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Bulk Sales, Best-Ex, Accounting Outsourcing, Verification Tools; FHA and Ginnie News; STRATMOR Tech Survey

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Bulk Sales, Best-Ex, Accounting Outsourcing, Verification Tools; FHA and Ginnie News; STRATMOR Tech Survey

By:
Rob Chrisman

Thu, Dec 7 2023, 10:58 AM

Time flies (see joke at bottom), and here we are at Pearl Harbor Day already. “I’m a multitasker. I can listen, ignore, and forget all at the same time!” Occasionally someone will accuse me of having a sense of humor. If true, it can be traced back to my parents, but a portion of it came from watching Norman Lear’s shows like All in the Family, Sanford and Son, Maude, The Jeffersons, and movies like The Princess Bride (“as you wish”). Mr. Lear died yesterday, but his impact will be long felt. Audiences loved his shows. Does your customer love you, no matter the price? That’s the case with Coke. The average price of a 12-ounce can of Diet Coke in a package of 12 was 34 cents in 2018 but hit 56 cents per can in October 2023, a 65 percent increase. In general, Diet or regular, prices have shot up: The average price of a Diet Coke at a restaurant hopped up from $2.05 to $2.77. Inflation at many levels is impacting rates, including Treasury and mortgage-backed securities: STRATMOR’s current blog is titled, “How Treasury Auctions Influence Mortgage Rates”. (Today’s podcast can be found here, and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products, nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics, unite the people, systems, and stages of the mortgage process. Hear an interview with United One’s Sean Higgins on the vendor status of full-service mortgage, credit reporting, fraud solutions, appraisals, title insurance, and loan closing support.)

Lender and Broker Products, and Services

Revolution Mortgage estimates that they can save up to $20,000 in cost on verifications with TRUV over competitors. Femi Ayi, EVP Operations shares how he estimates he is saving 80 percent on his verification costs with Truv in this recorded event. Let’s talk about our documentation costs and those giant monopolies that are out there laughing at customers and increasing prices because they have a particular monopoly. You want to lower your manufacturing costs. Contact TRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications.

“Are you struggling with declining production volumes and increasing costs per loan? Look no further. Outsourcing accounting is the elegant answer to this common challenge faced by independent mortgage banks. Whether you lack accounting expertise in-house or have a new team with no mortgage experience, the Richey May Client Accounting and Advisory Services (CAAS) team is here to provide the support you need. Our team consists of industry experts who can customize a solution to meet your specific needs in this volatile time, without requiring any additional training. Whether you need help transitioning to loan level accounting, a fully outsourced function, or industry training for your controller, we’ve got you covered. Contact Richey May today!”

Missed the chance to meet with Planet at IMN’s SFR Forum West? Connect with Planet’s commercial team to explore how our expertise enhances Single-Family Rental investments. Managing $100B+ in assets, we offer top-tier service, savings-focused strategies, and complimentary access to proprietary tools. Unlock the full potential of your investments: schedule your meeting now or call (585) 512-1030. Discover the Planet difference today!

Chief Sales Officer at Deephaven Tom Davis will join Rob Chrisman on a webinar you won’t want to miss. In today’s market, originators need Non-QM to fully serve borrowers and to stay competitive. Learning how to utilize and market Non-QM isn’t difficult when you partner with the right lender. Please find out how easy it is by attending the webinar on December 12th! Register now.

Nobody wants to be sold, they want to be served. Serve every homeowner in your database and get busy investing in relationships. Eric Spottswood, Regional Market Manager at Prosperity Home Mortgage did. Here’s what he had to say: “Recognizing that staying top of mind is crucial for securing repeat business, Milestones provides an excellent opportunity to consistently engage with our clients and reinforce those valuable connections with a one-stop home management platform. The bonus of having my team and our partners prominently featured in the portals is the icing on the cake. It’s not just a product I endorse – I actively use my own hub, and I’m thoroughly impressed with it! Milestones delivers the client engagement tools you need to retain every client you have. Book a demo today.

STRAMOR Tech Survey

Lenders, there’s still time to participate in the Digital Innovations Survey of STRATMOR Group’s Technology Insight® Study. Whether you are well on your way with your digital plans or are thinking through what to do in 2024, you’ll want the data that is only available from this study. This survey takes less than 10 minutes and participating lenders receive the survey report for free. Don’t miss your chance to have data on the key digital capabilities and the benefits and barriers to the digital technology available in the mortgage market today: take the Digital Innovations Survey now!

FHA and Ginnie Mae News

FHA announced new loan limits for calendar year 2024 its Single Family Title II forward and Home Equity Conversion Mortgage (HECM) insurance programs. FHA published Mortgagee Letter 2023-21, 2024 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2024. Mortgagees may view the list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” along with lists that can be sorted by state, county, or Metropolitan Statistical Area (MSA) or by calendar year on the Maximum Mortgage Limits web page.

Mortgagee Letter 2023-22, 2024 Nationwide Home Equity Conversion Mortgage (HECM) Limits, which provides the Calendar Year (CY) 2024 maximum claim amount for FHA-insured traditional HECM, HECM for purchase, and HECM-to-HECM refinances. The maximum claim amount for FHA-insured HECMs for all areas, including Alaska, Hawaii, Guam, and the U.S. Virgin Islands, in CY 2024 will be $1,149,825; 150 percent of the Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit of $766,550. This new maximum claim amount applies to case numbers assigned on or after January 1, 2024.

FHA published Mortgage Letter (ML) 2023-23, Updates to the Home Equity Conversion Mortgage Program. This ML updates and streamlines Home Equity Conversion Mortgage (HECM) servicing policy to enhance the program’s financial stability and improve overall performance. These changes reinforce FHA’s commitment to serving seniors choosing to age in place in their own homes through the HECM program. Loan officers and down payment assistance program providers can visit the DPA One website for more information and to request a demo.

In Multiclass Participants Memorandum (MPM) 23-03, Ginnie Mae announced an optional early closing date for multiclass transactions beginning in December 2023. This option will allow sponsors to close transactions either on the Closing Date specified on the Ginnie Mae REMIC monthly calendar available on Ginnie Mae’s website or on the Business Day immediately preceding such specified Closing Date (an “early Closing Date”). Those sponsors choosing an early Closing Date must notify Ginnie Mae no later than the Final Structure Date and be aware that document delivery requirements outlined in the Ginnie Mae Multiclass Securities Guide (the “Guide”) will apply equally to the early Closing Date. All other transaction dates on the REMIC calendar will remain the same, regardless of the type of Closing Date chosen. For information on capitalized terms used herein, but not defined, refer to the Guide currently in effect, found on the Ginnie Mae website.

