For a young man in his early 20s, he recalled the money was pretty good: “It worked for me as a single young guy where I was able to make more money than I’d made in any prior jobs and be able to learn some things as I went along.” The novelty begins to wear … [Read more…]
Today we’ll take a look at the top mortgage lenders in Alabama, based on their most recent year’s loan volume.
This is a list of the largest mortgage lenders in the state, not necessarily the top-rated ones (though those two things can coexist).
Despite being a less populated state, more than 800 lenders still managed to fund more than $51 billion in home loans there.
But like the other 49 states, one company managed to beat out the competition, and by a wide margin at that.
Read on to see which companies topped the list in the state of Alabama last year.
Top Mortgage Lenders in Alabama (Overall)
Ranking
Company Name
2021 Loan Volume
1.
Rocket Mortgage
$3.0 billion
2.
Pennymac
$2.0 billion
3.
Regions Bank
$2.0 billion
4.
Freedom Mortgage
$1.5 billion
5.
Fairway Independent
$1.5 billion
6.
Wells Fargo
$1.5 billion
7.
Trustmark
$1.3 billion
8.
UWM
$1.2 billion
9.
Renasant Bank
$1.2 billion
10.
Homepoint
$1.1 billion
If you had to guess which mortgage company did the most lending in Alabama, you’d probably guess right.
That’s because the nation’s top mortgage lender overall was also the biggest lender in Bama. Yes, I’m talking about Rocket Mortgage, which funded $3 billion, according to HMDA data from Richey May.
That was 150% more than their closest competitor, Pennymac, which came in second with $2 billion.
Birmingham, Alabama-based Regions Bank snagged third with a similar $2 billion, a positive development for local mortgage companies.
In fourth was Freedom Mortgage with $1.5 billion, followed by Fairway Independent Mortgage with a comparable total.
The bottom half of the top 10 included San Francisco-based Wells Fargo, Trustmark National Bank, United Wholesale Mortgage, Renasant Bank, and Homepoint.
Trustmark is headquartered in nearby Jackson, Mississippi, while Renasant Bank is located in Tupelo, MS.
So just one of the top 10 mortgage companies in the state of Alabama is homegrown.
Top Alabama Mortgage Lenders (for Home Buyers)
Ranking
Company Name
2021 Loan Volume
1.
Pennymac
$1.2 billion
2.
Fairway Independent
$1.1 billion
3.
Regions Bank
$901 million
4.
Trustmark
$828 million
5.
FirstBank
$765 million
6.
Renasant Bank
$660 million
7.
Rocket Mortgage
$614 million
8.
Wells Fargo
$598 million
9.
UWM
$588 million
10.
Homepoint
$542 million
The picture changes quite a bit when we look only at home purchase lending. Then Pennymac takes the top spot with $1.2 billion funded.
In second was Wisconsin-based Fairway Independent with $1.1 billion, followed by Regions Bank with $901 million.
The next three spots all went to banks, including Trustmark, FirstBank, and Renasant Bank.
That makes sense since home buyers often turn to brick-and-mortar institutions or companies they already do business with.
The rest of the top 10 included Rocket Mortgage, Wells Fargo, UWM, and Homepoint.
Top Refinance Lenders in Alabama (for Existing Homeowners)
Ranking
Company Name
2021 Loan Volume
1.
Rocket Mortgage
$2.3 billion
2.
Freedom Mortgage
$1.3 billion
3.
Regions Bank
$911 million
4.
Wells Fargo
$829 million
5.
Pennymac
$828 million
6.
loanDepot
$662 million
7.
Mr. Cooper
$641 million
8.
UWM
$615 million
9.
Homepoint
$562 million
10.
Renasant Bank
$511 million
When we filter out the purchase loans and focus on mortgage refinances, Rocket Mortgage easily takes the top spot with $2.3 billion funded.
That was a full billion more than second place Freedom Mortgage, and much more than Region Bank’s $911 million.
Two other heavyweights rounded out the top five, including Wells Fargo and Pennymac.
And spots six through 10 went to loanDepot, Mr. Cooper, UWM, Homepoint, and Renasant Bank.
No real surprises, and only one Alabama-based company in the list.
Top Mortgage Lenders in Birmingham
Ranking
Company Name
2021 Loan Volume
1.
Regions Bank
$942 million
2.
Rocket Mortgage
$770 million
3.
Fairway Independent
$587 million
4.
Wells Fargo
$424 million
5.
Pennymac
$399 million
6.
Renasant Bank
$387 million
7.
UWM
$371 million
8.
Freedom Mortgage
$341 million
9.
Mr. Cooper
$303 million
10.
Citizens Bank
$289 million
Top Mortgage Lenders in Huntsville
Ranking
Company Name
2021 Loan Volume
1.
Rocket Mortgage
$518 million
2.
Redstone FCU
$407 million
3.
FirstBank
$394 million
4.
