dream

Apache is functioning normally

If you spent your teenage years waiting anxiously for one of your siblings to get out of the shower, the idea of selling your spacious, multi-bathroom home and moving into a smaller house or condo may feel like a reversal of fortune.

Yet for many retirees, downsizing makes financial and practical sense. Younger baby boomers — those currently ranging in age from 57 to 66 — made up 17% of recent home buyers, while older boomers — ages 67 to 75 — accounted for 12%, according to a 2022 report from the National Association of Realtors Research Group. Boomers’ primary reasons for buying a home were to be closer to friends and family, as well as a desire to move into a smaller home, the report said. Both younger and older boomers were more likely than others to purchase a home in a small town, and younger boomers were the most likely to buy in a rural area.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.

Profit and prosper with the best of expert advice – straight to your e-mail.

For retirees Fred and Shelby Bivins, selling their home in Green Valley, Ariz., will enable them to realize their dream of traveling in retirement. The Bivinses have put their 2,050-square-foot Arizona home on the market and plan to relocate to their 1,600-square-foot summer condo in Fish Creek, Wis., a small community about 50 miles from Green Bay. They plan to live in Wisconsin in the spring and summer and spend the winter months in a short-term rental in Arizona, where they have family.  

Fred, 65, says the decision to downsize was precipitated by a two-month stay in Portugal last year, one of several countries they hope to visit while they’re still healthy enough to travel. “We’ve had Australia and New Zealand on our list for many years, even when we were working,” says Shelby, 68. The Bivinses are also considering a return visit to Portugal. Eliminating the cost of maintaining their Arizona home will free up funds for those trips. 

With help from Chris Troseth, a certified financial planner based in Plano, Texas, the Bivinses plan to invest the proceeds from the sale of their home in a low-risk portfolio. Once they’re done traveling and are ready to settle down, they intend to use that money to buy a smaller home in Arizona. “Selling their primary home will generate significant funds that can be reinvested to support their lifestyle now and in the future,” Troseth says. “Downsizing for this couple will be a positive on all fronts.”

Challenges for downsizers 

For all of its appeal, downsizing in today’s market is more complicated than it was in the past. With 30-year fixed interest rates on mortgages recently approaching 8%, many younger homeowners who might otherwise upgrade to a larger home are unwilling to sell, particularly if it means giving up a mortgage with a fixed rate of 3% or less. More than 80% of consumers surveyed in September by housing finance giant Fannie Mae said they believe this is a bad time to buy a home and cited mortgage rates as the top reason for their pessimism. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon,” Fannie Mae said in a statement. As a result, buyers are competing for limited stock of smaller homes, says Hannah Jones, senior economic research analyst for Realtor.com. 

Here, though, many retirees have an advantage, Jones says. Rising rates have priced many younger buyers out of the market and made it more difficult for others to obtain approval for a loan. That’s not an issue for retirees who can use proceeds from the sale of their primary home to make an all-cash offer, which is often more attractive to sellers. 

Retirees also have the ability to cast a wider net than younger buyers, whose choice of homes is often dictated by their jobs or a desire to live in a well-rated school district. While the U.S. median home price has soared more than 40% since the beginning of the pandemic, prices have risen more slowly in parts of the Northeast and Midwest, Jones says. “We have seen the popularity of Midwest markets grow over the last few months because out of all of the regions, the Midwest tends to be the most affordable,” she says. “You can still find affordable homes in areas that offer a lot of amenities.” 

Meanwhile, selling your home may be somewhat more challenging than it was during the height of the pandemic, when potential buyers made offers on homes that weren’t even on the market. The Mortgage Bankers Association reported in October that mortgage purchase applications slowed to the lowest level since 1995, as the rapid rise in mortgage rates has pushed many potential buyers out of the market. Sales of previously owned single-family homes fell a seasonably adjusted 2% in September from August and were down 15.4% from a year earlier, according to the National Association of Realtors. “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” NAR chief economist Lawrence Yun said in a statement. 

However, because of tight inventories, there’s still demand for homes of all sizes, Jones says, so if your home is well maintained and move-in ready, you shouldn’t have difficulty selling it. “The market isn’t as red-hot as it was during the pandemic, but there’s still a lot to be gained by selling now,” she says.

Other costs and considerations 

If you live in an area where real estate values have soared, moving to a less expensive part of the country may seem like a logical way to lower your costs in retirement. While the median home price in the U.S. was $394,300 in September, there’s wide variation in individual markets, from $1.5 million in Santa Clara, Calif., to $237,000 in Davenport, Iowa. But before you up and move to a lower-cost locale, make sure you take inventory of your short- and long-term expenses, which could be higher than you expect. 

Selling your current home, even at a significant profit, means you will incur costs, including those to update, repair and stage it, as well as a real estate agent’s commission (typically 5% to 6% of the sale price). In addition, ongoing costs for your new home will include homeowners insurance, property taxes, state and local taxes, and homeowners association or condo fees.

Nicholas Bunio, a certified financial planner in Berwyn, Pa., says one of his retired clients moved to Florida and purchased a home that was $100,000 less expensive than her home in New Jersey. Florida is also one of nine states without income tax, which makes it attractive to retirees looking to relocate. Once Bunio’s client got there, however, she discovered that she needed to spend $50,000 to install hurricane-proof windows. Worse, the only home-owners insurance she could find was through Citizens Property Insurance, the state-sponsored insurer of last resort, and she’ll pay about $8,000 a year for coverage. Her property taxes were higher than she expected, too. When it comes to lowering your cost of living after you downsize, “it’s not as simple as buying a cheaper house,” Bunio says 

Before moving across the country, or even across the state, you should also research the availability of medical care. “Oftentimes, those considerations are secondary to things like proximity to family or leisure activities,” says John McGlothlin, a CFP in Austin, Texas. McGlothlin says one of his clients moved to a less expensive rural area that’s nowhere near a sizable medical facility. Although that’s not a problem now, he says, it could become a problem when they’re older. 

If you use original Medicare, you won’t lose coverage if you move to another state. But if you’re enrolled in Medicare Advantage, which is offered by private insurers as an alternative to original Medicare, you may have to switch plans to avoid losing coverage. To research the availability of doctors, hospitals and nursing homes in a particular zip code, go to www.medicare.gov/care-compare.

At a time when many seniors suffer from loneliness and isolation, a sense of community matters, too. Bunio recounts the experience of a client who considered moving from Philadelphia to Phoenix after her daughter accepted a job there. The cost of living in Phoenix is lower, but the client changed her mind after visiting her daughter for a few months. “She has no friends in Phoenix,” he says. “She’s going on 61 and doesn’t want to restart life and make brand-new connections all over again.”

Time is on your side 

Unlike younger home buyers, who may be under pressure to buy a place before starting a new job or enrolling their kids in school, downsizers usually have plenty of time to consider their options and research potential downsizing destinations. Once you’ve settled on a community, consider renting for a few months to get a feel for the area and a better idea of how much it will cost to live there. Bunio says some of his clients who are behind on saving for retirement or have high health care costs have sold their homes, invested the proceeds and become permanent renters. This strategy frees them from property taxes, homeowners insurance, homeowners association fees and other expenses associated with homeownership 

The boom in housing values has boosted rental costs, as the shortage of affordable housing increased demand for rental properties. But thanks to the construction of new rental properties in several markets, the market has softened in recent months, according to Zumper, an online marketplace for renters and landlords. A Zumper survey conducted in October found that the median rent for a one-bedroom apartment fell 0.4% from September, the most significant monthly decline this year. 

In 75 of the 100 cities Zumper surveyed, the median rent for a one-bedroom apartment was flat or down from the previous month. (For more on the advantages of renting in retirement, see “8 Great Places to Retire—for Renters,” Aug.)

Aging in place

Even if you opt to age in place, you can tap your home equity by taking out a home equity line of credit, a home equity loan or a reverse mortgage. At a time when interest rates on home equity lines of credit and loans average around 9%, a reverse mortgage may be a more appealing option for retirees. With a reverse mortgage, you can convert your home equity into a lump sum, monthly payments or a line of credit. You don’t have to make principal or interest payments on the loan for as long as you remain in the home. 

To be eligible for a government-insured home equity conversion mortgage (HECM), you must be at least 62 years old and have at least 50% equity in your home, and the home must be your primary residence. The maximum payout for which you’ll qualify depends on your age (the older you are, the more you’ll be eligible to borrow), interest rates and the appraised value of your home. In 2024, the maximum you could borrow was $1,149,825.

There’s no restriction on how homeowners must spend funds from a reverse mortgage, so you can use the money for a variety of purposes, including making your home more accessible, generating additional retirement income or paying for long-term care. You can estimate the value of a reverse mortgage on your home at www.reversemortgage.org/about/reverse-mortgage-calculator.

Up-front costs for a reverse mortgage are high, including up to $6,000 in fees to the lender, 2% of the mortgage amount for mortgage insurance, and other fees. You can roll these costs into the loan, but that will reduce your proceeds. For that reason, if you’re considering a move within the next five years, it’s usually not a good idea to take out a reverse mortgage.

Another drawback: When interest rates rise, the amount of money available from a reverse mortgage declines. Unless you need the money now, it may make sense to postpone taking out a reverse mortgage until the Federal Reserve cuts short-term interest rates, which is unlikely to happen until late 2024 (unless the economy falls into recession before that). Even if interest rates decline, they aren’t expected to return to the rock-bottom levels seen over the past 15 years, according to a forecast by The Kiplinger Letter. And with inflation still a concern, big rate cuts such as those seen in response to recessions and financial crises over the past two decades are unlikely. 

Note: This item first appeared in Kiplinger’s Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related Content

Source: kiplinger.com

Apache is functioning normally

In the world of retail and fashion, home was 2023’s biggest loser.

Apparel firms faced some stress too, but the category managed to avoid the bankruptcy boom that hammered the home sector. In the U.S., the year saw the bankruptcy filings of women’s lifestyle brand Soft Surroundings in September and the April Chapter 11 petition by David’s Bridal, marking its second brush with bankruptcy following its November 2018 filing. Footwear firm Rockport Co. filed on June 14 for its second tour of bankruptcy proceedings, while Shoe City’s parent company ESCO Ltd. filed earlier in the year. Overseas, there was also the Scotch and Soda bankruptcy in March in the Netherlands, followed one month later by the Dutch filing of fashion brand Sandwich.

