives, financial situation or needs and we aren’t recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don’t cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
Evlin DuBose
Money writer
Coming from a diverse background in filmmaking, music production, and creative writing, Evlin is passionate about putting money-matters in relatable, personal contexts. Budget what? Finance who? She’s keen to find out!
Mortgage refinancing gives homeowners flexibility as their financial circumstances and needs change.
When you refinance your mortgage, you may be able to lock in a lower interest rate and get rid of private mortgage insurance, which can lead to significant savings over the life of the loan. It also allows you to switch from an adjustable-rate mortgage to a fixed-rate mortgage (and vice versa) or go from a government-backed loan to a conventional loan.
You can even shorten your loan terms by refinancing your mortgage, so you can pay off your loan even faster. Or, you can use refinancing to tap into the equity in your home to pay off debt, pay for a huge renovation or purchase another property.
CNBC Select evaluated home loan lenders based on the types of loans offered, customer support and minimum down payment amount, among others (see our methodology below).
The best mortgage refinance lenders
Best for cashing out full equity
Rocket Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA Interest Rate Reduction Refinance Loan (IRRRL) and jumbo loans
Fixed-rate Terms
8 – 29 years
Adjustable-rate Terms
Not disclosed
Credit needed
580 if opting for FHA loan refinance or VA IRRRL; 620 for a conventional loan refinance
Pros
Can use the loan to refinance a single-family home, second home or investment property, or condo
Can get pre-qualified in minutes
Rocket Mortgage app for easy access to your account
Allows borrowers to cash out 100% of their home’s equity
Cons
Doesn’t offer USDA loans, HELOCs, construction loans, or mortgages for mobile homes
Rocket Mortgage is a great option to consider if you’re looking to maximize the equity you can cash out of your home.
One of the advantages of refinancing is being able to tap into your home’s equity to pay for large expenses, like home improvements or a second property, or to consolidate debt. This is called a cash-out refinance. The total amount you’re able to borrow will depend on your home’s value and equity.
Most lenders only allow homeowners to cash out 80–90% of their home’s equity. But according to its website, Rocket Mortgage allows borrowers who are refinancing to cash out 100% of their equity, as long as they have a minimum FICO score of 620. This means you’ll have access to more cash when you refinance. Rocket Mortgage also offers a fast, online pre-approval process.
Best for no lender fees
Ally Home
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Fixed-rate, adjustable-rate and jumbo loans available
Fixed-rate Terms
15 – 30 years
Adjustable-rate Terms
5/6 ARM, 7/6 ARM, 10/6 ARM
Credit needed
Not disclosed
Pros
Doesn’t charge lender fees (no application, origination, processing, or underwriting fees)
Provides custom quotes in just a few minutes with no impact to your credit score
Online support available
Existing Ally customers can receive a discount that gets applied to closing costs
Cash-out refinancing available
Cons
Doesn’t offer FHA loans, USDA loans, VA loans or HELOCs, however, Ally allows borrowers to refinance from an FHA, USDA, or VA loan to a conventional loan
Mortgage loans are not available in Hawaii, Nevada, New Hampshire, or New York
As with its home purchase loans, Ally Bank’s mortgage refinances don’t come with lender fees. In other words, borrowers won’t pay application, origination, processing, or underwriting fees. Keep in mind, however, that you’ll still have to pay other charges like title checks and appraisal fees. Still, cutting lender fees out of the equation still gives borrowers a chance to save some money on an already-expensive process.
Ally offers both fixed-rate and adjustable-rate loans in addition to jumbo loans for refinancing. While this lender doesn’t offer any FHA, VA, or USDA loans, borrowers who currently have these loan types and wish to refinance to a conventional loan may do so through Ally Bank.
