Hedging, Client Retention Tools; STRATMOR on the ICE 24 Event; MBA on the NAR Settlement; Dual Compensation
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Hedging, Client Retention Tools; STRATMOR on the ICE 24 Event; MBA on the NAR Settlement; Dual Compensation
By: Rob Chrisman
7 Hours, 19 Min ago
I saw a sign recently: “Psychic Fair Cancelled Due to Unforeseen Circumstances.” No one can see into the future, or can read minds, and communication is always a good thing. But if I had to predict something, mortgage-related fees (what is disclosed, and how, at closing) will be something in which the CFPB would become increasingly interested. The CFPB believes that “junk” fees are driving up housing costs, and wants to hear from you. Regarding costs, many lenders are wondering about the proposed NAR settlement, its costs, and even dual licensing. Will we see an increase in the number of dual licenses with the recent NAR settlement, and what about the states that do not allow a person to maintain both NMLS licenses and Realtor Licenses simultaneously? Attorney Brian Levy addressed dual compensation in one of his Musings. (Found here, this week’s podcast is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Today’s has a roundtable discussion from the ICE conference in Vegas with Brett Brumley, Matt Kovac, Justin Demola, and Rob Chrisman on automation and its benefits to lenders and vendors.)
Lender and Broker Services, Products, and Software
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With the recent commissions’ settlement, loan officers must now reevaluate their engagement strategies with their agent network. The key ingredient in long-term success boils down to something so simple, yet very impactful: building closer relationships with homeowners. That’s why loan officers are turning to the Milestones “Super App,” a powerful platform that delivers white-labeled portals to manage the home, build wealth, and everything in between. The value loan officers can bring to homeowners NOW, in close partnership with their agent network, can help them build profitable, long-term relationships for years. Want to start serving your homeowners better? Talk to Sales.
STRATMOR on Customer Experience
When it comes to customer experience, STRATMOR Group covered all angles this week at ICE Experience 24 in Las Vegas. STRATMOR advisors were a common sight on the conference stages, with Brett McCracken sharing his characteristic bombshell secret shopping insights, Mike Seminari revealing some eye-opening truths about the critical importance of having a clean and simple loan process, Sue Woodard challenging tech vendors to look for ways to add value not only to the lender, but the borrower as well, and Garth Graham encouraging lenders to take a hard look at their compensation models to make sure they “get what they pay for.” Looking to refine your organization’s strategies? Contact STRATMOR today.
MBA’s Role in NAR Settlement
No one wants to harm the fragile first-time home buyer, or further dampen the activity in real estate sales and inventory. The Mortgage Bankers Association weighed in on last week’s announced proposed National Association of Realtors’ settlement. Remember that, despite the furor of news and conjecture, the Settlement is subject to court approval although the MBA states we’re likely see changes to go into effect mid-July 2024. “There is also a possibility that the Department of Justice may weigh in on whether the settlement goes far enough, which could result in changes, delays, or abandonment of the settlement. NAR will continue to update its site with the latest information.
“The MBA will work with NAR and other trade associations to limit possible disruption from the settlement and ensure that its provisions are not overly disruptive to home financing. It is important to understand how a change to buyer paid commissions might impact seller contribution limits and we have already advocated for the Department of Veterans Affairs (VA) to lift its prohibition on veterans’ payment for the buyer side agent.
“The proposed nationwide class of home sellers has reached a $418 million joint settlement with NAR that will resolve claims in some of the antitrust class actions against NAR. The Settlement with NAR is in addition to prior settlements (totaling $208.5 million) reached with defendants Anywhere Real Estate, RE/MAX, and Keller Williams.
“Under the terms of the Settlement, NAR will be responsible for paying $418 million in four annual installments along with interest, for the benefit of home sellers across the United States, as well as $3 million toward settlement notices. It also provides for far-reaching changes to NAR’s rules governing real estate broker compensation and the MLS system.
“NAR’s release does not cover agents affiliated with HomeServices of America and its related companies as they are still litigating. And firms that have a total transaction volume of $2 billion or above are not covered by the Settlement. However, the Settlement creates a framework for these larger firms to opt-in to the Settlement to resolve actual or potential claims against them. A firm that wishes to opt-in to the settlement route must deposit into an escrow account an amount equal to 0.0025 multiplied by its average annual ‘Total Transaction Volume’ over the most recent four calendar years and agree to not to engage in the certain prohibited practices. It is unclear at this stage whether the larger firms will in fact opt-in to the Settlement. A similar opt- in provision exists for independent MLS, with the payment being 100 multiplied by their 2023 subscribers.
“In the Settlement, NAR has agreed to various practice changes which are to begin 120 days after the plaintiffs seek preliminary approval of the Settlement. It will eliminate and prohibit any requirement by NAR and NAR MLSs that listing brokers or sellers must make offers of compensation to cooperating brokers or other buyer representatives, and prohibit and eliminate any requirement that such offers, if made, must be blanket, unconditional or unilateral (effectively, eliminating its rules requiring “cooperative” commissions as a condition of listing a home on the MLS).
“It requires MLS participants working with a buyer enter into a written agreement before the buyer tours a home with the following: (a) specify and conspicuously disclose the amount or rate of compensation to be received or how the amount will be determined, (b) the amount of compensation must be objectively ascertainable… It cannot be open-ended such as ‘buyer broker compensation shall be whatever amount the seller is offering to the buyer,’ (c) MLS participants may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.”
The language, “Prohibits NAR MLS participants, subscribers, other real estate brokers, other real estate agents, and sellers from making offers of compensation on the multiple listing service to cooperating brokers or other buyer representatives (either directly or through buyers) or disclosing on the multiple listing service listing broker compensation or total brokerage compensation. It eliminates and prohibits any requirements conditioning participation or membership in a NAR MLS on offering or accepting offers of cooperative compensation.
“Agree not to create, facilitate, or support any non-MLS mechanism for listing brokers or sellers to make offers of compensation to cooperating brokers or other buyer representatives. Require NAR MLS participants acting for sellers to conspicuously disclose to sellers and obtain seller approval for any payment or offer of payment that the listing broker or seller will make to another broker, agent, or other representative acting for buyers. And require MLS participants to disclose to prospective sellers and buyers in conspicuous language that broker commissions are not set by law and are fully negotiable.”
The MBA warned that cooperative commission is not banned; listing brokers and sellers can continue to offer compensation for buyer broker services, just not through the MLS. And the Settlement does not prevent sellers from offering seller concessions through the MLS (e.g., for general buyer closing costs), so long as such concessions are not limited to or conditioned on the use of or payment to a buyer broker.”
The settlement does nothing, unfortunately, to address incompetent, inexperienced real estate agents that do little to promote professionalism, often a complaint from the agent representing the opposite side of the transaction.
Capital Markets
As we mark four years since the big shake-ups caused by the COVID-19 pandemic, the mortgage industry continues to navigate its aftermath, especially in the MBS market. Despite the challenges, there’s been remarkable progress and resilience shown. Vice Capital Markets is one company that has stood firm in the face of adversity, consistently providing steadfast support and innovative strategies to its clients throughout these uncertain times. The company recently shared this video reflecting on the tremendous impact of the pandemic on our industry. If, like me, you’ll be on-site next week at TMC’s The Mane Event in Louisville, Vice Capital President Troy Baars will be on hand to chat about all things capital markets. Drop him a line if you’d like to meet.
Yesterday granted market participants more time to digest the results of this week’s Federal Open Market Committee meeting. As a reminder, the Fed maintained the fed funds rate at current levels and signaled that it would begin cutting this year, which kicked off a post-meeting rally in markets. There’s now more confidence that rate cuts are coming in the second half of the year than there was prior to the meeting. The revised “dot-plot” continues to show the majority of the committee believes that three 25 basis point cuts is the most likely outcome before we close the books on 2024. That said, there were more votes for two 2024 cuts than there were in December.
As far as economic releases, yesterday’s release of flash Manufacturing and Services PMI reading from major economies showed that most pointing to a continued contraction in both sectors. The U.S. was an outlier as both Manufacturing and Services PMI readings indicated an ongoing expansion. Those reports contributed to the early pressure, as did another solid jobless claims reading and a strong existing home sales report.
But existing home sales easily beat expectations and rose 9.5 percent during February. Although historically slow, the 4.38-million-unit pace marks the strongest pace since February 2023, and is likely due to the dip in mortgage rates that occurred at the beginning of the year. Inventory remains tight, but a small swell of new supply hitting the market was another factor driving the faster sales pace.