In All Participants Memorandum (APM) 23-13, Ginnie Mae announced revisions to its definition of High Balance Loans. These revisions align with the increased conforming loan limits recently announced by the Federal Housing Finance Agency (FHFA).

PRMG TPO Resource Center Updates 23-12 includes updates to Training/Instructional Material, VA Forms, Appraisal Forms, Second Mortgage Product Forms and Information, Non-QM Product Forms and Information, Updates on Bond/Housing Authority/DPA Products, Compliance and Quality Control Information.

Capital Markets

In any market scenario, it is crucial for lenders to analyze the best execution options to maximize profitability when selling loans in the secondary market. Determining what execution is most efficient and profitable will have a big impact on the bottom line. In MCT’s latest whitepaper, Optimizing your Best Execution Loan Sale Analysis, they provide insight into determining your company strategy, delivery options, retain release decisions, and more. Download the whitepaper or join MCT’s newsletter to stay up to date on the latest educational content.

MAXEX is now offering daily mandatory bids on bulk pools of Agency-eligible NOO and second home loans. Like our industry leading MAXEX Conforming flow program, get competitive pricing from five leading institutional buyers and avoid costly Agency LLPAs, all through a single contract and a single, standardized clearinghouse. MAXEX buys to agency guidelines via your existing bulk trading process. Visit here to learn more.

Taking a look at rates, which have improved, as the debate rages over when next year the U.S. Federal Reserve will begin cutting rates we learned yesterday that American employers unexpectedly cut back hiring in November, according to data from ADP. It’s yet another sign of the labor market softening, but don’t read too much into it before tomorrow’s payrolls number, history shows it’s a very bad guide. Despite pullbacks in hiring and spending, the service sector expanded at a faster pace last month on improved business activity.

Challenger, Gray & Christmas, Inc. tells us that U.S.-based employers announced 45,510 cuts in November, a 24 percent increase from the 36,836 cuts announced one month prior but 41 percent lower than the 76,835 cuts announced in the same month in 2022 and marks the first time cuts were lower than the corresponding month a year ago since July. So far this year, companies have announced plans to cut 687k jobs, a 115 percent increase from the 320k cuts announced in the same period last year. The job market is loosening, and employers are not as quick to hire. The labor market appears to be stabilizing with a more normal “churn.”

Today’s economic calendar also includes weekly jobless claims (220k; continuing claims 1.86 million), and wholesale inventories and sales for October. The U.S. Treasury will then announce the details of next week’s mini-Refunding package, estimated to be consisting of $50 billion 3-years, $37 billion reopened 10-years, and $21 billion reopened 30-years. And Freddie Mac will release its Primary Mortgage Market Survey. We begin the day with Agency MBS prices worse than Wednesday night by .125-.250 and the 10-year yielding 4.17 after closing yesterday at 4.12 percent; the 2-year is at 4.61.

Employment

Did you know that Houston, TX is the top area for TSAHC down payment assistance loans? Also, did you know that Mortgage Financial Services TPO (MFStpo) is the only wholesaler both TSAHC and TDHCA down payment and closing cost assistance programs to the mortgage broker community. MFStpo pioneered TSAHC for brokers and until recently, TDHCA was only available to retail LO’s. Brokers are growing with MFStpo by serving more families and referral partners and adding LO’s by recruiting with these programs. MFStpo is actively seeking to enhance support for brokers in the Houston market by hiring an experienced Account Executive. By making TSAHC and TDHCA DPA easy for brokers, MFStpo presents a compelling opportunity for AEs today. Notably, MFStpo also excels in non-DPA loans with great rates and a strong support team. Reach out to EVP John Hudson at 817.247.4766 for more info on this exciting opportunity in Houston!

“PrimeLending LOs have an exciting new mortgage solution to offer their customers looking to save money, increase home value and protect the planet: Green Home Loans from PrimeLending. It’s clear that energy efficiency is not just a trend; it’s a priority for the modern homeowner. According to a 2023 study by Thumbtack, 71 percent of homeowners consider sustainability a top priority, yet only one-third can afford the upgrades. Green Home Loans from PrimeLending is here to bridge the gap by helping borrowers finance green improvements immediately. With more than 400 mortgage solutions in our arsenal, including eco-friendly programs, we’re committed to helping our LOs not only beat the competition, but lead the way in offering the latest mortgage alternatives. If you’re looking for a sustainable career, your future may be at PrimeLending. Contact Nic Hartke for more information.”

“If you ask 50 people for their outlook on the Mortgage and Housing market in 2024, you’ll get 50 different responses (and we can attest to that!). Regardless of market conditions, our team at Pezian Search Group wants to make sure that YOUR organization is properly prepared for what’s next. Since 2010, we’ve spent much of December consulting and partnering with new and existing clients to discuss their outlook, upcoming needs, and to strategize ways to ensure ongoing success. We also take the time to uncover our candidates career goals and prepare them for growth, and we’d love to do the same for you. Reach out to us directly and let us show you how we can be a value add for your organization and in your career search. You can also connect with us on LinkedIn, and view all of our current openings here.”

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Source: mortgagenewsdaily.com

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It’s not likely you can travel with an expired passport, as a passport is generally required for international air travel. It also doubles as a valid form of ID for domestic U.S. travel.

If you realize your passport has expired and you have immediate travel plans, you’ll need to check the rules for the country you’re visiting and quickly submit an application for a new passport.

Learn why and when you need a passport to travel, how to renew your passport and what the rules are for traveling with an expired passport.

Why do you need a passport to travel?

A passport is a standardized form of government identification for those traveling internationally, though it can often be used for identification purposes domestically, too.

Passports ensure that travelers are who they say they are when entering or leaving a country or in other situations when identification is necessary. In most circumstances, everyone entering or leaving a country by land, sea or air needs to have their own passport, even if they’re a child, toddler or baby.

Generally, U.S. passports must be valid for six months beyond the traveler’s departure date to enter another country. However, some countries allow entry to travelers with only three months’ validity on their passport, and others have different regulations altogether. It’s important to verify the country’s rules where you’re planning to travel to ensure you can enter.

How do you renew a passport?

If your passport has expired and was issued more than 15 years ago, you must apply for a new one. Child passports for those under 16 expire after five years and cannot be renewed.

To renew your passport, follow these steps:

  1. Complete a passport renewal application (Form DS-82).

  2. Get passport photos taken.

  3. Mail in your completed application and photos along with your current or expired passport and the required fees.

Currently, it takes up to 10 weeks to get a new passport or renew an existing one. However, there are ways to reduce the time it takes to get a new passport if you need it faster.

  • Expedited processing. By choosing expedited processing for an additional $60, your passport can be issued in three to five weeks.

  • Expedited delivery. Applicants can pay $19.53 for expedited delivery from the U.S. Postal Service. This upgrade delivers your new passport to you one to two days after it is mailed.