Best for a no-frills lender
Better.com Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loan, FHA loan and jumbo loan
Fixed-rate Terms
15–30 years
Adjustable-rate Terms
Not disclosed
Credit needed
Not disclosed
Pros
No origination fee
No prepayment penalties for refinance
Receive a loan estimate in as little as 3 days
The Better Buying Guarantee provides up to $3,500 in lender paid credits to offset “covered fees,” which include: Lender’s Title Insurance Policy Fees; Owner’s Title Insurance Policy Fees; Appraisal Fees (includes second appraisal fee, appraisal re-inspection fee and appraisal recertification fee, if applicable); Flood Certification Fees; Credit Report Fees; and Other Settlement Fees (discount points are excluded)
Cons
Doesn’t offer VA loans or USDA loans
The Better Buying Guarantee is not available in Washington state
Better.com offers a straightforward refinance service with a few ways for borrowers to save money. This lender doesn’t charge any origination fees on the loan, and individuals who are refinancing their mortgage won’t be charged prepayment penalties for paying off the new loan early. Its pre-approval process can be completed in as little as three minutes and won’t impact your credit score.
This lender also offers a Better Buying Guarantee, which provides borrowers with up to $3,500 in lender-paid credits to offset “covered fees.” Those fees include: Lender’s Title Insurance Policy Fees; Owner’s Title Insurance Policy Fees; Appraisal Fees (includes second appraisal fee, appraisal re-inspection fee and appraisal recertification fee, if applicable); Flood Certification Fees; Credit Report Fees; and Other Settlement Fees (discount points are excluded). See their Terms and Conditions for rules around eligibility.
Better.com offers mortgage refinance terms that range from 15 to 30 years, and boasts the ability to provide potential borrowers with a loan estimate in as little as three days.
Best for saving money
SoFi Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans and jumbo loans
Fixed-rate Terms
10 – 30 years
Adjustable-rate Terms
Not disclosed
Credit needed
Pros
Provides access to Mortgage Loan Officers for guidance
Access to account via the mobile app
Members save $500 on processing fees for a cash-out refinance
Cons
Doesn’t offer FHA, VA or USDA loans
Available in all states except Hawaii
SoFi is known for offering a plethora of savings opportunities to members who use their financial products and services. When it comes to mortgage refinancing, this lender gives members the opportunity to save $500 on the loan processing fee as long as they also have a SoFi Personal Loan, SoFi Student Loan or have a minimum balance of $50,000 in their SoFi Invest accounts at the time of their application submission.
Mortgage refinance terms range from 10 years to 30 years, and SoFi offers an app to help customers have easy access to managing their account details.
Best for availability
PNC Bank Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Fixed-rate, adjustable-rate, FHA loans, VA loans and jumbo loans
Fixed-rate Terms
10 – 30 years
Adjustable-rate Terms
Available in periods of 7 and 10 years for a fixed rate, followed by an adjustment period when the interest rate may increase or decrease on an annual or semi-annual basis
Credit needed
Not disclosed
Pros
Refinance available for primary and secondary homes, and investment properties
Offers a wide variety of loans to suit an array of customer needs
Offers refinancing for VA and FHA loans
Available in all 50 states
Online and in-person service available
Cons
Doesn’t offer home renovation loans
PNC Bank is one of the most accessible lenders on this list since it provides services and mortgage products in all 50 states — both in-person and online. This lender offers fixed-rate loan terms that range from 10 years to 30 years. For jumbo loans, though, the loan terms go from 15 years to 30 years. Adjustable-rate terms are also available.
To make sure you’re fully prepared to begin the application process, PNC Bank has an application checklist on their website that lists all of the documents you’ll need if you want to refinance your mortgage.
Best for a credit union
PenFed Credit Union Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Rate-and-term refinance (for conventional, FHA and VA refinances), VA Interest Rate Reduction Loan (IRRRL), cash-out refinance, home equity line of credit (HELOC)
Fixed-rate Terms
Not disclosed
Adjustable-rate Terms
Credit needed
Not disclosed
Pros
Covers cost of VA funding fees, title fees, recording fees, transfer taxes, appraisal fee, credit report and flood certification where applicable
Offers jumbo loan refinance up to $3 million
Online support available
Available in all 50 states
Cons
Doesn’t offer USDA loans
Doesn’t offer adjustable-rate terms
PenFed cuts out some major closing costs for homeowners looking to refinance their mortgage. It will cover the cost of VA funding fees, title fees, recording fees, transfer taxes, appraisal fee, credit report and flood certification wherever applicable. This could save borrowers anywhere from hundreds to thousands of dollars in closing costs.
