A new online mortgage lender by the name of “Clara” looks to separate itself from the crowd by touting technology and transparency.
And from the looks of their website, they seem to be appealing to the youth. I might be joking a bit when I refer to them as a hipster mortgage lender, but that’s kind of what I take away when I peruse their site.
They highlight the fact that you can text, e-mail, call, or even video chat with your loan rep during the process.
Clara claims it can “help you finance your home in a modern, intuitive way,” and notes that they’re “powered by tech, supported by humans,” and “designed for you.”
So let’s see what makes Clara so special.
Clara Loan Specialists Don’t Get Paid Commission
First and foremost, the so-called “loan specialists” at Clara do not get paid a commission. That means they’re available to help you, not steer you into a certain loan product or urge you to do something you aren’t sure you want to do. That’s the idea at least.
I looked at their mortgage rate quotes and they seem to charge a flat $1,000 loan origination fee regardless of loan amount or transaction type, such as refi or purchase. They offer cash out refis as well, but do not offer HELOCs.
They seem to pride themselves on being super transparent with loan pricing, showing you all the fees associated with your loan right on the quote page. You can choose between a lower interest rate with more fees out-of-pocket, or a slightly higher rate with a lender credit.
Either way, it’s all spelled out for you to see with your own eyes to help determine what’s best for your situation.
At the same time, they want to empower the borrower by offering some mortgage education, with explanations on things like LTV and mortgage insurance.
Clara Wants to Fix the Broken Mortgage Industry
Clara has a page dedicated to their mission, which appears to be fixing the “broken” mortgage industry. We’ve heard this narrative before with the likes of Eave, Lenda, SoFi, and Quicken’s Rocket Mortgage.
But it always seems to be a case of oversimplifying what has become (or maybe always has been) a very regulated and bureaucratic process. Besides, people get upset when you make it too easy to get a mortgage…
As much as we’d all like to text the mortgage lender our details and receive our loan in 30 minutes or less, that’s just not going to be a reality anytime soon. I hope it is eventually, and maybe newcomers like Clara will get us there.
They do seem to have a very seasoned roster consisting of former employees from Yahoo, Google, Lyft, Twitter, Quicken Loans, Blackrock, the US Treasury, and even The White House. So they’ve certainly got the talent to make a difference.
Clara’s Mortgage Options and Interest Rates
Now let’s talk about what Clara offers aside from transparency and technology.
As noted, the company allows you to purchase a home or refinance an existing mortgage, including tapping home equity.
They say they specialize in conventional, conforming mortgages, which seems to include loan amounts above the traditional $417,000 loan limit.
You can get a fixed-rate mortgage, including a 30-year fixed, 25-year fixed, 20-year fixed, or 15-year fixed, or an ARM, including a 7/1 ARM, 5/1 ARM and 3/1 ARM.
I plugged in a $336,000 loan amount at 80% LTV for a rate and term refinance on a single-family, owner-occupied home for a borrower with excellent credit (720+) and it spit out the rates seen above.
Clara shows you the lender (and third-party) fees in detail as well, which is the transparency piece mentioned earlier.
Clara’s Loan Process and Technology
The process begins when a quote is generated online. If you’re happy with what you see you can create a login, at which point you’ll be assigned a licensed loan specialist.
Their contact information will appear in the online loan portal on the Clara website and you’ll be able to keep track of the loan’s progress from there.
The standard documentation is required for a Clara mortgage just as it is any other mortgage, though I think they allow you to autofill forms and speed through the paperwork a lot faster with their tech platform in place.
That same technology should lower the cost of offering mortgages, meaning origination fees can be contained while also delivering competitive mortgage rates.
When it comes to rate locks, Clara has a default 45-day lock for purchases and a 60-day lock period for refinance transactions. It’s unclear what happens if you exceed these time periods.
While they don’t guarantee a specific time-to-close, they aim to fund loans on your timeline.
Clara also sells all the mortgages it originates, but stresses that it is not a mortgage broker. I guess that makes it a mortgage banker because all of their loan officers, processors, and underwriters are in-house at their San Francisco headquarters.
At the moment, Clara is only offering mortgages to California homeowners. But if things go well, there’s a good chance they’ll expand to other nearby states and eventually nationwide. So if you don’t reside in CA, stay tuned.
A reverse mortgage may help older Americans who find they need more money in retirement. It’s common for inflation and rising medical costs to be issues. A reverse mortgage allows them to convert some of their home’s equity into cash, which can benefit their financial situation.
Protections established over the past few years by the U.S. Department of Housing and Urban Development (HUD) focus on lowering the risk previously associated with reverse mortgages. What’s more, the federal and state governments have taken aim at deceptive marketing practices that can minimize the complex aspects of reverse mortgage agreements.
That said, it’s wise to proceed with caution. There are still considerable cons to reverse mortgages, and borrowers may be unaware of the finer points. One important fact: It is possible to lose one’s home if you don’t comply with all the loan terms. Take a closer look at this topic here.
Why Do People Choose a Reverse Mortgage?
A reverse mortgage allows qualifying homeowners age 62 and older to convert part of the equity they’ve built up in their primary residence into money they can use to pay off their existing mortgage or for any other expenses that come up in retirement (from health-care costs to home repairs).
The big selling point for reverse mortgages is that the loan usually doesn’t have to be paid back until the last borrower, co-borrower, or eligible non-borrowing spouse dies, moves away, or sells the home. And when it is time to repay the loan, neither the borrower nor any of the borrower’s heirs will be expected to pay back more than the home is worth.
Main Types of Reverse Mortgages
There are three basic types of reverse mortgages. The most common is a home equity conversion mortgage (HECM), which is the only reverse mortgage insured by the U.S. government and is available only through an FHA-approved lender. An HECM can be used for anything, but there are limits on how much a homeowner can borrow.
There are also proprietary reverse mortgages, which are private loans that may have fewer restrictions than HECMs — including how much a homeowner can borrow.
And there are single-purpose reverse mortgages, which are typically offered by nonprofit organizations or state or local government agencies that may limit how the funds can be used. Most of the time, when someone refers to a reverse mortgage, though, they’re talking about an HECM.