There is no notable data scheduled for release today but plenty of Fed speakers no doubt reinforcing the message from earlier this week: Chair Powell, Governor Bowman, Fed Vice Chair Jefferson, Fed Vice Chair for Supervision Barr, and Atlanta Fed President Bostic are all scheduled to deliver remarks. We begin the day with Agency MBS prices better .125-.250 than Thursday night, the 10-year yielding 4.22 after closing yesterday at 4.27 percent, and the 2-year at 4.60.
Jobs
“At Evergreen Home Loans, we’re proud of our strong female leadership, with 68 percent of our team being women, including 11 branch managers. We’re on a mission to expand our team with talented Loan Officers who are eager to work in an empowering, supportive environment. Here, you’ll join a group of industry-leading professionals who thrive under the guidance of skilled women leaders. We offer a nurturing space for growth, innovation, and success. If you’re a Loan Officer aspiring to excel in a company that values diversity and leadership, Evergreen Home Loans is your destination. Join us and shape a brighter future in the mortgage industry. To view all job listings, visit Mortgage Jobs.”
“Looking to thrive in the mortgage game? Northpointe Bank has been crushing it for 25 years, leading the charge with a robust product line of traditional, non-QM, and portfolio loans. We’re looking for loan officers and sales teams to join our retail lending team nationwide. Why us? Because we’re not just any bank! Northpointe is like finding a unicorn in the mortgage world: a bank with home lending at its core. Plus, since we’re a bank, there’s no need for loan officers to deal with pesky state licensing. You can originate in all 50 states on day one! Ready to join our winning team? Contact Cody Archer today to hear why Northpointe Bank should be your home.”
As mentioned in yesterday’s Commentary, AmeriHome’s Chief Operating Officer John Hedlund is leaving the company. Also effective April 7, Chief Risk Officer Mark Miller, and Chief Information Officer Dave Andersen, will also be leaving AmeriHome. AmeriHome (the nation’s largest bank-owned correspondent investor) has promoted the following, effective today: Anthony Ho, Managing Director, Chief Credit Officer, Greg McElroy, Managing Director, Chief Operations Officer, Steve Kolker, Managing Director, Correspondent Sales, and Peter Roeske, Managing Director, Retail Lending. AmeriHome Mortgage is a Western Alliance Bank company.
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How to get the best mortgage rates and deals
Mortgage rates vary depending on the type of mortgage you’re looking for, your financial situation and your credit score. But when we talk about getting the best mortgage rate, it’s important to find the best rate among the mortgage deals that suit you and your circumstances.
Mortgage fees and the features you want in a mortgage should always be considered alongside the mortgage rate when making mortgage comparisons and shopping around for any mortgage deal.
If you’re in any way unsure or want help finding the best mortgage deal for you we recommend you seek mortgage advice.
Are mortgage rates going down?
Mortgage rates have mainly been rising in the past week, continuing the upward trend seen during much of February. The average rate on two-year fixed-rate mortgages increased to 5.15% in the week to 28 February, rising from 5.08% a week earlier, according to Rightmove. At the same time, the average rate on five-year fixed-rate mortgages increased to 4.80%, up from 4.72%.
Many of the big UK lenders have increased the cost of their fixed-rate mortgages in recent weeks. However, average rates remain lower than at the beginning of the year, due to the significant rate cuts seen during the mortgage rate price war in January.
Some experts are predicting that more mortgage rate rises may be on the way. This is mainly because of expectations that the Bank of England base rate may need to stay higher for longer, to get inflation down.
What are current UK mortgage rates?
The average two-year fixed-rate mortgage rate, if you have a 25% deposit or equity, increased to 4.99% over the past week, up from 4.90%, while the average rate on a similar five-year fixed-rate mortgage rose to 4.70%, from 4.61%. If you have a smaller deposit or equity of 5%, the average two-year fixed rate remained unchanged at 5.79%, while the average five-year rate increased to 5.38%, from 5.35%. All rates are according to Rightmove as at 28 February 2024.
Latest average two-year fixed-rate mortgage rates
Loan to value (LTV)
21 February 2024
28 February 2024
Week-on-week change
⇩ ⇧
60% LTV
4.50%
4.62%
+0.12%
⇧
75% LTV
4.90%
4.99%
+0.09%
⇧
85% LTV
5.08%
5.14%
+0.06%
⇧
90% LTV
5.31%
5.38%
+0.07%
⇧
95% LTV
5.79%
5.79%
No change
⇔
Latest average five-year fixed-rate mortgage rates
Loan to value (LTV)
21 February 2024
28 February 2024
Week-on-week change
⇩ ⇧
60% LTV
4.19%
4.30%
+0.11%
⇧
75% LTV
4.61%
4.70%
+0.09%
⇧
85% LTV
4.67%
4.73%
+0.06%
⇧
90% LTV
4.86%
4.93%
+0.07%
⇧
95% LTV
5.35%
5.38%
+0.03%
⇧
Data sourced from Rightmove/Podium. Correct as at 28 February 2024.
Average rates are based on 95% of the mortgage market and products with a fee of around £999.
What mortgage do I need?
If you’re looking for a mortgage, you’ll usually fall into one of the following categories of mortgage borrower.
If you’ve never owned a home before, you’ll usually need a first-time buyer mortgage. Knowing that you’re just starting out, the deposit requirements on most first-time buyer mortgages are generally small. You should also be able to find mortgage deals where upfront fees are kept to a minimum. However, mortgage rates for first-time buyers tend to be higher than if you’re already on the property ladder. This is because you’re likely to require a larger loan relative to the value of your property – so borrow at a higher loan-to-value (LTV) – making you a riskier proposition in the eyes of lenders. As it’s your first mortgage, lenders also have less to go on when trying to assess your reliability as a mortgage borrower.
If you already have a mortgage but want to switch to a new one, you are looking to remortgage. You may want to remortgage because your current fixed-rate or discounted term is at an end and you don’t want to move on to your lender’s standard variable rate (SVR), which may be higher. Other reasons you may remortgage include to raise funds to pay for home improvements, or because falling interest rates or a rise in the value of your home means remortgaging could save you money. If you’ve built equity in your property since taking out your current mortgage, it may be possible to borrow at a lower LTV for your new mortgage – and the lower your LTV, the lower mortgage rates tend to be.
If you already have a mortgage but are moving home, you may be able to take your current mortgage with you – this is called porting. Alternatively, you may want to arrange a new mortgage altogether, either with your current lender or a different one. Whichever option you’re considering, it’s important to weigh up the costs of either porting or exiting your existing deal, along with any potential fees you may need to pay on a new mortgage deal.
If you’re buying a property to rent out to tenants, you’ll be looking for a buy-to-let mortgage. You’ll normally need a larger deposit for a buy-to-let mortgage than you would for a residential mortgage, and buy-to-let mortgage rates tend to be higher too. Lenders will also want to see that the rental income you expect to receive will more than cover your monthly repayments.
How mortgage rates work
Mortgage rates are the interest rate you pay to a lender on the mortgage balance you have outstanding. The lower your mortgage rate, the lower your monthly mortgage repayments tend to be, and vice versa.
Different types of mortgage
The type of mortgage you take out can affect the mortgage rate you pay, and whether it may change going forward.
Fixed-rate mortgage
A fixed-rate mortgage guarantees that your mortgage rate, and therefore your monthly repayments, won’t change during the set fixed-rate period that you choose.
This can help with budgeting and means you are protected against a rise in mortgage costs if interest rates begin to increase. However, you’ll miss out if interest rates start to fall while you are locked into a fixed-rate mortgage.
Variable rate mortgages
With a variable rate mortgage, your mortgage rate has the potential to rise and fall and take your monthly repayments with it. This may work to your advantage if interest rates decrease, but means you’ll pay more if rates increase. Variable rate mortgages can take the form of:
a tracker mortgage, where the mortgage rate you pay is typically set at a specific margin above the Bank of England base rate, and will automatically change in line with movements in the base rate.
a standard variable rate, or SVR, which is a rate set by your lender that you’ll automatically move on to once an initial rate period, such as that on a fixed-rate mortgage, comes to an end. SVRs tend to be higher than the mortgage rates on other mortgages, which is why many people look to remortgage to a new deal when a fixed-rate mortgage ends.
a discount mortgage, where the rate you pay tracks a lender’s SVR at a discounted rate for a fixed period.
Offset mortgages
With an offset mortgage, your savings are ‘offset’ against your mortgage amount to reduce the interest you pay. You can still access your savings, but won’t receive interest on them. Offset mortgages are available on either a fixed or variable rate basis.
Interest-only mortgages
An interest-only mortgage allows you to make repayments that cover the interest you’re charged each month but won’t pay off any of your original mortgage loan amount. This helps to keep monthly repayments low but also requires that you have a repayment strategy in place to pay off the full loan amount when your mortgage term ends. Interest-only mortgages can be arranged on either a fixed or variable rate.