And just this month, mall operator Pennsylvania Real Estate Investment Trust, better known as PREIT, found itself in bankruptcy proceedings for the second time in three years. The mall REIT expects to exit bankruptcy early next year, after which it will find itself under the ownership of its lenders.

Other retail bankruptcies include Party City, long a fixture on credit ratings watch lists, which filed in January. The party favor firm exited bankruptcy in October, but its bankruptcy also saw the closure of 35 big-box locations. And Christmas Tree Shops, once owned by Bed Bath & Beyond, ended up in bankruptcy court when its parent Handil Holdings filed for Chapter 11 protection in May. The company closed down operations in August, and shuttered 72 doors in the process.

But it’s been the troubled home furnishings category that has endured the most distress this year. That comes as little surprise, particularly after the home furnishings boom during COVID when people were sheltering in place. The return to offices, even in hybrid work environments, curtailed additional spending for refurbishing home workspaces. And the home sector was further hit by rising supply chain costs post-COVID, much of which was due to higher expenses connected to moving big pieces of furniture, both in imports and in shipments to customers.

Related Stories

Even credit experts foresaw trouble ahead in home. The home furnishings category carried the highest default risk across retail since 2021, according to data from S&P Global Market Intelligence.

And the firing salvo from Wells Fargo’s emergency motion on Dec. 30, 2022, that pushed United Furniture Industries (UFI) into an involuntary Chapter 7 after its shutdown one month earlier set the stage for the upheaval to come in 2023. UFI eventually filed a Chapter 11 petition on Jan. 6.

Home was also the big category loser due to the the mega filings of Bed, Bath & Beyond and Tuesday Morning, with the latter contributing to what seemed to be a trend in second filings, the so-called Chapter 22. Z Gallerie was the rare exception across retail sectors that landed in bankruptcy court for the third time on Oct. 16. It’s first filing was back in 2009.

There’s another reason why the home sector’s bankruptcies stood out this year. By the end of the first quarter of 2023, there were already nearly 2,000 announced store closures. That tally included 300 CVS doors and 545 Foot Locker Inc. stores by 2026, including 420 Foot Locker branded sites and 125 Champs Sports locations.

Moving to the end of 2023, total store closings are edging closer to 2,900 locations. The store closures in the home sector contributed a total of 1,228 closed retail doors in 2023. That’s over one-third of the total stores closed this year, with Bed Bath & Beyond contributing 896 to the home sector’s total.

Below is a summary of the top bankruptcies in the home sector in 2023.

Serta Simmons

Mattress maker Serta Simmons Bedding, owned by private equity firm Advent International, filed a Chapter 11 petition on Jan. 23. The filing included the company’s bed-in-a-box brand Tuft & Needle. The company owned more than $62 million to its top 10 unsecured creditors.

Serta Simmons said on June 29 that it completed its restructuring and had emerged from bankruptcy proceedings. “The Serta and Beautyrest brands in our portfolio have a deep heritage in innovation and have played meaningful roles in the lives of consumers for generations,” the company’s CEO Shelley Huff said. “With our financial restructuring behind us, we are taking steps to drive growth by getting back to our innovation roots, reinvesting in our iconic brands, and nailing the fundamentals of our business with a focus on commercial and supply chain excellence.”

During the bankruptcy process, the company reduced its funded debt to $315 million from $1.9 billion at the time of its filing. The $1.6 billion debt reduction lowered the company’s annual cash interest expense by more than $100 million.

Tuesday Morning

Tuesday Morning found itself bankrupt for the second time in three years. It filed for Chapter 11 bankruptcy protection on Feb. 14, citing “exceedingly burdensome debt.” The off-price home retailer has since liquidated operations.

Tuesday Morning’s first petition was in May 2020, which saw it close 213 of its 700 stores. The retailer emerged from bankruptcy in January 2021 with 487 locations in operation. At the time of the second filing, the retailer said it planned to shutter 265 doors. This past May, the 49-year-old retailer decided to shut down operations and join the retail graveyard.

Bed Bath & Beyond

The long-awaited Bed Bath & Beyond bankruptcy finally occurred on April 23, eight months after speculation about its finances had suggested that a collapse was forthcoming.

One month before the bankruptcy, Bed Bath & Beyond closed 416 stores in the U.S., including some Buybuy Baby doors and it shut down its 45-store Harmon’s Beauty business. It also closed its Canadian stores, resulting in a loss of 1,400 retail jobs. When it shut down operations in June, the retail sector lost another 360 Bed Bath & Beyond stores and 120 Buybuy Baby locations.

The Bed Bath & Beyond intellectual property (IP) assets were sold to Overstock.com, best known for its liquidator origins selling excess or closeout inventory, for $21.5 million. Overstock in August rebranded itself as Bed Bath & Beyond. And the Buybuy Baby IP assets were sold to one of its suppliers, Dream on Me Industries Inc., for $15.5 million. Dream on Me subsequently acquired 11 of the Buybuy Baby store leases for $1.17 million, and reopened those locations on Nov. 18. The Harmon IP asset was acquired by investor Jonah Raskas for a reported $300,000. His initial plans are to open five Harmon locations, a CNBC story said.

The home goods chain had been struggling for years, but things started going downhill in a big way after it  dismissed chief executive Mark Tritton and its merchandising leader in the wake of a first-quarter flop in 2022 when it burned through nearly $500 million in Q1 alone. It also spent $589 million on share buybacks instead of investing in turnaround strategies.

Its other problem was Tritton’s turnaround plan, which saw the retailer triple the number of private brands to lift opening price points and bring in more value products for a customer base that was on the hunt for deals on national brands. More bad news followed the troubled chain when its former chief financial officer, Gustavo Arnal, committed suicide in September 2022 after being named in a lawsuit alleging securities violations that included investor Ryan Cohen and his firm RC Ventures as defendants. Arnal has since been removed as a named defendant.

Altmeyer Home Stores

The 81-year-old family-owned regional home chain Altmeyer Home Stores filed for Chapter 7 liquidation in July.

The company operated 11 stores. It was headed by a fourth-generation Altmeyer at the time it filed its Chapter 11 petition.

The company sold primarily soft home linens in bedding, rugs, window treatments and kitchen accessories. But like many in the home sector, it also faced sourcing problems and a slew of online competitors.

Mitchell Gold + Bob Williams

August saw one of the biggest surprises of the year with the abrupt shutdown of upscale home lifestyle retailer Mitchell Gold + Bob Williams after its lender pulled the plug on financing, resulting in the closure of about 35 retail stores and outlets. The company filed its Chapter 11 petition in September, and went into liquidation mode after failing to find a buyer. In November, Surya, a Cartersville, Ga.-based home furnishings firm that specializes in rugs, textiles, lighting, furniture and decor, stepped up to acquire the Mitchell Gold + Bob Williams assets, including its IP and manufacturing facilities.

Surya, which brought on co-founder Mitchell Gold as an advisor, plans to restore the home lifestyle brand to its former glory. It plans to begin shipping the brand’s product line in the first quarter of 2024.

August also saw the closure of furniture firm Klaussner, better known as Klaussner Home Furnishings. And Solid Comfort, a Fargo, N.D.-based maker of casegoods for firms such as Marriott and Hilton in the hospitality industry, also shut down.

Z Gallerie

Upscale home decor retailer Z Gallerie landed back in bankruptcy court for the third time following a Chapter 11 filing by its parent company DirectBuy Home Improvement Inc. in October.

Z Gallerie was sold to DirectBuy, as affiliate of CSC Generation Holdings, during its second tour of bankruptcy proceedings in 2019. Its first petition was filed in 2009. The retailer started out as a picture framing and poster shop in 1979. During its heyday, it operated about 60 locations. At the time the business shut down for good, there were only 21 stores left in operation.

Source: sourcingjournal.com

Apache is functioning normally

While many people dream of paying for a home in cash, this goal can be very challenging. Housing prices are surging all over the country, and some markets are so pricey it could take decades to save up even for a starter home. Plus, who wants to rent their whole life while they save up to buy a home?

Fortunately, you don’t have to take out a traditional thirty-year loan and make only the minimum monthly payments. Instead, you could take out a mortgage of any length and pay more than the minimum to pay off your mortgage early. This strategy gives you the best of both worlds — a home to live in and the ability to get out of debt faster, provided you can afford to pay extra toward your mortgage each month.

Before you decide to pursue the strategy of paying off your mortgage early. However, it’s essential to make sure your mortgage doesn’t charge a prepayment penalty. While it may sound preposterous, some mortgage lenders charge prepayment penalties if you pay off too much of your outstanding loan balance in any given year — even if you’re selling your home so you can move.

What is a mortgage prepayment penalty?

A mortgage prepayment penalty is a fee imposed by some lenders when a borrower pays off their mortgage loan earlier than the agreed-upon schedule. This fee can be triggered by either paying a significant portion of the loan balance or refinancing the mortgage. The rationale behind this fee is to compensate the lender for the interest payments they will miss out on due to the early repayment.

Types of Mortgage Prepayment Penalties

There are mainly two types of mortgage prepayment penalties: soft and hard.

Soft Prepayment Penalties

This penalty is applied only when you refinance your mortgage, leading to an early payoff of the original loan. However, if you sell your home, you won’t be charged this penalty. Soft penalties are generally more borrower-friendly, offering some flexibility.

Hard Prepayment Penalties

These are more stringent. A hard prepayment penalty is charged not only when you refinance, but also if you sell your home. This means that any action leading to the early payoff of the mortgage, whether it’s selling your house or refinancing it, will incur a penalty. Hard penalties can be financially significant and are a crucial factor to consider when agreeing to a mortgage.

Why do mortgage lenders charge prepayment penalties?

Lenders charge prepayment penalties for a few reasons:

  1. Interest revenue: The most apparent reason is the loss of interest revenue. When a borrower pays off a loan early, the mortgage lender misses out on future interest payments they had counted on.
  2. Loan pricing strategy: Some mortgage lenders offer lower initial interest rates or more favorable terms on the assumption that they’ll earn interest over a longer period. Early repayment disrupts this strategy.
  3. Risk management: From a lender’s perspective, prepayment can introduce financial unpredictability. The penalty is a way to mitigate this risk.
  4. Secondary market influence: Loans are often sold on the secondary market. Investors in these loans expect a certain return, calculated based on the loan’s expected life. Prepayments can disrupt these expectations, and penalties help to balance the equation.