Reverse Mortgage Terms to Know
There are safeguards in the reverse mortgage process that protect borrowers, but there are also loan terms borrowers are required to uphold or risk defaulting and potentially triggering a mortgage foreclosure. They include:
Staying Current With Ongoing Costs
Borrowers must stay up to date on property taxes, homeowners insurance, homeowners association fees, and other costs, or they could risk defaulting on the loan. An assessment of a borrower’s ability to pay for those ongoing expenses is part of the reverse mortgage application process, and if it looks as though money might be tight, a lender may require a borrower to set up a reserve fund, called a “set-aside,” for those costs. (In this way, it’s akin to an emergency fund, which is there to cover expenses if needed.)
Maintaining Full-Time Residency
Borrowers (and eligible non-borrowers) must use the home as their primary residence — the home they occupy for most of the year. If they move out of the house or leave the home for more than six months, or receive care at a nursing home or assisted living facility for more than 12 consecutive months, it could result in the lender calling the loan due and payable.
The lender also may choose to accelerate the loan if the borrower sells the home or transfers the title to someone else, or if the borrower dies and the property isn’t the principal residence of a surviving borrower.
Keeping the Home in Good Repair
Because the home is collateral and may have to be sold to repay the loan, lenders may require borrowers to do basic maintenance that will help the property keep its value (e.g., repairing a leaky roof or fixing a problem with the electrical system). If an inspector feels the home is not being properly maintained, the lender could take action.
What Happens If a Reverse Mortgage Borrower Defaults?
If the homeowners default, the first thing that could happen is that future loan payments may be stopped. And if the problem isn’t corrected within the lender’s stated timeline, the loan may become due and payable, which means the money the lender has distributed to the borrower, plus any interest and fees that have accrued, must be repaid. In that case, the borrower typically has four options:
• They can pay the balance in full and keep their home.
• They can sell the home for the lesser of the balance or 95% of the appraised value and use the proceeds to pay off the loan.
• They can sign the property back to the lender.
• They can allow the lender to begin foreclosure.
No matter what the homeowners decide to do, the process could take months to complete. HECM lenders may offer borrowers additional time to fix the problem that put them into default, or the borrowers may qualify for extensions or a repayment plan.
But in the meantime, there could be other implications — if the homeowners are no longer getting money they need to pay their bills or if the lender reports the default to credit monitoring agencies — that could affect the homeowners’ credit scores.
A Few Alternatives to Consider
The advertisements some lenders use to sell their reverse mortgages can be convincing, and some seniors may see these loans as a convenient way to get some extra cash or as a much-needed lifeline.
But, as with any financial decision, there are advantages and disadvantages — and alternatives — to be considered. There are other ways homeowners may be able to get help that could be less complicated and less limiting than a reverse mortgage.
Here are a few options:
• Borrowers may wish to tap into their home’s equity with a traditional home equity loan or home equity line of credit. They’ll have to make monthly payments, and their income and credit history will be considered when they apply, but the terms may be more flexible and the overall cost may be lower than a reverse mortgage. Because the home is used as collateral, there’s still a risk of foreclosure.
• Low interest-rate personal loans might be another option for homeowners who qualify for a competitive interest rate based on their income and credit. Borrowers who don’t have much equity in their home may choose to look into this type of loan, which is unsecured and is paid out in a lump sum. While foreclosure is not a worry with a personal loan, there still may be consequences to the borrower’s credit rating if they don’t uphold the loan terms.
• Borrowers who are struggling to keep up with their bills in retirement may find that refinancing a mortgage with a new, lower-cost mortgage might be an option to help them lower their monthly payments and stay on track with their budget.
Or, if they need extra cash right away and can get a low enough interest rate, they may want to look into a “cash-out refinance,” which would involve taking out a new loan for a larger amount based on the equity they’ve built up during the years they’ve lived in the home.
Unfortunately, no matter which type of loan homeowners might choose, there could be risks.
The government requires a counseling session for reverse mortgage borrowers for a reason: They’re complex, and it can be helpful to have someone cover all the rules and costs involved.
Homeowners also may want to pay a financial advisor and tap their expertise about what type of loan, if any, fits with their needs, goals, and where they are in their retirement.
Though reverse mortgages are available to homeowners starting at age 62, borrowers who expect to have a long retirement may choose to wait until they’re older to tap into their home equity, so they don’t risk running out of money in their later years.
How SoFi Can Help
For many retirees, the equity they have in their home is their biggest asset. Armed with knowledge about the pros and cons of each type of loan and a long-term plan, borrowers can better protect that asset and their financial security.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: Simple, smart, and so affordable.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires PMI for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
North Carolina is experiencing a boom these days, with record employment growth and an increasing population. If you live in the state, you already know there’s plenty to offer, including beautiful tourist attractions, breathtaking scenery, and a rich history that makes it unique.
But North Carolina also has plenty to offer when it comes to banks and credit unions. Whether you’re looking for an interest-bearing checking account or retirement accounts that offer the biggest bang for your buck, the best bank is the one that suits your needs.
15 Best Banks in North Carolina
If you’re on the hunt for a new bank or credit union, you’re in luck. North Carolina has a little of everything when it comes to bank accounts, from that small local bank with a focus on community service to large banks with branches in the state. This list of the best banks in North Carolina covers a variety of areas to ensure you find the best place to park your cash.
1. U.S. Bank
U.S. Bank offers customers the unique combination of local access with the extensive services of a nationwide bank. By opening a Bank Smartly® Checking account with U.S. Bank, clients can potentially earn up to $300. The qualification process involves two steps within the first 90 days of opening the account online:
Ensure at least two direct deposits totaling $6,000 or more
Register for online banking or download the U.S. Bank Mobile App
This promotional offer is subject to specific terms and restrictions and will remain valid until July 11, 2023. As a member of the FDIC, U.S. Bank ensures customer deposits are protected up to the FDIC’s established limits.
Fees:
$0 – $6.95
No-fee overdraft protection
Balance requirements:
$1,500 minimum balance or $1,000 direct deposit to qualify for free checking
$25 opening deposit
ATMs:
No ATM transaction fees at U.S. Bank ATMs
No surcharge fees at MoneyPass® Network ATMs
Interest rates:
Up to 4.50% APY on money market accounts
Up to 4.75% on fixed-rate CDs
Additional perks:
$300 bonus
Competitive rates on money market accounts & CDs
2. First Citizens Bank
Founded in North Carolina in 1898, First Citizens Bank has expanded over the years. You’ll find First Citizens Bank branches in 21 states, but the majority of its locations are in North Carolina and South Carolina.