Pennymac
$388 million
5.
Freedom Mortgage
$342 million
6.
loanDepot
$335 million
7.
Wells Fargo
$310 million
8.
UWM
$234 million
9.
Homepoint
$207 million
10.
Hometown Lenders
$197 million
Who Are the Best Alabama Mortgage Lenders?
If we consider customer reviews as opposed to total loan volume, we might be able to determine the best vs. top lenders in the state.
Of course, reviews are subjective and there are many review websites out there. But I typically check out Zillow to see which lenders are faring the best in each state.
Turns out Birmingham-based SouthPoint Bank has the best rating, a 4.99 out of a possible 5 from about 170 reviews.
Not far off is fellow Birmingham-based lender MortgageRight with a 4.97/5 from roughly 550 reviews, a much higher total.
Meanwhile, Tuscaloosa-based First Federal Bank has a 4.97/5 rating from nearly 200 reviews.
Those big names on the list also have Zillow ratings, including Rocket’s 4.48/5 , Pennymac’s 4.40/5, Freedom Mortgage’s 4.85/5, and Fairway Independent Mortgage’s 4.95/5.
Take the time to consider lenders both big and small, and nationwide or local to find the right fit for your home loan needs.
You may also want to speak to a mortgage broker or two, who can shop your loan with multiple companies at once.
Let’s talk about the top mortgage lenders in Connecticut, based on their total loan volume.
Nearly 700 companies originated home loans in The Constitution State during 2021, with overall funding volume exceeding $58 billion.
But one company beat out the competition, though not by a significantly wide margin.
Yes, it was the nation’s top lender, Rocket Mortgage, which you may have already guessed.
Read on to which other banks and mortgage lenders made the leaderboard in Connecticut.
Top Mortgage Lenders in Connecticut (Overall)
Ranking
Company Name
2021 Loan Volume
1.
Rocket Mortgage
$3.2 billion
2.
Chase
$2.9 billion
3.
Wells Fargo
$2.3 billion
4.
Citizens Bank
$2.1 billion
5.
Bank of America
$1.8 billion
6.
loanDepot
$1.7 billion
7.
U.S. Bank
$1.7 billion
8.
Total Mortgage
$1.4 billion
9.
Webster Bank
$1.3 billion
10.
UWM
$1.2 billion
As noted, the #1 spot went to Rocket Mortgage, which funded $3.2 billion in Connecticut in 2021, per HMDA data from Richey May.
That wasn’t a huge surprise, as they are also the top mortgage lender in the country overall.
In second was NYC-based Chase Bank, which came close with $2.9 billion funded. It then dropped off a bit with San Francisco-based Wells Fargo funding $2.3 billion.
Two more banks rounded out the top five, including Citizens Bank and Bank of America.
Citizens Bank is basically a local institution as they are headquartered in nearby Providence, Rhode Island.
The bottom half of the top 10 included loanDepot, U.S. Bank, Total Mortgage (CT), Webster Bank, and United Wholesale Mortgage.
Webster Bank is also Connecticut-based, with headquarters in Waterbury, CT.
Top Mortgage Lenders in Connecticut (for Home Buyers)
Ranking
Company Name
2021 Loan Volume
1.
Chase
$1.3 billion
2.
Citizens Bank
$1.1 billion
3.
Total Mortgage
$918 million
4.
Wells Fargo
$898 million
5.
U.S. Bank
$830 million
6.
Rocket Mortgage
$680 million
7.
Guaranteed Rate
$643 million
8.
Bank of America
$613 million
9.
UWM
$590 million
10.
Citibank
$576 million
When it came to home purchase financing, Chase took first place with $1.3 billion funded, followed by Citizens Bank with $1.1 billion and Total Mortgage with $918 million.
Fourth went to Wells Fargo with $898 million, while U.S. Bank grabbed fifth with $830 million funded.
The rest of the heavy hitters included Rocket Mortgage, Guaranteed Rate, Bank of America, UWM, and Citibank.
Total Mortgage is headquartered in Milford, CT, making them the one Connecticut-based mortgage company in the bunch.
But several other companies listed are pretty local as well. This is common as home buyers tend to gravitate to local options when financing a home purchase.
Top Refinance Lenders in Connecticut (for Existing Homeowners)
Ranking
Company Name
2021 Loan Volume
1.
Rocket Mortgage
$2.5 billion
2.
Chase
$1.4 billion
3.
Wells Fargo
$1.3 billion
4.
loanDepot
$1.2 billion
5.
Bank of America
$1.1 billion
6.
Citizens Bank
$897 million
7.
U.S. Bank
$806 million
8.
Webster Bank
$788 million
9.
Freedom Mortgage
$773 million
10.
People’s United Bank
$744 million
If we exclude home purchase loans, and only include rate and term refinances (and cash out refinances), Rocket Mortgage slides into first place with $2.5 billion funded.