The Problem with Prepayment Penalties

While getting a mortgage with a prepayment penalty may not be the end of the world, you may face notable disadvantages if your housing situation or your finances change. With a hard prepayment penalty, in particular, you would actually be penalized if you refinanced your home into a mortgage with a lower interest rate and better terms.

And, what if you need to relocate for a job or find yourself needing additional room for your growing family? A prepayment penalty would ding you then as well.

A soft prepayment penalty only applies if you refinance (and not if you sell), but it’s still not much better. You’ll still be stuck paying a significant prepayment penalty fee if you need to change your mortgage terms, and this fee could come at the worst possible time if you’re refinancing as a result of financial distress.

How to Avoid Prepayment Penalties

One of the most critical steps in avoiding prepayment penalties is to thoroughly read and understand your mortgage terms. Often, the details regarding prepayment penalties are buried in the fine print of the mortgage agreement.

It’s essential to review these terms carefully before signing. Look for sections titled “Prepayment,” “Prepayment Penalty,” or similar headings. Understand the conditions that trigger the penalty, the calculation method, and the duration for which the penalty applies.

If the document is complex or uses technical jargon, consider consulting a real estate attorney or a financial advisor for clarification.

Questions to Ask Your Lender

When discussing mortgage options with your lender, it’s crucial to ask direct questions about prepayment penalties. Some questions to consider include:

  1. Does this mortgage have a prepayment penalty? – A straightforward question to start the conversation.
  2. What are the specific terms of the prepayment penalty? – Ask for details like the amount, duration, and conditions.
  3. Under what circumstances does the penalty apply? – Clarify if the penalty is triggered by refinancing, selling, or making large payments.
  4. Is the prepayment penalty clause negotiable? – Find out if there’s room for negotiation on this aspect.
  5. Can you provide a loan option without a prepayment penalty? – Express your interest in alternatives without such penalties.

Negotiating Mortgage Terms

Negotiation is a powerful tool in securing favorable mortgage terms. Here are some strategies to help negotiate out of a prepayment penalty:

  • Shop around: Before settling with one lender, shop around. Use offers from other lenders as leverage in your negotiations.
  • Highlight your creditworthiness: If you have a strong credit score and a stable financial history, use this as a bargaining chip. Lenders are more likely to offer favorable terms to low-risk borrowers.
  • Be upfront about your plans: If you intend to pay off your mortgage early or think you might refinance, let your lender know. This can open up discussions for more suitable mortgage products.
  • Ask for a trade-off: If the lender insists on a prepayment penalty, negotiate for a lower interest rate or other benefits to offset the potential penalty.
  • Seek professional advice: A mortgage broker or financial advisor can provide valuable insights and negotiation tactics specific to your situation.

Remember, knowledge and negotiation skills are key to avoiding prepayment penalties. By understanding your mortgage terms, asking the right questions, and effectively negotiating, you can secure a mortgage that aligns with your financial goals and offers the flexibility you need.

With all this in mind, here are some steps to consider as you shop for a new mortgage:

Check Your Credit Score

Your credit score plays a pivotal role in determining the terms of your mortgage, including interest rates and eligibility for certain loan types. Higher credit scores typically unlock lower interest rates and more favorable loan terms.

If your credit score is not in the ‘good’ or ‘excellent’ range, it’s advisable to take steps to improve it. This could include paying down debts, ensuring timely bill payments, and correcting any inaccuracies on your credit report. Even small improvements in your credit score can lead to significant savings over the life of a mortgage.

Comparing Mortgage Offers

When shopping for a mortgage, it’s essential to compare offers from multiple lenders. Look beyond just the interest rates; consider the overall loan terms, including fees, loan duration, and flexibility.

Use a mortgage calculator to understand the long-term implications of each offer, including the total interest you’ll pay over the life of the loan. It’s also crucial to compare prepayment penalties, as these can significantly impact your financial flexibility and cost you more if you decide to pay off your mortgage early or refinance.

Government-Sponsored Home Loan Programs

For those with less-than-ideal credit, or who are seeking more flexible qualification criteria, government-sponsored home loan programs like FHA (Federal Housing Administration) and USDA (United States Department of Agriculture) loans can be excellent alternatives.

These home loans often come without prepayment penalties and can be easier to qualify for compared to conventional loans. FHA loans are known for their lower down payment requirements and more lenient credit score criteria, making them suitable for first-time homebuyers.

USDA loans, targeted at rural and suburban homebuyers, offer benefits such as no down payment and competitive interest rates. However, they come with specific eligibility requirements related to the location of the property and the borrower’s income level.

Read the Fine Print

Before you make the final decision on your new mortgage, the Consumer Financial Protection Bureau (CFPB) advises reading through the details of your loan documents. If your mortgage contract has a prepayment penalty, make sure you understand how much it will cost and how long it lasts.

Bottom Line

Before you take out a mortgage, make sure you’re not setting yourself up for an unpleasant surprise. You should know how much your mortgage payment will be each month and exactly when your loan will be paid off, for example. Moreover, you should also be aware of any prepayment penalties or fees you’ll be charged if you need to refinance or move for any reason.

Generally speaking, it’s wise to avoid mortgages that charge a prepayment penalty. You may think you’ll remain in your home forever, but you never know how life could change in the next five years. By choosing a mortgage without a prepayment penalty, you’re keeping your options open and protecting yourself from expensive prepayment fees.

At the end of the day, you should try to find an affordable mortgage free of “gotchas” that can cost you big time when you least expect it. If you fail to read the loan agreement and wind up facing a big mortgage prepayment penalty, you could live to regret it.

Source: crediful.com

Apache is functioning normally

From 9 a.m. ET on December 22, 2023, to 5 p.m. ET on Thursday, February 15, 2024, fans have the opportunity to enter for a chance to win the 2024 HGTV Dream Home.

HGTV and FoodNetwork fans have the chance to win the 2024 HGTV Dream Home giveaway in Anastasia Island, Florida. The prize package, valued at over $2.2 Million, includes keys to the home, all furnishings, an all-new Mercedes-Benz E Class Sedan, and $100,000. Eligible fans can enter for a chance to win daily at HGTV.com/DreamHome and FoodNetwork.com/HGTVDreamHome, where they will also find full details of the official rules and additional home features.

The three-bedroom, four-bathroom home sits at approximately 3,300 square feet with views of the Matanzas River and the St. Augustine Lighthouse. The home combines classic coastal elegance with modern touches and layers of natural textures drenched in soothing blue and white hues. Upon entry, guests will instantly be taken away by the beautiful views of the waterfront. The front door leads to the great room with an open concept, including a living room with sleek sofas and a fireplace, a dining room with a beach-inspired distressed table, and a bright blue cabinet-filled kitchen. The laundry room and well-organized mudroom sit between the kitchen and an attached two-car garage. The main bedroom looks up to airy skylights and offers a private retreat from the rest of the home with a walk-in closet and main bathroom.

The house is perfect for entertaining, with two guest suites and a loft that provides a cosy space with a wet bar and a mini fridge. The spacious backyard is a dreamy getaway with an outdoor kitchen and high-top bar, two fire features, a pool, and multiple outdoor entertaining spaces, including a screened-in porch with lounge and dining and a pergola with conversation seating.

Architect Michael Stauffer designed the home, and local builder Glenn Layton Homes brought it to life. The interior design was done by Brian Patrick Flynn.

2024 HGTV Dream Home features overview:

  • 3-bed, 4-bath home with 3,300 sq ft
  • Views of Matanzas River and St. Augustine Lighthouse
  • Classic coastal elegance meets modern touches
  • The front door opens to a great room with an open-plan concept
  • Main bedroom with walk-in closet and main bathroom
  • 2 guest suites and loft with wet bar and mini fridge
  • Spacious backyard with outdoor kitchen, high-top bar, fire features, pool, and multiple entertaining spaces

The HGTV Dream Home inspires millions of HGTV fans who enter for a chance to win every year. With this year’s home, we are showcasing Anastasia Island, which offers something for everyone from historical sites to year-round outdoor adventures.

Loren Ruch, Head of Content, HGTV

Anastasia Island is located off the northeast Atlantic coast of Florida, just east of St. Augustine, considered the oldest city in America. The 14-mile island is connected to the city of St. Augustine by the Bridge of Lions, giving access to everything from the charming cobblestone streets and powder sand beaches to historical sites and a wide range of activities. With a rich architectural history, Anastasia Island sits atop layers of local coquina stone formed from seashells used to build the Castillo de San Marcos, a national monument and the oldest fort in the United States. Visitors can explore the St. Augustine Lighthouse, Anastasia State Park, Matanzas Inlet, St. Augustine Amphitheatre and many other local attractions. With endless water sports, scenic boat rides, campsites and majestic views, this seaside escape is the perfect dreamy getaway to call home.

Sponsors of the 2024 HGTV Dream Home include Belgard®, Cabinets To Go, Delta Faucet, James Hardie Building Products Inc., LL Flooring, Mercedes-Benz USA, The Sherwin-Williams Company, SimpliSafe Home Security, Sleep Number®, Trex Company LLC, VELUX® No Leak Skylights, Viva®, Wayfair® and KitchenAid, and Maytag by Whirlpool Corporation.

Find me on:

Mihaela Lica Butler is senior partner at Pamil Visions PR. She is a widely cited authority on public relations issues, with an experience of over 25 years in online PR, marketing, and SEO.She covers startups, online marketing, social media, SEO, and other topics of interest for Realty Biz News.

Find me on:

Latest posts by Mihaela Lica Butler (see all)

Source: realtybiznews.com

Apache is functioning normally

Houston relocations are up yet again, and it’s no surprise considering the city’s low cost of living.

With a metro area population of over seven million, Houston is booming. New residents are discovering the perks of living in one of the most popular cities in the Lone Star State. With a diverse population, sunny climate and plenty of entertainment options, Houston is an excellent choice for many young families and working professionals. According to labor statistics, it also has a rapidly growing job market.

Best of all, Houston‘s overall cost of living is nearly 6 percent under the national average — pretty impressive for the fourth-largest city in the nation.

Cost of living in Houston

Figuring out the cost of living index for a city requires a lot of comprehensive information and data. From accommodations and food to healthcare and goods and services, here’s how it all breaks down.

Housing costs and average rent

Data shows that housing costs in Houston neighborhoods are 18.6 percent lower than the national average. When it comes to renting, you can’t beat the price.