  • Urgent travel. This service is available by appointment at a passport agency and is for those with urgent travel plans within the next 14 days (or five days if you’ve already applied by mail). There is no fee for the appointment but spots are limited.

  • Emergency. In life-or-death situations that require travel within 72 hours, you may be able to obtain a passport the same day or the next day.

Passport expeditors or courier companies are another option to get your passport more quickly. These private, third-party companies are allowed to submit expedited passport applications on behalf of their customers. These agencies typically charge additional fees on top of the standard application and expedited service fees.

Can you fly with an expired passport?

Typically, travelers are required to have valid identification when flying. However, the rules can vary depending on whether you’re flying domestically or internationally.

Can you travel domestically with an expired passport?

A passport isn’t required for U.S. citizens traveling within the United States. If you’re flying within the U.S. and your passport has expired, it’s best to use another form of government identification. Forms of ID that are accepted by the Transportation Security Administration (TSA) and the airlines include state-issued driver’s licenses, state-issued ID cards and military ID.

If you’re traveling with an expired passport and don’t have one of the forms of ID listed above, you may still be able to fly if your passport hasn’t expired more than 12 months ago. However, you may be asked to show secondary forms of identification to prove your identity.

Can you fly with an expired passport to another country?

Traveling internationally requires a valid passport to depart the U.S. and/or return from a foreign country.

There are a few exceptions for passengers traveling within the Western Hemisphere. These include a NEXUS card when returning from Canada, a Merchant Mariner Document when traveling on official business or a Military Identification Card when traveling on official orders.

Traveling with expired passport rules during COVID

During the pandemic, the U.S. government issued a temporary order allowing those with an expired passport to fly home to the U.S. This rule granted travelers with passports expiring on or after Jan. 1, 2020, to return directly to the U.S. until June 30, 2022. This exception has since expired and is no longer valid.

What if your passport expired and you need to travel tomorrow?

If you’re traveling within three business days because of a life-or-death emergency of one of your immediate family members, you may be able to get a new passport the same day. Here’s how to get a passport quickly for next-day travel:

  1. Get documentation of the emergency. This could be a death certificate, letter from a mortuary or a letter from a hospital explaining your family member’s condition. It must be translated by a professional if it’s not in English.

  2. Obtain proof of your upcoming travel, such as an airline ticket or itinerary.

  3. Complete a passport application and get passport photos taken.

  4. Call the National Passport Information Center at (877) 487-2778 during business hours or (202) 647-4000 during non-business hours.

  5. Explain your situation and why you need to travel right away.

  6. If you qualify, the center will assist you in making an appointment at an eligible passport agency. Note that an appointment is not guaranteed.

  7. Bring proof of the emergency and travel plans, your passport application and payment for all necessary fees to your appointment.

Flying with an expired passport recapped

Travelers must have a valid passport when traveling internationally. However, if your passport has expired, you have a few options to get a new passport faster than the standard seven to 10 weeks it currently takes. The fees and process required will depend on how quickly you need your new passport.

In life-or-death situations, you may be able to get a new passport the same day if your international travel is within three business days.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

Source: nerdwallet.com

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The Bright MLS 2024 National Housing Market Outlook predicts that next year will bring better conditions for homebuyers. Despite the challenges posed by affordability, buyers can expect a slowdown in home price growth, lower mortgage rates, and an increase in housing options. This shift will occur as life events prompt current homeowners to enter the market, providing more opportunities for prospective buyers.

The Bright MLS 2024 National Housing Market Outlook forecast signals several critical developments for buyers and sellers:

  1. Mortgage rates will establish a new standard, dipping below 7% in the initial quarter and fluctuating between 6-6.5% before landing at 6.2% by year-end.
  2. The year’s conclusion will witness existing home sales reaching 4.6 million, marking a 12.1% surge from the historically low figures in 2023, albeit beneath the standard home sales volume in a typical year.
  3. Evolving family and financial circumstances will increase the number of sellers entering the market, resulting in a 7.6% upturn in inventory by the culmination of 2024.
  4. The augmented inventory and heightened buyer activity will likely maintain home prices steady, as the median home price in the U.S. will ascend by a mere 1.5% to $394,200.
  5. Escalating affordability hurdles and an upsurge in the availability of new homes will steer home prices downward in certain markets, primarily concentrated in California and Florida.
The 30-year mortgage rate is expected to drop below 7% in the first quarter of 2024, continuing to decrease to 6.2% by the end of the year. (Bright MLS)

More Home Sales in 2024

Home sales will increase next year, following a prolonged period of subdued activity. In 2023, the housing market experienced a notable decline in home sales, reaching the lowest level since 2008 because of limited inventory, heightened mortgage rates, and soaring home prices, which dampened demand, particularly in the latter part of the year.

Nevertheless, there remains substantial pent-up demand for homeownership, particularly among younger households, whose homeownership rate still lags because of previous generations. Lower rates and increased inventory will drive the anticipated influx of buyers in 2024. However, affordability will remain a significant challenge, potentially deterring some prospective buyers from entering the market in 2024.

Stable Home Prices

The housing market will likely experience relatively stable home prices in 2024, with a modest 1.5% increase in the median home price in the U.S. compared to 2023. Factors like inventory offset by a rise in the number of buyers in the market will drive the projected growth in home prices.

Overall, the median home price in the U.S. will grow modestly, rising to $394,200 in 2024, a 1.5% increase over 2023.

Affordability Remains a Challenge

In 2024, the U.S. housing market will not experience widespread price corrections. However, certain local markets have seen rapid price increases, posing affordability challenges for potential buyers. Additionally, some metropolitan areas have witnessed a surge in new construction activity. 

This surge and decreased affordability may lead to price declines in particular markets nationwide. Based on an analysis of price growth, affordability, and construction trends, 10 of the 50 largest metro areas are forecasted to have lower median prices in 2024 compared to 2023. Notably, California and Florida dominate the list of regions with forecasted price declines, although no market is anticipated to experience a double-digit price drop next year.

2024 National Housing Market Outlook by Bright MLS

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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.

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Source: realtybiznews.com

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Lately, some mortgage lenders have pitched “buy now, refinance for free” offers to get more home buyers to take the plunge.

The thinking is mortgage rates will be lower in the near future. And when that time comes, you won’t have to pay any lender fees.

This can even sway the decision to buy a home, assuming you’re on the fence about renting vs. buying because it feels too expensive today.

These offers sound like a win-win for the home buyer, as they’ll get a lower interest rate and avoid potentially thousands in closing costs.

But there are quite a few issues with this line of thinking that are worth discussing.

Nobody Knows If Mortgage Rates Will Rise or Fall

Last I checked, mortgage rate predictions have been a tough game. Prior to early 2022, mortgage rates defied the forecasts.