Of course, you’ll want to make sure you have a PenFed membership in order to apply for this lender’s mortgage products. Membership is open to everyone but you’ll need to open a savings account and make an initial deposit of at least $5.
FAQs
What do you need to refinance your mortgage?
As with any other line of credit, mortgage refinancing requires a decent credit score. Lenders typically like to see a minimum credit score of 620 or higher. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate. Borrowers should also have at least 20% equity in their home in order to refinance. You’ll also need to provide documents, such as bank statements, pay stubs, W-2s, 1099s, tax returns, employment verification and proof of homeowner’s insurance.
How do you refinance your mortgage?
To refinance your mortgage, you’ll want to make sure you have all the required financial documents and meet your desired lender’s qualifications. You’ll use this information to submit an application (either online or in-person, depending on the lender you’d like to go with). Lenders typically also offer the help of mortgage refinance experts who can walk you through the process, answer any questions you have and make sure you submit a complete application.
How often can you refinance your mortgage?
There is no limit on the number of times you can refinance a home loan. Refinancing can be valuable when your circumstances change. For instance, if you were to change careers and take a pay cut, refinancing into a mortgage with a longer loan term would allow you to receive lower monthly payments.
Just be aware that refinancing is not free and every time you refinance, you’ll have to pay a slew of closing costs and other fees, and your credit score could take a hit every time the lender runs a hard inquiry.
What are the different types of mortgage refinances?
A rate-and-term refinance is one of the most common types of mortgage refinancing since it involves simply changing the loan term (how long you have to repay the balance) or the interest rate.
Borrowers can also do a cash-out refinance where the borrower takes out a loan that’s larger than what they currently owe and can use the difference between the two loans to receive cash. Borrowers can then use that cash for a large expense, a down payment on another property, debt consolidation and more.
As the name suggests, FHA Streamline Refinance is meant for borrowers who are looking to refinance their FHA loan. A VA Streamline Refinance is similar except it’s meant for VA loan borrowers.
Does refinancing hurt your credit?
As with any other form of credit you apply for, applying for a mortgage refinance means the lender will run a hard inquiry on your credit. Hard pulls do temporarily lower your credit score by a few points. However, making on-time monthly payments and avoiding applying for too many new lines of credit all at once can help your credit score recover.
Reasons not to refinance your mortgage
Refinancing isn’t for everyone. If you already have a low, fixed interest rate with affordable monthly payments, refinancing your mortgage might not save you money. In fact, due to closing costs, refinancing can actually wind up costing you more than you anticipated.
You should also avoid refinancing if you have bad or fair credit since you could end up with a higher interest rate, which will make the loan even more expensive.
It’s also not a good idea to refinance if you’re already several years into a mortgage. Refinancing essentially replaces your loan with a new one and you’ll have to start all over with payments. So if you’re already, say, 15 years into a 30-year mortgage, refinancing to another 30-year mortgage means you’ll still be on the hook with the mortgage for another 30 years.
Bottom line
Refinancing can be instrumental for those who want to have lower monthly payments or a lower interest rate, or want to tap into some of the cash in their home. Just make sure you run the numbers so you can be sure they make sense for your situation, since there are some instances when refinancing may not be a good idea.
Our methodology
To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best mortgages, we focused on the following features:
Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you’ll lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. Lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can to cater to a wider range of applicants. We’ve also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does.
Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.
After reviewing the above features, we sorted our recommendations by best for overall financing needs, quick closing timeline, lower interest rates and flexible terms.
Note that the rates and fee structures advertised for mortgage refinances are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee your interest rate and monthly payment remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Whether looking for summertime adventures or a winter escape, hitting the beach is a great way to make incredible memories.
Because of their popularity and ease of booking flights, two destinations stand out among vacationers: Hawaii and the Bahamas. However, when comparing the Bahamas to Hawaii, there are many differences that you need to know.
The main differences between the Bahamas versus Hawaii are the need for a passport and distance. Hawaii is part of the United States, while the Bahamas is not. West Coast travelers often prefer Hawaii, while the Bahamas is easier to get to from the East Coast.
Let’s see what sets these two paradise locations apart.
How to get to Hawaii vs. the Bahamas
Most major domestic airlines offer flights to these popular destinations. However, one option may be much closer and easier, depending on where you live. You may also have to contend with airline routes and time zones that will affect flight options.