The average rent in Houston is just $1,264 (up 16 percent from the local average last year) for a one-bedroom. Rent prices for studio apartments are around $1,375 and two-bedroom apartments average $1,649. Of course, rent varies depending on which Houston neighborhoods you choose to call home. Also, splurging for a fancy apartment will also drive up the cost of the rent.

Most expensive and affordable neighborhoods

According to rent statistics, the Museum District, Uptown-Galleria and Downtown Houston are the most expensive neighborhoods in Houston for renters. The Museum District neighborhood is the cultural hub of the city, home to Hermann Park, the Houston Zoo and the Museum of Fine Arts. Average apartment rent prices here range from $2,264 to $2,049. Downtown is another popular area with great dining, things to do and outdoor fun at spots like Buffalo Bayou Park.

Medical Center and Great Uptown are two other top-tier expensive neighborhoods for rent in Houston.

For the most affordable neighborhoods in the city, rent in areas like Hearthwood Condominiums, North Houston and East Houston. These are popular areas for budget-conscious renters and families seeking affordability and good schools. You can find one-bedroom housing units starting at $686 in rent and going up to $738 in these areas.

Most popular neighborhoods

If you’re looking for a happy balance between affordable rent and quality of life, you may want to consider an apartment in one of Houston’s most popular neighborhoods. The Waterford Square neighborhood, Inner Loop and Montrose are among the most popular Houston neighborhoods.

Here, renters will find apartment rent in the $1,578 to $1,265 range. But they generally are more hip, desirable areas to live in, with better access to amenities and entertainment than some of the more affordable areas. That can include trendy art and dining districts like those in Montrose, schools, parks and more.

Buying a house

When you’re ready to buy a house in a local neighborhood, Houston offers some of the lowest home prices in the nation among large cities. Data provided by sister company Redfin shows that the median cost for a single-family home is around $312,000. In other cities like Austin and Dallas, average home costs vary from $405,000 to $581,000. San Antonio is a little more affordable than Houston. The homeowner’s market here is also not as cut-throat as in other major cities, giving you better chances to score your dream house in your dream neighborhood.

Food costs

The cost of living in Houston for food is cheaper than in other parts of the country. Average food prices are nearly 4 percent lower than the national average.

A dozen Grade A eggs typically cost just $1.55, while a loaf of whole wheat bread runs around $3.62 and a pound of ground beef is $4.14.

Unfortunately, the price of some basic grocery items here is higher than in other major Lone Star State cities. While a half-gallon of milk in Houston will cost around $2.04, it would be $1.98 in Austin.

Not a fan of cooking at home? Texans love to eat out and typically do so up to seven days a week. According to data from Zagat, Houston locals dine out more than any other city in the nation.

Utility costs

Utilities are the only cost of living factor that’s higher than the national average. All those hot Houston summers will run up your electricity bill. On average, Houstonians should expect to pay around $194 per month on total energy costs — 7.4 percent higher than the national average.

Houston operates with a privatized energy distribution model. Consumers can save money by comparing energy providers like CenterPoint Energy or TXU Energy.

Impressively, Houston gets 92 percent of its power from renewable energy sources like solar and wind. That puts it up there with places like San Francisco as a leader in renewable energy usage.

Transportation costs

Houston is largely a commuting city, so having a car is necessary for many parts of the metro area. But it still does have a reliable public transit system. If you live closer to downtown, you can get around primarily relying on public transportation or by walking and biking. Houston has a fairly decent walk score of 55 and bike score of 53, though the city’s transit score is just 46 out of 100.

Luckily, data shows that transportation expenses in Houston are almost 4 percent cheaper than the national average. So, if you do need to use or rely on public transit, it’s affordable.

The METRO system’s fares for local buses or METRORail is just $1.25 per ride or $3 for a Day Pass. Frequent riders can use a METRO Q Fare Card that acts as a digital wallet. It also grants users free unlimited transfers for up to 3 hours after starting their trip.

If you own your own vehicle, getting around on Houston’s major toll roads will cost you between $0.50 and $1.75 per segment of highway. Most drivers opt for the EZ TAG automatic toll pass.

Parking in downtown Houston is pricey. Monthly parking rates vary by location but you can find deals for as little as $50 a month in low-demand areas. Meanwhile, average rates in high-demand areas range from $150 to $400.

Gas prices and car repair costs

Houston’s gas prices are some of the cheapest in the nation. A gallon of regular unleaded averaged $2.40 in 2021. However, this is subject to change and market volatility.

Auto maintenance is also affordably priced at just $55.89 for a tire balance service.

Healthcare costs

The cost of healthcare in Houston is 3.6 percent cheaper than the rest of the nation, despite offering some of the best world-class facilities. Houston hospitals often score top-ranking positions in U.S. News & World Report’s “Best Hospitals Honor Roll and Medical Specialties Rankings” list.

While calculating an average cost for unique individual healthcare needs is difficult, you can get a good idea of the price of medical expenses in Houston by looking at the average cost of some basic services. A visit to the doctor is around $92, while an optometrist appointment costs just under $100 on average and a dentist visit just over $107.

Meanwhile, an OTC medication like Ibuprofen costs an average of $9.83. Also, the average cost of prescription drugs comes in at just under $472 (without insurance).

Just as with your own personal healthcare costs, pet care costs less in Houston. A typical vet visit should run just about $54.

Goods and services costs

The price of other miscellaneous goods and services in the Houston area hovers just above the national average (0.8 percent). Nearly everything from your mechanic to your clothing will cost about the same as it would elsewhere.

Houston is home to plenty of entertainment options, so date night here is affordable. Movie tickets are reasonably priced at $9.63 per ticket, even lower than other in-state metro areas like El Paso and Dallas.

Personal care expenses are also cheaper in Houston. A basic haircut comes in at an average of $21.69, while a visit to the dry cleaners will cost an average of $9.47.

Taxes

In Texas, you’ll have no state income tax munching away a large portion of your paycheck. However, if you’re a homeowner, you may use some of that larger take-home pay on property taxes. Texas has the seventh-highest property tax rate in the nation.

Texas does have a state sales tax, which is 6.25 percent. Various other taxes like county or city can bring that up to 8.25 percent.

The Lone Star State also typically holds an annual sales tax holiday in the fall for clothing and back-to-school supplies and another in the spring for emergency preparation supplies.

How much do I need to earn to live in Houston?

Financial experts advise keeping your rent or other housing expenses under 30 percent of your total household budget. You want to have enough for rent and to still live comfortably and enjoy city life. Considering the average rent in Houston is $1,264, that means you would need to make at least $50,560 to reasonably afford a one-bedroom apartment to rent in Houston.

Since the average annual salary in Houston is $74,000, you can cover rent in Houston comfortably and have plenty left for all other Houston costs of living expenses.

To help determine how much rent you can afford based on your annual salary, check out our handy rent and cost of living calculator.

Living in Houston

The cost of living in Houston is a bargain for those used to high prices in other urban areas. All categories except for utilities run lower than the national average. Everything from groceries to food is affordable. Living in the city, Houston locals have access to everything from great dining to world-class art. Plus, the average rent in Houston will feel like a breath of fresh air to many transplants.

For these reasons, relocation to Houston in 2022 is a great move.

Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of March 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.

Source: rent.com

Apache is functioning normally

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

The interest rate on a 30-year fixed-rate mortgage is 6.375% as of December 26, which is unchanged from Friday. Additionally, the interest rate on a 15-year fixed-rate mortgage is 5.875%, which is 0.500 percentage points higher than Friday.

With mortgage rates changing daily, it’s a good idea to check today’s rate before applying for a loan. It’s also important to compare different lenders’ current interest rates, terms, and fees to ensure you get the best deal. 

Rates last updated on December 26, 2023. Rates are based in Texas and the assumptions are shown here. Actual rates may vary. Credible, a personal finance marketplace, has 5,000 Trustpilot reviews with an average star rating of 4.7 (out of a possible 5.0).

How do mortgage rates work?

When you take out a mortgage loan to purchase a home, you’re borrowing money from a lender. In order for that lender to make a profit and reduce risk to itself, it will charge interest on the principal — that is, the amount you borrowed.

Expressed as a percentage, a mortgage interest rate is essentially the cost of borrowing money. It can vary based on several factors, such as your credit score, debt-to-income ratio (DTI), down payment, loan amount, and repayment term.

After getting a mortgage, you’ll typically receive an amortization schedule, which shows your payment schedule over the life of the loan. It also indicates how much of each payment goes toward the principal balance versus the interest.

Near the beginning of the loan term, you’ll spend more money on interest and less on the principal balance. As you approach the end of the repayment term, you’ll pay more toward the principal and less toward interest.

Your mortgage interest rate can be either fixed or adjustable. With a fixed-rate mortgage, the rate will be consistent for the duration of the loan. With an adjustable-rate mortgage (ARM), the interest rate can fluctuate with the market.

Keep in mind that a mortgage’s interest rate is not the same as its annual percentage rate (APR). This is because an APR includes both the interest rate and any other lender fees or charges.

Mortgage rates change frequently — sometimes on a daily basis. Inflation plays a significant role in these fluctuations. Interest rates tend to rise in periods of high inflation, whereas they tend to drop or remain roughly the same in times of low inflation. Other factors, like the economic climate, demand, and inventory can also impact the current average mortgage rates.

To find great mortgage rates, start by using Credible’s secured website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.

What determines the mortgage rate?

Mortgage lenders typically determine the interest rate on a case-by-case basis. Generally, they reserve the lowest rates for low-risk borrowers — that is, those with a higher credit score, income, and down payment amount. Here are some other personal factors that may determine your mortgage rate:

  • Location of the home
  • Price of the home
  • Your credit score and credit history
  • Loan term
  • Loan type (e.g., conventional or FHA)
  • Interest rate type (fixed or adjustable)
  • Down payment amount
  • Loan-to-value (LTV) ratio
  • DTI

Other indirect factors that may determine the mortgage rate include:

  • Current economic conditions
  • Rate of inflation
  • Market conditions
  • Housing construction supply, demand, and costs
  • Consumer spending
  • Stock market
  • 10-year Treasury yields
  • Federal Reserve policies
  • Current employment rate

How to compare mortgage rates

Along with certain economic and personal factors, the lender you choose can also affect your mortgage rate. Some lenders have higher average mortgage rates than others, regardless of your credit or financial situation. That’s why it’s important to compare lenders and loan offers.