That was well ahead of the rest, with second place Chase only managing $1.4 billion in refis in Connecticut.
In third was Wells Fargo with a close $1.3 billion, followed by loanDepot with $1.2 billion and Bank of America with $1.1 billion.
Others making the top-10 list included Citizens Bank, U.S. Bank, Webster Bank, Freedom Mortgage, and Bridgeport-based People’s United Bank.
Top Mortgage Lenders in Bridgeport
Ranking
Company Name
2021 Loan Volume
1.
Chase
$2.2 billion
2.
Wells Fargo
$1.4 billion
3.
Bank of America
$1.3 billion
4.
U.S. Bank
$1.1 billion
5.
Rocket Mortgage
$1.1 billion
6.
Citizens Bank
$1.0 billion
7.
loanDepot
$835 million
8.
Citibank
$800 million
9.
First Republic Bank
$724 million
10.
People’s United Bank
$707 million
Top Mortgage Lenders in New Haven
Ranking
Company Name
2021 Loan Volume
1.
Rocket Mortgage
$665 million
2.
Citizens Bank
$400 million
3.
Total Mortgage Services
$335 million
4.
Wells Fargo
$309 million
5.
UWM
$299 million
6.
loanDepot
$294 million
7.
Chase
$263 million
8.
Newrez
$231 million
9.
Homepoint
$209 million
10.
Guaranteed Rate
$206 million
So when it came to refis, there were three CT-based mortgage companies in the mix.
Top Rated Mortgage Lenders in Connecticut (by Customer Reviews)
Now let’s try to determine who the best Connecticut mortgage lenders are by focusing on customer reviews.
On Zillow, Total Mortgage has the most reviews (nearly 3,500 at last count) and a solid 4.90/5 rating.
But West Hartford, CT-based First World Mortgage Corp. and Avon, CT-based Norcom Mortgage have superior 4.97/5 ratings, with about 900 and 1,000 reviews, respectively.
There’s also Newtown Savings Bank (4.94/5), Northeast Financial (4.98/5), and Luxury Mortgage (4.91/5). Each of these companies have a few hundred reviews on Zillow.
Then there are the big names, like Rocket Mortgage (4.48/5), Citizens Bank (4.96/5), Wells Fargo (4.95/5), Chase (4.95/5), and Bank of America (4.82/5).
So clearly there is no shortage of quality mortgage companies in and around Connecticut and beyond.
Put in the time to gather several quotes from local banks and credit unions, mortgage brokers, and the big household names too. Generally, the more quotes you obtain the better the savings.
Borrowers seeking mortgage financing to purchase a home could find themselves saving $100 a month or more by shopping around, and locating cheaper lenders with which to do business. This is according to a new blog post published this week by the Consumer Financial Protection Bureau (CFPB).
By analyzing Home Mortgage Disclosure Act (HMDA) data from 2021, the CFPB determined that mortgage rates paid by consumers vary across a wide variety of lenders, including for mortgages backed by Fannie Mae and Freddie Mac, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and jumbo loans through “price dispersion.”
“We found that price dispersion for mortgages is often around 50 basis points of the annual percentage rate,” the CFPB notes in its blog. “To put this number in context, the median loan amount in 2021 was close to $300,000 and the median interest rate was 3%. The monthly payment for such a 30-year fixed loan is $1,265. The monthly payment for a 3.5% interest rate loan on a loan of the same amount is $1,347 – a difference of $82 a month (a 6.5% higher payment).”
Interest rates since the 2021 HMDA data was gathered have obviously increased significantly, but the CFPB found that much of the price difference between lenders — and consequently, the underlying math — remains the same.
“In a higher interest-rate environment, with monthly payments being much higher overall, this $100 a month difference might matter even more as borrowers potentially are more stretched to make ends meet,” the Bureau said.
The analysis of HMDA data only took data from the 20-largest volume lenders for each of the reported market segments. While other studies have documented the price dispersion phenomenon, this is the first instance that has used new HMDA data with multiple variables necessary for this kind of analysis, according to the CFPB.
“Our results are largely consistent with previous studies, despite previous studies often using either rate sheet data and/or selected data on originations from private providers without coverage comparable to [HMDA],” CFPB said. “It is particularly notable that earlier studies considered pre-pandemic data, which does not have the same historic volume of refinance loans.”
There are a number of attributable causes of price dispersion. These include differences between lenders (some include servicing, others market their closing speed); competition in the mortgage market not always being channeled into lower prices; some lenders may engage in demand rationing through pricing changes; and lenders with “less restrictive overlays” may charge higher prices to compensate for additional risk.
Earlier this year, the CFPB issued guidance in an effort to protect mortgage borrowers from pay-to-play digital comparison shopping platforms. Agency Director Rohit Chopra reiterated the importance of shopping around for a mortgage at the time.