» MORE: Should I get an interest-only or repayment mortgage?
How rate changes could affect your mortgage payments
Depending on the type of mortgage you have, changes in mortgage rates have the potential to affect monthly mortgage repayments in different ways.
Fixed-rate mortgage
If you’re within your fixed-rate period, your monthly repayments will remain the same until that ends, regardless of what is happening to interest rates generally. It is only once the fixed term expires that your repayments could change, either because you’ve moved on to your lender’s SVR, which is usually higher, or because you’ve remortgaged to a new deal, potentially at a different rate.
Tracker mortgage
With a tracker mortgage, your monthly repayments usually fall if the base rate falls, but get more expensive if it rises. The change will usually reflect the full change in the base rate and happen automatically, but may not if you have a collar or a cap on your rate. A collar rate is one below which the rate you pay cannot fall, while a capped rate is one that your mortgage rate cannot go above.
Standard variable rate mortgage
With a standard variable rate mortgage, your mortgage payments could change each month, rising or falling depending on the rate. SVRs aren’t tied to the base rate in the same way as a tracker mortgage, as lenders decide whether to change their SVR and by how much. However, it is usually a strong influence that SVRs tend to follow, either partially or in full.
» MORE: How are fixed and variable rate mortgages different?
Mortgage Calculators
Playing around with mortgage calculators is always time well-spent. Get an estimate of how much your monthly mortgage repayments may be at different loan amounts, mortgage rates and terms using our mortgage repayment calculator. Or use our mortgage interest calculator to get an idea of how your monthly repayments might change if mortgage rates rise or fall.
Can I get a mortgage?
Mortgage lenders have rules about who they’ll lend to and must be certain you can afford the mortgage you want. Your finances and circumstances are taken into account when working this out.
The minimum age to apply for a mortgage is usually 18 years old (or 21 for a buy-to-let mortgage), while there may also be a maximum age you can be when your mortgage term is due to end – this varies from lender to lender. You’ll usually need to have been a UK resident for at least three years and have the right to live and work in the UK to get a mortgage.
Checks will be made on your finances to give lenders reassurance you can afford the mortgage repayments. You’ll need to provide proof of your earnings and bank statements so lenders can see how much you spend. Any debts you have will be considered too. If your outgoings each month are considered too high relative to your monthly pay, you may find it more difficult to get approved for a mortgage.
Lenders will also run a credit check to try and work out if you’re someone they can trust to repay what you owe. If you have a good track record when it comes to managing your finances, and a good credit score as a result, it may improve your chances of being offered a mortgage.
If you work for yourself, it’s possible to get a mortgage if you are self-employed. If you receive benefits, it can be possible to get a mortgage on benefits.
Mortgages for bad credit
It may be possible to get a mortgage if you have bad credit, but you’ll likely need to pay a higher mortgage interest rate to do so. Having a bad credit score suggests to lenders that you’ve experienced problems meeting your debt obligations in the past. To counter the risk of problems occurring again, lenders will charge you higher interest rates accordingly. You’re likely to need to source a specialist lender if you have a poor credit score or a broker that can source you an appropriate lender.
What mortgage can I afford?
Getting an agreement or decision in principle from a mortgage lender will give you an idea of how much you may be allowed to borrow before you properly apply. This can usually be done without affecting your credit score, although it’s not a definite promise from the lender that you will be offered a mortgage.
You’ll also get a good idea of how much mortgage you can afford to pay each month, and how much you would be comfortable spending on the property, by looking at your bank statements. What is your income – and your partner’s if it’s a joint mortgage – and what are your regular outgoings? What can you cut back on and what are non-negotiable expenses? And consider how much you would be able to put down as a house deposit. It may be possible to get a mortgage on a low income but much will depend on your wider circumstances.
» MORE: How much can I borrow for a mortgage?
Joint mortgages
Joint mortgages come with the same rates as those you’ll find on a single person mortgage. However, if you get a mortgage jointly with someone else, you may be able to access lower mortgage rates than if you applied on your own. This is because a combined deposit may mean you can borrow at a lower LTV where rates tend to be lower. Some lenders may also consider having two borrowers liable for repaying a mortgage as less risky than only one.
The importance of loan to value
Your loan-to-value (LTV) ratio is how much you want to borrow through a mortgage shown as a percentage of the value of your property. So if you’re buying a home worth £100,000 and have a £10,000 deposit, the mortgage amount you need is £90,000. This means you need a 90% LTV mortgage.
The LTV you’re borrowing at can affect the interest rate you’re charged. Mortgage rates are usually lower at the lowest LTVs when you have a larger deposit.
What other mortgage costs, fees and charges should you be aware of?
It’s important to take into account the other costs you’re likely to face when buying a home, and not just focus on the mortgage rate alone. These may include:
Stamp duty
Stamp duty is a tax you may have to pay to the government when buying property or land. At the time of publication, if you’re buying a residential home in England or Northern Ireland, stamp duty only becomes payable on properties worth over £250,000. Different thresholds and rates apply in Scotland and Wales, and if you’re buying a second home. You may qualify for first-time buyer stamp duty relief if you’re buying your first home.
» MORE: Stamp duty calculator
Mortgage deposit
Your mortgage deposit is the amount of money you have available to put down upfront when buying a property – the rest of the purchase price is then covered using a mortgage. Even a small deposit may need to be several thousands of pounds, though if you have a larger deposit this can potentially help you to access lower mortgage rate deals.
Mortgage fees
Among the charges and fees which are directly related to mortgages, and the process of taking one out, you may need to pay:
Sometimes also referred to as the completion or product fee, this is a charge paid to the lender for setting up the mortgage. It may be possible to add this on to your mortgage loan although increasing your debt will mean you will be charged interest on this extra amount, which will increase your mortgage costs overall.
This is essentially a charge made to reserve a mortgage while your application is being considered, though it may also be included in the arrangement fee. It’s usually non-refundable, meaning you won’t get it back if your application is turned down.
This pays for the checks that lenders need to make on the property you want to buy so that they can assess whether its value is in line with the mortgage amount you want to borrow. Some lenders offer free house valuations as part of their mortgage deals.
You may want to arrange a house survey so that you can check on the condition of the property and the extent of any repairs that may be needed. A survey should be conducted for your own reassurance, whereas a valuation is for the benefit of the lender and may not go into much detail, depending on the type requested by the lender.
Conveyancing fees cover the legal fees that are incurred when buying or selling a home, including the cost of search fees for your solicitor to check whether there are any potential problems you should be aware of, and land registry fees to register the property in your name.
Some lenders apply this charge if you have a small deposit and are borrowing at a higher LTV. Lenders use the funds to buy insurance that protects them against the risk your property is worth less than your mortgage balance should you fail to meet your repayments and they need to take possession of your home.
If you get advice or go through a broker when arranging your mortgage, you may need to pay a fee for their help and time. If there isn’t a fee, it’s likely they’ll receive commission from the lender you take the mortgage out with instead, which is not added to your costs.
These are fees you may have to pay if you want to pay some or all of your mortgage off within a deal period. Early repayment charges are usually a percentage of the amount you’re paying off early and tend to be higher the earlier you are into a mortgage deal.
Government schemes to help you buy a home
There are several government initiatives and schemes designed to help you buy a home or get a mortgage.
95% Mortgage Guarantee Scheme
The mortgage guarantee scheme aims to persuade mortgage lenders to make 95% LTV mortgages available to first-time buyers with a 5% deposit. It is currently due to finish at the end of June 2025.
Shared Ownership
The Shared Ownership scheme in England allows you to buy a share in a property rather than all of it and pay rent on the rest. Similar schemes are available in Scotland, Wales and Northern Ireland.
Help to Buy
The Help to Buy equity loan scheme, designed to help buyers with a smaller deposit, is still available in Wales, but not in England, Scotland and Northern Ireland.
Forces Help to Buy
The Forces Help to Buy Scheme offers eligible members of the Armed Forces an interest-free loan to help buy a home. The loan is repayable over 10 years.
First Homes Scheme
Eligible first-time buyers in England may be able to get a 30% to 50% discount on the market value of certain properties through the First Homes scheme.
Right to Buy
Under this scheme, eligible council tenants in England have the right to buy the property they live in at a discount of up to 70% of its market value. The exact discount depends on the length of time you’ve been a tenant and is subject to certain limits. Similar schemes are available in Wales, Scotland and Northern Ireland, while there is also a Right to Acquire scheme for housing association tenants.
Lifetime ISAs
To help you save for a deposit, a Lifetime ISA will see the government add a 25% bonus of up to £1,000 per year to the amount you put aside in the ISA.