Here are some of the best ways to compare mortgage rates and ensure you get the best one:

  • Shop around for lenders: Compare several lenders to find the best rates and lowest fees. Even if the rate is only lower by a few basis points, it could still save you thousands of dollars over the life of the loan.
  • Get several loan estimates: A loan estimate comes with a more personalized rate and fees based on factors like income, employment, and the property’s location. Review and compare loan estimates from several lenders.
  • Get pre-approved for a mortgage: Pre-approval doesn’t guarantee you’ll get a loan, but it can give you a better idea of what you qualify for and at what interest rate. You’ll need to complete an application and undergo a hard credit check.
  • Consider a mortgage rate lock: A mortgage rate lock lets you lock in the current mortgage rate for a certain amount of time — often between 30 and 90 days. During this time, you can continue shopping around for a home without worrying about the rate changing.
  • Choose between an adjustable- and fixed-rate mortgage: The interest rate type can affect how much you pay over time, so consider your options carefully.

One other way to compare mortgage rates is with a mortgage calculator. Use a calculator to determine your monthly payment amount and the total cost of the loan. Just remember, certain fees like homeowners insurance or taxes might not be included in the calculations.

Here’s a simple example of what a 15-year fixed-rate mortgage might look like versus a 30-year fixed-rate mortgage:

15-year fixed-rate

  • Loan amount: $300,000
  • Interest rate: 6.29%
  • Monthly payment: $2,579
  • Total interest charges: $164,186
  • Total loan amount: $464,186

30-year fixed-rate

  • Loan amount: $300,000
  • Interest rate: 6.89%
  • Monthly payment: $1,974
  • Total interest charges: $410,566
  • Total loan amount: $710,565

Pros and cons of mortgages

If you’re thinking about taking out a mortgage, here are some benefits to consider:

  • Predictable monthly payments: Fixed-rate mortgage loans come with a set interest rate that doesn’t change over the life of the loan. This means more consistent monthly payments.
  • Potentially low interest rates: With good credit and a high down payment, you could get a competitive interest rate. Adjustable-rate mortgages may also come with a lower initial interest rate than fixed-rate loans.
  • Tax benefits: Having a mortgage could make you eligible for certain tax benefits, such as a mortgage interest deduction.
  • Potential asset: Real estate is often considered an asset. As you pay down your loan, you can also build home equity, which you can use for other things like debt consolidation or home improvement projects.
  • Credit score boost: With on-time payments, you can build your credit score.

And here are some of the biggest downsides of getting a mortgage:

  • Expensive fees and interest: You could end up paying thousands of dollars in interest and other fees over the life of the loan. You will also be responsible for maintenance, property taxes, and homeowners insurance.
  • Long-term debt: Taking out a mortgage is a major financial commitment. Typical loan terms are 10, 15, 20, and 30 years.
  • Potential rate changes: If you get an adjustable rate, the interest rate could increase.

How to qualify for a mortgage

Requirements vary by lender, but here are the typical steps to qualify for a mortgage:

  1. Have steady employment and income: You’ll need to provide proof of income when applying for a home loan. This may include money from your regular job, alimony, military benefits, commissions, or Social Security payments. You may also need to provide proof of at least two years’ worth of employment at your current company.
  2. Review any assets: Lenders consider your assets when deciding whether to lend you money. Common assets include money in your bank account or investment accounts.
  3. Know your DTI: Your DTI is the percentage of your gross monthly income that goes toward your monthly debts — like installment loans, lines of credit, or rent. The lower your DTI, the better your approval odds.
  4. Check your credit score: To get the best mortgage rate possible, you’ll need to have good credit. However, each loan type has a different credit score requirement. For example, you’ll need a credit score of 580 or higher to qualify for an FHA loan with a 3.5% down payment.
  5. Know the property type: During the loan application process, you may need to specify whether the home you want to buy is your primary residence. Lenders often view a primary residence as less risky, so they may have more lenient requirements than if you were to get a secondary or investment property.
  6. Choose the loan type: Many types of mortgage loans exist, including conventional loans, VA loans, USDA loans, FHA loans, and jumbo loans. Consider your options and pick the best one for your needs.
  7. Prepare for upfront and closing costs: Depending on the loan type, you may need to make a down payment. The exact amount depends on the loan type and lender. A USDA loan, for example, has no minimum down payment requirement for eligible buyers. With a conventional loan, you’ll need to put down 20% to avoid private mortgage insurance (PMI). You may also be responsible for paying any closing costs when signing for the loan.

How to apply for a mortgage

Here are the basic steps to apply for a mortgage, and what you can typically expect during the process:

  1. Choose a lender: Compare several lenders to see the types of loans they offer, their average mortgage rates, repayment terms, and fees. Also, check if they offer any down payment assistance programs or closing cost credits.
  2. Get pre-approved: Complete the pre-approval process to boost your chances of getting your dream home. You’ll need identifying documents, as well as documents verifying your employment, income, assets, and debts.
  3. Submit a formal application: Complete your chosen lender’s application process — either in person or online — and upload any required documents.
  4. Wait for the lender to process your loan: It can take some time for the lender to review your application and make a decision. In some cases, they may request additional information about your finances, assets, or liabilities. Provide this information as soon as possible to prevent delays.
  5. Complete the closing process: If approved for a loan, you’ll receive a closing disclosure with information about the loan and any closing costs. Review it, pay the down payment and closing costs, and sign the final loan documents. Some lenders have an online closing process, while others require you to go in person. If you are not approved, you can talk to your lender to get more information and determine how you can remedy any issues.

How to refinance a mortgage

Refinancing your mortgage lets you trade your current loan for a new one. It does not mean taking out a second loan. You will also still be responsible for making payments on the refinanced loan.

You might want to refinance your mortgage if you:

  • Want a lower interest rate or different rate type
  • Are looking for a shorter repayment term so you can pay off the loan sooner
  • Need a smaller monthly payment
  • Want to remove the PMI from your loan
  • Need to use the equity for things like home improvement or debt consolidation (cash-out refinancing)

The refinancing process is similar to the process you follow for the original loan. Here are the basic steps:

  • Choose the type of refinancing you want.
  • Compare lenders for the best rates.
  • Complete the application process.
  • Wait for the lender to review your application.
  • Provide supporting documentation (if requested).
  • Complete the home appraisal.
  • Proceed to closing, review the loan documents, and pay any closing costs.

FAQ

What is a rate lock?

Interest rates on mortgages fluctuate all the time, but a rate lock allows you to lock in your current rate for a set amount of time. This ensures you get the rate you want as you complete the homebuying process.

What are mortgage points?

Mortgage points are a type of prepaid interest that you can pay upfront — often as part of your closing costs — for a lower overall interest rate. This can lower your APR and monthly payments. 

What are closing costs?

Closing costs are the fees you, as the buyer, need to pay before getting a loan. Common fees include attorney fees, home appraisal fees, origination fees, and application fees.

If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

Source: foxbusiness.com

Apache is functioning normally

The residential mortgage as we know it today is less than a century old. In fact, until the Federal Housing Administration (FHA) was founded in 1934, only one in 10 Americans even owned a home: It was a luxury available only for cash or with a very short-term loan. That all changed with the development of the 30-year fixed-rate mortgage during the Great Depression, and the perfection of it after World War II. Essentially a way to buy a house on the installment plan, it made homeownership possible for millions, and solidified homeownership as a key part of the American Dream.

With the development of the 30-year mortgage came another great American pastime: the watching of mortgage interest rates. When shopping for a home loan, it can be helpful to understand the history of mortgage rate trends in America. Here we’ll break down the past 50-plus years of mortgage trends.

Current and historical mortgage rates

1970s mortgage rate trends

The 30-year fixed-rate mortgage — now the most popular type of home loan — started off the decade at about 7.3 percent in 1971, according to Freddie Mac’s survey. By the end of 1979, the 30-year rate was at 12.9 percent. During this decade, the Federal Reserve’s expansionary policy and other factors helped drive inflation and borrowing costs way up.

1980s mortgage rate trends

At the beginning of 1980, homes in the U.S. cost a median $63,700, according to the Department of Housing and Urban Development (HUD). By 1990, that median had risen to $123,900. Spurred by the Great Inflation, the 30-year fixed mortgage rate reached a pinnacle of 18.4 percent in October 1981, according to Freddie Mac. Once the Fed reined in inflation, the 30-year rate seesawed down to the 9 percent range, closing the decade at 9.78 percent.

1990s mortgage rate trends

The 1990s saw a dramatic shift in the 30-year rate, which plunged to an average of 6.91 percent in 1998, according to Bankrate data. This drop was brought on by the dot-com bubble, an era when investors rushed to buy stocks from technology companies that were overvalued. When these stocks plummeted, investors turned their focus to fixed-income investments, such as bonds. As bond prices rose and yields fell, mortgage rates, which follow the 10-year Treasury’s yield, also declined.

2000s mortgage rate trends

The 30-year rate took another tumble in the latter half of the 2000s when the housing market crashed due to the prevalence of subprime loans. The average 30-year fixed mortgage rate dropped from about 8 percent at the start of the decade down to 5.4 percent by 2009, according to Bankrate data. At this time, the Federal Reserve implemented quantitative easing measures, buying mortgage bonds in bulk to drive down interest rates and usher in an economic recovery.

2010s mortgage rate trends

In the 2010s, the 30-year mortgage rate continued to trend downward, beginning in the 4 percent range, dipping under the 4 percent mark and then ending the decade back in that range, according to Bankrate data. These rates were brought on in part by the Federal Reserve’s pull-back on bond-buying.

2020s mortgage rate trends

2020 saw new lows for mortgage rates, with the 30-year fixed rate diving to just under 3 percent, according to Bankrate data, and averaging 3.38 percent for the year. Amid the pandemic, fearful investors were attracted to safer products such as Treasury and mortgage bonds, pushing yields — and rates — lower.

Rates began to creep back up in 2021, but the ongoing pandemic ultimately tempered their rise.

Then came 2022 and 2023. Determined to curb rampant inflation, the Federal Reserve began raising its benchmark interest rate, and mortgage rates followed suit. In October 2022, the 30-year rate breached 7 percent, but settled back into the 6 percent range for the first half of 2023. In July 2023, rates reversed course. The 30-year peaked above 8 percent on October 25, before drifting back down to 7.21 percent on December 13.

Will mortgage rates continue dropping?

While we can try to guess based on historical data, no one knows for certain what will happen to mortgage rates — whether they’ll change at all, or when. The economy and housing market are cyclical, experiencing ups and downs, at times unpredictably.