“Given the rise in mortgage interest rates, it is even more important for homebuyers to shop and compare loan offers,” Chopra said in February. “We are working to ensure that online platforms are not manipulating their search results in order to coerce kickbacks from lenders.”
Today we’ll check out the top mortgage lenders in Hawaii based on total loan volume.
These companies closed the most home loans in The Aloha State last year, beating out nearly 300 others that do business there.
In general, there are fewer mortgage companies operating in the state of Hawaii, so you tend to see only the bigger household names along with local banks and credit unions.
Still, one company managed to originate a lot more than the competition, making them the go-to spot for a mortgage in Hawaii.
Read on to see which bank or mortgage company ranked #1 in Hawaii.
Top Mortgage Lenders in Hawaii (Overall)
Ranking
Company Name
2021 Loan Volume
1.
Bank of Hawaii
$3.0 billion
2.
loanDepot
$2.0 billion
3.
First Hawaiian Bank
$1.9 billion
4.
Freedom Mortgage
$1.8 billion
5.
American Savings Bank (HI)
$1.6 billion
6.
Rocket Mortgage
$1.4 billion
7.
UWM
$1.4 billion
8.
Central Pacific Bank (HI)
$1.3 billion
9.
Guaranteed Rate
$1.2 billion
10.
Homepoint
$1.0 billion
Coming in first was Honolulu’s own Bank of Hawaii, which funded $3 billion in mortgages during 2021, per Richey May.
That was a full billion more than second place SoCal-based loanDepot, which originated a respectable $2 billion there.
In third was another Hawaiian institution, First Hawaiian Bank, also Honolulu based, with a close $1.9 billion.
Taking the fourth spot was Boca Raton, Florida-based Freedom Mortgage with $1.8 billion, followed by Honolulu-based American Savings Bank (HI) with $1.6 billion.
Others landing in the top 10 included Rocket Mortgage, United Wholesale Mortgage, Central Pacific Bank (HI), Guaranteed Rate, and Homepoint.
In total, four of the top 10 mortgage lenders in Hawaii are based out of Honolulu. Not surprising as local names tend to do the most business there.
Top Hawaii Mortgage Lenders (for Home Buyers)
Ranking
Company Name
2021 Loan Volume
1.
Bank of Hawaii
$881 million
2.
Guaranteed Rate
$698 million
3.
First Hawaiian Bank
$672 million
4.
American Pacific Mortgage
$616 million
5.
loanDepot
$577 million
6.
UWM
$547 million
7.
American Savings Bank
$530 million
8.
Central Pacific Bank
$488 million
9.
Freedom Mortgage
$435 million
10.
Wells Fargo
$375 million
When looking solely at home purchase lending, Bank of Hawaii remains the leader with $881 billion funded.
In second was Chicago-based Guaranteed Rate with a close $698 million, followed by First Hawaiian Bank with $672 million.
Taking fourth was Roseville, CA-based American Pacific Mortgage with $616 million, trailed by loanDepot with $577 million.
The rest of the best included UWM, American Savings Bank (HI), Central Pacific Bank, Freedom Mortgage, and finally Wells Fargo.
That means half of the top 10 home purchase lenders in the state of Hawaii are based in Hawaii.
Top Refinance Lenders in Hawaii (for Existing Homeowners)
Ranking
Company Name
2021 Loan Volume
1.
Bank of Hawaii
$2.0 billion
2.
loanDepot
$1.4 billion
3.
Freedom Mortgage
$1.4 billion
4.
Rocket Mortgage
$1.2 billion
5.
First Hawaiian Bank
$1.0 billion
6.
American Savings Bank
$967 million
7.
UWM
$814 million
8.
Homepoint
$770 million
9.
Central Pacific Bank
$751 million
10.
Pennymac
$602 million
If we’re talking mortgage refinances only, which are reserved for existing homeowners, Bank of Hawaii tops the list with $2 billion funded.
They were followed by loanDepot with $1.4 billion in refis funded, and Freedom Mortgage with a similar amount.
Rocket Mortgage took fourth with $1.2 billion, and First Hawaiian Bank fifth with $1.0 billion in loan origination volume.
American Savings Bank (HI), UWM, Homepoint, Central Pacific Bank, and Pennymac made up the rest of the top 10.
For refis, four of the top 10 were Hawaii-based, similar to the overall total.
Top Mortgage Lenders in Honolulu
Ranking
Company Name
2021 Loan Volume
1.
Bank of Hawaii
$2.3 billion
2.
Freedom Mortgage
$1.5 billion
3.
loanDepot
$1.5 billion
4.
American Savings Bank
$1.3 billion
5.
First Hawaiian Bank
$1.2 billion
6.
Central Pacific Bank
$1.1 billion
7.
Homepoint
$886 million
8.
American Pacific Mortgage
$864 million
9.
UWM
$855 million
10.
Rocket Mortgage
$816 million
The Best Hawaii Mortgage Lenders
We’ve discussed the largest mortgage lenders in Hawaii. Now let’s talk top rated based on customer reviews.