While most expected them to rise, they hit fresh all-time lows and stayed at those levels for much longer than expected.

Then the Fed announced an end to it Quantitative Easing (QE) program and the start of Quantitative Tightening (QT), which sent shockwaves through the mortgage market.

Accompanied by 11 Fed rate hikes, the 30-year fixed surged from around 3% in January 2022 to as high as 8% in October 2023.

Once again, no one expected this, and most predictions called for improvements in 2023 after a rough 2022.

Instead, mortgage rates climbed even higher, leading to the lowest mortgage demand in decades.

People stopped buying homes and virtually nobody refinanced their mortgage. Even worse, existing owners won’t sell because they don’t want to lose their ultra-low interest rate.

This so-called mortgage rate lock-in effect has stifled inventory, which was already low to begin with.

It also partially explains why home prices remain so high, in spite of much more expensive mortgage rates. There’s no supply.

To entice buyers, some real estate agents and mortgage lenders have pitched the phrase, marry the house, date the rate.

The logic is you can still buy your forever home today, while mortgage rates are high. But refinance that pesky high mortgage rate once they fall again.

Problem is they haven’t fallen. And those predictions didn’t pan out. At least not yet.

Speaking of, take a look at the 2024 mortgage rate predictions if you think they’ll be of any use.

Mortgage Rates Are About 1% Below Their Recent Peak

Over the past month and change, the 30-year fixed has come down about one percentage point.

It surpassed 8% in mid-October before falling precipitously, thanks to favorable economic data.

Several reports hinted at possible weakness in the economy, pushing bond yields down from their recent highs while mortgage rates followed.

At the same time, the Fed is expected to cut rates several times in 2024 as the economy cools.

The thought is inflation has peaked, and restrictive monetary policy can ease somewhat.

This is all good news for mortgage rates, which tend to fall when inflation is low, or when the economy is showing signs of weakness.

But there’s still no guarantee mortgage rates will come down. Nor is there a guarantee they’ll fall by an amount necessary to make a refinance worthwhile.

I don’t subscribe to a refinance rule of thumb, but generally you’d want an interest rate at least 1% below your current rate for it to be worth it.

Once you factor in the closing costs, you’ll need to realize some decent monthly payment savings to make it worthwhile. And to break even on those upfront costs.

These Refinance for Free Later Deals Have Some Issues

  • Will mortgage rates fall enough in the future to make the refinance work?
  • Will this lender still be in business and agree to the terms of the deal?
  • Will anything change that limits your ability to refinance (credit score, property value, etc.)
  • What if a different lender has a lower rate in the future?
  • Could this type of offer pressure you into buying a home today if you’re unsure or not ready?

To make a refinance more compelling, or at least easier to pencil, some mortgage lenders are offering a free one in the future if you use them for a home purchase loan.

It seems like a no-brainer. Why not take them up on the deal, right? Well, there are myriad issues with these types of offers.

For one, you have to use the same lender twice. And you have to use the lender offering the free refinance deal to begin with.

So their “refinance for free” deal might stop you from shopping your rate with other banks, lenders, brokers, etc.

The next problem is this lender might not even be in business once it comes time to refinance. Trust me, many lenders have closed their doors as business has dried up.

And if you do use them again in the future, you’ll need to hope they have the lowest rate compared to other lenders. What are the chances of that?

Then there is the pesky issue of mortgage rates. Remember, nobody is very good at predicting them.

Sure, they could drop. But they might not. Or they may not fall enough to make the refinance worthwhile.

At the same time, you’ll need to qualify for the refinance. What if home prices fall between now and then, and you’ve got negative equity to deal with?

Or something else comes up that limits your ability to refinance? Perhaps a lower FICO score, a gap in employment, etc.

Ultimately, you’re probably better off going with the lowest combination of rate and fees you come across today.

And if and when the time comes to refinance in the future, do the same exact thing. Look for the best deal in front of you.

There are simply too many variables and unknowns to bank on a free refinance in the future.

Source: thetruthaboutmortgage.com

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Many people want to buy a home but think it isn’t possible because they don’t have money to put toward a down payment. Traditionally, lenders require a 20% down payment toward your mortgage.

But a 20% down payment adds up to a lot of money. For example, if you plan to purchase a $150,000 home, you’d need to come up with a $30,000 down payment. Many people cannot afford this, but fortunately, the 20% rule is a lot less common than you might think.

Is a buying a house with no money down possible?

The National Association of Realtors (NAR) reports that 39% of non-owners believe they need a 20% down payment or more and 22% believe they need a 10% to 14% down payment.

But neither of these are true. Many mortgage lenders will let you buy a home by putting down as little as 3%. And some lenders will let you skip the down payment altogether.

NAR also found that 61% of first-time homebuyers made a down payment between zero and 6%. So, it’s safe to say that a 20% down payment isn’t the standard anymore. But unfortunately, many consumers choose not to pursue homeownership because they believe this down payment myth.

Weighing the Pros and Cons of No Down Payment Mortgages

Is there any reason to aim for 20% down when most home buyers buy with a down payment less than 20%? If you can afford it, yes, the 20% rule is still a wise choice.

The more money you put toward your mortgage, the less debt you’ll have to repay and the less your monthly payment will be. Plus, there are several drawbacks to putting down less than 20%:

  • Less favorable rates: If you pay less than 20%, lenders will probably see you as a risky investment. And they will take this into consideration when calculating your mortgage rates. In general, you can expect to pay a higher interest rate if you put down a smaller down payment.
  • Higher closing costs: Closing costs are based on the size of your mortgage. So, the smaller your down payment is, the higher your closing costs will be. However, you may be able to get around this if you live in a state where it’s typical for the seller to pay the closing costs.
  • Private mortgage insurance (PMI): Private mortgage insurance is a type of mortgage insurance designed for borrowers who make a down payment lower than 20%. It protects your mortgage lender in case you end up defaulting on your loan.

PMI can cost as much as 1% of your total monthly mortgage payment. So for a $150,000 mortgage, you’ll end up paying $150 per month.

However, this may not be that bad, especially if you have a less expensive mortgage. And once you reach 20% home equity, you can cancel your PMI and get rid of these extra payments.

Check Out Our Top Picks for 2023:

Best Mortgage Lenders

How to Buy a House With No Money Down

Fortunately, there are several lending programs that do not require a down payment. Here are five payment assistance programs that will help you buy a home with little to no down payment.

1. VA Loans

VA loans are a valuable option for eligible military veterans, active-duty service members, and certain surviving spouses. These government-backed loans offer several benefits, making homeownership more accessible and affordable through the use of a VA loan.