If you frequently travel, though, check the service area. You’ll pay a $2.50 out-of-network ATM transaction fee if you can’t locate a First Citizens ATM while you’re away from home.
Fees:
No monthly fees
$10 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum monthly balance
ATMs:
Fee-free at 500+ First Citizens Bank ATMs
$2.50 for out-of-network ATM transactions
Interest on balance:
0.03% APY on savings accounts
Up to 0.15% APY on CDs
Up to 0.15% APY on money market accounts
Additional perks:
Credit cards offer generous rewards
Robust mobile banking solutions
3. Chime
Chime is ideal for those who do most of their banking virtually. While you won’t find any brick-and-mortar locations, Chime does offer 24/7 phone support and access to cash through more than 60,000 ATMs nationwide. You can also deposit cash at more than 90,000 retail partners, including CVS and Walmart.
Fees:
No service fee
No overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 for each out-of-network ATM transaction
Interest on balance:
2.00% APY on savings account balances
Additional perks:
Access to direct deposits up to 2 days early
SpotMe covers up to $200 in overdrafts
4. CIT Bank
North Carolina residents interested in online banks should take a look at CIT Bank, which is based in Raleigh, North Carolina. This national bank recently merged with First Citizens Bank, which means CIT Bank customers can enjoy brick-and-mortar banking at any CIT location.
You’ll get everything you need to manage your money in CIT’s mobile banking app, as well as refunds of up to $30 in out-of-network ATM fees each month.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
$25 minimum deposit to open
No minimum daily balance required
ATMs:
No ATMs provided
Up to $30 in ATM fees reimbursed monthly
Interest on balance:
Up to 0.25% APY on checking
Up to 4.736% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.538% APY on money market accounts
Additional perks:
Competitive rates on business loans
Award-winning customer service
5. Coastal Federal Credit Union
Credit unions tend to offer perks you won’t find with banks, and Coastal Federal is no exception. You can qualify if you’re with one of the employers or associations approved for membership or if you live or work in one of the North Carolina cities CFCU services.
As with many credit unions, though, CFCU’s real value comes with its interest rates. Not only will you enjoy an interest checking account, but you can also find great rates on share certificates, which are the credit union version of CDs.
Fees:
No monthly service fees
$31 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at CFCU ATMs
Fee-free at CO-OP ATMs nationwide
$2 out-of-network ATM fee (waived for first five per month)
Interest on balance:
Up to 3.00% APY on savings account balances
Up to 5.00% APY on share certificates
Up to 3.50% APY on money market accounts
Additional perks:
Competitive rates on loans
Financial planning assistance available
6. GO2bank
Another online-only bank is GO2bank, which stands out for its cash accessibility. Not only can you withdraw cash, fee-free, at any Allpoint ATM, but you can deposit cash at more than 90,000 retailers nationwide.
All you need to waive monthly maintenance fees is at least one direct deposit monthly, either from an employer or the government. Those looking to build credit should check out the secured credit card, which you can get with no credit check. Pay your bill on time each month and GO2bank will report your activity to the three credit bureaus, helping you boost your score.
Fees:
$5 monthly fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum daily balance required
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Deposit cash at 90,000+ retailers nationwide
Secured credit card helps you build credit with no credit check required
7. Ally Bank
Ally Bank is an online and mobile banking option that puts a priority on budgeting and wealth building. The fee-free checking account comes with no minimum requirements and gives you access to more than 53,000 ATMs nationwide. But one of the best features of Ally Bank is its annual percentage yield on savings and CDs. You’ll earn 4.00% APY on savings and up to 5.00% APY on CDs.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum balance requirements
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
No out-of-network ATM fees
Up to $10 in ATM fee refunds monthly
Interest on balance:
Up to 0.25% APY on checking accounts
4.00% APY on savings accounts
Up to 5.00% APY on CDs
4.15% APY on money market accounts
Additional perks:
Spending buckets make it easy to save money
Robo Portfolios help automate investing
8. Chase
Like Bank of America, Chase Bank is one of the biggest banks in North Carolina, with more than 4,700 branches and 16,000 ATMs across the country. Currently, Chase is offering a $100 bonus for new checking account customers as long as you complete at least 10 qualifying transactions within the first 60 days.
Whether you go with Chase for your regular banking or not, though, take a look at Chase’s credit card offerings. Chase has multiple card options, with each offering perks like bonuses and cash back rewards.
Fees:
$12 monthly maintenance fee
$34 overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 16,000 Chase Bank ATMs nationwide
$3-$5 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 3.75% APY on CDs
Additional perks:
$100 bonus for new checking accounts
Multiple credit card options with bonuses and generous rewards
9. First Horizon Bank
First Horizon Bank is a regional bank with branches in 11 states across the Southeast, including a heavy presence in North Carolina. One standout feature of First Horizon is its money market rates, which currently go as high as 5.38%. You’ll find ATMs throughout the Southeast, but you can also use your debit card at any Allpoint ATM nationwide without a fee.
Fees:
No monthly service fee
$37 overdraft fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at more than 600 First Horizon ATMs
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 2.78% APY on savings accounts
0.10% APY on CDs
Up to 5.38% APY on money market account
Additional perks:
Business banking options available
Wealth management help available
10. Truist Bank
In 2019, BB&T and SunTrust Banks merged to become Truist Bank. Although Truist has a limited ATM footprint, the Truist One checking account makes it worth it. You’ll get a 10% loyalty bonus based on your monthly balance in addition to a 10% bonus if you choose a Truist credit card.
The interest rates also make Truist a suitable option, since you’ll earn 5.00% APY on 7-month CDs. To waive the $12 monthly service fee on your checking account, you’ll need at least $500 in direct deposit activity each month.
Other options include a combined daily balance of $500 across all your Truist accounts, a Truist credit card or qualifying loan, or a linked business checking account. Students 25 and younger also qualify for a fee-free checking account.