How to apply for a mortgage
You may be able to apply for a mortgage directly with a bank, building society or lender, or you may need or prefer to apply through a mortgage broker. You’ll need to provide identification documents and proof of address, such as your passport, driving license or utility bills.
Lenders will also want to see proof of income and evidence of where your deposit is coming from, including recent bank statements and payslips. It will save time if you have these documents ready before you apply.
» MORE: Best mortgage lenders
Would you like mortgage advice?
Taking out a mortgage is one of the biggest financial decisions you’ll ever make so it’s important to get it right. Getting mortgage advice can help you find a mortgage that is suitable to you and your circumstances. It also has the potential to save you money.
If you think you need mortgage advice, we’ve partnered with online mortgage broker London & Country Mortgages Ltd (L&C) who can offer you fee-free advice.
Key mortgage terms explained
Loan to value (LTV)
Your loan-to-value ratio is the amount you wish to borrow through a mortgage expressed as a percentage of the value of the property you’re buying.
Initial interest rate
This is the interest rate you’ll pay when you’re still within the initial fixed-rate period of a mortgage deal.
Initial interest rate period
This is the period of time your initial interest rate will last, before your lender switches you over to its SVR.
Annual Percentage Rate of Charge (APRC)
The APRC is a single percentage figure designed to help you compare the annual cost of different mortgage deals.
Annual overpayment allowance (AOA)
This is the amount a lender will let you overpay on your mortgage each year without being charged a fee.
Early Repayment Charge (ERC)
This is a charge you may need to pay if you want to pay off some or all of your mortgage earlier than you agreed with your lender.
Mortgage term
A mortgage term is the full period of time over which the mortgage contract is taken out for – it should not be confused with the deal term. At the end of the term you will have paid off the full debt or all of the interest depending on what type of mortgage you took.
The current average rate on a five-year fixed-rate mortgage for a 10% deposit or equity is 4.93%, up from 4.86% a week earlier. For an equivalent two-year fixed-rate mortgage, the average rate of 5.38% has increased from 5.31%. If you have a 40% deposit/equity, the average five-year fixed rate is 4.30%, up from 4.19% a week earlier, while the average two-year fixed rate is 4.62%, rising from 4.50%. All rates are according to Rightmove as at 28 February 2024.
A mortgage rate is the interest rate a lender charges on the mortgage amount that you borrow. Mortgage interest rates may be fixed, guaranteeing that they will remain the same for a certain length of time, or variable, meaning it may fluctuate.
Mortgage providers regularly review the mortgage rates that they offer to take into account the costs involved with funding its lending activities, their latest priorities in terms of target borrowers, and wider conditions in the market. As a result, when searching for a new mortgage, it’s always a good idea to consider various lenders and take the time to compare different mortgages. Crucially, you need to bear in mind that a deal offering the best mortgage rate may not necessarily be the one that is most suitable for you. The mortgage rate is important, but at the same time, you need to consider other factors, such as the charges and fees attached to a mortgage, the type of mortgage that you need, and the mortgage term that you want.
While mortgage rates have been rising in recent weeks, many commentators still expect to see mortgage rates fall across 2024 as a whole.
The next move in the Bank of England base rate, which currently sits at 5.25%, is widely forecast to be down. But with inflation remaining unchanged in January, and wage growth easing by less than expected, some experts predict the first rate cut may not be made until September. Towards the end of 2023, some believed the rate could begin falling in March.
The uncertainty makes it even more difficult than usual to predict what may happen to mortgage rates next.
The interest rate is the percentage of a loan amount that a lender charges for borrowing money, whereas the APRC, or annual percentage rate of charge, is a calculation expressed as a percentage that takes into account both the interest rate and associated costs of a mortgage across its lifetime. The aim of the APRC is to help borrowers make meaningful comparisons between mortgage deals.
Taking the time to compare mortgage rates and deals, making sure your credit score is in good shape, saving for a larger deposit and paying off existing debts can all help improve your chances of getting a good mortgage deal.
When looking for a mortgage it is vital that you compare mortgage lenders and the rates and deals on offer. Taking the time to carry out a mortgage comparison can improve your chances of finding the best mortgage for your circumstances.
A mortgage is a loan you take out to help you buy a property you don’t have the money to pay for up front. You may be a first-time buyer, remortgaging, securing a buy to let, or moving to your next home. The amount you need to borrow will depend on the purchase price of the property, and how much you can put down as a deposit or already hold in equity in your current property. The mortgage is secured against the property, which means your home is at risk if you don’t meet the repayments.
With a capital repayment mortgage, your monthly repayments pay off your interest and some of your original loan amount each month, so that everything should be paid off by the time you reach the end of your mortgage term. The alternative to a repayment mortgage is an interest-only mortgage, where you will repay only the interest each month before needing to pay off your original loan amount in its entirety at the end of the mortgage term.
A mortgage term is the period of time you agree with a lender over which you intend to entirely pay off your mortgage and interest. A typical mortgage term in the UK is usually considered to be 25 years, but you may opt for a shorter period or a longer one, if allowed. Some lenders offer mortgage terms of up to 40 years. If you have a longer term, your monthly repayments will be lower, but you’ll pay more interest overall.
The cost of your mortgage will depend on many factors, including how much you borrow, the size of your deposit, the length of your mortgage term, the mortgage rate you’re paying, and whether you can afford to make overpayments. Your mortgage lender must provide you with the full cost of the mortgage before you apply.
» MORE: How much could your mortgage cost you?
Besides making sure your monthly repayments are affordable, there are many other costs associated with arranging a mortgage. These may include arrangement, survey, valuation and mortgage broker fees.
If you’ve previously owned a home and the property you’re buying is worth more than £250,000, stamp duty will be payable as well; if you’re a first-time buyer, stamp duty only becomes payable on properties worth over £425,000.
To get a mortgage as a first-time buyer you’ll usually need at least a 5% deposit and a regular income. Most lenders offer first-time buyer mortgages aimed primarily at those with smaller deposits. First-time buyers may also be able to secure a mortgage with the help of close relatives through a guarantor mortgage.
Some lenders offer buy-to-let mortgages that can be arranged on a property you want to rent out to a tenant, rather than live in yourself. You’ll usually need a larger deposit for a buy-to-let mortgage than for a residential mortgage, and interest rates are often higher. You may also need to already own your own home or have a residential mortgage on another property.
It may be possible to get a mortgage with bad credit but you’ll probably have fewer mortgage deals to choose from and need to pay higher mortgage rates.
You may want to consider remortgaging if your initial fixed-rate period is close to ending and you want to avoid moving on to your lender’s SVR. Choosing to remortgage has the potential to save you money if you find the right mortgage deal.
» MORE: How remortgaging works
It’s always important to think about your plans, particularly when it comes to choosing the type of mortgage that will suit you best. For instance, if you plan to move in perhaps two years, choosing a five-year fixed-rate mortgage may mean you have to pay early repayment charges if you need to get a new mortgage.
Getting an agreement in principle, or AIP, from a lender will give you an idea of how much you may be able to borrow for your mortgage without needing to formally apply. Getting an AIP usually involves a soft credit check, which shouldn’t affect your credit score. However, having an AIP does not guarantee that a lender will offer you a mortgage. An agreement in principle is also sometimes referred to as a decision in principle or a mortgage promise.
Yes, some providers offer halal or Islamic mortgages in the UK. These are compliant with Sharia law and allow people to borrow but not pay interest.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a loan or any other debt secured on it.
Information on this page is a guide. It does not constitute advice, recommendation or suitability to your needs or financial circumstances. Seek qualified mortgage advice before proceeding with a mortgage product.
NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products and services are presented without warranty. When evaluating products, please review the financial institution’s Terms and Conditions.
Meanwhile, Triick will oversee a team of portfolio managers and analysts dedicated to the company’s public strategies. He will also serve as a portfolio manager for all mutual funds, ETFs, and interval funds. Triick has been with Angel Oak for over 12 years and most recently served as senior portfolio manager. “Namit will serve as … [Read more…]
U.S. Government Vs. Robocalls; Study on Debt and Generations; FHA is Alive and Well; Comprehensive Vendor News
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U.S. Government Vs. Robocalls; Study on Debt and Generations; FHA is Alive and Well; Comprehensive Vendor News
By: Rob Chrisman
6 Hours, 45 Min ago
Yesterday the U.S. Government took a step addressing robocalls! But in that vein, sorry for the delay in sending out today’s Commentary. I received an email earlier this morning saying that my Mont Blanc quill pen set had shipped, and for me to click on a link to track it. After clicking on the link, I was asked to provide my birthday, address, the VIN on my 1988 Corolla, and some other information. After a while, I realized that a) I never ordered a quill pen set, and that b) Montblanc is actually one word. Another phishing attempt! Steel point, fountain, and ballpoint pens all came along in the 1800s, but where were you 250 years ago? Jokes about older loan officers aside (the oldest person is currently Spain’s Maria Branyas, born in 1907), it was a quarter of a millennium ago when tensions between the American colonists and their British colonizers hit the boiling point, much of it about tea, and finally erupted into the Boston Tea Party on December 16, 1773, a political act of defiance against taxation without representation. Speaking of that era, the first real mortgage loans in America weren’t issued until the late 1700s, after the formation of the first commercial bank. On to mortgage stuff! If you’re not quite ready for that, how about a 17th of December song with a good beat heading into tomorrow?