100% Financing and No Down Payment

One of the most significant advantages of VA loans is the 100% financing, meaning you won’t need to make a down payment when utilizing a VA loan. This can save borrowers a substantial amount of money upfront, making it easier to enter the housing market.

No Private Mortgage Insurance (PMI) Requirement

Unlike conventional loans that require PMI for down payments less than 20%, VA loans do not require PMI. This can save borrowers hundreds or even thousands of dollars per year in mortgage insurance premiums when using a VA loan.

VA Funding Fee

While VA loans offer numerous benefits, there is a one-time funding fee charged to help offset the costs of the program. The funding fee is 2.15% of the total loan amount for first-time users of VA loans and 3.3% for subsequent uses.

This fee can be financed into the VA loan, reducing the out-of-pocket expenses for the borrower. In some cases, borrowers may be exempt from the funding fee, such as those with service-connected disabilities.

Certificate of Eligibility

To apply for a VA loan, borrowers need to obtain a Certificate of Eligibility (COE) from the Department of Veterans Affairs. The COE verifies the borrower’s eligibility for the VA loan program based on their military service or, in some cases, the service of their spouse. The COE can be requested online through the Department of Veterans Affairs website, by mail, or through an approved lender.

Additional Benefits

VA loans also offer competitive interest rates, more lenient credit requirements, and flexible underwriting guidelines compared to conventional loans. Additionally, there are no prepayment penalties, allowing borrowers to pay off their VA loans early without incurring additional fees.

2. Navy Federal Credit Union

Navy Federal Credit Union’s loan program is similar to what the VA offers. It offers a zero down mortgage and no mortgage insurance. And Navy Federal’s funding fee is only 1.75%.

Navy Federal offers a 30-year loan and a 30-year jumbo loan. 30-year loans have a loan limit of $424,100 while jumbo loans are available up to $1 million. However, you will have to be a Navy Federal member to qualify.

3. USDA Loans

If you’re looking to move to a rural area, you might qualify for a USDA loan. The United States Department of Agriculture Housing Program was designed to aid rural development and is aimed at low-income families. USDA loans offer 100% financing with low interest rates.

Here are the eligibility requirements you must meet to qualify for a USDA loan:

  • When buying a home it must be within the USDA’s boundaries: Although this loan targets rural areas, some suburban areas may still qualify. You can look at this map on the U.S. Department of Agriculture’s website to see if your location falls within the USDA’s geographical boundaries.
  • Your household income can’t exceed a certain threshold: This applies to everyone living in the household, even if they won’t be listed on the mortgage. For instance, if you have a parent living with you who collects Social Security, this counts toward the gross income of all members of a household. The maximum household income varies by state and county so you can find out if you qualify here.

See also: Best Home Loans for Low-Income Borrowers

4. Lease-Option

A lease-option (also known as rent-to-own) allows you to rent a home with the option to buy it at a predetermined price after a certain period. A portion of your monthly rent may be applied toward the purchase price or down payment. This can be a solid option if you need more time to save for a down payment or improve your credit.

5. Seller Financing

In some cases, the seller may be willing to finance the property for you, allowing you to purchase the home without a traditional mortgage. This arrangement typically requires a contract outlining the terms of the loan, including the interest rate, payment schedule, and any potential penalties.

Seller financing can be a viable option if you have a strong relationship with the seller or if the seller is having difficulty selling the property.

6. Crowdfunding

Crowdfunding is a method where you raise money from multiple individuals, typically through online platforms. You can set up a campaign to raise funds for your down payment or even the entire purchase price. This method may work best if you have a strong network of friends, family, and supporters who are willing to contribute to your home-buying goal.

7. Shared Equity Agreements

Shared equity agreements involve partnering with an investor who provides a portion or all of the down payment in exchange for a percentage of ownership in the property. When the property is sold or refinanced, the investor receives a return on their investment based on the agreed-upon share of equity. This can be an attractive option if you can’t afford a down payment but are willing to share future appreciation in the home’s value.

8. Housing Assistance Programs

There are numerous local, state, and federal housing assistance programs that offer grants, low-interest loans, or other forms of financial support to help eligible individuals purchase a home with no money down. These programs often have specific requirements, such as income limits, property location, or first-time homebuyer status. Be sure to research and apply for any programs for which you might be eligible.

Low Down Payment Loans

If you’re unable to buy a house with no money down but can afford a small down payment, consider these low down payment options that can help make homeownership more accessible.

1. 97% LTV mortgages

97% LTV mortgages is a loan program that is offered to first-time homebuyers by Fannie Mae and Freddie Mac. They require a 3% minimum down payment and private mortgage insurance.

Here are the guidelines for the program:

  • You’ll need a credit score of at least 680
  • One of the borrowers must be a first-time homeowner
  • Manufactured housing isn’t permitted
  • Gifts, grants, and other funds may be used toward the down payment

2. Federal Housing Administration (FHA) Loans

The Federal Housing Administration (FHA) was established in 1934 to reduce the requirements to qualify for a mortgage. This government-backed mortgage program offers flexible requirements, making it an attractive option for first-time homebuyers.

Here are the guidelines you’ll need to meet to qualify for an FHA loan:

Credit Score Requirements

The minimum credit score required to qualify for an FHA loan is 500. The specific down payment requirements depend on your credit score:

  • If your credit score is between 500 and 579, you’ll need to make a 10% down payment.
  • If your credit score is 580 or higher, you’ll have to make a 3.5% down payment.

Seller Contributions

FHA loans allow sellers to contribute up to 6% of the closing costs. This can help reduce the upfront costs for the buyer and make it easier to afford the purchase.

Mortgage Insurance Requirements

Mortgage insurance is required for an FHA loan, protecting the lender in case the borrower defaults on the loan. However, once you build 20% equity in the home, you can refinance to a conventional loan to eliminate the mortgage insurance requirement.

Debt-to-Income Ratios

FHA loans accept high debt-to-income (DTI) ratios, allowing borrowers with significant existing debt to still qualify for a mortgage. The FHA typically requires a maximum DTI of 43%, but exceptions can be made for borrowers with compensating factors, such as substantial savings or a history of making large payments on time.

3. HomeReady Mortgage

The HomeReady mortgage is a Fannie Mae program designed for low-to-moderate-income borrowers. It requires a down payment as low as 3% and offers flexible underwriting guidelines, making it an attractive option for first-time homebuyers or those with limited credit history.

4. Home Possible Mortgage

Similar to the HomeReady mortgage, the Home Possible mortgage is a Freddie Mac program that allows for a down payment as low as 3%. It is designed to help low-to-moderate-income borrowers achieve homeownership and offers flexible underwriting guidelines.

5. State and Local Homebuyer Assistance Programs

Many state and local governments offer homebuyer and down payment assistance programs that provide grants or low-interest loans to help cover down payment and closing costs. These programs typically have income and property location requirements, so be sure to research and apply for any programs for which you might be eligible in your area.