Fees:
$12 monthly service fee (waived with requirements)
No overdraft fees
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at Truist Bank ATMs
$1 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings accounts
Up to 5.00% APY on CDs
Additional perks:
Generous cash rewards with Truist Bank credit card
Checking balances earn rewards
11. Mechanics & Farmers Banks
You may know it as M&F Bank, but it actually started under the name of Mechanics & Farmers Bank in 1907. Throughout the 1900s, it was known as one of the most influential Black-owned businesses in the state of North Carolina. Today, M&F has locations throughout North Carolina and access to 44,000 ATMs nationwide, thanks to partnerships with Bank of America, JPMorgan Chase, and Wells Fargo.
Fees:
No service fee
$35 overdraft fee
Balance requirements:
$50 deposit to open
No minimum balance required
ATMs:
Fee-free at M&F Bank ATMs
Fee-free at Bank of America, JPMorgan Chase, and Wells Fargo ATMs
$3 for each out-of-network ATM transaction
Interest on balance:
Rates not publicly disclosed
Additional perks:
Rewards on debit card transactions
Robust business banking options
12. First National Bank
First National Bank has branches throughout North Carolina, as well as in DC, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia. The free checking account is Freestyle Checking, but it does come with overdraft fees, and the exact fee amount isn’t disclosed until you sign up for an account.
You’ll also only get fee-free transactions at First National Bank ATMs, and they’re limited to the First National Bank service area.
Fees:
No monthly fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 1,500+ First National Bank ATMs
Interest on balance:
Up to 0.05% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.25% APY on money market account
Additional perks:
Cash and check deposit available at Smart Deposit ATMs
The site makes ordering banking products and scheduling branch appointments easy
13. PNC Bank
PNC Bank has branches in 29 states, including 107 branches in North Carolina. Currently, new customers are eligible for bonuses of up to $400. You’ll get a $50 bonus simply for opening a Virtual Wallet with a basic checking package, but that bonus bumps up to $200 if you add a Performance Spend checking account and $400 if you upgrade to a Performance Select account.
The PNC Bank basic account only requires $500 in monthly direct deposits or a combined $500 balance between accounts.
Fees:
$7 monthly fee (waived with requirements)
$36 overdraft fee
Balance requirements:
$25 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at PNC Bank ATMs
Fee-free at 60,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 0.03% APY on savings accounts
Up to 4.00% APY on CDs
Additional perks:
Up to $400 bonus for new virtual wallet customers
Financial planning tools built into the app
14. Fifth Third Bank
Fifth Third Bank focuses operations on the Midwest and Southeast U.S. regions, with 1,087 full-service locations in 11 states. You’ll find a variety of banking products, from savings and checking accounts to investment and retirement accounts. Fifth Third Bank offers competitive interest rates on CDs, with a 7-month CD currently offering 5.00% APY.
Fees:
No monthly maintenance fee
$37 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 2,100+ Fifth Third Bank ATMs
Fee-free at 40,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 5.00% APY on CDs
Additional perks:
Early Pay gives you access to direct deposit two days early
Grace period to resolve overdrafts
15. Bank of America
If you prefer what national banks have to offer, you can’t go wrong with Bank of America, which is one of the biggest banks in the country. You’ll find ATMs and branches across the country, as well as a wide variety of services. Although Bank of America does have competitive interest rates on CDs, the basic checking account comes with a $12 monthly fee and a $100 deposit to open.
Fees:
$12 monthly fee
$10 overdraft fee
Balance requirements:
$100 deposit to open
No minimum balance required
ATMs:
Fee-free at 15,000+ Bank of America ATMs nationwide
$5 for each out-of-network ATM transaction
Interest on balance:
Up to 0.04% APY on savings account balances
Up to 4.75% APY on CDs
Additional perks:
Generous bonus on new credit cards
Wealth planning services available
Our Methodology: How We Chose the Best Banks in North Carolina
North Carolina has a large selection of banks, some paying more in interest than the national average. In putting together this list, we kept in mind that each person has different criteria when choosing savings and checking accounts. Your choice of bank will largely depend on your own banking habits. If you tend to do all your banking online, a user-friendly app might be a top priority, while those who prefer the in-person experience might put nearby branches first.
Our top goal was to bring a variety of banking options to this list. We’ve combined local, regional, online, and national banks to help you choose. We also looked at fees and interest rates to help you protect and grow your earnings.
Frequently Asked Questions
You have questions, and we have answers. Here are some of the most frequently asked questions about banks in North Carolina.
What is the safest bank for your money?
Lately, financial security has been a top priority for account holders in search of a new bank. The top thing to look at is a bank’s Federal Deposit Insurance Corporation coverage. This insurance protects each deposit holder for up to $250,000 if a financial institution goes belly up.
Once you’ve verified a bank is FDIC insured, pay attention to any news of mergers or buyouts involving your bank. Selling can be a sign of financial distress.
See also: Safest Banks in the U.S. for 2023
What is the best bank in North Carolina?
That’s a tough question because the definition of “best bank” can vary from one person to another. If you think the best checking accounts come with an annual percentage yield and a mobile app to manage it all, you’ll be looking at different criteria from someone who wants a local bank with personalized customer service.
If you’re going for customer satisfaction ratings, J.D. Power gives high marks to both Capital One and Chase, which both have a heavy presence in North Carolina. But if you’re looking for that local banking experience, you can’t go wrong with First Citizens Bank or M&F Bank.
What is the best credit union in North Carolina?
There are several credit unions in North Carolina, but the one that impressed us most was Coastal Federal. CFCU’s fee-free checking and annual percentage yield on savings and share certificates makes it stand out. But it’s also important to take a look at the interest rates on personal loans and compare them to banks in the area to make sure you’re getting the best deal.
One issue with credit unions is that they tend to come with strict membership requirements. You may find you’re limited to only those that will accept your employer or city of residence, and those credit unions might not have financial accounts that meet your needs. However, there are also some credit unions that anyone can join.
Which bank has the most branches in North Carolina?
If you do most of your banking in North Carolina, you might not care if your debit card works at ATMs across the country. In that case, you’ll need a bank with plenty of branches and ATMs in the areas where you work and live.
When it comes to sheer branch numbers, take a look at Truist Bank and Wells Fargo. Both have a heavy branch presence throughout the state. For smaller banks, First Citizens and First Horizon both have substantial branch coverage in North Carolina.
However, you’ll also need to check your neighborhood. If you’re interested in that in-person bank experience, you’ll be disappointed if you have to drive a half hour or more to get to the closest branch.