I typically turn to Zillow for customer reviews as they are entirely mortgage-centric, even for banks and credit unions that offer other non-mortgage products.
As far as mortgage companies are concerned, Element Mortgage Hawaii (dba of American Pacific Mortgage) had the most reviews and a 4.94/5 rating.
Then there’s Ohana First Mortgage with 184 reviews and 4.99/5 rating, Hawaii Mortgage Company, Inc.’s 4.93/5 rating from 176 reviews, and Smart Money Inc.’s perfect score (5/5) from 161 reviews.
Some of these companies operate as mortgage brokers, which allows them to partner with wholesale lenders and shop on your behalf.
The big companies also have reviews on Zillow, including loanDepot (4.9/5), Freedom Mortgage (4.85/5), Rocket Mortgage (4.48/5), Guaranteed Rate (4.96/5), and Homepoint (4.89/5).
To sum things up, there are a lot of good lender options in the state of Hawaii, including big household names, local Hawaiian companies, and local individual mortgage brokers. Be sure to explore them all.
A jumbo loan is something you’ll likely need if you’re looking to purchase a luxurious home, one whose features are more expensive than the average property in the area. What qualifies as a jumbo loan in your neck of the woods depends on the county in which you live.
Let’s explore the details around getting a jumbo loan.
What’s a Jumbo Mortgage Loan?
If you’re in the market for a new home and the asking price is higher than average, you might need to consider getting a jumbo loan.
Technically, a jumbo loan is a mortgage whose size surpasses the threshold set by government agencies Fannie Mae and Freddie Mac. These government-sponsored enterprises (GSE) are responsible for buying up the lion’s share of U.S. single-family mortgages, but not when it comes to oversized loans.
Due to their nature as non-GSE products, jumbo mortgages are considered non-conforming loans.
Considering that jumbo loans fall outside the parameters of the GSEs, they do not qualify for the government guarantees that their conforming loan counterparts receive. As a result, jumbo home loan requirements can be more stringent than secured loan products.
Jumbo vs. Conventional Loan
The GSEs were formed so that banks and credit unions would have enough cash on hand to perpetuate the lending process to other homebuyers.
A key feature of conforming loans is a cap placed on the amount, which protects the government from getting stuck holding too big a bag from borrowers who turn out to be a credit risk.
Jumbo loans are outsized mortgages for homes on the expensive side of the price spectrum. Often, a jumbo loan is appropriate if you are looking to buy a luxury home that stands out from the pack in the neighborhood, but that’s not always the case.
In a white-hot real estate market, you might find yourself needing to access a jumbo mortgage to outbid the competition.
Interest rates attached to jumbo loans are likely to exceed conventional loans because of the bigger risk to lenders. A similarity between jumbo and conventional loans is that both are repackaged and sold to investors in the secondary market.
However, due to their size, jumbo mortgages attract a different set of investors with a different risk profile.
Conforming Loan Limit Explained
The restrictions around conforming loans mainly involve the size of the mortgage. The Federal Housing Finance Agency, the department that oversees Fannie Mae and Freddie Mac, updates these parameters annually.
In 2021, conforming loan limits prices were $548,250 for single-family homes and increased to $647,200 in 2022.
The conforming loan limits are adjusted each year due to fluctuations in the average U.S. home price. Between Q3 2020 and Q3 2021, the average home price increased an average of 18.05%, which established the baseline from which the conforming loan limit was set.
Total Mortgage works with borrowers across the United States, making it easy to find a mortgage expert near you.
How Do Jumbo Loans Work?
When you’re getting a jumbo loan, it helps to know what to expect beforehand. We have streamlined the mechanics of jumbo mortgages so you’re not taken by surprise:
Higher Rates: Interest rates on jumbo loans tend to be higher than those on conforming loans to reflect the greater risk the lender is inheriting. According to Experian, you can expect a jumbo loan interest rate to be 1-2% higher vs. the going rates for more conventional loan products.
Second Opinion: You might need more than one appraisal. Considering the sheer size of a jumbo mortgage and potentially tough comps by which to compare the home’s market value, lenders may ask for two appraisals. They want to make sure that the value of the home measures up to the price.
Higher Expenses: Expect the closing costs to be higher than traditional loans. Lenders will generally charge a percentage of the home’s total purchase price that’s higher than usual because of the extra vetting that jumbo mortgages lend themselves to. According to Bankrate, as of Q1 2021, the average closing costs for a typical mortgage range between 2% and 5%, or $6,837 for a single-family property.
Requirements for a Jumbo Loan
Jumbo home loan requirements will vary from lender to lender, but everything is higher as a general rule of thumb. This is due to the bigger size of these mortgages, which places more risk on the lender’s shoulders.