People, Debt, and Money Management
Loan originators are keen students of people and their financial habits. The highlights report from the latest Logica® Future of Money Study looks at the impact of today’s economy on people’s money management and includes data from a special report on debt, how different generations are saving and investing, especially the newest generation of adults (Gen Z). It also covers who people are turning to for financial advice and what they are expecting from employers in terms of financial programs and money management.
“The top reasons people say they invest are to provide long-term financial security, build wealth and meet financial goals. Thirty-three percent (33 percent) of all generations are saving less compared to six months ago in today’s economy, while 26 percent are saving more. Notably, 42 percent of Gen Z specifically say they are saving more than they were six months ago.
“Areas where Americans want help with financial and investment decisions include understanding the basics of how to invest (61 percent), selecting investment options that align with goals (61 percent), and knowing how to manage money during uncertain financial times (60 percent).” (More information about the Logica Future of Money Insights Kit can be found here.
The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 0.6 points in November, remaining within the bounds of the low-level plateau it established in the first half of 2023. Consumers’ perceptions of homebuying conditions remain overwhelmingly pessimistic, as only 14 percent of consumers believe it’s a good time to buy a home, a new survey low. Pluralities of respondents also continue to expect both home prices and mortgage rates to increase over the next 12 months. Overall, the full index is up 7.0 points compared to last year.
“Over the past year, the HPSI has plateaued at a low level, evidence of persistent consumer pessimism regarding the state of the housing market,” said Doug Duncan, Fannie Mae Senior Vice President, and Chief Economist. “Looking back, consumer belief that it’s a ‘bad time to buy a home’ hit a survey high several times this year, including this month, and each time the pessimism could be attributed to high home prices and high mortgage rates. At the end of 2022, as mortgage rates approached 7%, a rate level not seen in over a decade, a plurality of consumers said they expected home prices to decrease; however, that optimism faded over the course of 2023. A significant majority of respondents have also continued to expect mortgage rates to increase or stay the same, though these expectations have tempered over the year. At the same time, consumers have expressed a reduced sense of financial security, with fewer respondents reporting household income growth over the year and a higher percentage saying their incomes remained the same.”
FHA is Alive and Well
Contrary to what some in the industry have said about the government-backed program, things are good.
Recently the Federal Housing Administration (FHA) released its annual report to Congress on the financial status of FHA’s Mutual Mortgage Insurance Fund (MMI Fund) covering FHA’s Title II Single Family Mortgage Insurance programs for fiscal year (FY) 2023.
The percentage of first-time homebuyers using FHA insurance was 82.21 percent of total FHA forward mortgage purchase endorsements. The share of mortgages insured by FHA to borrowers of color reached 30.63 percent of all FHA forward mortgage insurance endorsements.
The MMI Fund’s overall Capital Ratio as of September 30, 2023, is 10.51 percent, a slight decrease of 0.60 percentage points from the previous year. The performance of the forward book of business posted a stand-alone capital ratio of 10.20 percent, decreasing by 0.27 percentage points from FY 2022. The Home Equity Conversion Mortgage (HECM) portfolio stand-alone capital ratio stands at 16.72 percent, a decrease of 6.05 percentage points from FY 2022.
FHA’s serious delinquency rate as of September 30, 2023, was 3.93 percent. This is a decrease of 7.97 percentage points from the peak of 11.90% experienced in November 2020 and is similar to the rate prior to the onset of the COVID-19 pandemic.
Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), stated, “The FHA program is healthy, with a high capital reserve ratio and delinquency levels that are now lower than before the pandemic. We applaud the tremendous efforts of HUD, FHA lenders, and mortgage servicers in managing risk, originating quality loans, and helping distressed homeowners exit forbearance and stay in their homes.
“The Fund’s capital reserve ratio is far above the statutory minimum reserve ratio and is well positioned to withstand any economic slowdown.
“FHA’s move to lower mortgage insurance premiums (MIP) earlier this year improved the purchasing power for many homebuyers, but affordability challenges persist because of low housing inventory and high mortgage rates and home prices. Further action on the MIP, such as eliminating the life of loan premium requirement, should be considered to provide payment relief to FHA borrowers.
Scott Olson, Executive Director of Community Home Lenders of America (CHLA), noted, “CHLA is thrilled by FHA’s continued financial strength, as evidenced by today’s FHA Actuarial Report. In light of FHA’s financial strength, just as relief from excessive student debt burdens has been a priority, the Administration should make relief from excessive homeownership mortgage cost burdens a priority by ending the FHA Life of Loan premium policy.”
Most FHA and VA loans go into Ginnie Mae securities. Ginnie Mae published its Annual Financial Report for the fiscal year 2023, which highlights its financial performance and accomplishments from the past year, and its plans and approaches for strengthening the U.S. housing finance market and supporting affordable and equitable housing opportunities for all Americans.
Ginnie Mae supported more than 1.2 million households, including underserved communities, first-time home buyers, service members, and veterans. Mortgage-backed security (MBS) issuance topped $404 billion, and the Ginnie Mae MBS outstanding reached another historic high of $2.476 trillion.
To read the Annual Report and learn more about Ginnie Mae’s impressive accomplishments and business highlights during the past year, please visit Ginnie Mae’s website here.
A Wealth of Vendor Program Updates
The days when a mortgage company could do everything by itself are long gone, and “third-party providers” are the norm. Who’s doing what out there?
Secure Insight announced that it has entered into a business agreement with Forta Solutions to provide wire verification technology as an integrated tool in Agility™, Forta’s revolutionary new warehouse lending platform. Designed by warehouse lenders, Agility represents a major leap forward in the banking industry, offering unprecedented flexibility, transparency, and efficiency. Agility is the first adaptable, modern warehouse lending platform built by warehouse lenders that provides a faster, safer path to warehouse liquidity. Agility’s modular-based design, simple integrations and dynamic reporting makes it the perfect choice for organizations seeking to simplify and streamline warehouse lending processes. The SOC II Type 1 compliant platform features automated decisioning engines and customized user dashboards with real-time updates. Secure Insight will be integrated into the platform for the benefit of warehouse bank users.
Secure Insight and Corelogic are partnering in providing vendor risk and wire fraud protection for users of the Corelogic LoanSafe Fraud Manager™ product. Secure Insight provides a data feed to LoanSafe in a product enhancement called SARA” Settlement Agent Risk Assessment. This add-on report is available through the existing fraud protection product offered to Corelogic clients. It provides real time risk assessments of settlement professionals, as well as trust account verification pre-closing to avoid fraud. The collaboration allows the two companies to partner in enhancing wire fraud and closing fraud protection in mortgage transactions. The partnership is the result of the collaborative work of Andrew Liput, CEO at Secure Insight and Bridget Berg, Senior Leader of Loan Solutions at Corelogic.
CBC Mortgage Agency (CBCMA), a Native American wholly owned and federally chartered housing finance agency, is introducing a buydown feature, either a 2-1 buydown or a 1-0 buydown, for its down payment assistance (DPA) program for FHA first mortgage financing which lowers the interest in the first formidable years of homeownership making a significant difference in helping borrowers purchase a home if they can make the payments once the interest rate increases. Read more in the Strategic Vantage Press Release.
Start-up Stairs Financial announced the successful completion of a $3.5 million funding round, offers a mortgage marketplace, now licensed in 40 US states, which enables first-time buyers to identify the support programs they are eligible for, and recommends specific products according to their needs and circumstances.
Floify, the mortgage industry’s leading point-of-sale (POS), announced the launch of Floify Broker Edition, an easy-to-use, one-stop lending platform for mortgage brokers. Thoughtfully configured to make managing loans simpler at an accessible price point for brokers. Floify’s borrower-friendly interface increases application pull-through, while rule-based automations promote operational efficiency by performing rote tasks and advancing loans behind the scenes.
Broker Edition comes equipped with four pillar features that enable brokers to use the platform in lieu of a traditional loan origination system (LOS) or as a complement to their existing LOS.
Mortgage Call Reports (MCR) functionality allows brokers to swiftly generate mandatory NMLS reporting documentation and export reports by quarter, year, and state, streamlining a burdensome compliance requirement. View the Press Release for more information.