What banks are in Charlotte, NC?
North Carolina isn’t just a thriving state filled with business opportunities. The state is a financial center in itself. Not only does Charlotte have smaller banks like M&F Bank and First Citizens Bank, but both Bank of America and Truist Bank are headquartered in North Carolina, as well.
This heavy financial presence has made North Carolina great for finding banking services. The many banks in the state are eager to win your business and offer competitive rates to ensure it happens. That means it’s more likely that checking accounts come with low fees and savings accounts earn top-dollar interest rates. When combined with the many online bank options, the biggest issue will be narrowing the list to just one.
From high-yield savings accounts to fee-free checking accounts, North Carolina has it all. Shopping around will help you choose from the best banks so that you can find the perfect banking partner for you.
If you’ve fallen prey to a devious money scam, you’re not alone. In 2020 alone, the Federal Trade Commission (FTC) received millions of scam reports, which amounted to more than $3 billion dollars in losses for those involved.
When you lose money to a scammer, it’s common to feel a little lost yourself. Fortunately, there are several organizations available, from local authorities to the federal government, to assist victims of these scams and even help them reclaim their money.
Read on for four steps to take if you’ve fallen for a money scam and some additional tips to protect yourself from future scammers as well.
What’s Ahead:
What to do if you’ve fallen for a money scam
Scammers are clever thieves, and they’re good at getting what they want. If you’ve fallen for a scammer’s tricks (see the list of common scams below), here are four steps you can take to report the issue, (hopefully) recover your cash, and even prevent the scammer from striking again.
1. Compile data and details about the scam
Before you reach out to your bank or the local authorities for help, make sure you have your story straight.
Gather any relevant documentation, such as email correspondence, the name and contact information of your perpetrator (if available), phone recordings (if applicable and available), and more. This information will not only help regulators identify and (hopefully) stop the scammer, but it can also help keep other would-be victims safe.
2. Contact your bank or the company you used to send money
As stated previously, scams are not uncommon in America. Consequently, many banks, payment transfer services, online sellers, and other relevant organizations have dedicated fraud departments to address the problem of phony charges. In some cases, these financial institutions can reverse the fraudulent transactions and return your money right then and there.
Depending on how the scammer acquired your cash, here is what the FTC recommends you do next:
If you paid with a credit or debit card…
Contact the company/bank that issued the card to report a fraudulent charge and request that they reverse the transaction.
If the scammer transferred money from your bank account…
Contact your bank to report an unauthorized debit/withdrawal and request that they reverse the transaction.
If you paid with a gift card…
Contact the company that issued the gift card to report the scam and request a refund.
If you paid through a wire transfer…
Contact your bank or the wire transfer company to report a fraudulent charge and request that they reverse the transaction.
If you paid through a money transfer app…
Contact the company that owns the app to report a fraudulent transaction and request that they reverse the payment. If the app is linked to your credit or debit card, report the charge to the company or bank that issued the card.
If you paid with cryptocurrency…
Contact the company you used to send money to report a fraudulent transaction and request that they reverse the payment.
If you sent cash via U.S. mail…
Contact the U.S. Postal Inspection Service (877-876-2455) to request that they intercept your package.
If the scammer has access to your financial information, such as a credit card or bank account, you should also freeze your credit report and place a fraud alert on your account in order to prevent the scammer from doing more damage. Or, consider closing the card/account altogether.
3. Report the scam
Perhaps the most important step for any individual to take following a money scam is to report it.
By notifying organizations like the FTC (the main agency that collects money scam reports) of the scam, you empower regulators to fight back against scammers. Agencies, like the FTC, compile scammer trends and habits and use the information to educate communities and prevent future crimes. In some cases, they are even able to gather enough incriminating data to take legal action.
Here are a few places that I recommend reporting your money scam to:
Federal Trade Commission: report the scam through their website or call 1-877-382-4357 (9:00 AM – 8:00 PM, ET).
FBI’s Internet Crime Complaint Center: if you’re a victim of internet crime, report the scam here.
SSA’s Inspector General: if a scammer has your social security information, report the scam through their website or call 1-800-269-0271 (10:00 AM – 4:00 PM, ET).
Treasury Inspector General for Tax Administration (TIGTA): to report an IRS imposter, call 1-800-366-4484.
National Center for Disaster Fraud (NCDF): if you’ve lost money through a form of disaster fraud, such as coronavirus-related scams, call the NCDF Hotline at 1-866-720-5721 or submit a complaint through their website.
For additional advice and even emotional support, contact AARP’s Fraud Watch Network. Their hotline (877-908-3360) can help victims of money scams determine the next best step.
4. Notify local authorities
Along with reporting scams to the FTC and other relevant regulators, you should also contact your local authorities.
Start by reporting the scam to your state consumer protection office. For stolen cash or possessions, you should contact your local law enforcement officials as well to file a police report. This does not only initiate an investigation, but it may help protect fellow community members from the same scam.
Finally, notify neighbors and local businesses of scammers in your area by reporting the incident to the Better Business Bureau. Their Scam Tracker can warn others and help prevent the scammer from causing more harm.
What are some of the most common scams?
According to the Federal Trade Commission (FTC), the phone is still a scammer’s primary weapon, and the most common type of scam is imposter scams. In fact, imposter scams amounted to nearly one-quarter of the 2.2 million scams reported to the FTC in 2020, with crafty con artists masquerading as anything from a government agency to a family friend.
Some of the most common scams — by phone, email, internet, and more — include:
Tech support scams.
Fake check scams.
Charity scams.
Disaster fraud (including coronavirus scams).
Internet scams (fake websites, emails, etc.).
Fake college loans and scholarships.
Fake prizes and sweepstakes offers.
Social Security Administration (SSA) and Internal Revenue Service (IRS) scams.
Tips to guard yourself against future scams
One crucial preventative measure you can take to protect yourself from money scams is to educate yourself on how scammers work.
Since scammers employ several routine tactics, such as offering financial aid that seems too good to be true or establishing a sense of urgency that encourages you to “act now,” there are plenty of red flags to watch for.
Here are some common scammer strategies that you should be aware of:
Saying you’ve been “selected” or “chosen” to receive a special prize or offer.
Guaranteeing you’ll receive money, benefits, etc.