Flights to Hawaii
If you live on the West Coast, deciding between vacationing in the Bahamas versus Hawaii may be easy. Hawaii and the Bahamas are about the same distance from California, but the flight options to Hawaii may make it much more desirable.
With Southwest Airlines entering the market, many airlines lowered their cash prices to compete. Southwest offers flights starting at $124 each way from Los Angeles.
Once in Hawaii, you can easily hop between the islands with cheap flights on Hawaiian Airlines, Southwest Airlines and others. Southwest offers flights starting at just $39 each way.
Flights to the Bahamas
Flying to the Bahamas is harder for West Coast residents but much easier for those living on the East Coast. There are many flight deals and the cost is much less versus Hawaii.
Award flights to the Bahamas start at just 10,000 miles in Economy or 20,000 miles in First Class on American Airlines. This makes the Bahamas and other Caribbean destinations a popular winter escape.
The downside of the Bahamas is that you need a passport to get there. It is more difficult to arrange a last-minute vacation if you don’t have a passport because passport applications can take several months to process.
Where to stay for your Bahamas vs. Hawaii vacation
When weighing the Bahamas versus Hawaii, choosing between hotels might be difficult because there are many fantastic options. Depending on the length of your stay, the cost of your accommodations may be greater than the cost of the flight. However, you can save a lot of money on your vacation using hotel points. Let’s look at some popular choices.
Hotels in Hawaii
There are six major Hawaiian islands, each with its own unique attractions and experiences. Hotel options vary based on which island you choose. However, most major hotel brands are available on each of these islands.
In Honolulu, for example, you can book any of these hotels using points:
Hyatt Centric Waikiki Beach — from 15,000 World of Hyatt points (or use a Hyatt credit card annual free night certificate).
Hilton Hawaiian Village Waikiki Beach Resort — from 70,000 Hilton Honors points.
The Laylow, Autograph Collection — from 58,000 Marriott Bonvoy points.
Holiday Inn Express Waikiki — from 34,000 points (or use an IHG credit card annual free night certificate).
Hotels in the Bahamas
There are fewer options for redeeming hotel points in the Bahamas versus Hawaii. The major tourist destination in the Bahamas is Nassau. This is also where you’ll find popular hotels where you can redeem points.
Atlantis — several buildings available, with rates starting at 44,000 Marriott Bonvoy points.
Grand Hyatt Baha Mar — from 21,000 World of Hyatt points.
Holiday Inn Express & Suites Nassau — from 32,000 points (or use an IHG credit card annual free night certificate).
Hilton at Resorts World Bimini — from 60,000 points per night.
The best time to visit Hawaii vs. the Bahamas
Travel dates can help you decide between Hawaii versus the Bahamas. These islands are similar distances from the equator, so their weather and seasons are similar. However, there are some significant differences.
Hawaii weather and terrain
Although Hawaii offers primarily tropical weather, its terrain offers multiple climate options. Hawaii features numerous mountains formed by volcanoes, some almost 14,000 feet tall. Its lush landscape and natural canopies also provide an escape from the tropical heat.
On average, Hawaiian temperatures only vary about six degrees throughout the year. The range from a low in the mid-70s during the winter to a peak in the low-80s in September. However, the tallest mountain peaks experience significant weather events, including temperatures in the 90s, winter blizzards and thunderstorms.
Hawaii is rarely affected by hurricanes in the Pacific Ocean. It rains an average of 25 to 30 inches annually, with the heaviest rains occurring from October to April.
Weather in the Bahamas
Located in the Caribbean, the Bahamas has fairly consistent weather throughout the year. Its peak temperatures of the upper-80s occur from early June to early October. Winter temperatures drop to highs in the upper-70s. January is the coldest month of the year, with lows of 70 degrees and highs of 79.
It doesn’t rain that often in the Bahamas. October is its rainiest month, with an average of seven days of rain, while December is the driest, with just two days of rain.
The Bahamas faces extreme seasonality with its humidity. From June to October, the humidity can be described as “oppressive” or “miserable,” affecting how much you enjoy your vacation. However, spending time in the pool or ocean can minimize the impact.