Here’s a breakdown of the requirements for a jumbo loan:
Credit Score: You’ll need pristine credit to qualify for a jumbo loan. Lenders will be looking for a FICO credit score of at least 720, though they may be willing to go as low as 660. By comparison, borrowers could qualify for a conventional mortgage with a credit score of as low as 600.
Down Payment Amount: Expect to plunk down anywhere from 20-30% of the home’s purchase price as a down payment. A silver lining is that with a down payment of this size, as long as it doesn’t dip below the 20% threshold, you may not need to invest in private mortgage insurance (PMI).
Debt-to-Income (DTI) Ratio: Lenders want to see that your debt-to-income (DTI) ratio, which is the result of dividing your monthly expenses by your gross monthly income, does not exceed 36%. By comparison, lenders could be willing to overlook a DTI as high as 50% for a conventional mortgage.
Net Worth: Considering the risk that a lender is taking on, they might require borrowers to provide proof that they can liquidate other assets, if necessary. This is to cover the cost of the jumbo mortgage payments for 12 months.
Explore Total Mortgage’s Jumbo Loan Options
If your next home is one that is probably going to turn some heads, and you’ve got the credit profile and income required, you came to the right place. Consider jumbo loan options from Total Mortgage, whether a 10/1 ARM, 15-year, or 30-year mortgage, and apply online today.
Disclaimer: Bible Money Matters has entered into a referral and advertising arrangement with Wealthsimple US, LTD and receives compensation when you open an account or for certain qualifying activity which may include clicking links. You will not be charged a fee for this referral and Wealthsimple and Bible Money Matters are not related entities. It is a requirement to disclose that we earn these fees and also provide you with the latest Wealthsimple ADV brochure so you can learn more about them before opening an account.
In the past couple of years I’ve written about quite a few investing startups that offer easy ways to invest that take the human component out of the equation.
They’re typically simple enough for anyone to understand, low cost and try to capture market returns via low cost ETF index funds. Many people call them robo-advisors.
As I was researching some of the best robo-advisors I came across one that had previously only been available in Canada, Wealthsimple. As of earlier this year they have now crossed the border, and are now available to U.S. users (You can also get up to a $10,000 managed for free as a reader of Bible Money Matters).
Wealthsimple is a hot company, and there is a lot to like about this newer online investment manager.
Today I thought I would take a close look at this automated investment advisor in this Wealthsimple review. How does Wealthsimple work? How do they invest your money? What are the pros/cons of their service?
Wealthsimple Background
Wealthsimple was founded in September of 2014 in Toronto, Ontario Canada. Shortly thereafter it acquired ShareOwner Investments, the country’s first robo-advisor.
Wealthsimple Financial Inc. is an online investment management service focused on making “investing easier for millennials.” The firm was founded in September 2014 by Michael Katchen and is based in Toronto. As of August 2019, the firm had over C$5,000,000,000 in assets under management.
Wealthsimple has over $5 billion Canadian dollars in assets under management ($3.75 million U.S.) and over 175,000 clients as of August 2019. They’re growing at a decent rate, and with the jump to the U.S. market in January 2017, that can only accelerate.
The company has garnered several awards in it’s first few years including:
Fintech 100 – Top 100 Global Financial Technology Companies
2017 Webby Winner – Best Financial Services/Banking Website.
2016 Webby Winner – Best Financial Services/Banking Website.
2016 – Fintech Five – Hottest and most promising financial technology companies.
2015 Product Hunt Toronto – Product of the Year Award.
How Does Wealthsimple Work?
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Wealthsimple was founded on the idea of simplifying and automating investing in order to give newer and experienced investors alike a diversified long term portfolio, without any hassle.
How do they do that? They create diversified stock and bond portfolios that are typically made up of ETF index funds. The funds are low cost and diversify your holdings across different sectors of the global economy to increase your gains, and lower your risk.
When you sign up you’ll be given a personalized portfolio, based on your answers to a survey at the beginning of the process. It will be tailored to your personal level of acceptable risk, be automatically re-balanced (so that your investments stay in line with your goals) and dividends will automatically be reinvested.
In short, it’s a simplified, low cost and automatic investment portfolio that can help you to reach your long term goals.
Opening A Wealthsimple Account (Get Up To $10,000 Managed Free!)
Opening an investing account with Wealthsimple is easy, and users in the USA, Canada and UK are eligible.
To get started, and to get your sign-up bonus, just go through this process:
Go to Wealthsimple.com via this link. (Our link gives you up to a $10,000 managed for free as a bonus.)
Start the online application: From the landing page click “Claim your bonus” and follow the prompts.
Enter basic details: Enter some basic personal information, answer a few questions about your previous investment experience and e-sign one or more Investment Management Agreements.
Bank verification:Verify your banking information via one of the approved methods.
DONE!
No need to worry about providing your banking details as Wealthsimple is fully secure, using 128 bit encryption. They’re also SIPC insured up to $500,000.
After you verify your banking information, your Wealthsimple account should be up and running within 5 business days, according to their FAQ.
