PrimeLending, a Texas-based retail mortgage bank, aims to expand its market share by growing within its existing footprint in a margin-thinning environment.
The lender brought on 100 loan officers in June, bringing the total number of LOs to about 800. Licensed in 23 states across the country, PrimeLending has 150 branches including satellite and primary retail locations.
“We are dialing down data, metrics and information that allow us to target communities and markets where we again think we have a competitive advantage and we’re using that strategy across the country,” Gene Lugat, executive vice president of strategic support at PrimeLending, said in an interview.
“Companies may be struggling in one way or another. We’ll reach out to those loan officers in markets where we have existing retail branch locations. We’re certainly putting out in both the social media and through our local retail offices that we want the right loan officers,” Lugat added.
While mergers and acquisitions (M&A) is an option for PrimeLending, it’s a challenging market to execute such deals. Instead, tapping high-volume loan officers in targeted locations has worked for PrimeLending.
“We would prefer to be picking up the loan officers without the branches, without physical locations,” Lugat noted. “Because we’re trying to backfill into where we have existing retail opportunities and we have space.”
PrimeLending sees an opportunity to grow in the entire Southwest region and Texas in particular, where the lender is headquartered. The goal is to expand its overall market share to 1% this year from 0.6%.
PrimeLending, led by president and CEO Steve Thompson, ranked as the 34th largest mortgage lender in the first quarter of 2023, with an estimated origination volume of $1.73 billion, a 54% decline from $3.76 billion in Q1 2022 (which was roughly in line with industry peers). Production dropped about 15.2% from the fourth quarter of 2022’s $2.04 billion, according to data from Inside Mortgage Finance.
The target client base for PrimeLending is first-time homebuyers, as the entire industry is struggling to overcome the lock-in effect. Nearly 92% of U.S. homeowners with mortgages have an interest rate below 6%, according to Redfin.
While the 30-year fixed-rate mortgages are the bread-and-butter products for PrimeLending (accounting for about 95% of origination volume), down payment assistance programs, renovation loans and temporary rate-buydowns have become popular options for buyers, Lugat noted.
Competition in the industry is even more fierce with the number of mortgage transactions expected to drop to 5 million in 2023 from 16 million in 2019, Lugat said, citing data from the Mortgage Bankers Association (MBA).
A combination of higher loan amounts, cash buyers and a radical drop of refi volume add to the difficulty of today’s environment.
“This is a battle for a very finite amount of buyers that are entering into this space. (…) You have to be presenting your borrowers in the best possible light just to get their contracts accepted, pre-qualifying borrowers and trying to get them in an approved subject to appraisal and any other condition so they can be in a position to win,” Lugat said.
Other than possible lender-imposed waiting periods after a mortgage loan closes, you can generally refinance your home as many times as you like. But you’ll want to do the math first.
Homeowners choose to refinance for a number of reasons: to lower monthly payments, take advantage of lower interest rates, get better terms, pay the loan off more quickly, or eliminate private mortgage insurance.
Refinancing involves paying off the current mortgage with a second loan that has (hopefully) better terms. Borrowers don’t have to stay with the same lender—it’s possible to shop around for the best deals.
Mortgage rates seem to be constantly in flux, moving mostly in parallel with the federal interest rate. In 2021, the average rate of a 30-year fixed mortgage was 2.96%. In 2022, as the Federal Reserve raised interest rates to try to tame inflation, mortgage rates began to rise and jumped to more than 7%. By mid-June 2023, the average rate of a 30-year fixed mortgage was 6.69%.
So is now the right time for you to refinance? Here are some things to consider before taking the plunge.
The Basics of Mortgage Refinancing
Because a homeowner who chooses to refinance is essentially taking out a new loan, the cost of acquiring the new loan must be compared with potential savings. It could take years to recoup the cost of refinancing.
As with the initial mortgage loan, a refinance requires a number of steps, including credit checks, underwriting, and possibly an appraisal.
Typically, however, many homeowners start with an online search for the rates they qualify for. (A lower average mortgage rate doesn’t necessarily translate to an individual offer—creditworthiness, debt-to-income ratio, income, and other factors similar to what’s required for an initial mortgage will matter.)