As in previous years, the Consumer Financial Protection Bureau (“CFPB”) has updated a couple of the dollar amounts specified in various parts of Federal Regulation Z (12 CFR Pt. 1026), which amounts are required to be adjusted annually for inflation. These amounts include the “Truth in Lending (Regulation Z) Threshold Adjustment” and the “Higher-Priced Mortgage Loans Exemption Threshold Adjustment”. docutech Compliance posted additional details. These changes are available for testing on Stage servers and will take effect on January 1, 2024.
On July 28, 2023, Governor JB Pritzker approved Illinois House Bill 2717 which amends the Illinois Mortgage Escrow Account Act regarding notifications about terminating or continuing escrow accounts for higher-priced mortgage loans. More information is available in the docutech Compliance post: document Updates: Illinois Mortgage Escrow Account Act.
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!
In this Strategic Vantage Press Release, the unveiling of new research performed by Snapdocs, the U.S. mortgage industry’s leading digital closing provider, revealed that the majority of lenders who have purchased eClose technology are not realizing the benefits of the product at scale. A survey of 100 top mortgage lenders found, among other things, that global and national banks are more likely to offer hybrid and eNote closings. But credit unions, smaller banks, and independent mortgage bankers are more likely to require all documents to be printed and signed in person at closing, according to the study.
MISMO® announced the publication of the new MISMO Engineering Guideline (MEG) for Extending a Standard MISMO XML Schema (MEG 0025). “The MISMO MEGs ensure that work products adhere to all applicable technology standards, are produced in a consistent fashion, and meet the needs of the mortgage industry,” said David Coleman, MISMO President.
MEG 0025 provides guidance on how to extend the MISMO Version 3.x XML schema – providing an orderly way of enabling a message to hold additional data needed for mortgage processing that is not included in a specific MISMO XML schema version.
Hundreds of thousands of Americans are currently considering homeownership but are facing a major hurdle of a down payment on a new home. According to the National Association of Realtors® (NAR), the median sales price for existing homes in January 2023 was $359,000, which means that a potential homeowner trying to save up a 10% down payment would need close to $40,000. Silverton Mortgage, a leading direct residential mortgage lender, has programs that can help potential home buyers obtain a mortgage loan with no cash down. Eligible homebuyers can receive 100% financing on Conventional, FHA, VA, and USDA loans through a variety of loan programs and, in some cases, second mortgages.
Rapidio, a pioneer of mortgage underwriting technology, officially announced the first component of its FlexStack Component System™: Income Assessment, an automated income verification feature that makes the process quick and hassle-free, ensuring accuracy and reducing processing time. Available across various types of loans, including GSE, FHA, and VA, Rapidio validates, verifies, calculates, and assesses guideline eligibility, and then presents the entire income story to underwriters for review who make the final assessment. Rapidio’s Income Assessment component is part of its Flexstack Component System, providing financial institutions with the foundational architecture to revolutionize the underwriting process. Rapidio is offering financial institutions to try a free, two-week trial of its income component.
MISMO®, the real estate finance industry’s standards organization, published new eVault Standards and SMART Doc® Validation Rules documents, designed to ensure that eVaults have the proper functionality for all industry participants. eVaults using the standards, including the validation rules, ensure seamless interoperability for lenders trading eNotes. The standards contain guidance for the minimum technical standards by which an electronic vault should be built. The SMART Doc Validation Rules document is a consolidated set of rules that outlines the components and fields that are expected in an eNote. Uniformity of eVault platforms and eNote Validation Rules are necessary to alleviate friction between trading partners.
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Secured credit cards are designed to help individuals improve their credit history and score. However, these cards differ from traditional unsecured cards in a few ways, and it’s important to understand all the details before you apply for a secured card.
What Is a Secured Credit Card?
A secured card is one with a credit limit that’s secured by collateral you put up. In the case of these cards, the collateral is a cash deposit you make to secure the credit limit. Typically, your credit limit is equal to your deposit, and you may have an option for how much that is.
For example, some cards allow you to deposit $200 to $3,000 to open your card account. So if you choose to deposit $500, your credit limit will be $500.
Your deposit is held by the credit card company the entire time you have the card. If you fail to make payments on your balance in a timely manner, the credit card company may close your account and use the deposit funds to cover its losses. This reduces risk for the lender, which is why these card companies are willing to offer credit cards to people with no or bad credit.
Once you close your account—assuming you’ve paid off your balance—you get your security deposit back.
Other than the factors surrounding the security deposit, a secured credit card typically works like any other credit card. You can use it to pay for purchases anywhere it’s accepted—these are usually Visa or Mastercard cards, so they’re accepted widely. If you carry over a balance each statement cycle, you’ll be charged interest on it in keeping with the rates associated with your card.
Building Credit With a Secured Credit Card
Secured credit cards aren’t a magic elixir for your credit. You have to manage these accounts appropriately to get the benefits. Here are some tips for building credit with a secured credit card.
Don’t apply randomly for credit cards. Every application could result in a hard inquiry on your credit report, bringing your score down further. Instead, do your research. Check your own credit, and consider what type of credit the lender is looking for before you apply. That increases your chances of getting approved the first time.
Make sure the cardholder reports your payments. Credit card companies don’t actually have to report your payments—so some won’t report to any bureaus, while others report to just one or two. Ideally, you want to work with a secured credit card lender that will report to all three credit bureaus. That way, your timely payments can help you build your credit on each of your credit reports.
Make every payment on time. Failing to make a payment can result in a negative mark on your credit reports, which defeats the entire purpose of the card. It can also result in hefty missed payment fees, which increase your balance even more.
Don’t max out your credit limit. Try to keep your utilization below 30%. That means if you have a credit limit of $1,000, keep your balance at $300 or lower. Your credit utilization—how much of your credit limit you use—impacts your credit score.
Don’t expect your credit to improve immediately. It takes time to build your credit via any means.
Tools like our Credit Report Card can help you keep track of your credit score and the factors affecting it so you can make good and informed decisions when building credit.
How to Choose a Secured Credit Card
When shopping for a secured credit card, consider the following factors:
Likelihood of approval. Don’t apply for a card you know requires good or excellent credit if you have poor credit. That just creates unnecessary hard inquiries.
Annual fee. You want to pay as little as possible for the benefit of building your credit. A few secured credit cards have no annual fee, but most do. Look for options with the most competitive annual fees, which tend to be under $40 per year.
Credit reporting. The best secured credit card options are those that report to all three credit bureaus. Plenty of secured credit card companies do, so you don’t have to settle for one that doesn’t.
Competitive interest rates. Rates for bad-credit products tend to be higher than average in general. However, you can find secured credit cards with more competitive rates, and you should definitely compare these cards to each other to find the lowest possible rate.
Account management tools. Look for a card lender that makes it easy for you to manage your account well. Payment reminders, online portals and apps can keep you in the know about your balance and reduce the risks you’ll miss a payment.
Next Steps After Using a Secured Card
Once you’re approved for and start building credit with a secured card, continue to plan for your financial future. At some point, hopefully, your credit will improve enough that you qualify for cards with better rates, limits, and perks.
Once you establish new cards, you might consider closing your secured credit card account because you may not want to keep paying an annual fee on a card that no longer serves your needs. However, closing your account might hurt your credit by potentially increasing your credit utilization ratio and also by affecting your average credit age, so weigh the pros and the cons of closing your card before making a choice. Visit Credit.com to learn more about our products like ExtraCredit® that could help you stay on top of your credit.
The path to a clean divorce is riddled with obstacles. If not handled correctly, a mortgage can be the last holdout linking your finances with your ex-spouse. Regardless of financials, divorce can be an exhausting and emotionally draining process. Now, what to do about it?
As we noted in a blog post last year, refinancing after divorce is difficult. More than any other financial investment, a mortgage is truly the biggest hurdle on your path toward independence. Because the house is the largest asset for most families, it is a ripe bargaining chip for divorce settlements. The mortgage becomes a liability as opposed to an asset. “Divorcing” your mortgage is not an easy process—in the eyes of your mortgage lender, you remain married and responsible for the mortgage until you decide to refinance or sell.
Is It Worth Leaving Your Ex?
What comes next is a chance to perform a cost-benefits analysis on your situation. If you are close to paying off your mortgage, is it worth staying on the loan? If you are far away from repayment, is there a way to get to equity and cash out?
This decision is no simpler when it comes to occupancy issues. Who gets to keep the marital house?
Who Gets What in the Divorce?
With or without children, the social and economic anxieties of divorce can be taxing. Even when it’s an amicable split, divorcees must grapple with the negotiating terms of settlement: alimony payments, custody battles, and liabilities. When it finally comes to divorcing the mortgage, many people would rather surrender the house and save themselves another battle. On the other hand, some divorcees decide to ride out their mortgage together, cohabitating until they have repaid the loan.