Wealthsimple Basic Vs. Wealthsimple Black
When you’re opening your account and making your initial deposits, one thing you may want to consider is just how much your initial deposit is. With a deposit of less than $100,000 you’ll be signed up for a Wealthsimple Basic account, which gives you everything you need to invest in a diversified portfolio, at an annual fee of 0.5%. Signing up for the Basic account will give you a $50 bonus through our link.
If you deposit more than $100,000 in your account you’ll be upgraded to a Wealthsimple Black account, which means you’ll have a lower annual fee of 0.4%, along with the following benefits:
Financial planning with a Wealthsimple advisor
Access to tax-efficiency benefits like tax-loss harvesting and tax efficient funds.
VIP Priority Pass access for you and a guest to more than 1,000 airline lounges in over 400 cities.
If you already have a large amount to transfer in, the added benefits of Wealthsimple Black are nice to have, and in many cases puts Wealthsimple ahead of the competition. In addition to the $50 bonus for opening a new Wealthsimple account, you’ll get an additional $50 bonus if you deposit over $100,000 and open a Wealthsimple Black account.
Wealthsimple Investment Portfolios
The Wealthsimple portfolios mainly invest in diversified ETF index funds and are based on Nobel Prize winning ideas behind Modern Portfolio Theory. Here’s how they explain it:
Our approach is based on Modern Portfolio Theory, introduced by the Nobel Prize-winning economist Harry Markowitz, who proved you can minimize volatility (risk) and maximize reward (money!) by diversifying your investments. We invest your money across thousands of companies using Exchange Traded Funds (ETFs) that track different sectors of the global economy. This way, you bet on bigger slices of the economy while taking advantage of market diversification, without being impacted by the growth or loss of one company. In a few easy steps, we’ll determine the right mix of investments you should have based on your personal goals. We also designed a socially-responsible portfolio that prioritizes low carbon emissions, advances cleantech innovation, and promotes sustainable growth in emerging markets.
So their portfolios are based on a proven investment strategy, and are designed to maximize reward while minimizing risk. It’s a strategy similar to the ones used by other robo-advisors, although the details are a bit different.
Available Portfolios
When signing up there are 3 main portfolios that you can choose from:
Conservative: 65% Stocks, 35% Bonds
Balanced: 50% Stocks, 50% Bonds
Growth: 80% Stocks, 20% Bonds
As of 2017, the following low cost investments are in the portfolios:
Vanguard US Total Stock Market ETF (VTI)
Vanguard Mid-Cap Value ETF (VOE)
Vanguard Small-Cap Value ETF (VBR)
Vanguard FTSE Europe ETF (VGK)
WisdomTree Japan Hedged Equity Fund (DXJ)
Vanguard FTSE Emerging Markets ETF (VWO)
iShares National Muni Bond ETF (MUB)
iShares TIPS Bond (TIP)
Vanguard Total Bond Market ETF (BND)
VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL)
Socially Responsible Investing
Wealthsimple recently released socially responsible investing options for investors who want to invest with their values. Those investments include:
iShares MSCI ACWI Low Carbon Target (CRBN)
PowerShares Cleantech Portfolio (PZD)
iShares MSCI KLD 400 Social ETF (DSI)
SPDR® SSGA Gender Diversity Index ETF (SHE)
PowerShares Build America Bond Portfolio (BAB)
iShares GNMA Bond ETF (GNMA)
Socially responsible investing options will carry a slightly higher fund cost associated with managing the funds to keep the investments “socially responsible”. Keep that in mind when choosing this option.
Investments in all of the portfolios can change over time, so check for current investment mix when you sign up.
Wealthsimple Roundup
Wealthsimple added a new feature in October of 2018 called Wealthsimple Roundup that helps you to save and invest in small increments, based on your daily spending in a linked account.
Spend $4.50 at Starbucks? The amount will get rounded up to the nearest dollar, $5 in this case, and once a week your combined roundups will be invested.
How can you take advantage? From their FAQ:
If you’re already a Wealthsimple client, open your mobile app and click on “Add funds.” There will be an option to turn on Roundup. Then just select the credit and debit cards you want to connect, and the Wealthsimple account you want your roundups to go to. Bingo, you’re done. Every time you spend money with one of your linked debit or credit cards, the amount gets rounded up to the nearest dollar, and once a week that money gets invested.
Investing 50 cents at a pop may not seem like much, but when the roundups are added together it can be a surprisingly significant amount of money.
In the past when I’ve used a roundup feature it can lead to saving $100-200 in a single month if I’ve spent enough. Definitely a cool feature and one to take advantage of.
Wealthsimple Mobile Apps
Wealthsimple has beautiful mobile apps for both iOS and Android. The apps were redesigned from the ground up at the end of 2016, and are now even more beautiful and functional.
Some of the functions you can perform in the app:
View your portfolio.