The Bahamas vs. Hawaii honeymoon destination
Both destinations have natural beauty, gorgeous beaches and amazing hotels. It’s no wonder that many couples consider the Bahamas versus Hawaii for their honeymoon celebration. Whether you want to explore the island or relax on the beach, each destination is ideal for a honeymoon.
Because the climate is more reliable throughout the year, Hawaii may be a better honeymoon destination than the Bahamas. Many weddings occur over the summer, peak hurricane season in the Atlantic. You wouldn’t want the stress of a hurricane impacting your honeymoon.
Winter is a much better time to visit the Caribbean if that matches your wedding planning.
Hawaii vs. the Bahamas: Which is the better choice?
Choosing between the Bahamas versus Hawaii is a tough choice for many travelers. While both islands offer many appealing features, your decision is often based on where you live and if you have a passport.
Hawaii is a U.S. state which does not require a passport for travel, while you must have a passport to visit the Bahamas. Traveling to Hawaii is much easier from the West Coast, and many East Coast travelers can get to the Bahamas easily.
Hawaii offers more hotel redemption options and multiple climates among its numerous islands versus the Bahamas. The U.S. dollar is the primary currency, and amenities such as roads, restaurants and hospitals are up to U.S. standards.
The Bahamas has its currency, but prices are pegged to the U.S. dollar, so prices are the same in both currencies. While the Bahamas has many modern conveniences, you may not have the same choices for dining, attractions or medical needs during your visit.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
REACH operates a variety of accelerator programs around the globe, created and operated by Second Century Ventures and backed by NAR. Its Great Britain version, REACH UK, will leverage a community of real estate industry executives, investors, mentors, and entrepreneurs across Europe and throughout the global REACH network.
Applications for the Class of 2020 are now open, but only until the end of day September 30th. That means, if you’re an early stage startup interested, you best start the process now…
In another milestone move to expand its reach, UCLA announced Thursday that it has purchased a landmark building in downtown Los Angeles for satellite classes, aiming to widen access at the nation’s most popular university and help revitalize the city’s historic core.
UCLA purchased the 11-story, Art Deco-style Trust Building on Spring Street and expects to begin classes in it later this year — initially through its large Extension program. But Chancellor Gene Block said in an interview that the university has “not precluded” eventually developing the site, renamed UCLA Downtown, to accommodate more undergraduate and graduate students with possible housing nearby.
The purchase comes nine months after UCLA bought two large properties owned by Marymount California University, a small Catholic institution in Rancho Palos Verdes that closed its doors last year. The $80-million purchase of Marymount’s 24.5-acre campus and an11-acre residential site in nearby San Pedro marked the university’s most significant expansion to help meet the burgeoning demand for seats.
UCLA, the most-applied-to university in the nation, drew nearly 150,000 first-year applications for about 6,500 spotsin fall 2022and nearly that many for fall 2023 — sparking angst among growing legions of rejected Californians and pressure from state legislators to reduce the number of out-of-state students.
But the university’s 419-acre Westwood footprint is the smallest among UC’s nine undergraduate campuses, leaving it no room to grow and prompting efforts to look for ways to meet its goal to add about 3,000 more undergraduates and 350 more graduate students by 2030.
Block said the 334,000-square-foot Trust Building, which will be renovated with classrooms, office space and more, can help accommodate additional students, anchor research projects, potentially host startup companies and serve the neighborhood.
“We believe deeply in Los Angeles and its future,” Block said. “We couldn’t be prouder to expand UCLA’s presence in the beating heart of downtown, which has been a vision of ours for a full decade. The sky’s the limit on what we can do.”
Block declined to disclose the sales price, but UCLA appears to have scored a significant deal. Real estate experts with knowledge of the transaction, who were not authorized to speak publicly, placed it at less than $40 million, a sharp discount from the building’s assessed value of nearly $88 million.
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The sellers, Rising Realty Partners and its financial partner Lionstone Investments, bought the building in 2016 for $80.4 million, according to real estate data provider CoStar. Rising Realty, which is headquartered in the building, performed an estimated $40-million makeover that brought it up to modern earthquake safety standards and restored original features such as gilded ceiling decorations that were painted over in late 20th century renovations.