Why Would Anyone in Their Right Mind Want to Live With Their Ex?
It’s hard to tell, but as New York Magazine reported, couples who undergo this special form of purgatory usually do so for the benefit of children. Otherwise, couples will choose to cohabitate for financial reasons. This is yet another reason to avoid becoming house poor and keeping some money stashed away in your own savings account. And even if it is for the benefit of children, the cohabitation situation is bizarre. We see it again and again on television sitcoms and big screen movies, from The Real O’Neals to the 2006 film The Break-Up starring Jennifer Anniston and Vince Vaughn. Today, more people are simply grinning and bearing it.
Fortunately, you are not Jennifer Anniston’s character from the film. With a little guidance you can navigate both divorce and refinancing your mortgage.
Going Solo to Refinance Your Mortgage
The hard truth is that there is only one way to remove your spouse’s name from the mortgage: you must refinance the mortgage in your name only. Since you had originally applied with two names (and two salaries) the lender needs to recalculate the loan’s interest rate for a single payer.
Just as before, you will have to pass the lender’s eligibility test on your own merit. Due to the hit on your combined income, you may have to make a larger down payment or ask for a cosigner. Remember, the mortgage cannot be more than 28 to 30% of your gross income, and your total monthly debt payments cannot exceed 43% of your gross income. They will also factor in child support and alimony payments.
If you can pass each of the lender’s eligibility requirements, then you move on to your final challenge: the quitclaim deed.
A quitclaim deed transfers the ownership of a property without it being sold. The same type of deed is used if you want to add someone to the deed, like a new husband or wife in the future. No money is involved here, but you will need your ex-spouse to sign the deed in the presence of your lender for it to be valid. Remember! The quitclaim deed only refers to ownership. You still need to refinance your mortgage for your spouse to be taken off of payments.
Give Me Equity or Give Me Death
If you choose to go the equity route, it involves more number crunching than tactics. For example, if you and your spouse own a house valued at $500,000 with an outstanding mortgage balance of $100,000 both of you could split the property’s equity 50-50 for a clean $200,000 each. (The other $100,000 from the house sale would finish off the loan.) Your share of equity is determined by premarital assets, if the home is covered in a prenuptial agreement, and whether you made any improvements to the property.
In cases of property and divorce, laws vary dramatically. Be sure to attain legal advice before taking any of these steps. Because of how costly and meticulous the path toward independence can be for soon-to-be divorcees, it is important to have a true understanding of your financials.
Take the time to think of worst case scenarios. Will the divorce be amicable? Can you and your ex decide on an equity agreement? With a mortgage, the best you can hope for is that they will.
State-owned Bank of Baroda (BoB) on Tuesday announced the launch of the “BOB Ke Sang Tyohaar Ki Umang” festive campaign, which will run up to 31st December, 2023. Under the campaign, BoB launched a festival offer with an attractive rate of interest on home, car, personal, and education loans.
BoB launches festive offer
Bank of Baroda’s festival offers include the launch of 4 new savings accounts with a host of benefits &concessions and attractive interest rate offers on Home, Car, Personal & Education Loans. The Bank has also tied up with Top Brands across categories such as Electronics, Travel, and Food to provide festive offers and discounts for its Debit and Credit Card holders.
Bank of Baroda home, auto loans
During the festive period, Bank of Baroda Home Loans will be available at a highly competitive rate of 8.40% p.a. onwards – with a complete waiver of processing fees. Baroda Car Loans start at 8.70% p.a. onwards with a nil processing fee.
Bank of Baroda education loans
On Education Loans, the Bank has introduced a special rate beginning at 8.55% p.a., a discount of up to 60 basis points, and without collateral for students who have secured admissions in identified premier educational institutions in the country. Baroda
Personal Loans start at 10.10% p.a. – a discount of up to 80 basis points, with a nil processing fee and higher loan limits of up to ₹20 lakh. The Bank has introduced a fixed rate of interest option. Personal and car Loans and borrowers can now choose between fixed and floating rates of interest.
Further, the Bank has established 112 Retail Asset Processing Centres (RAPC) in various cities for faster mortgage-based loan processing.
BoB launches four new savings accounts
The Bank has also introduced a range of Savings Accounts for the benefit of its customers. These include the Bob LITE Savings Account – a Lifetime No Minimum Balance Account; the BOB BRO Savings Account – a Zero Balance Savings Account for Students (16 to 25 years), the My Family My Bank/BOB Parivar Account – a Family Savings Account designed to meet the needs of the entire family and the Baroda NRI PowerPack Account. The Bank has also launched the BOB SDP (Systematic Deposit Plan), which is a recurring deposit scheme. During the festive period, these Savings Accounts come with a range of benefits & concessions.
Debadatta Chand, Managing Director & CEO, of Bank of Baroda said, “The festive season is upon us and we are already seeing the early signs of a spur in demand with high-frequency indicators such as car sales and credit card spending registering record highs. Bank of Baroda’s festive campaign “BOB Ke Sang Tyohaar Ki Umang” brings together a suite of attractive offerings across savings accounts, loans, and credit & debit cards. These attractive festive offers coupled with the convenience of our digital platforms will make the festive season even more rewarding and joyous for people, thereby giving a significant boost to demand.”
BoB offers discounts for its debit, and credit card holders
Bank of Baroda has also introduced attractive exclusive offers and discounts on Bank of Baroda Debit and Credit Cards and EMI offers this festive season. The Bank has tied up with leading brands across categories such as Electronics, Consumer Durables, Travel, Food, Fashion, Entertainment, Lifestyle, Grocery and Health.
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Despite her initial misgivings, Boston U.S. District Court judge Patti Saris granted preliminary approval of MLS Property Information Network’s (MLS PIN) settlement agreement in the class action buyer-broker commission antitrust lawsuit.
In court documents filed last Thursday, Saris approved the agreement, stating that the releases in the agreement were “fair, reasonable, and adequate to the Settlement Class.”
Originally filed in December 2020, the Nosalek lawsuit, named after its lead plaintiff, alleges that the broker-owned MLS PIN is not directly required to abide by the National Association of Realtors (NAR) rules. However, it has nonetheless adopted a rule similar to an NAR rule requiring listing brokers to offer a blanket, unilateral offer of compensation to buyer brokers in order to submit a listing to MLS PIN.
Other defendants in the lawsuit include Anywhere, RE/MAX, Keller Williams and HomeServices of America. Unlike the two other buyer-broker commission lawsuits, Moehrl and Sitzer/Burnett, NAR is not a defendant in the Nosalek lawsuit. Additionally, while Anywhere has filed settlement agreements in the Moehrl and Sitzer/Burnett suits, it has not tried to settle the Nosalek suit.
MLS PIN, which is New England’s largest multiple listing service (MLS), filed the settlement agreement in late June. In the agreement, MLS PIN denied any wrongdoing, but stated that it agreed to the settlement in order “to avoid the further risk, expense, inconvenience, and distraction of burdensome and protracted litigation, and thereby to resolve this controversy, to avoid the risks inherent in complex litigation, and to obtain complete dismissal of the Action as to MLS PIN.”
The MLS also agreed to pay $3 million in the settlement, with up to $900,000 going towards attorney’s fees, up to $200,000 going towards expenses, $250,000 going towards notifying settlement class members, and each of the three named lead plaintiffs will get up to $2,500 for being class representatives.
According to the settlement agreement, the plaintiffs will use the remaining funds of at least $1.6425 million to pay for further expenses for the litigation against the remaining defendants “for the benefit of Settlement Class Members.”
In early August, Saris expressed skepticism over the financial portion of the proposed agreement.
“I’ve never seen a settlement agreement like this in my 30 years,” Saris said at an August hearing.
With the payment structure outlined in the agreement class members in the case will not be getting any money from the settlement agreement, however the plaintiffs’ class-action attorneys, “get fully funded for expenses to date, and they basically get a litigation fund open-ended for the future for as long as it takes, which may be another three to five years,” Saris said. A final approval hearing for the settlement agreement is expected before the end of the year.
In an emailed statement, a spokesperson for MLS PIN said the firm was “pleased with the Judge’s decision to move the settlement forward,” but would not comment further.
Attorneys for the plaintiffs did not return a request for comment.
In the picturesque landscapes of Connecticut, from vibrant cities like Hartford to scenic towns like Mystic, the real estate market thrives on details that span centuries of architectural evolution. Navigating this market, especially the home inspection phase, becomes a crucial endeavor for both buyers and sellers. For buyers, a home inspection can illuminate potential issues, ensuring they make a well-informed investment. For sellers, it provides a transparent platform to address any concerns and validate their asking price.