Each of these low down payment mortgage options has its own set of eligibility requirements and potential benefits. Be sure to research and compare these options to determine which one best aligns with your financial situation and home-buying goals.

Preparing for Homeownership

Before jumping into the home buying process, it’s essential to prepare yourself financially and mentally. This section covers tips for improving credit scores, creating a budget, and managing debt to make the home buying process smoother.

Credit Score Improvement Tips

Improving your credit score involves checking your credit report for errors and disputing any inaccuracies. Ensure that you pay your bills on time and reduce outstanding debt as much as possible. Keep credit card balances low, avoid opening new credit accounts, and consider requesting a credit limit increase without increasing your spending.

Creating a Budget

Creating a budget requires tracking your income and expenses to understand your spending habits better. Categorize your expenses and set realistic limits for each category. Allocate funds for saving and investing, including a down payment and emergency fund, and regularly review and adjust your budget as needed.

Managing Debt

Managing your debt effectively involves prioritizing high-interest debt and paying more than the minimum payment. Consider debt consolidation or refinancing options to secure a lower interest rate. Avoid taking on new debt before applying for a mortgage and create a debt repayment plan that you can stick to.

Understanding the Total Cost of Homeownership

Understanding the total cost of homeownership means factoring in property taxes, insurance, maintenance, and utility costs. Estimate homeowners association (HOA) fees if applicable and consider the costs of furnishing and updating the home. Prepare for potential increases in expenses over time, such as property tax hikes.

How to Choose the Right Mortgage Option

With various mortgage options available, it’s crucial to select the one that suits your financial needs and long-term goals. This section discusses factors to consider when choosing a mortgage, such as loan term, interest rates, and mortgage insurance.

Fixed-Rate vs. Adjustable-Rate Mortgages

Fixed-rate mortgages have a consistent interest rate for the loan’s duration, providing stability and predictable monthly payments. In contrast, adjustable-rate mortgages (ARMs) have an initial fixed-rate period followed by periodic rate adjustments, which may result in lower initial payments but potential rate increases over time.

Mortgage Term: 15-Year vs. 30-Year

The mortgage term plays a crucial role in determining the overall cost of your mortgage. 15-year mortgages typically have lower interest rates and allow for faster equity buildup, but require higher monthly payments. 30-year mortgages offer lower monthly payments, but result in more interest paid over the loan’s lifetime.

Mortgage Insurance Considerations

PMI may be required for conventional loans with less than a 20% down payment. Loans backed by the federal government, such as FHA, VA, or USDA loans, may have different insurance requirements or fees.

Assessing Your Long-Term Goals

When choosing a mortgage option, consider how long you plan to live in the home and whether your financial situation or housing needs may change. Evaluate the potential for home value appreciation and the impact on your future financial goals.

Planning Your Next Steps

Assess Your Financial Situation

The amount of money you choose to put toward a down payment is a personal choice. If you feel ready for homeownership but know that a 20% down payment isn’t feasible for you, there are many options available to help you.

The best place to start is by looking at your monthly budget and seeing what you can realistically afford. Use a mortgage calculator to reverse engineer your goal and find your ideal home purchase. Consider factors like property taxes, insurance, and maintenance costs, as well as any debts you currently have.

Get Pre-Approved

Get pre-approved for a mortgage before you start house hunting. This will give you an idea of how much you can afford, and it will show sellers and real estate agents that you’re a serious buyer.

To get pre-approved, you’ll need to provide your lender with documentation such as pay stubs, bank statements, and tax returns. They’ll then assess your credit score and financial history to determine how much they’re willing to lend you.

Shop Around for the Best Mortgage

Shop around for the best mortgage rates and terms. Don’t just settle for the first lender you come across. Compare different lenders and loan programs to find the best fit for your financial situation. Look for competitive interest rates, low fees, and flexible repayment terms.

Work with a Knowledgeable Real Estate Agent

A good real estate agent can help you find a home that fits your needs and budget. They’ll also guide you through the home buying process, making it less stressful and ensuring you don’t make any costly mistakes.

Attend First-Time Homebuyer Classes

Consider attending first-time homebuyer classes or workshops. Many local organizations and government agencies offer educational resources for first-time homebuyers. These classes can help you understand the ins and outs of the home buying process and give you the knowledge you need to make informed decisions.

Save for Unexpected Expenses

Even if you’re able to buy a home with no money down, it’s a good idea to have some savings set aside for unexpected expenses. These might include moving costs, home repairs, or furnishing your new home.

Build an Emergency Fund

In addition to saving for unexpected expenses, it’s also important to have an emergency fund in place. This should be enough to cover three to six months’ worth of living expenses in case you lose your job or face another financial emergency.

Be Patient and Stay Disciplined

Home buying is a complex process, and it can take time to find the right home and secure financing. Stay focused on your goals, be disciplined with your spending, and remember that homeownership is a long-term investment.

Conclusion

Buying a home with no money down is possible, but it may not be the best choice for everyone. Consider your financial situation, your long-term goals, and the various mortgage options available to you before deciding on a zero down payment mortgage. With careful planning and preparation, you can make your dream of homeownership a reality, even if you don’t have a large down payment saved up.

Source: crediful.com

Apache is functioning normally

Lately, new home sales have surged as existing housing supply continues to be hard to come by.

This is partially because mortgage rates more than doubled in less than two years, effectively locking in existing homeowners.

With many of these homeowners unwilling to budge, home builders have gained a lot more market share.

After all, they need to move their inventory, and there isn’t a borrower living in the property with a low interest rate to worry about.

To boost sales in spite of high rates, many builders have offered impressive mortgage rate deals that everyday lenders just can’t seem to match. Does this mean there’s no need to look anywhere else?

Most Home Builders Have Their Own Financing Department

Despite being in the business of building homes, many home builders also operate financing divisions.

This means they are also fully-fledged mortgage lenders with the ability to offer home loans on the properties they sell.

And several of them are quite large. For example, D.R. Horton’s DHI Mortgage is a top-25 mortgage lender in the nation. The same goes for Lennar Mortgage.

Both companies originate tens of billions of dollars in mortgages annually to their home buyer customers.

On top of this, they also operate title/escrow companies and insurance agencies. This means a prospective home buyer can do one-stop shopping.

Convenience aside, these builder lenders are also able to offer aggressive financing offers that outside lenders often can’t beat.

So if you’re buying a new home, why look anywhere else?

It’s Wise to Speak with More Than One Mortgage Lender

Even if your home builder doubles as a lender, it’s always prudent to get more than a single mortgage rate quote.

There are studies that prove those who obtain 2-3 quotes (or even more) wind up with a lower rate and monthly savings for years to come.