That said, we regularly ask economists and other experts to weigh in. For week-to-week predictions, check out our mortgage rate poll. For a monthly look-ahead, read our latest mortgage rate forecast.

Summary: Historical mortgage rates over time

Over the last 50 years, mortgage rates have reached both peaks and valleys, from the high of 18 percent in the 1980s to today’s relatively moderate, but somewhat volatile figures. You can view and follow current 30-year mortgage rates on Bankrate.

Below is a summary of the average 30-year fixed mortgage rate by year. From the mid-1980s on, the numbers reflect Bankrate’s calculation of the effective mortgage rate, which takes into account the average number of points borrowers pay. The data from the 1970s to the early 1980s is based on Freddie Mac’s reporting.

Year 30-year fixed-rate average
Sources: Bankrate, Freddie Mac
2023 7.00%
2022 5.53%
2021 3.15%
2020 3.38%
2019 4.13%
2018 4.70%
2017 4.14%
2016 3.79%
2015 3.99%
2014 4.31%
2013 4.16%
2012 3.88%
2011 4.65%
2010 4.86%
2009 5.38%
2008 6.23%
2007 6.40%
2006 6.47%
2005 5.93%
2004 5.88%
2003 5.89%
2002 6.57%
2001 7.01%
2000 8.08%
1999 7.46%
1998 6.91%
1997 7.57%
1996 7.76%
1995 7.86%
1994 8.28%
1993 7.17%
1992 8.27%
1991 9.09%
1990 9.97%
1989 10.25%
1988 10.38%
1987 10.40%
1986 10.39%
1985 12.43%
1984 13.88%
1983 13.24%
1982 16.04%
1981 16.64%
1980 13.74%
1979 11.20%
1978 9.64%
1977 8.85%
1976 8.87%
1975 9.05%
1974 9.19%
1973 8.04%
1972 7.38%

How historical mortgage rates affect buying a home

Broadly speaking, lower mortgage rates fuel demand among homebuyers and can increase an individual’s buying power. A higher rate, on the other hand, means higher monthly mortgage payments, which can be a barrier for a buyer if the cost becomes unaffordable. In general, a borrower with a higher credit score, stable income and a sizable down payment qualifies for the lowest rates.

While you should keep an eye on mortgage rates, don’t try to time the market or predict what’ll happen. While a home is an investment, it’s also where you live. In general, it’s best to get a mortgage when the time is right for you.

How historical mortgage rates affect refinancing

When mortgage rates are on the upswing, it might make less financial sense to try to refinance. Generally, it’s best to refinance if you can shave off one-half to three-quarters of a percentage point from your current interest rate, and if you plan to stay in your home for a longer period of time. If you plan to sell your home soon, the cost to refinance might not be worth it.

Many homeowners, however, are sitting on higher levels of equity, so consider exploring a cash-out refinance. Shop around to find the lowest possible rate and fees based on your credit and finances, and be sure to lock your rate.

Source: bankrate.com

Apache is functioning normally

HousingWire Editor in Chief Sarah Wheeler sat down with Kathryn Amor, senior vice president and head of enterprise products at Guaranteed Rate, to talk about the intersection of product and technology.

Sarah Wheeler: You joined Guaranteed Rate in January of 2023. What drew you to that role?

Kathryn Amor: Their amazing tech stack was a really important factor. They had really great tech — including some proprietary tech — and they were at the leading edge of creating tech around products that I wanted to launch.

SW: As a product leader, how did you think about products coming into a year like 2023?

KA: Coming into 2023, a lot of people were just thinking about survival and there was a lot of movement going on with investors. For me personally, I was walking into a new company so I was looking at: what do we have going on here? What do we need to rebuild? And how do we frame out what the future is going to look like?

I spent a lot of time doing research to understand how to position Guaranteed Rate for the future, to be a center of product excellence, and to leverage all of the technologies that have been put in place to create products and programs that we can monetize. Part of that was also having to completely reconsider how we looked at investors and how we look at sources of liquidity. It was also to find meaning in all the change that’s happening and a new north star because what worked in 2020 and 2021  — and actually for the last 10 years — isn’t what’s going to work in the future.

For me it was a lot about embracing change and how to get other people to embrace change and to see what could be done, because I think there’s a lot of negativity out there. But there’s a lot to be hopeful about. We’re on the brink of seeing that in 2024.

SW: Does this cycle remind you of any other time in housing?

KA: It doesn’t remind me of anything I’ve seen before. If anything, it’s being able to take advantage of opportunities as they’re coming in front of you, and having a more bespoke perspective. I don’t think there’s a one-size-fits-all solution to any of this. In the past, you could come up with big broad solutions that were going to solve for a large swath of people and I’m not saying that some of that doesn’t exist today. But where we differentiate ourselves is in the ability to see opportunities and to take advantage of what’s coming because we’re diversified. And we’re not just serving a single cohort.

The biggest theme is the need to let go of the past and embrace where the future is going to take us.

SW: What was attractive about Guaranteed Rate’s tech stack?

KA: I really like their hybrid model of build your own, combined with some tech that was taken off the shelf. And what I dig about it is that we’re not in any box. We’re going to take the best of the best and not limit ourselves based on any one particular perspective. At the end of the day, Guaranteed Rate really is a fintech company that happens to also do retail lending, which is a very unusual combination. Usually fintech companies tend to be focused on consumer direct and a pure digital play.

I liked that they were trying to solve the problem across a variety of different channels of customer touch points, which I thought was much more relevant to the way that customers want to interact with their loan officers. So sure, some people just want to do online, and we can do that. But there’s also that need to be able to support Realtor partners, to be able to talk to financial planners, to have more of a consultative sales approach.

And then on top of it, Guaranteed Rate was at the cutting edge of automation. As a product person, I have all these dreams and aspirations for all the cool things I’m putting out. And if your tech partner can’t deliver on that because all they do is vanilla, Fannie and Freddie business, that’s limiting. We’re actually solving across all these different products and programs, which really supports my ability to be creative.

And we’re quick — we don’t have all this red tape. And that speed is like a dream come true. So now I feel like I found some real alignment between the ability to dream things and quickly execute a go-to-market strategy and plan that we’re able to implement in a meaningful way. That’s like nirvana.

SW: What are some of the things you have done this year?

KA: We’ve had an amazing year with getting out our reverse product line and we have launched a proprietary non-QM product, which I think is really amazing. We’ve put out 223 new product programs and features this year so it’s been an awesome year.

And we’ve done a lot with affordability, which has been so important in this market. And I don’t just mean like down payment assistance programs, but affordability options when mortgage rates have impacted everyone.

SW: How do you work with the tech team? And where do the ideas for new products come from?

KA: Victor [Ciardelli, Guaranteed Rate’s CEO] is a visionary when it comes to tech, and one of the great things about working with him is that he is so tech-focused. Where I come in and complement that is that I’ve always been super focused on product and how product interacts with tech in order to drive meaningful results and allow us to serve more customers. So Victor sets the direction and really provides the north star, but there’s room for everyone to contribute to how we bring the best version of that out to market.

I’m a firm believer that product is a team sport so I partner closely with the tech team. It takes a range of different amazing people and different ideation to create great product strategy and programs. My job as an executive is to know a good idea when I hear it. My philosophy for product management is to bring smart people in the room and let them all participate in that and raise up the best idea.

SW: Looking back to when you started in the industry, what are some defining moments as far as technology and what technology could mean for product?

KA: The first was when Fannie Mae and Freddie Mac came out with Day One certainty, which started the conversation about what could automation look like and how could we do more to create a better customer experience. That was a moment where I started dreaming and realizing it’s not just about getting rid of the little plastic things on our fingers to flip through the paper. We’re gonna do cool stuff!

And then, when blockchain HELOCs became a thing, I thought about, where does data lead us in this equation? To me, it’s still one of the most interesting conversations because it’s really a conversation about data and ledgers and what that means for how we bring data into the process. Because technology can have all these great ideas, but if we can’t get into a format that ultimately goes into the secondary markets and people are going to buy, this is where the breakdown occurs. And so thinking about how to be part of that long-term solution that could really benefit customers in the long run is cool.

And then recently, of course, seeing that AI is going to be another defining moment. We haven’t really seen how that one’s going to suss out yet but it’s going to change the way we in our industry provide value to our communities. It’s going to completely change the way over time that we fulfill loans and everything else that we do.

SW: One of the products you launched this year was the Rate App, which is focused not just on financial education but overall wellness. What was the thinking behind that?

KA: We often talk about educating people and communities to drive better outcomes, and when I think through that lens of education and empowerment, I see Victor’s vision for the Rate App, which is about financial wellness but also total personal wellness. It allows us to make and maintain a relationship with a consumer by offering a true value to the community that we’re serving — it’s not just a transactional relationship. It also provides a social good that is beneficial to everyone. It’s got meditation and yoga as well as financial education.  

SW: How are you developing products for the next wave of homebuyers?  

KA: When I think about where the future is going, I see a continued diversification and departure from this homogenous customer base that’s a W-2, single-breadwinner household.  

It is very unusual to find a single-income household any longer. Many people have multiple different jobs and there are lots of multigenerational households, so the definition of what it means to earn income and how we provide value to society is really changing.

SW: How do you stay close to the consumer to make sure that there’s a reason for a particular product and it’s not just a cool idea?

KA: I think it’s important to start out with the vibe, but the next step needs to be looking at some facts and data. After doing some digging I might find it’s not as cool as I thought it was, so I like to have a robust process around product development and idea evaluation. It’s important to have a wide net, looking at data, P&L, a cost benefit analysis, then talking to trusted resources and influencers throughout the business to get a pulse on what they think about an idea.

I have a very informal committee structure where I will shop around an idea, pulling data together and just doing a temperature test. And then sometimes it’s also fun to experiment because there’s not always a clear answer. So we’ll try it and see if we’re going to innovate some gold here.

SW: Looking to 2024, what are you excited about?

KA: I am really excited about 2024 because I have spent the last year building out a new team and a product launching structure that I think is going to dominate. And I feel that I’m at the right place, at the right time and with the right company to pull that off.

For the industry at large, I think we’re going to continue to see consolidation in 2024. I think that we’re going to see companies that have been prudent with their finances and made smart tech investment being the ones that succeed. There’s going to be a lot of companies that reinvent themselves. We need highly adaptable companies with prudent capital who are well invested in tech — I think those are going to be the winners in this whole consolidation piece.