This Redfin article is designed to illuminate the significance of home inspections in Connecticut and offer invaluable expert insights to prospective homebuyers and sellers. Let’s delve into the essential factors you should keep in mind.
Why should you get a home inspection in Connecticut?
In Connecticut, a state rich in architectural history and diverse in its landscape, obtaining a home inspection is paramount for both buyers and sellers. The state is home to properties that range from historic colonial estates to modern builds, each with its unique set of attributes and potential concerns. Given the region’s varied weather patterns, homes may be subjected to conditions that can affect their structure, from heavy snowfall to coastal storm surges.
“Home inspections have unbelievable value. A good home inspection provides the consumer a detailed report on what systems are working well and which ones are not, without the interest of selling a contracting service. Whether it’s an ‘as is’ or full contingency inspection, it’s the best opportunity to really understand the pros and cons of your investment,” recommends JPL Inspectors.
“Conducting an inspection with a licensed property inspector can potentially save a buyer tens of thousands of dollars with the information provided,” recommends Compass Property Inspections.
Are there any specialized inspections that Connecticut buyers should consider?
In Connecticut, given its mix of old and new properties and unique environmental factors, buyers should consider several specialized inspections. Older homes might need a thorough structural assessment to pinpoint age-related issues or outdated construction techniques. Coastal or flood-prone properties can benefit from a flood risk evaluation. Given the state’s climate, checks for mold or moisture, particularly in basements or attics, are valuable. Homes with wells should undergo water quality tests.
“An issue we do encounter relatively often in Connecticut is high radon. Radon is a tasteless, odorless, invisible radioactive gas naturally released from rocks and soil into the home. A radon test should always be offered during the home inspection. Most home buyers choose to test, just to be safe,” suggests Mark’s Inspections. “Something else you always want to look out for is evidence of an underground oil tank. Buyers will not be able to transfer a sale if there is an underground oil tank present.”
Are home inspections required in Connecticut?
“While a home inspection is not required legally or mandated in the state of Connecticut, it is an essential step in the whole home buying process and should be performed as soon as you are ready to put an offer in. A good home inspector can help you avoid the costly mistake of buying a property in need of expensive repairs,” shares Sonic Home Inspections.
“A home may look good to a buyer but only a home inspection can uncover some costly issues that may not be so readily visible to an untrained eye,” continues Sonic Home Inspections. “The most frequent issues found in homes in Connecticut have to do with some sort of moisture intrusion. Whether it’s issues in the foundation due to moisture intrusion or perhaps issues in the attic due to leaky roofs moisture intrusion is the most common issue found in homes in CT.”
“While you aren’t necessarily required to do a home inspection when buying or selling a home in Connecticut, it’s a financially smart thing to do to insure your safety and comfort,” National Property Inspections.
“For example, if you move into your new house and the HVAC system fails, you have to pay for the repairs out of your pocket. If you conducted an inspection and found out the HVAC system needs repairs, you could have saved thousands by either requesting a price credit for the issue, or have the seller make repairs before the closing at no cost to you.”
How much does a home inspection cost in Connecticut?
“Home inspection costs can range anywhere from $300 for a small coop to thousands, it really depends on the property being inspected. On average though, a home inspection should cost between $600-$700 for a single family home,” says Mark’s Inspections.
Can you sell a house in Connecticut without an inspection?
Yes, in Connecticut, you can sell a house without an inspection. A home inspection is primarily for the benefit of the buyer, giving them a clear understanding of the property’s condition before finalizing the purchase. It’s worth noting that while a seller might not initiate an inspection, a buyer will likely request one as a condition of the purchase agreement. If significant issues are discovered during the buyer’s inspection, it could lead to negotiations or even the buyer backing out of the deal. Therefore, some sellers opt for a pre-listing inspection to identify and address potential problems beforehand, ensuring a smoother sales process.
“With a highly-competitive housing market driven by high-demand and limited inventory, waiving home inspections has become a trend to make buyer’s offers more appealing. This is a high risk for buyers to take, and is something I do not recommend due to the liability and risks it brings,” advises Prime Home Inspecting. “Skipping an inspection is like buying a car without looking under the hood or taking it for a test drive. It’s simply a matter of you don’t know what you don’t know.”
Expert advice for Connecticut buyers before they get a home inspection
“A septic system replacement is one of the costliest repairs a homeowner can incur, so skipping a septic system inspection when buying a home is not advised. Although not required, we strongly suggest pumping out the tank at the time of the septic inspection to properly check for any cracks, leaks, or deterioration in the septic tank. The extra dollars spent on the septic pumping could save you thousands if any issues are present,” says Skips Wastewater Services.
Connecticut home inspection: the bottom line
Buyers and sellers alike must be mindful of the specific conditions, from coastal influences to the state’s varying climate, that can impact a property’s integrity. Ultimately, a comprehensive home inspection isn’t just a procedural step in Connecticut—it’s an essential tool that ensures transparency, trust, and a smooth transaction.
In a letter to a group of founders and shareholders, New York-based asset management firm Sculptor Capital Management said their request to inspect the company’s books and records pertaining to its acquisition by Rithm Capital was “improper” and motivated by founder Daniel Och’s “long-standing resentment” of being exited from the company.
Sculptor also said in the letter sent on Tuesday that Och and the other shareholders have requested millions of dollars in cash for legal expenses incurred during the process of being acquired by Rithm Capital. Och and shareholders also requested a prepayment related to a tax agreement tied to the company’s IPO in 2007.
Och, shareholders and Rithm Capital did not reply to requests for comment.
The letter from Sculptor is the latest chapter of a dispute between the asset management firm, Och and other shareholders since Rithm — the real estate investment trust that operates NewRez, Caliberand several other businesses —announced a deal to acquire Sculptor for $639 million in July. If regulators approve, it will bring Sculptor’s $34 billion in assets under management to Rithm.
“While ostensibly requesting information about the sales process described in the Company’s preliminary proxy statement, your Demand for books and records is set against historical context that makes clear that purpose is pretextual, and that the true purpose is the continuation of what the company views as Mr. Och’s well-publicized, years’ long smear campaign against the Company’s management,” the letter states.
Och, who founded Sculptor in 1994, stepped down as CEO in 2018. In 2016, an Africa-based subsidiary entered into an agreement with the Department of Justice (DOJ) to pay a criminal penalty of more than $213 million in connection with a bribery scheme involving officials in the Democratic Republic of Congo and Libya.
Och, who is still an active shareholder, and other former executives sued the firm in 2022 over CEO Jimmy Levin’s $145.8 million compensation.
Och, who was previously a mentor to Levin, now finds himself on the opposite side of a dispute with Levin in which the Rithm deal is a key issue.
On August 16, a group of shareholders, including Och, Harold Kelly, Richard Lyon, James O’Conner and Zoltan Varga, sent a letter to Sculptor’s special committee of the board of directors saying the deal with Rithm “substantially undervalues the company.”
They noted that on December 17, 2021, when “the Board of Directors approved the exorbitant compensation package” for Levin, the stock was trading at $20.02.
“Just over 18 months later, the Board now has approved a deal that would pay the public shareholders $11.15 per share, just a fraction of what the stock was once worth.”
In the letter, Och and the other shareholders said they were working with Rithm to see whether deal terms could be improved. Absent “material changes,” the group will “vigorously oppose this transaction,” they wrote.
On August 21, Sculptor replied in a proxy statement that it received multiple takeover bids higher than the Rithm offer, some valuing the company at more than $700 million. Sculptor did not accept these bids due to burdensome conditions, lack of secured financing, or, according to the company, because Och and other founding partners rejected its terms.
Och and other shareholders, in subsequent correspondence, demanded that Sculptor release books and records on August 22.
“The suggestion that there were other credible bids that provided greater value and certainty of closing, with or without current management, is distorted — no such bid exists,” Sculptor said in response to the request. “Nor does Rithm’s bid crystallize supposed losses from the adoption of Mr. Levin’s compensation package. Mr. Levin has also agreed to substantial reductions in his compensation to support a Rithm transaction.”
Sculptor said in its letter that Och and the other shareholders asked Rithm to agree to advance tens of millions of dollars as a prepayment at the favorable discount rate of the company’s Tax Receivable Agreement.
Och and shareholders also demanded Rithm pay an additional $5.5 million in cash for the group’s legal expenses supposedly incurred in connection with the company’s sales process.
“The transaction under discussion between the Och Group and Rithm would have included the option for a rollover in order to allow you to avoid recognizing significant taxable gain received in the transaction. Notably missing from those discussions were meaningful concessions by any of you for the benefit of public stockholders,” Sculptor states in its letter.