So even if the home builder’s lender is offering you a spectacular deal, it’s still beneficial to shop your rate.

Sure, you might speak with a third-party lender (or two) and find that they just can’t come close. But if you don’t take the time to do that, you won’t know what else is out there.

In addition, having other quotes in hand allows you to negotiate your mortgage rate with the home builder.

If the builder knows you haven’t looked elsewhere, they might not offer you their lowest rate. With other offers in hand, their deal might get better.

You can also learn a thing or two by speaking to different lenders, mortgage brokers, and so on.

This can make you a more confident home buyer who knows the ins and outs of the process better than someone being led by just one company.

Home Builder Mortgage Rates Are Typically Hard to Beat

Now, from what I’ve seen lately, home builder mortgage rates are hard to beat. They’re buying down their rates aggressively to draw in buyers.

They’re also doing this out of necessity because home prices are so high. This allows more borrowers to qualify for a mortgage and keep their DTI ratio below maximum thresholds.

Remember, they have to move their inventory. Otherwise it sits and costs them money. At the same time, they don’t want to lower their prices.

If they sell homes for less, it could hurt appraised values on subsequent home sales. So it’s more beneficial for them to offer you a lower mortgage rate instead.

This allows them to keep the purchase price intact, while providing you monthly payment relief.

It’s a win-win for both home buyer and home seller. And it makes it very difficult for outside lenders to compete.

They’re able to sell the home more easily and win the loan at the same time.

Lately, home builders have offered both temporary and permanent buydowns, or even a combination of both.

For example, I’ve seen home builder lenders offer 30-year fixed rates as low as 5.5%, with a temporary 2-1 buydown for the first two years.

This means a home buyer gets a rate of 3.5% in year one, 4.5% in year two, and 5.5% for the remainder of the loan term.

Chances are an unaffiliated mortgage lender just won’t be able to compete.

Consider Using Credits from a Home Seller to Buy Down Your Rate

One strategy you can employ if you don’t want to buy a new home is to ask for a credit from the seller.

Known as seller concessions, these can be used to buy down the mortgage rate to something that resembles what new home builders are offering.

Instead of asking for a home price reduction, you can use these credits to pay discount points, which in turn lower the mortgage rate.

This is essentially what the home builder lenders are doing, and there’s really no reason it can’t be done on an existing home.

If you want to go a step further, you could also ask for a credit fro the real estate agent as well.

This may allow you to snag a lower mortgage rate and reduce your closing costs at the same time.

In the end, you might have a deal that resembles that of the builder’s, but on an existing home.

While home builders like to refer to existing homes as “used homes,” they are often located in more desirable, central locations. And they might be bigger too.

As such, it can be in your best interest to purchase a used home as opposed to a newly-built one.

So if the financing is holding you back, the use of seller concessions can make the deal pencil.

There Are Other Advantages to Using the Builder’s Mortgage Lender Beyond Price

While I’ve mostly focused on price, or mortgage rates specifically, there are other perks to using the builder’s captive lender.

For one, they are affiliated businesses, so communication should be strong. There should be a direct line between builder and lender throughout the loan process.

They should know each other’s timelines and processes in and out, which ostensibly means fewer hiccups and issues.

Conversely, an outside lender could have difficulty getting in touch with the builder to check status. And this could result in unnecessary delays and problems.

Of course, that’s how it’s supposed to work. In reality, this might not be the case given the many mixed reviews I’ve come across from builder lenders.

Despite their close relationship with the builder, somehow lots of customers still walk away upset. But this could just boil down to home buying being very emotional in general.

And it could be even worse when using an outside lender if the two companies don’t cooperate well.

In summary, if buying a new home you’ll likely be pushed to use their in-house lender. You are not required to do so. You can use any lender, bank, credit union, or broker you choose.

But there are certainly perks, including mortgage rate specials (the #1 reason to use them) and perhaps the convenience of one-stop shopping.

However, even if you like what the builder’s lender has to offer, you should still take the time to speak with outside lenders and gather additional quotes.

Pros and Cons of Using the Home Builder’s Lender

The Pros

  • The convenience of one-stop shopping
  • Get your new home and mortgage all in one place
  • Affiliated lender might communicate better with the builder
  • Can offer special mortgage rates to home buyer customers
  • Mortgage process is short-lived, rate stays with you for decades potentially
  • Long rate locks that match the longer home buying/building process
  • Often operate their own title/escrow and insurance agencies as well

The Cons

  • Lots of mixed/negative reviews for home builder lenders
  • Mortgage rate specials are often limited to certain homes
  • May be enticed to buy in an area because the financing alone
  • May offer limited loan choices

Source: thetruthaboutmortgage.com

Apache is functioning normally

Nursing can be a rewarding career in a couple of important ways. It involves caring for the health of others and helping them through what can be a challenging moment in their lives, which can be satisfying. A nursing degree can mean job stability as well. According to the Bureau of Labor Statistics, demand for nurses will increase at 6% per year, faster than the average career growth. And here’s one other important fact: The average registered nurse salary is at a median of $81,220 per year. Compare that with the median US salary for the same period of $54,132, and you can see that nursing can be a lucrative career, too.

The average nursing salary will vary depending on the type of nursing you do. For instance, there’s the average nurse salary vs. the average registered nurse salary vs. the average nurse practitioner salary. Qualifications and other factors will determine how much you make as a nurse.

Read on to learn more about this important topic. The information that follows can help you decide if nursing is the right career path for you, and, if so, which type of nursing you want to pursue.

Average Salaries for Different Types of Nurses

Wondering, “How much do nurses make?” First, understand that when considering nursing as a career, it’s vital to know about the different types of nurses. Each has its own education and certification requirements.

•   A licensed vocational nurse (LVN) or licensed practical nurse (LPN) is one of the lowest-paid jobs within the nursing field. Job responsibilities are typically similar for LVN and LPNs. California and Texas use the term LVN, while the rest of the country uses the designation LPN. These positions also have the lowest educational requirements.

While LVN/LPN roles don’t always require a college education, there are usually state-approved training certification programs. Most of these courses take aspiring LVN/LPNs one year to complete, and then they must pass the NCLEX-PN examination for state licensing. How much does a nurse make a year with this kind of credential? The average salary for LVN/LPNs as of 2023 was about $50,580 annually.

•   Aspiring registered nurses (RN) typically need a bachelor’s or associate’s degree from an accredited program. There are also some accelerated programs available and some second degree programs for students who already have a bachelor’s degree in another field.

After successfully completing their chosen coursework, nursing students must then pass the NCLEX-RN exam in order to become a certified RN. In addition, RNs usually must obtain a state license after passing the NCLEX-RN exam.