Establishing urgency (“act now,” “this is a one-time offer,” etc.).
Offering “free” services, aid, etc.
Requesting payment in an uncommon way, such as through gift cards or wire transfer.
Using threats or demands to incite action (common for SSA and IRS scams).
Claiming to be a government entity or large organization, such as the IRS or Apple (this is common for phone calls).
Summary
Falling for a money scam can be a jarring experience. Unfortunately, it’s also a common occurrence in America.
Every year, scammers steal billions of dollars from unsuspecting Americans. To assist these victims and prevent scammers from doing more harm, organizations like the Federal Trade Commission are collecting data to disarm the thieves and warn the public. Many banks and financial institutions even have dedicated fraud departments to address fraudulent charges.
If you’ve been a victim of a money scam, fight back! Report the scam and help dismantle this destructive industry to protect your neighbors from the same fate.
Mortgage applications increased 12% from the previous week due to a surprising uptick in demand for “refis” as borrowers try to secure a lower rate, according to the Mortgage Bankers Association (MBA) survey for the week ending Jan. 28.
The seasonally adjusted Refinance Index rose 18.4% in the same period. Meanwhile, the Purchase Index increased 4%.
Compared to the same week one year ago, mortgage apps overall dropped 37%, with a sharp decline in refinance (-50.4%) compared to purchase (-6.7%).
According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, mortgage rates continued to climb, with the 30-year fixed rate rising for the sixth consecutive week to its highest level since March 2020.
The trade group estimates that the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) increased to 3.75% from 3.72% the week prior. For jumbo mortgage loans (greater than $647,200), rates climbed to 3.59% from 3.56% the week prior.
“Despite the increase in rates, refinance applications were up 18%, driven mainly by a 22% jump in conventional applications,” Kan said in a statement. “There has likely been some recent volatility in application counts due to holiday-impacted weeks, as well as from borrowers trying to secure a refinance before rates go even higher.”
How lenders can continue to serve borrowers despite housing affordability challenges
Potential borrowers who’ve been priced out of the housing market need to be able to compete with an increasingly growing share of cash buyers and investors who are beating them in bidding wars.
Presented by: Equifax
Regarding purchases applications, the average loan size hit a new record level at $441,100. “Stubbornly low inventory levels and swift home-price growth continue to push average loan sizes higher,” Kan said.
The survey showed that the refinance share of mortgage activity increased to 57.3% of total applications last week, from 55.8% the previous week. The VA apps dropped to 9.1% from 9.9% in the same period.
The FHA share of total applications decreased to 7.7% from 8.6% the prior week Meanwhile, the adjustable-rate mortgage share of activity increased from 4.4% of total applications to 4.5%. The USDA share of total applications went from 0.5% to 0.4%.
Attention Zillow shoppers, if you’ve used their mortgage marketplace to compare mortgage rate quotes, you may have come across Semper Home Loans.
The direct-to-consumer mortgage lender seems to advertise quite a bit on the Zillow platform and often takes the top spot in the listings with its seemingly low rates and APRs.
Let’s learn about this mortgage company to determine if they’re the best fit for your home loan needs.
Semper Home Loans Quick Facts
Direct-to-consumer mortgage lender founded in 2005
Headquartered in Providence, Rhode Island
Currently licensed in 40 states and Washington D.C.
Funded roughly $300 billion in 2019 via the retail channel
Offer home purchase financing, mortgage refinances, and home renovation loans
In 2005, Semper Home Loans was founded by current president Matthew Sullivan, a 20+ year mortgage industry veteran.
The company is located in Providence, Rhode Island, but also has branch locations in several states, including Arizona, California, Florida, New York, Oregon, Texas, and so on.
They funded roughly $300 billion in home loans via the direct-to-consumer retail channel last year, with a home purchase loan share of roughly 60%.
Semper Home Loans helps both prospective home buyers obtain mortgage financing, and existing homeowners looking to refinance their mortgages.
At the moment, they appear to be licensed in 40 states, including: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington D.C., and Wyoming.
How to Apply for a Mortgage with Semper Home Loans
They offer a digital mortgage application called HomeEasy powered by Ellie Mae
Allows you to apply remotely from smartphone or computer without any human interaction
Borrowers can securely upload paperwork, eSign documents, and link financial accounts
Those who want a hands-on approach can call or request a free consultation with a loan officer
One thing I like about Semper Home Loans is the fact that you can apply for a mortgage right from their website without any human interaction.
Many of today’s homeowners want to go it alone, and Semper Home Loans appears to let you do just that if you wish.
They provide a digital mortgage application powered by Ellie Mae that makes it easy to get the ball rolling from just about anywhere.
Once at the application page on their website, simply click on “Create Account” to begin the mortgage application process.
Like a traditional mortgage application, you’ll be required to plug in various personal and financial information.
You can complete the app from any device, such as a smartphone, and do so via a paperless process that should make it a lot quicker, more secure, and more accurate.
Borrowers have the ability to securely upload paperwork, eSign documents, run their own credit reports, and verify assets by linking accounts.
After you’re approved, you can make contact with your loan officer at any time and receive status updates as your loan progresses to the funding table.
If you prefer a more hands-on approach, you can schedule a free consultation with a Semper Home Loans loan originator or simply call them up directly.
Loan Types Offered by Semper Home Loans
Home purchase loans
Refinance loans including rate and term, cash out, and streamline
Renovation loans such as the FHA 203k
Conventional loans backed by Fannie Mae and Freddie Mac
Jumbo home loans that exceed conforming loan limits
FHA loans, USDA loans, and VA loans
Fixed-rate and adjustable-rate mortgage options available
Semper Home Loans Mortgage Rates
Semper Home Loans does not publicize its mortgage rates on its own website, which is a slight negative but not necessarily a bad thing.
Some mortgage companies like to advertise their interest rates everywhere (see Intelliloan), while others choose to keep their rates to themselves.
It’s understandable why a lender wouldn’t post them on their website since advertised rates are very limited and come with lots of assumptions.
In other words, if you have a different credit score, property type, loan amount, or transaction type, the rate you see might be nothing close to what you actually qualify for.
That being said, they do seem to advertise quite a bit on Zillow, so if comparing mortgage rates there, you might see their rates to get a better idea of pricing.