Source: housingwire.com

Apache is functioning normally

Austin has a reputation as a global live music capital, a hipster haven and an outdoor enthusiast’s dream come true. Best of all? The cost of living in Austin is still more affordable than most bustling metropolises.

Even though locals complain about skyrocketing prices, the overall cost of living in the Lone Star State capital is just a fraction higher — only 1.2 percent — compared to other cities.

The most expensive part of living in Austin is housing, but even that’s offset by savings on gas prices, transportation, utilities and food. It would be negligent not to mention the quality of life — which is impossible to put a price tag on — that Austinites will proudly tell you is one of the highest around.

Year-over-year cost of living changes in Austin

We’ll deep dive into the data and highlight the cost of living and rent in Austin, but first, here’s a snapshot of year-over-year changes in the cost of living in Austin.

  • Groceries: -0.22%
  • Housing: +1.82%
  • Utilities: no change
  • Transportation expenses: -3.57%
  • Healthcare: -3.41%
  • Miscellaneous expenses: -2.23%

As you can see, in most categories, the cost of living has actually decreased. However, the average housing costs increased by almost 2 percent.

Now that we’ve highlighted annual changes from the past year, let’s look into each category so you can put together a living calculator and determine if this is one of the best places for you to call home.

Average rent is cheaper than San Francisco

How you feel about the housing market in Austin depends on where you’re coming from. New York City and San Francisco transplants will find property value refreshingly affordable, while those moving to Austin from smaller cities may find average rent surprisingly expensive.

Average rents for Austin apartments have increased compared to last year. A one-bedroom apartment in Downtown Austin is up 45 percent and costs an average of $1,523 per month. Of course, the cost of housing varies pretty dramatically depending on what part of Austin you’re in.

Average apartment rent in Austin

When you compare the cost of rent for a one-bedroom in Austin to a one-bedroom in San Francisco, you’ll realize the price difference. A one-bedroom in San Fran averages $3,368 a month.

Minutes from Downtown and a short walk to all things boutique and hip, Bouldin Creek rents average around $3,037 per month. Triangle Slate, Central Austin and Barton Hills have all seen price hikes for one-bedroom apartments and range from $2,146 to $2,588. These are some of the most popular neighborhoods and you’ll pay a higher price to live here.

More typical, however, are the family-friendly neighborhoods of Clarksville and Brentwood, with average rents ranging from $1,825 to $1,839, respectively.

For bargain hunters, it’s possible to find even better deals on rent, like $950 in Crestview or $1,000 a month for a one-bedroom in North Loop.

Average cost of homeownership in Austin

Homebuyers will probably not be surprised to find that the real estate market is hot and housing prices are competitive. Housing costs in Austin are 11.8 percent higher than the national average. Data shows the average cost of a home in the best neighborhoods of Austin is $565,000.

Of course, home prices vary, but one thing is certain — most are going well above the asking price. In fact, according to Redfin, homes in Austin are selling at the biggest premium in the country, seven percent above asking prices and are on the market for an average of 38 days.

Cost of food in Austin

Food costs vary from Houston to Dallas to Austin, but one thing is for sure — foodies have much to celebrate in Austin. From celebrity chefs to taco trucks, good eats await around every corner, at every price point.

Budget diners can enjoy Taco Tuesdays at Quality Seafood with $2 beers and $2 seafood tacos. On the higher end, Sunday brunchers can savor authentic Mexican fare at Fonda San Miguel for around $39 per person.

Groceries in Austin cost about 8 percent below the national average. A dozen eggs will set you back $1.56, a half-gallon of milk is $1.98 and everyone’s favorite morning beverage, coffee, will cost $4.04.

Overall, Austinites will pay less for groceries compared to other cities. In fact, the cost of food decreased by 0.22 percent since last year in the same location, according to coli.org data.

Utility costs in Austin

Austinites are an outdoorsy bunch, whether it’s kicking back at a music festival or taking care of business from a coffee shop patio. But don’t be fooled by the sometimes mild climate — this is a city that loves its air conditioning and is willing to pay for it.

Luckily, utilities are about 5 percent below the national average, totaling around $155.01 a month for your total energy bill.

When you calculate the average rent and cost of living in Austin, don’t forget to include the cost of utilities. Your average rent budget should account for the cost of electricity, water, sewage, gas and internet.

Transportation costs in Austin

First, the good news: Transportation costs in Austin are about 14 percent lower than the national average. Now, the bad news: There’s a reason Austinites love to complain about the traffic.

With only two east-west interstates and no ring road around the metro, traffic in town is nothing to scoff at. Austin is often ranked in the top 10 worst commutes in the country, with average commute times around 40 minutes. One of the keys to happiness for life in this city is minimizing the time you spend on freeways.

Public transportation in Austin

The city has a fair transit score of 44 — primarily because of urban sprawl. Settling down in an area with access to public transportation can relieve some of the headaches of your daily commute. CapMetro is the local transit system, and it includes bus routes, light rail and university and airport shuttle buses.

Overall, CapMetro is an affordable option for getting around — if you’re not in a hurry. Kids under 18 ride free on all services, and the standard single-ride bus fare is $1.25. You can expect to pay $41.25 for a 31-day pass.

Even with the sweltering heat and sprawl, Austin’s overall walk score is 62. And with a bike score of 70, cyclists find Austin generally bike-friendly. However, the central parts of town are the most bikeable parts of the city and the most walkable: Downtown, Cedar Park, Central East Austin, all University of Texas areas, Hyde Park and Old West Austin. CapMetro buses and trains have bicycle racks that make it easy for folks to do a hybrid bike commute, even if they live in the suburbs.

Whether you’re using public transit to and from schools or your university or your job, renters can rely on public transit to get them around. Just don’t forget to account for this with your annual salary.

Driving costs in Austin

There are a handful of toll roads around Austin, which can significantly reduce driving times from the suburbs. The rates are confusing and vary dramatically, ranging from $0.62 to $2.79. For savings and convenience, a TxTag reduces tolls by about 25 percent and deducts from a prepaid account.

Driving is most people’s primary mode of getting around town, but it comes at a premium. Parking costs an average of $219 per month, and gasoline — while lower than the national average — still costs around $3.85 a gallon. Tire balancing costs about 10 percent less than the national average of about $43.10.

Healthcare costs in Austin

Always a hot-button issue, healthcare costs are one of those areas where your mileage may vary. Taking that into consideration, there are some general benchmarks that can give you an idea of overall healthcare costs in Austin.

A visit to an Austin dentist for a routine examination typically costs around $119, and a regular checkup with a family doctor will run you about $111.

If you’re paying out of pocket, expect to shell out around $473 for a prescription, which is right in line with the national average. But if an Ibuprofen is all you need, then you’re in luck — at $8.79 for a bottle, it’s a bargain.

Goods and services costs in Austin

Having covered the bare necessities, that leaves a world of non-essential — but not unimportant — spending to consider. Austin ranks well in this area, with goods and services just barely more than the national average.

Austin is a film buff’s dream — full of movie theaters showing everything from obscure classics to mega-blockbusters. An average movie ticket costs just $10.53, and if you’re at a BYOB backyard event, a six-pack of beer will set you back $10.12.

Staying fit and looking sharp is easy in Austin. Yoga studios dot the city, and the typical class fee is around $20, although monthly memberships will cut that fee in half or less.

Haircuts cost on average $28, and a visit to a beauty salon is usually around $50.

Even if you’re on a tight budget, you’ll find a ton of free entertainment and opportunities for physical activity in the many parks around town.

Taxes in Austin

For anyone new to the great state of Texas, the big bonus is that there’s no state income tax, which everyone loves come tax time. Effectively, tax rates are non-existent.

State sales tax is 6.25 percent which makes up most of the 8.25 percent sales tax in Austin. So, if you drop $1,000 on a flat-screen TV, you’ll spend an extra $82.50 in tax.

However, there are four sales tax holidays each year in Austin, each offering breaks in different categories. April is for emergency preparation supplies, Memorial Day weekend is for EnergyStar appliances and water-efficient products and August is for back-to-school items. These are perfect opportunities to buy big-ticket items at considerable savings.

How much do you need to earn to live in Austin?

For overall financial stability and well-being, finance experts recommend that your rent should not exceed 30 percent of your budget. For an average $1,599 apartment, that means that your average salary is $63,960.

According to the U.S. Census Bureau data, the average Austin income is $71,576. Use our rent calculator to see for yourself how you might need to tweak your budget to afford the average rent for an apartment in Austin.

Living in Austin

Most locals will tell you that life in the ATX lives up to the hype. “Come for the mild weather, stay for the Tex-Mex,” they say. OK, maybe nobody says that, but they definitely should.

Austin offers all the amenities of a big city — a booming economy, excellent food and world-class entertainment — while maintaining a famously small-town feel. From professional opportunities at tech companies to natural beauty, there’s always something more to explore in Texas’ capital city.

Regardless of your budget or tastes, there’s a home in Austin waiting for you. Check out the apartments for rent in Austin and find your landing spot today.

Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of March 2022. Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.

Source: rent.com

Apache is functioning normally

TPO, Anti-Valuation Bias Tools; Retail and Broker News; Interview on Home Equity Levels

<meta name="smartbanner:author" content="We now have a native iPhone
and Android app.
Download the NEW APP”>


This website requires Javascrip to run properly.

TPO, Anti-Valuation Bias Tools; Retail and Broker News; Interview on Home Equity Levels

By:
Rob Chrisman

Thu, Dec 21 2023, 10:43 AM

“What do you call a Christmas wreath made out of $100 bills? Aretha Franklins.” It’s cutting-edge humor like this that keeps readers coming back for more, right? Or astronomy tips, as today is the Winter Solstice, with the least amount of sunlight in the Northern Hemisphere and a little music to go along with it. “The winter is here again, oh Lord. Haven’t been home in a year or more.” (Look at that hair!) Lenders and vendors are hoping that the decline in rates keeps the “winter” away from lending, and holds more salary cuts, layoffs, and furloughs at bay. Mortgage banking is not alone in expanding automation and trying to save money. Do you think that you deserve a lower price for checking out of a store yourself and not using a paid clerk? Many do. The number of people who work as cashiers dropped from 1.4 million in 2019 to 1.2 million today, and over the next decade the BLS projects an additional 10 percent decline. (Today’s podcast can be found here, and this week’s is sponsored by Lender Toolkit’s AI-powered AI Underwriter and Prism borrower income automation tools. Get loans approved in under two minutes. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar. Listen to an interview with Hometap’s Dan Burnett on record home equity levels and how Americans can best leverage them.)