To drill down on the details here, know that each state has its own licensing board. You may want to research the specific requirements in the state where you plan to practice. How much do RNs make? The average RN salary as of 2023, as noted above, was approximately $88,220 per year. (Below you will find state-by-stage nursing salaries, though not specifically for RNs.)

Next, consider the career of a Clinical Nurse Specialists (CNS). This type of nurse has gone a step beyond RN and pursued additional education. At a minimum, you must have a master of science in nursing (MSN) to become a CNS.

A CNS typically trains extensively in a specialty area, such as emergency medicine, oncology, or women’s health. At the end of 2023, the average salary for a CNS was $99,148 annually, which is higher than the RN salary, reflecting the additional education and skills.

•   A Nurse Practitioner (NP) holds an advanced degree, but their responsibilities vary slightly when compared with a CNS. For example, in most states, a nurse practitioner is able to prescribe medication, while a CNS is not. The average nurse practitioner salary at the end of 2023 was $124,680 annually.
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Average Salaries and Location

Here’s another factor that can impact the average nurse’s salary: location. After all, wages and overall cost of living can vary dramatically depending on whether you live in, say, a small town or close to a pricey urban center.

Check this chart to see how average nurse salaries compare state by state. Note that these figures reflect LPN salaries, which are at the lower end of the spectrum, but they can give you an idea of how much nurses make by location. This could be good information to consider when deciding where to practice.

State Mean Annual Nurse Salary
Alabama $45,260
Alaska $66,710
Arizona $61,920
Arkansas $45,990
California $69,930
Colorado $60,310
Connecticut $62,620
Delaware $57,360
District of Columbia $62,010
Florida $53,780
Georgia $50,830
Hawaii $55,730
Idaho $54,710
Illinois $58,840
Indiana $55,850
Iowa $51,400
Kansas $51,700
Kentucky $49,570
Louisiana $47,430
Maine $55,830
Maryland $60,180
Massachusetts $68,170
Michigan $57,180
Minnesota $54,870
Mississippi $45,020
Missouri $49,500
Montana $52,420
Nebraska $52,080
Nevada $63,910
New Hampshire $63,550
New Jersey $61,990
New Mexico $59,400
New York $57,560
North Carolina $53,010
North Dakota $53,080
Ohio $52,330
Oklahoma $48,090
Oregon $66,190
Pennsylvania $54,520
Rhode Island $66,770
South Carolina $51,060
South Dakota $46,000
Tennessee $46,540
Texas $52,850
Utah $55,790
Vermont $57,150
Virginia $52,790
Washington $69,950
West Virginia $45,530
Wisconsin $52,610
Wyoming $54,880

How Much Does it Cost to Get a Nursing Degree?

The cost of getting a nursing degree varies based on the type of nursing program you choose. Each of the nursing positions listed above requires different degrees and certification.

•   The process to become an LVN/LPN generally costs between $1,000 and $5,000.

•   Taking an RN two-year associate’s program can cost $3,500 per year at public institutions; $15,470 per year at private schools.

•   An alternative is to become an RN through a four-year bachelor’s program. This process works similarly to most other bachelor’s degree programs and typically costs the same as a four-year college or university.

•   In addition to having already been an RN, both CNS and NP careers require advanced degrees. Typically, a masters of science in nursing (MSN) is required for both positions, which can cost between $18,000 to $57,000 in total.

•   Some choose to further their education, becoming a Doctor of Nursing Practice (DNP). These degrees can be expensive but also have the potential to increase a nurse’s salary. After a master’s degree, expect to pay an additional $20,000 to $40,000, but your nursing salary is likely to rise, too.

There are usually costs beyond nursing school tuition. You’ll likely have to buy textbooks and supplies like a lab coat, scrubs, and a stethoscope. Many programs also charge additional lab fees each semester. Many schools will require nursing students to take out liability insurance and get some mandatory immunizations.

After graduating from your chosen program(s), you’ll also likely want to factor in the cost of licensing and exam fees as you enter the job market.
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Paying for Your Nursing Degree

Becoming a nurse can be a pricey process, depending on the path you choose. But there are options available to help students pay for their nursing degree. The American Association of Colleges of Nursing has a database of scholarships for nursing schools. As you may know, scholarships don’t need to be repaid. This can make them an especially valuable resource in making ends meet as a nursing student.

In addition, federal aid, including grants, scholarships, work-study, and federal student loans could provide some relief. To apply, students must fill out the Free Application for Federal Student Aid (FAFSA) each year.

Student Loan Forgiveness Options for Nurses

There are a number of student loan forgiveness programs available to nurses. Keep in mind that each typically has its own program requirements, so it’s helpful to review them closely to determine whether you qualify.

•   Public Service Loan Forgiveness (PSLF) forgives certain federal Direct loans after 10 years of qualifying, on-time payments. This program is open to borrowers who work for a qualifying organization. You can find details online about qualifying for the PSLF program to see if you could benefit from it.

•   The NURSE Corps Loan Repayment Program will repay a portion of a nurse’s eligible student loans when they work full time at a Critical Shortage Facility or as a faculty member at a qualifying nursing school. Those accepted by the program are eligible to have 85% of their outstanding loan balances forgiven over a two-year commitment.

•   The National Health Service Corps Loan Repayment Program provides loan forgiveness to qualifying nurses who commit to working for two years in clinical practice at a National Health Service Corps site.

Repaying Student Loans after Nursing School

If you borrowed federal or private student loans to help you pay for nursing school, developing a repayment strategy can be valuable. Not only will it set you on a path to repaying your debt, it can teach you valuable budgeting skills as well.

If you don’t qualify for any of the available loan forgiveness options, federal student loans come with a few different student loan repayment plans so you can find the option that works best for your budget.

If you relied on private student loans to help you pay for your tuition at nursing school, you may want to review your repayment terms. Each lender will determine their own terms and conditions for the loans they lend.

As you develop a game plan to help you repay your student loans, one option to consider is student loan refinancing.

When you refinance a loan, you take out a new loan with new terms. This loan can then be used to repay your existing loans. If you borrowed multiple loans, that means you could have the option to consolidate them into one single monthly payment — potentially with a lower interest rate.

However, it’s important to keep in mind a couple of factors:

•   You may pay more interest over the life of the loan if you refinance with a longer term.

•   If you are considering refinancing federal student loans, know that they come with an array of benefits and protections that are forfeited if you refinance.

To see how refinancing could impact your student loan, you can take a look at this student loan refinancing calculator.

The Takeaway

Nursing can be a challenging but rewarding profession, and the average nurse salary could provide a well-paying career. How much do RNs make? The typical salary currently tops $88,000. There are different kinds of nursing degrees and positions, so it’s wise to do your research to understand what each one requires and which might best suit your needs. Also, financing your education as a nurse can also need research to understand the obligation and how you might fund it.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com