I came across them on Zillow and they topped the rankings for lowest mortgage APR and mortgage rate for a sample loan scenario, thanks in part to charging just $1 in lender fees.
To that end, you can probably get a no cost refinance with the company as well if you want to keep closing costs low or nil.
Semper Home Loans Reviews
On Zillow, they enjoy a 4.91-star rating out of 5 possible based on over 1,000 customer reviews.
A good portion of their past customers said both the interest rate and closing costs were lower than expected.
And many of the reviews remarked about the great rates or how low the rates were that they offer.
They are an accredited company with the Better Business Bureau, and have been since inception in 2005. They currently have an A+ BBB rating.
Semper Home Loans has a 2.5-star rating out of 5 on the BBB website, but it’s based on just six reviews, so not a large sample size. And the reviews on the BBB website tend to be customer complaints.
They have a 4.4-star rating on both WalletHub and Birdeye as well based on about 100 customer reviews each.
All in all, they appear to be well-liked by their customers, though like all mortgage companies have their share of issues and unpleasant experiences.
Semper Home Loans seems to be a good choice for a borrower looking for convenience and low rates, who may not need any hand-holding from their lender.
Semper Home Loans Pros and Cons
The Pros
Appear to offer low mortgage rates with $1 lender fees Offer a digital mortgage application that allows you to apply from anywhere Can apply for a home loan without contacting a human first Excellent reviews from past customers A+ BBB rating Some of their loan officers also speak Portuguese and Spanish Free mortgage calculators on site
The Cons
Not licensed in all 50 states Don’t list mortgage rates or lender fees on their website Limited branch locations They don’t service their home loans
A “For Sale” sign outside a house in Albany, California, US, on Tuesday, May 31, 2022. Homebuyers are facing a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade.
Joe Raedle | Bloomberg | Getty Images
Mortgage rates pulled back for the second straight week last week, and it was enough to get both current and potential homeowners on the phone with their lenders.
Mortgage application volume rose 7.2% last week, compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.77% from 6.81% in the prior week, with points falling to 0.65 from 0.66 (including the origination fee) for loans with a 20% down payment.
Applications to refinance a home loan rose 6% for the week but were 41% lower than the same week one year ago. While rates pulled back, they are still more than a full percentage point higher than they were a year ago and more than twice what they were in the first two years of the Covid pandemic, when there was a refinance boom. Most borrowers today have lower rates than what is currently available and therefore do not want to lose those rates even for a cash-out refinance.
Applications for a mortgage to purchase a home increased 8% for the week but were 27% lower than the same week one year ago.
“Rates that are still more than a percentage point higher than a year ago, and low for-sale inventory continue to constrain homebuying activity in many markets,” said Joel Kan, an MBA economist, in a press release. “The average loan size on a purchase loan decreased for the third straight week, as we continue to see more first-time homebuyer activity in the purchase market.”
Mortgage rates haven’t moved much this week, but that could change Wednesday afternoon when the Federal Reserve announces the results of its latest policy meeting and updated rate forecasts.
“Some say the Fed will use those forecasts to telegraph another rate hike or two in 2023. Although the Fed Funds Rate doesn’t directly dictate mortgage rates, such a move would still put quite a bit of upward pressure on interest rates of all shapes and sizes,” wrote Matthew Graham, COO of Mortgage News Daily.
One mortgage lender that’s been around a while, but is beginning to shake things up is Loan Simple.
As the name suggests, they’re all about simplicity, whether it’s simple talk or a simple loan process.
They consider themselves a boutique mortgage lender, striving for relationships and quality customer service over sheer volume.
However, they still managed to fund half a billion in home loans in 2019 via the retail channel, with even more slated for 2020 and beyond.
One thing I like about Loan Simple is their effort to increase mortgage literacy by offering free classes powered by EverFi.
So they actually want you to know more about mortgages before/when you apply, which is a rarity in this industry or any other for that matter.
Additionally, they donate to charities they care about each time a loan funds, including Feeding America, Water.org, and the World Wildlife Fund.
Loan Simple Quick Facts
Direct mortgage lender located in Englewood, Colorado
Founded by Roland Dozois more than 20 years ago (son Jason is current CEO)
Licensed to lend in 30 states nationwide
Launched a wholesale lending division in late 2020
Donate to charities for each loan funded
Also a licensed loan servicer
Loan Simple did about half a billion in loan volume last year, which makes them one of the smaller fish, but a growing one.
They did more than half their total loan volume in their home state of Colorado, so if you’re from the Centennial State, you’ve likely heard of them.
Another big mortgage lender in Colorado is Cherry Creek Mortgage, FYI.
A good chunk of their remaining volume came from the states of Arizona, California, and Texas, but they’re also expanding in other states nationwide.
About two-thirds of their loans were used to finance a home purchase, with the remaining mortgage refinances.
Aside from operating a retail lending channel, they also recently launched a wholesale lending division for mortgage brokers, and they service their own loans.
Where Is Loan Simple Available?
At the moment, they appear to be licensed to do business in 30 states nationwide.
Those states include Arizona, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.
Some notable missing states include Alaska, Connecticut, Hawaii, Massachusetts, New Jersey, New York, and North Carolina.
Hopefully they’ll continue to roll out to new states in the near future.
Getting a Mortgage with Loan Simple
To get started, you literally click on “Get Started” from their website. From there, you select a state where they do business and you’ll see a corresponding list of loan officers licensed there, along with any branch locations.
Once you select a loan officer, you can apply for a home loan right on their website. Like many other lenders, they utilize fintech company Blend for their digital mortgage application.
It allows you to complete most of the process online from your computer or smartphone in just minutes.
You can e-sign documents, scan and upload paperwork, see personalized mortgage rates, track loan progress, and receive status updates.
Loan Simple says they’re big on technology and their overarching goal is to keep things simple, hence their name and slogan, “The Simple Way to Home.”
So you should expect a fast and easy home loan experience if you choose to go with Loan Simple, complemented by a human touch.
Types of Mortgages Offered by Loan Simple
Home purchase loans and mortgage refinance loans
Conforming loans backed by Fannie Mae and Freddie Mac
FHA loans, USDA loans, and VA loans
Jumbo home loans
Fixed-rate and adjustable-rate mortgage options available
What’s somewhat strange is the lack of a lending menu on then Loan Simple website. They don’t appear to mention what types of loans they offer anywhere.