The secret sauce that makes up a mortgage refinance rate might seem like a mystery, but there are some common factors that can affect your offer:
• Credit score: As a general rule, higher credit scores translate to lower interest rates. A number of financial institutions and credit card companies will give account holders access to their credit scores for free, and a number of independent sites offer a free peek, too. • Loan term/type: Is the loan a 30-year fixed? A 15-year? Variable rate? The selected loan repayment terms are likely to affect the interest rate. • Down payment: A refinance doesn’t typically require cash upfront, as a first-time mortgage usually does, but any cash that can be put toward the value of a loan can help reduce payments. • Home value vs. loan amount: If a home loan is extra large (or extra small), interest rates could be higher. But generally speaking, the less the mortgage amount is compared with the value of the home, the lower the interest rates may be. • Points: Some refinance offers come with the option to take “points” in exchange for a lower interest rate. In simplest terms, points are discounts in the form of a fee that’s paid upfront in exchange for a lower interest rate. • Location, location, location: Where the property is physically located matters not only in its value but in the interest rate you might receive.
What Types of Refinance Loans Are Out There?
As with first-time home loans, consumers have a number of refinance mortgage options available to them. The two most common types involve either changing the terms of the original loan or taking out cash based on the home’s equity.
A rate-and-term refinance changes the interest rate, repayment term, or sometimes both at once. Homeowners might seek out this type of refinance loan when there’s a drop in interest rates, and it could save them money for both the short term and the life of the loan.
A cash-out refinance can also change the terms or interest rate, but it includes cash back to the homeowner based on the home’s equity.
Within those two basic types of refinance options, conventional mortgages from traditional lenders are the most common. But refinancing can also happen through a number of government programs.
Some, like USDA-backed loans , require the initial mortgage to be a part of the program as well, but others, such as the VA, have a VA-to-VA refinance loan called an interest rate reduction refinance loan and a non-VA loan to a VA-backed refinance , so it’s important to shop around to find the best option.
How Early Can I Refinance My Home?
If a home purchase comes with immediate equity—it was purchased as a foreclosure or short sale, for example—the temptation to cash out immediately with a refinance may be strong. The same could be true if interest rates fall dramatically soon after the ink is dry on a mortgage. Especially for conventional loans, it may be possible to refinance right away. Others may require a waiting period.
For example, there can be a six-month waiting period for a cash-out refinance. Or, refinancing via government programs like the FHA streamline refinance or VA’s interest rate reduction refinance loan can require waiting periods of 210 days.
Lenders can require a waiting period (also called a “seasoning period”) until they refinance their own loans for a number of reasons, including assurance insurance that the original loan is in good standing.
For a cash-out refinance, some lenders may also require that the home has at least 20% equity.
Questions to Ask Before You Refinance
Just because you can refinance doesn’t necessarily mean you should. First, ask yourself these questions.
What Is the Goal?
Identifying the endgame of a mortgage refinance can help determine whether now is the right time. If a lower monthly payment is the goal, it can be wise to play around with a refinance calculator to see just how much a lower interest rate will help.
For years, it has been a general rule that a refinance should lower the interest rate by at least 2 percentage points to be worth it. Some lenders believe 1 percentage point is still beneficial (each percentage point amounts to roughly $100 a month in payment reduction), but anything less than that and the savings could be eaten up by closing costs.
What Is the Total Repayment Amount?
It’s important to remember that a lower monthly payment—even if it’s significantly less—doesn’t necessarily equal savings in the long run.
If a mortgage with 20 years remaining is refinanced to lower the monthly payment, for example, the most affordable option could be a 30-year mortgage. But is the lower monthly payment worth it if you’ll be paying it off for 10 additional years?
Will I Need Cash to Close?
One of the biggest differences between a first-time mortgage and a refinance is the amount it costs to close the loan. Many times, closing costs for a refinance can be rolled into the loan, requiring no cash at the outset.
Closing costs typically come in at 2% to 5% of the loan amount, and although they can be rolled into the loan and paid off over time, that could mean the new monthly payment isn’t as low as planned.
One way to make sure the investment is worth the cost is to consider how long it would take you to reach the break-even point, which is when you recoup the costs of refinancing. For instance, if it takes you 24 months to reach the break-even point, and you plan on living in your home for at least that long, refinancing may make sense for you.
Considering refinancing your home? SoFi offers mortgage refinance loans with competitive interest rates.
Whenever you’re ready to refinance, SoFi is here to help.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
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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A slew of ambitious housing legislation has emerged recently in states as varied as Maine, Utah and Washington. Many of the proposals aim to loosen zoning restrictions with the goal of addressing housing shortages. Perhaps not surprisingly, California is mentioned in many of the resulting conversations and debates, and not in a positive light.