“Downtown L.A.’s challenging commercial real estate market gave UCLA a great value for their investment,” said Hal Bastian, a real estate broker and longtime downtown advocate who lives near the Trust Building. “After lots of bad press for downtown L.A., this is proof that people still have confidence in our long-term success.”
Mayor Karen Bass hailed UCLA’s move. “It’s exciting to see institutions like UCLA expanding their presence in downtown Los Angeles and committing to its future as a vibrant urban hub that draws people from all over our City and around the world,” she said in a statement.
Once known as the “Queen of Spring Street,” the building was designed by legendary architects John and Donald Parkinson — who also created City Hall, Union Station and the Los Angeles Memorial Coliseum — and is now designated a city Historic-Cultural Monument.
It was built in 1928 at the behest of Title Insurance and Trust Co., one of the city’s biggest financial institutions in an era when Spring Street was hailed as the Wall Street of the West. The firm used the building as its headquarters until 1977, when the city’s top white-collar firms were moving to newer office towers in downtown’s financial district and elsewhere as the historic core, the city’s original downtown, was going to seed.
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In recent years the imposing structure, designed to signal prestige and power with its finishes of marble, brass and black walnut, has been used primarily as a filming location for period pieces and fantasies such as “Batman.”
The Trust is nearly devoid of tenants amid a contracting downtown office leasing market. As in other parts of downtown L.A., the nearby streets have a significant homeless population that increased during the pandemic. In the evening hours, however, there are often crowds of people patronizing bars and restaurants as well as residents walking their dogs.
Real estate experts expressed hope that UCLA’s purchase will accelerate downtown renewal.
“After several years of nothing but negative news surrounding downtown Los Angeles, the UCLA acquisition of the Trust appears to be one of the first green shoots towards recovery,” said real estate broker Mike Condon Jr. of Cushman & Wakefield, who represented the seller in the transaction. ”Such a large and prominent institution like UCLA making a big bet in the market is a much-needed boost to the historic core.”
José Andrés, a celebrated chef known for both his culinary and his humanitarian work, has agreed to open a rooftop restaurant at the Trust Building. Last year Andrés and his hospitality group opened two restaurants, two cocktail bars and a poolside lounge in downtown’s Conrad hotel, with steakhouse Bazaar Meat projected to open in the second half of 2023 within the $1-billion Grand complex on Bunker Hill.
Andrés’ restaurant group will continue as tenants in the building, along with Rising Realty and KTGY Architecture + Planning.
Block said UCLA has wanted to expand in downtown L.A., where it already operates health clinics, some Extension courses and a labor center in nearby MacArthur Park, for the last decade. The Trust acquisition will pay off even more in 2027, when the Purple Line is set for completion and will connect nearby Pershing Square to the Westwood main campus.
The chancellor said he first saw the building this year and was “dazzled” by its grand architecture and elegant space.
Arizona State University also saw ripe educational opportunities in the area, opening a downtown Los Angeles center in 2021 in the renovated Herald Examiner building on 11th and Broadway. The expanded presence of both universities, along with USC, is higher education’s “very important statement on the confidence in the future of cities,” Block said, adding that he hoped “hundreds” of people would eventually occupy UCLA Downtown.
Other UC campuses also are expanding operations in their city cores. UC Davis is building Aggie Square, an “innovation hub” on its Sacramento campus that will include science and technology buildings and student housing. The campus estimates a few hundred undergraduates can spend a quarter there.
Last year, UC San Diego opened a four-story, 66,750-square-foot structure downtown just steps from the Blue Line Trolley at the corner of Park Boulevard and Market Street. The building is designed as a cultural, educational and business hub to showcase creative ventures, boost economic activity and deepen ties across the border, university officials say.
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“We’re all coming to the same conclusion that we have cities that need to be protected and helped to thrive,” Block said. “So I think we’re all seeing the need to be downtown.”
After several consecutive weeks of drops, mortgage applications jumped 16% for the week ending July 9, 2021, according to the latest report from the Mortgage Bankers Association.
The prior week‘s report showed a 1.8% drop in applications to the lowest level since January 2020.
The sudden increase in applications was driven “heavily” by increased refinancing as mortgage rates dipped again, said Joel Kan, MBA associate vice president of economic and industry forecasting.
“Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth,” Kan said. “There also may have been a delayed spillover of applications from the previous week, when rates also decreased but there was not much of response in terms of refinance applications.”
Those lower rates may be helping some homebuyers close on their purchases, especially first-time homebuyers, Kan said.
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“We continue to see ebbs and flows as housing demand remains strong, but for-sale inventory remains low,” he said. “The year-over-year comparisons were down significantly for both purchase and refinance applications.”
The sheer amount of bidding wars decreased from May to June, per a study released this week from Redfin, as more homes for sale have slowly hit the market in the past month. Overall inventory is still low, of course, but a cooling of the market could lead to more would-be buyers and an increase in mortgage applications soon, experts said.
The refinance share of activity of total mortgage applications increased to 64.1% from 61.6% the previous week. On an unadjusted basis, the market composite index decreased 13% compared with the previous week. However, the seasonally adjusted purchase index increased 8% from one week earlier.
The FHA share of total mortgage applications decreased to 9.5% from 9.8% the week prior, and the VA share of total mortgage applications decreased to 10.3% from 10.8%.
Here is a more detailed breakdown of this week’s mortgage applications data:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.09% from 3.15%
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.16% from 3.20%
The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.15% from 3.17%
The average contract interest rate for 15-year fixed-rate mortgages also decreased to 2.48% from 2.52%
The average contract interest rate for 5/1 ARMs increased to 3.02% from 2.94%, with points decreasing to 0.32 (including the origination fee) for 80% LTV loans
To mark the 10-year anniversary of Detroit’s historic July 18, 2013, municipal bankruptcy filing, the Free Press is examining what has changed, what hasn’t, and why. Find more coverage atfreep.com.
Alease “Cookie” Moore loves her Cornerstone Village neighborhood.
It’s the simple things. Walking the streets, saying hi to neighbors sitting on their porches, planting crops at the community garden — beets, corn, sweet potatoes, herbs. She loves supporting the East Warren Farmers Market and local businesses like the Detroit Pepper Company, a Warren Avenue carryout spot that opened in 2019. She attends neighborhood meetings and advocates for her community as secretary of the Cornerstone Village Community Organization.
the city promised to crack down on blight by suing landlords.
10-year, $1.7 billion reinvestment plan.
Did it work? Are we better off?
retirees. Under state law, the city’s budget reserve is required to hold at least 5% of its projected recurring expenditures each fiscal year to cover a potential financial disaster or reduction in revenues. Detroit’s reserve was 11% of its expenditures in its latest adopted budget.
“Right after the bankruptcy, revenues certainly stabilized, and we’re starting to show some modest growth,” said Detroit Budget Director Steve Watson. “It was in the years just prior to the pandemic, income taxes really started to take off and show much more robust growth … where the bankruptcy assumed somewhere around a 2% growth rate per year in revenues, we’ve instead vastly exceeded that.”
At the end of the 2022 fiscal year, city income tax revenue was about $400 million — up from less than $250 million in 2014. The bankruptcy plan of adjustment — the court-approved document that charted a path forward as the city exited bankruptcy in 2014 — assumed that income tax revenue would be about $300 million in 10 years, Watson said. Increased revenues generated a surplus, which is now funding various initiatives, while allowing money to be set aside for rainy day and retiree protection funds. Watson said the developments have put the city in a stronger financial position in the long term.
Citizens Research Council. At the end of the 2022 fiscal year, Detroit reported more than $544 million in cash on hand, or more than 200 days’ worth of expenditures.
criminal record expungement that could boost employment opportunity in the city.
“Programs that are expunging (criminal) records on job applications, combined with skills training and increased apprenticeships, will go a long way to reduce crime by giving men in their late teens and early 20s hope and meaning,” Metzger said.
Home values
It wasn’t exaggeration or urban myth.
Buyers were picking up houses for the price of a cheap couch in areas of Detroit following the Great Recession.
Those bargain basement prices helped deflate the median owner-occupied home value to just under $43,000 in 2013. That’s according to U.S. census estimates in 2021 dollars from the annual American Community Survey.
But the rebound has been considerable, experts say, with help from an overall real estate market recovery paired with Detroit’s post-bankruptcy reinvestment in basic city services stirring more demand.