Lender and Broker Products, Programs, and Services

“With increased regulatory focus on property-valuation bias, lenders need robust risk-management processes in place. The recently released interagency proposals on AVM-quality control and ROV-process guidance are designed to prevent valuation bias and help ensure industry stakeholders follow fair-lending practices. Watch our complimentary on-demand webinar to learn how you can prepare, and implement the tools needed to support the proposed changes.* Our experts discuss how to identify potential bias in valuations, ways to mitigate bias risk, how to monitor AVM and appraisal compliance with fair-lending requirements, and more. Watch this timely and important webinar here. *Check with your compliance or legal department for information on complying with applicable law.”

“As the year draws to a close, Planet Home Lending extends our heartfelt gratitude to our invaluable correspondent partners. Together, we’ve stood strong in the face of challenges in a demanding market. Thank you for being an integral part of our shared journey. As we look forward to 2024, we continue our commitment to being your go-to team, your reliable partner, your toolkit, and your product gateway. Here’s to a smooth finish for 2023 and a prosperous New Year.”

“Ready to make your borrowers’ dreams of homeownership a reality? Kind ‘s blended FICO (conventional representative score) loan options can help make it happen! With this option, your borrowers have a greater chance of final approval for a home loan based on their average combined score. Kind has the tools & resources to help you get the job done fast and easy! Using the Kwik Pricer in our broker platform, Kwikie – built with brokers in mind, you’ll be able to knock out deals hassle-free! Learn more by connecting with your Kind Account Executive. If you’re not yet a partner with us, join the #kindmovement today by submitting your broker inquiry.”

Disaster Updates and Other Industry News

On December 13, 2023, with DR-4751-TN, the Federal Emergency Management Agency (FEMA) declared that federal disaster aid with individual assistance has been made available to four Tennessee counties; Davidson, Dickson, Montgomery and Sumner to supplement recovery efforts in the areas affected by severe storms and tornadoes on December 9, 2023.

On 12/13/2023, with DR-4751, FEMA declared federal disaster aid with individual assistance has been made available to counties affected by severe storms and tornadoes on 12/9/2023. See AmeriHome Mortgage Disaster Announcement 20231205-CL for inspection requirements.

Hometown Equity Mortgage is offering G-PA 525 Fast closings 21-30 days, 5-25 units can be mixed use, Mixed use is viable with 70 percent residential, no prepay, I/O 12/24, Up to 75 percent LTV.

Create opportunities with ITIN borrowers in the new year. If you’re not sure how, reach out to the Champs of Non-QM. Champions Funding is steadfast in its mission to help you and your borrowers access loan products outside of traditional agency options. Don’t miss out on learning all the CDFI benefits too! Not yet partnered with the Champs? Sign up today!

loanDepot, Inc. a leading provider of home lending solutions that enable customers to achieve the dream of home ownership, unveiled its fully automated melloNow underwriting engine, changing the game for mortgage borrowers by delivering a fully conditional loan approval in minutes rather than hours or days. Utilizing a fully digital verification process, melloNow swiftly analyzes credit reports, detects fraud, and validates income and employment data at the point of sale, instantaneously generating unique borrower conditions. Now, with the melloNow digital underwriting engine, many loanDepot customers will enjoy a dramatically improved experience.

Newfi Wholesale announced its partnership with the popular technology solution, ARIVE to bring its full suite of Non-QM products to loan officers and brokers. With this partnership, ARIVE is now expanding its capabilities to include DSCR loans. This illustrates the industry-wide shift towards the growing Non-QM sector. Specializing in alternative lending products, Newfi has led the way with innovative solutions relevant for today’s markets. This strategic partnership will empower mortgage brokers with a one-stop shop mortgage experience to a wide array of niche loan programs. Newfi approved brokers will gain immediate access to Newfi’s diverse product lineup and competitive pricing in seamless technological experience, with deeper integrations in development and are set to be unveiled soon, further enriching our shared platform’s capabilities. Brokers interested in working with Newfi can sign up here.

Effective for FHA case number assignments on or after January 1, 2024, AmeriHome’s 2024 Loan Limit Pricing will be available. For additional information including updates on VA loan limits, see AmeriHome Mortgage announcement 20231207-CL for details.

For Mortgage Loans converted from interim construction financing to a permanent loan with a modification, the Loan Modification Agreement required to be included in the Collateral Package may be a certified copy with the original document treated as a Trailing Document. View AmeriHome Mortgage Product Announcement 20231206-CL for details.

VA announced an update to VA Lenders Handbook Chapter 4 Topic 7, Subsection b on Collection Accounts. See AmeriHome Mortgage announcement 20231204-CL for details.

Jet Mortgage is offering a new FHA DPA, 100 percent LTV FHA with New Improved Pricing. Jet 200 FHA DPA Highlights include 600 Min FICO, 1 Unit, Condo’s, Townhomes, Repayable & Forgivable Option, Max 2 percent BPC/LPC – Max 2 percent Discount Points. Must be DU Approve/Eligible, no Manual Underwrites allowed. Contact Jet Mortgage for more information.

VA has issued Circular 26-23-26 regarding the impact of 2024 Conforming Loan Limits on VA loans. Contact Kind Lending with questions about impacts to VA loans regarding changes to conforming loan limits for 2024

Capital Markets

Bonds enjoyed another winning session yesterday on the back of some market-friendly inflation data for November out of the United Kingdom, geopolitical angst tied to a potential military response to Houthi rebels disrupting shipping activity in the Red Sea, slowdown worries linked to disappointing forward revenue guidance from economic bellwether FedEx, and some safe-haven positioning before the extended Christmas weekend. The market largely overlooked some stronger-than-expected existing home sales activity in November, a nice pickup in consumer confidence in December, and a weak 20-year bond reopening auction.

In housing/real-estate news, Existing Home sales rose 0.8 percent month-over-month in November to a seasonally adjusted annual rate of 3.82 million, ending a five-month decline. Despite the rise, sales still sit 7.3 percent lower than a year ago largely due to mortgage rates spiking in September and October. Sales of existing homes continue to be hindered by high mortgage rates, high selling prices, and limited inventory. Inventory remains light, with only 3.5 months’ worth at the current pace. Fortunately, the recent drop in mortgage rates is expected to be a driver of stronger sales activity in December. The median home price rose 4 percent year-over-year to $387,600, while the first-time homebuyer share rose to 31 percent from 28 percent from the month prior.

As previously mentioned, this week contains a lot of housing data. After learning Tuesday of a substantial pick-up in residential activity recently, it would appear that home builders are becoming more optimistic as mortgage rates trend lower and economic growth remains resilient. Speaking of optimism, we also learned yesterday that the Conference Board’s Consumer Confidence Index increased in December as there was renewed optimism across all ages and household income levels with attention being paid to improved inflation trends, business conditions, and job availability. Consumer confidence is highly influenced by gasoline prices, which have been falling.

There will be little data of importance on the economic front until we get into the new year, though we do have a busy economic calendar today that is underway with the third look at Q3 GDP (4.9 percent, revised slightly downward). We’ve also received weekly jobless claims (205k, up from 202k) and Philadelphia Fed manufacturing (-10.5, much lower than expected). The core PCE deflator was expected to be unchanged at 2.3 percent. Later today brings leading indicators for November, KC Fed manufacturing for December, Treasury announcing next week’s laundry list of supply including 2-, 5- and 7-year notes before auctioning $20 billion reopened 5-year TIPS, and Freddie Mac’s Primary Mortgage Market Survey with the prior week’s 30-year mortgage rate slipping eight basis points to 6.95 percent. We begin the day with Agency MBS prices unchanged from Wednesday night, the 10-year yielding 3.87 after closing yesterday at 3.88 percent, and the 2-year at 4.36. With yesterday’s gains, the 10-year note yield returned to unchanged for 2023 after hitting 5.02 percent intraday in the middle of October.

Employment

“Logan Finance bucks mortgage industry trends with strong Q4 growth! As the year-end fast approaches, Logan Finance finds itself in a thriving environment sparking growth that has more than doubled over the last two years. “There’s a great need for Non-QM lending and we are positioned well to handle the influx of new business,” says Aaron Samples, Logan’s Chief Revenue Officer. TPO partners, if you missed the year-end pricing special announcement, see our LinkedIn profile at Logan Finance Corporation. Mortgage broker clients can get rate discounts of up to .375 on select loan products through the end of December, so bring your deals to Logan! Logan’s growth is also fueling several new hires including Wholesale and Correspondent industry veterans Nick Pabarcus and Dave Weatherford, who will focus on recruiting and growing our network. And speaking of hiring, we’re looking for Non-QM superstar AE’s, so contact Aaron Samples for hiring information. Learn more about Logan’s growth at Loganwholesale.com and Logancorrespondent.com.”

Happy Holidays from PrimeLending! Looking back at 2023, are you wrapping up the year feeling more confident of where your career is headed than when you started? Did you receive the coaching and support needed to strengthen critical skills, harness cutting-edge tools, and propel yourself to new heights? As you gear up for 2024, why settle for treading water? Take charge and position yourself to thrive at PrimeLending. Our LOs are transforming their professional journeys through One More, our exclusive peer-to-peer coaching program. Designed to empower producers to excel in today’s volatile market, One More offers a dynamic, fast-paced, and results-oriented small group support system where LOs can connect, collaborate, and ultimately surpass their goals. We’d love to talk with you about how we can help you flourish more too. Contact Nic Hartke for more information.

A Greater Town has built a robust real estate portal into its national hyperlocal marketing site and is looking for one mortgage lender (or a few select mortgage lenders) to “own” it, similar to having your own Zillow or Rocket Homes. About 600 MLS associations are represented with over 1,100,000 listings & 750,000 real estate agents & brokers. A comprehensive directory of every mortgage lender & MLO in the country is in construction as well. It’s the ideal environment for a national lender to set up shop. Examples include Editors Picks, Sally Forster Jones, Founder & CEO of the Sally Forster Jones Group at Compass, and Jerry & Lisa String, Listing & Buyer Agents at Realty ONE Group DocksideSouth. For further information, please contact Drew Knapp, CEO of A Greater Town, (973-477-7154).

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com