Policymakers and advocates elsewhere have invoked the Golden State as a warning: We must pass pro-housing policies to avoid ending up like California. One think tank in Montana went so far as to advocate repealing “California-style zoning” to make starter homes more feasible.
At the same time, however, California has become a national model among many of the same housing advocates for its recent efforts to fix past mistakes. Since 2016, state legislators have passed more than 100 housing-related laws with the intent of encouraging the construction of more affordable and market-rate homes. These laws have fundamentally changed the landscape of housing rules and regulations throughout the state and helped inspire similar reforms in other places.
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A new law to allow accessory dwelling units in Maine draws on California’s example, and pending legislation in Oregon would create local housing targets similar to California’s goals for regions and cities. But even as advocates and lawmakers around the country echo our reforms, a key question remains: Are California’s new laws actually producing more housing here?
The short answer is no. In the aggregate, despite the deluge of legislation, annual building permits have remained stubbornly stagnant at just over 100,000 homes annually for the last few years — well below the 180,000 a year state officials say we need to keep up with demand. Meanwhile, homelessness has only increased statewide, and rents and home prices remain at historic highs.
But those numbers don’t tell the whole story. And in fact, many of the recently passed laws have had a clear, positive effect.
Reforms to ease restrictions on accessory dwelling units — so-called granny flats, backyard cottages and other secondary dwellings — have led to a significant increase in this type of housing. Just six years ago, such units made up an insignificant share of home building; today, they account for 1 in 5 building permits.
Similarly, legislation streamlining California’s notoriously lengthy approval processes has helped get more housing built faster, particularly affordable and mixed-income developments. Enhancements to the state’s density bonus programs, which allow developers to add more units to a project if some are designated as below market rate, have also helped.
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Other changes are setting the table for significant new home construction in (we hope) the near future. Specifically, technical but critical changes to the arcane California laws and regulations that govern local housing production, such as the Regional Housing Needs Allocation, the Housing Element Law and the Housing Accountability Act, have forced cities to plan for substantially more housing in more realistic ways. These reforms have also taken away many of the tools used to delay and block approval and construction of housing.
While not necessarily headline-grabbing, all these changes signal an important shift in the ways cities and counties do their part to plan for and actively encourage new home building — as evidenced by the Los Angeles City Council’s vote this week to zone for 135,000 more units in Hollywood and downtown. And some cities have embraced this shift, treating state-level requirements as a floor, not a ceiling. San Diego, for example, has expanded on baseline accessory dwelling unit and density bonus requirements while empowering staff to embrace a culture of “yes” when it comes to getting housing approved.
California’s housing crisis should indeed serve as a cautionary tale for other states, a warning to actively increase supply before it’s too late. Despite the recent reforms, broader challenges still threaten to stymie California’s apparent progress, among them stubbornly high construction costs and uncertain economic conditions.
But even if it takes some time to realize tangible results, the important work of creating a new housing paradigm in California should not be discounted. We are finally moving in the right direction, and policymakers in other states can learn from our successes as well as our struggles.
David Garcia is the policy director of UC Berkeley’s Terner Center for Housing Innovation. Bill Fulton is a Terner Center fellow and a former San Diego planning director.
(Bloomberg) –Treasury Secretary Janet Yellen reiterated her optimism about the U.S. economy, saying inflation can slow down without a slump in employment, even if growth cools.
“Our economy has proven more resilient than many had thought,” amid forecasts of recession, Yellen said in excerpts of remarks due to be delivered later Friday in New Orleans. “I continue to believe that there is a path to reducing inflation while maintaining a healthy labor market. Without downplaying the significant risks ahead, the evidence that we’ve seen so far suggests that we are on that path.”
Yellen said in an interview last week that she sees diminishing risk for the U.S. to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation.
“While there are parts of our economy that are slowing down, households are spending at a robust pace and businesses continue to invest,” Yellen said in the excerpts, released by the Treasury Department. “Going forward, I expect the current strength of the labor market and robust household and business balance sheets to serve as a source of economic strength, even if our economy does cool a bit more as inflation falls.”
Federal Reserve officials have raised interest rates by 500 basis points in little more than a year and have signaled more tightening will be needed to rein in an inflation rate that’s running higher than the Fed’s 2% target.
They’ve warned that returning inflation to the goal will likely require a period of below-trend growth and some softening of labor-market conditions.