The most recent estimate shows that median owner-occupied home values rose to $69,300 in 2021, a nearly 62% increase since 2013. (The data is based on survey respondents’ estimates of how much the home is worth.)
according to the mayor’s office.
New mortgage loans in Detroit still remain low compared with other cities, according to research by Detroit Future City, with only 3,211 home purchase loans made in 2022. And Black applicants were denied home loans in the city at twice the rate as white applicants, the group found in 2020.
Williams Clark said it’s important to make sure the city continues to have a “diversity of price points,” where a wide range of people can buy into the American Dream of homeownership.
“So that people who are existing residents and other residents can benefit from that wealth creation, but there is also still opportunity for people to have access to those homeownership dreams and goals,” she said.
Poverty
Detroit has seen major gains in its households moving out of poverty.
So much that it has surpassed the improvement in most large industrial cities in the Midwest and Northeast since 2012, researchers say. One expert went as far as to call the progress “remarkable.”
“This is real success,” said Luke Shaefer, director of Poverty Solutions, an initiative at the University of Michigan that partners researchers, policymakers and community members toward alleviating poverty. “That’s transformational.”
In 2013, 40.7% of Detroiters were considered living below the poverty line, according to the U.S. Census estimates from the annual American Community Survey. But that number dropped to 30% as of 2021.
announced the city’s unemployment rate had dropped to its lowest level since the Bureau of Labor Statistics started tracking monthly jobless levels in the city in 1990.
Detroit’s unemployment rate in April was 4.2%, according to BLS figures. That rate has risen slightly since then, to 6.4% in May, but is still much lower compared with an average rate of 18.8% in 2013.
Study finds Detroit’s unemployment rate was 16% in March when including a group called “labor force rebounders:” residents who are retired, disabled, students, have family or personal obligations or otherwise choose not to work, but report actively searching for a job in the past month. This group of residents in other surveys may not be considered unemployed because they chose not to work and weren’t laid off recently.
DMACS’ surveys show that the jobless rate has improved from the beginning of the COVID-19 pandemic — when unemployment spiked to 43% — and from September 2021, when DMACS said the jobless rate in the city was 25%. The jobless rate is still higher, though, than its estimated pre-pandemic unemployment rate of 8%.
Lydia Wileden, author of the University of Michigan DMACS report, said the differences between BLS and DMACS data “suggests something about the employment situation is potentially being missed.”
High school graduation rates
While Michigan’s four-year graduation rate has hovered around 80%, Detroit’s has continually lagged behind.
Just before Detroit filed for bankruptcy in 2013, 64.6% of Detroit Public Schools seniors graduated, according to state data, compared with 77% of Michigan seniors. The school district’s four-year graduation rates for students has since ticked up to a high of 78.3% in the 2015-16 school year, and dropped again to 64.5% in 2020-21, at the height of the coronavirus pandemic, as students struggled to show up to school in-person.
signed a $617 million state bailout of the district. The deal restructured the district into two entities: One retired district to exist for debt retirement, and a new community school district with a locally elected board and revenue to operate.
District Superintendent Nikolai Vitti, who took the helm in 2017, has touted academic progress since then, including improved attendance. However, the pandemic set students back considerably, and Detroit continues to rank last among major city school districts in reading and math scores.
‘What about the neighborhoods?’
It’s difficult for many Detroiters to rejoice in the progress that has been made, with much left to be desired.
Karen Knox, an east-sider and executive director of the Eden Gardens Community Association, has noticed that police have been quicker to respond in emergencies, and there are far more working streetlights since the bankruptcy.
But she said she isn’t seeing enough businesses opening, or houses being built in lots where blighted properties were demolished. Illegal dumping, flooding and blight persist. She has seen long wait times for buses, and crime remains a top concern.
“Where did the money go?” asked Knox, 62. “Downtown is booming, but what about the neighborhoods? … No one is talking to neighborhoods and asking them what they want — look how we’re living.”
It’s a familiar sentiment. Detroiters were making the same complaints 10 years ago. But the tone is different. There doesn’t appear to be the same level of anger and desperation. And with poverty and unemployment way down, home values up and a city budget with some breathing room, the outlook appears far less bleak.