Track account activity.
Setup auto deposits, or make one time deposits.
Access educational content.
Update your profile information.
Wealthsimple Service Fees And Minimums
So how much will you be paying to use Wealthsimple? What are the fees and minimums for using the service?
Wealthsimple currently has no minimums on an account, and there are no trading, account transferring or rebalancing fees either. You can start investing when you deposit $500.
Low Annual Management Fees
The account management fees with Wealthsimple are pretty easy to break down.
While the fees for the service aren’t the lowest in the industry, they are often much lower than going with a traditional human advisor or a large mutual fund company. They are very much in line with much of the industry on pricing, especially if you’re investing more than $100,000 where they include meetings with advisors, lower fees and other perks.
Simplified & Automated Investing
Wealthsimple was launched in the U.S. market in January 2017, and has quickly become one of the premier options for people looking to have a simple, effective and automated investment portfolio. (If you’re a Canadian, check out this Wealthsimple review that was written specifically for a Canadian audience.)
Their portfolios are created and based on the ideas of Modern Portfolio Theory, and those proven strategies are the sound basis for a good long term investing portfolio for anyone.
Their fees are lower than you’d likely see when using a traditonal financial advisor, and are in the range of what other providers charge (although some are lower). The fact that they’re offering a $100 sign-up bonus through our link should give you plenty of time to test the service out, before deciding if you want to use them for the long term.
I think their service is top notch, and I’d recommend giving them a try.
Sign Up For Wealthsimple, Get Up To A $10,000 Managed Free!
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When the sun is shining and the weather is perfect, it’s time to gather your friends and family for some outdoor fun. While barbecues and picnics are great, why not level up your outdoor space by incorporating lawn games? Whether you’re having a housewarming party for your newly purchased home in Houston or simply entertaining friends at your ranch-style house in Columbus, OH, here are eight outdoor lawn games that are sure to provide endless entertainment for you and your guests.
1. Cornhole
Cornhole has become a staple at outdoor parties, gatherings, and tailgates. It involves throwing bean bags at a raised platform with a hole at the far end. The goal is to get the bags to land on the platform or, better yet, through the hole. Cornhole can be enjoyed casually or in competitive tournaments, making it a versatile game for all ages and skill levels.
2. Giant Connect 4
A beloved childhood game, Connect 4 gets a supersized twist in this outdoor version. Players take turns dropping colored discs into the frame, aiming to connect four of their own discs in a row. This giant-sized version adds an extra layer of excitement and strategy to the game, making it perfect for players of all ages.
3. Spikeball
Spikeball is a fast-paced, action-packed game that combines elements of volleyball and foursquare. Played with a round net on the ground, players take turns hitting the ball off the net, trying to make it difficult for the opposing team to return. With its quick reflexes and dynamic movements, Spikeball guarantees an exhilarating experience for players and spectators alike.
4. Giant Jenga
Jenga is a classic tabletop game, but when played outdoors with giant-sized blocks, it becomes a whole new level of excitement. Players take turns removing blocks from the tower and carefully placing them on top, hoping to avoid a collapse. Giant Jenga requires steady hands and strategic thinking, creating a suspenseful atmosphere as the tower grows taller and more unstable.
“Giant Jenga is such an excellent party game,” says Gordon Buchanan, founder of national lawn game rental provider Triangle Lawn Games. “We see in every setting, whether it be a formal wedding or a relaxed festival, Giant Jenga entertains everyone. From kids to adults, for whatever reason that’s one of those games that just always works.” According to Buchanan, the simplicity is the key. “It’s a simple concept, just pull the blocks out one at a time, and try not to knock it down.”
5. Bucketball
Bucketball is a fantastic game that combines the throwing skills of cornhole with the focus and targeting of basketball. It involves throwing balls into different-sized buckets placed at various distances. Each bucket has a point value and players aim to accumulate the highest score by successfully making shots. Bucketball is easy to set up and can be played in teams or individually.
6. Bocce
Bocce is a classic Italian game that is enjoyed by people of all ages. It’s played by tossing balls to get as close as possible to a smaller target ball called the pallino. The game requires precision and strategy, as players try to knock opponents’ balls away or position their own closer to the pallino. Bocce can be played on any lawn or even on sandy beaches, adding versatility to its appeal.
7. Tug of War
Tug of War is a timeless and thrilling game that tests the strength and teamwork of participants. Two teams pull on opposite ends of a rope, aiming to drag the opposing team towards their side. Tug of War is a great way to build camaraderie and encourage friendly competition, making it a fantastic addition to any outdoor event.
8. Putterball
For those who enjoy golf or mini-golf, Putterball is a must-try lawn game. It combines golfing skills with a touch of beer pong, as players take turns putting golf balls into a large putting green with cups. The objective is to sink the ball into the cups while strategically planning shots to outscore opponents. Putterball offers a fun and challenging experience for golf enthusiasts of all levels.