Yellen touted President Joe Biden’s legislative achievements that stepped up investment in infrastructure, semiconductors and the green-energy transition.
She is the latest administration official to do so, two days after the president delivered what the White House called a “cornerstone” address on his economic policy, “Bidenomics,” with his office seeking to improve perceptions about his job performance before the 2024 election campaign gets into full swing.
Yellen said the policies of Bidenomics are rooted in what she laid out early last year as “modern supply-side economics.”
The idea is to “prioritize investments in our workforce and its productivity – in order to raise the ceiling for what our economy can produce,” Yellen said, highlighting how the Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act constitute “one of the most important economic investments” the U.S. has made to date.
Deepak Parekh on Friday announced his decision to step down as HDFC chairperson. “It is my time to hang my boots with both anticipations and hopes for the future. While this will be my last communication to shareholders of HDFC, rest assured we now stride tall into a very exciting future of growth and prosperity”, Parekh said in his last message to shareholders on the eve of HDFC and HDFC Bank merger. The reverse merger of parent HDFC Ltd with HDFC Bank is expected to be effective from July 1.
Hindustan Times’ sister website Livemint accessed Parekh’s last statement to his shareholders as HDFC chairperson. Read here.
Dear Shareholders,
When I wrote to you last year, we had just commenced our journey of working towards the merger of HDFC and HDFC Bank. Financial year 2023 marked a year of many happenings. We have been working relentlessly on the merger, whilst continuing to focus on ‘business as usual’ in a global macro-economic environment that has been exceptionally volatile.
The optimism on India continues with renewed vigour. The country has demonstrated resilience with its broad-based recovery. India’s position has been further strengthened with cyclical and structural tailwinds. The country’s GDP growth rate is likely to be more than double that of global growth. We are extremely confident that the runway for housing finance in India will remain immense for several years to come.
During the year, we have made substantial progress on the merger. Personally, if I were to summarise the year in one word, it would be ‘gratitude’.
When we announced the merger, we knew we had hard deadlines to meet and a maze of complex transactions to navigate through. Being one of the world’s largest merger announcements in recent times, each milestone has been closely followed by all stakeholders. We have been unwavering in our commitment of being transparent throughout this process and have engaged deeply with our stakeholders to keep them abreast of the progress of the merger.
Working on a merger of this scale has been challenging and rewarding. Encountering hurdles is par for the course in such transactions. Yet, what amazed us the most has been the immense goodwill and strong relationships that HDFC as a group has. Whenever and wherever we reached out for guidance, doors opened and help was at hand instantly. We have worked with possibly the country’s best legal teams, chartered accountants, valuers, bankers, advisors and other specialised professionals. The collective knowledge and experience of all these parties is unparalleled.
The approvals by the Competition Commission of India, the National Company Law Tribunal, the shareholders and the regulators were important merger milestones. In all our dealings pertaining to the merger, the HDFC group has been treated in a fair and just manner. We stand committed to adhering to the prerequisites as stipulated by the regulators, respecting the fact that these decisions are made keeping in mind the best interests of the Indian financial ecosystem.
As we approach the tail end of the merger process, the effectiveness of the preparatory work undertaken will be tested. For over ten months, the Integration Committee has been labouring on ensuring a seamless transition. This is a painstaking exercise given the many moving parts of this complex merger. Cross functional teams are hard at work to ensure that the execution plan and strategic objectives are upheld in the merged entity.
Working towards the common goal of executing the merger has helped both sides get to know each other better. It has been a phase of working jointly to tackle issues on hand, but more importantly, it has enabled HDFC Bank to have a deeper understanding of the underlying dynamics of the home loan business.
Over the course of the year, both HDFC and HDFC Bank have gone to great lengths to explain the rationale of the merger, which has been well received by our stakeholders. An oft-repeated question is what happens to the culture of HDFC? My answer to this is that mergers are inherently about change. The work culture will be an amalgamation of the best of both organisations.
Culture at the workplace is always a shared responsibility. It needs daily reinforcement through the demonstration effect with the tone set at the top. What remains steadfast is the underlying ethics and value systems of both entities.
The confidence I derive is the agreed tenet of this integration — preserving the fabric of the ‘HDFC way of working’. This has also been publicly articulated by the leadership at HDFC Bank.