Perhaps they took this whole simple thing a little too seriously…
Fortunately, we can look at their HMDA data to see that they offer all the typical stuff you’d expect from a big mortgage lender like home purchase loans and mortgage refinances, likely including cash out refinances.
They appear to originate mostly conventional loans, such as those backed by Fannie Mae and Freddie Mac, along with jumbo loans that exceed the conforming limit. It’s unclear how high you can go in the jumbo department.
Loan Simple also does a good share of FHA loans, along with VA loans and some USDA home loan lending, so all major loan types are covered.
Most of their borrowers tend to go with the 30-year fixed, like most other lenders, though they also offer the 15-year fixed, 5/1 ARM, 7/1 ARM, and so on.
While it’s unclear if they offer construction or home renovation loans, there’s a good chance they do the latter at least.
They don’t seem to offer any sort of second mortgages, such as home equity loans or lines.
Hopefully they’ll update their website so we know exactly what they offer to their customers.
Loan Simple Mortgage Rates
Unfortunately, they do not publicize their mortgage rates on their website or elsewhere as far as we know.
As a result, it’s unclear how competitive their interest rates are compared to other lenders. The same goes for lender fees, which aren’t disclosed on their website.
The one hint we have about their pricing comes from their Zillow reviews, which are generally favorable, and many customers have remarked about rates/fees being lower than anticipated.
But you’ll need to get in touch with a loan officer in order to get pricing, then you can shop their rate and closing costs with other lenders to determine where they stand.
Loan Simple Reviews
On Zillow, they’ve got a 4.95-star rating out of 5, which is pretty darn close to perfection. It’s based on over 600 customer reviews.
Many customers indicated that the interest rate and closing costs were lowered than expected, and overall there a lot of positive comments.
They are accredited with the Better Business Bureau, and currently enjoy an A+ rating with the company.
At the moment, there are no customer complaints, but they have a 1-star rating based on five customer reviews. Typically, BBB customer reviews aren’t very good because they’re complaint-driven.
Loan Simple Pros and Cons
The Good Stuff
Can apply for a home loan directly from their website
Also have brick-and-mortar branches in select states
Offer a digital loan process via Blend technology
Excellent reviews from past customers
A+ BBB rating
Donation to a charity for every loan closed
Offer free mortgage literacy classes
They service their own loans
The Maybe Not-So-Good Stuff
Not licensed in all states
Do not publicize their mortgage rates or lender fees
Website is a little too simple
Lacks information regarding available loan types, calculators, etc.
The easy choices have already been made: the low performers left many moons ago, the travel budgets have been slashed, and struggling branches have been sold to competitors or unceremoniously closed.
For the mortgage industry, more often it’s about making the very hard choices these days – exiting a channel, deciding which star performer to let go, etc. After all, the average retail lender lost nearly $2,000 per loan in the first quarter, and I expect losses to be similar in Q2 and elevated in Q3.
One consequence of mortgage lenders – and LOs, for that matter – being on the ropes is the lack of investment back into their business. I get it! Money’s tight and lenders are plugging holes in the boat, not buying a new engine.
In our quarterly HousingWire LenderPulse survey, we asked retail loan officers, branch managers, C-suite execs, brokers and others how they feel about the market, where they expect rates to be in Q3, and what they’re doing to reduce costs.
Interestingly, 57% of the 166 respondents said they do not plan to invest in tech, services or solutions in the third quarter. The rest of the surveyed pros were evaluating or still planning to purchase lead generation services and keep loan originations systems, customer relationship management (CRM) platforms and services that maximize repeat and referral business for lenders.
While the respondents were split as to whether to invest or hold spending money in tech, when asked about what business cost reductions they plan to make in the future, 39% of surveyed mortgage professionals pointed to cutting their marketing spend/tools. Just under 25% of the respondents said they would cut down on production or origination-focused headcount, followed by operational software and solutions (18%); and originations software (8%). Other responses included cutting down excessive incentives, business trips, open houses and sponsorships.
Mortgage is famously an unforgiving, low-margin business. The lenders and LOs that saved their cash from the pandemic unicorn years and have been disciplined about maintaining their marketing strategy and investing in technology should see outsized returns in the years to come.
After all, as the famous Warren Buffett saying goes, “Only when the tide goes out do you learn who’s been swimming naked.”
James Kleimann Managing Editor, HW Media
In our weeklyDataDigest newsletter, HW Media Managing Editor James Kleimann breaks down the biggest stories in housing through a data lens. Sign up here! Have a subject in mind? Email him at [email protected]
Texas-based Mr. Cooper Group has extended the deadline of its tender offer to acquireHome Point Capital’s outstanding shares, the company announced on Wednesday. The offer, which was previously scheduled to end on June 27, will expire on July 21.
The tender offer is part of Mr. Cooper’s agreement to acquire Home Point Capital, which also includes the payment of $324 million in cash. In addition, Mr. Cooper is assuming $500 million in outstanding Home Point 5% senior notes due in February 2026, per the deal announced in May.
Heisman Merger Sub, a subsidiary of Mr. Cooper Group, is paying $2.33 per share net to the seller in cash, without interest thereon.
Mr. Cooper said that the depositary Equiniti Trust Company “indicated that 136,030,882 shares had been validly tendered into and not validly withdrawn from the tender offer, representing approximately 98.2% of the outstanding shares.”
According to Mr. Cooper, the offer is conditioned to certain conditions, including consent from state mortgage regulators, the Government Mortgage Association, the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association.
“The tender offer was extended to allow additional time for the satisfaction of the remaining conditions to the tender offer,” the company said in a news release.
Mr. Cooper and Home Point Capital expect the deal to close in the third quarter of 2023.
After onboarding Home Point customers, Mr. Cooper will shut down the seller operations. In April, Michigan-based Home Point sold its wholesale origination business to The Loan Store.
Mr. Cooper is acquiring Home Point’s $84 billion servicing portfolio, which will contribute to its return on equity with an estimated 10% increase to operating earnings in the first year. Mr. Cooper also estimates a tangible book value increase of about $1 per share at closing.
Mr. Cooper had 4.1 million customers and $853 billion in unpaid principal balance (UPB) at the end of March. But the servicing portfolio is expected to grow as the company has been active in acquiring MSRs.