No institution in India has the richness of 46 years of understanding the needs of a home loan customer. Home loans are always different from other financial products. It is the single largest investment a person makes in his or her lifetime. Home loans as a financial product evokes a strong emotional quotient.
No doubt, the housing finance industry is a competitive one today. Yet, HDFC will always have the distinction of being the institution that introduced retail housing finance to the country. Over the years, we have, in no small measure, helped chart the course for housing finance to be recognised as an integral part of development of the country.
‘HDFC home loans’ is an invaluable intangible. Since inception, HDFC has been committed to building a customer centric organisation. We pride ourselves on our deep expertise in understanding real estate markets at the micro level, the relationships we have nurtured with developers and our ability to provide value added services such as legal and technical appraisals in-house.
Our experience has taught us that every home loan customer has their own story and it is the empathy factor that is the key differentiator between housing finance providers. Dealing with home loan customers requires immense patience. It is about understanding the needs and feelings of a home loan customer, assuaging their anxiety during this complex transaction, customising solutions, explaining financial implications of a mortgage product and lending responsibly to ensure a customer is not over stretched.
Home loans will now be complemented with HDFC Bank’s core strengths — its sales engine, execution capabilities at scale and deep insights on consumer behaviour. For HDFC Bank, a home loan customer marks the beginning of a journey of having a customer in perpetuity. HDFC Bank is excited at the prospect of cross selling an array of asset and liability products to home loan customers. This will be done seamlessly on their digitalisation platforms — all through a one click experience. HDFC Bank’s vast distribution network will be better harnessed for both home loans and the group companies. As a natural progression, the synergies between HDFC Bank and the group companies will deepen with HDFC Bank taking on the mantle of ownership.
What the future holds, only time will tell. The biggest risk organisations face today is staying with the status quo, believing what worked well yesterday will continue in the future. Change takes courage as it displaces one from the cocoon of comfort and familiarity. Yet, with change comes the power of adaptability, growth and new aspirations. The orchestration of this merger is to ensure that the future is not constrained for any of our stakeholders.
As HDFC hands the baton, my wish is that our core founding values of kindness, fairness, efficiency and effectiveness gets woven deeper into the fabric of the HDFC group.
To all our employees transitioning to HDFC Bank, know that you will always carry the indelible mark of ‘HDFC’ with you. This is your era of new possibilities. Embrace change, continue to work as close-knit teams, be kind and have each other’s back. The future is yours to grasp.
Our senior management and leadership team over the years have been the torchbearers and crusaders, ensuring that our core values percolate down to every level within the organisation. More importantly, to all our employees, past and present, I personally salute each and all of you who built the foundation, the walls and then the floors brick by brick with solid mortar. Some have been true HDFC lifers, others have dispersed, but none will be forgotten. They are the fulcrum upon which this institution has stood on.
Governance has been the cornerstone of HDFC and for that, I am grateful to all our directors who have supported and guided us through the decades.
To all our shareholders, thank you for your trust and belief in us. HDFC’s new home is about strategising and building for the long-term.
I deeply acknowledge the pivotal role and contribution of the Chairman of HDFC Bank, Mr. Atanu Chakraborty along with the other board members during this merger process.
With the proven execution capabilities of HDFC Bank, we are confident that Sashi, together with the leadership team will forge an era of new opportunities for the combined entity.
It is my time to hang my boots with both anticipation and hope for the future. While this will be my last communication to shareholders of HDFC, rest assured we now stride tall into a very exciting future of growth and prosperity.
The HDFC experience is invaluable. Our history cannot be erased and our legacy will be taken forward.
Deepak Parekh
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North Carolina is experiencing a boom these days, with record employment growth and an increasing population. If you live in the state, you already know there’s plenty to offer, including beautiful tourist attractions, breathtaking scenery, and a rich history that makes it unique.
But North Carolina also has plenty to offer when it comes to banks and credit unions. Whether you’re looking for an interest-bearing checking account or retirement accounts that offer the biggest bang for your buck, the best bank is the one that suits your needs.
15 Best Banks in North Carolina
If you’re on the hunt for a new bank or credit union, you’re in luck. North Carolina has a little of everything when it comes to bank accounts, from that small local bank with a focus on community service to large banks with branches in the state. This list of the best banks in North Carolina covers a variety of areas to ensure you find the best place to park your cash.
1. U.S. Bank
U.S. Bank offers customers the unique combination of local access with the extensive services of a nationwide bank. By opening a Bank Smartly® Checking account with U.S. Bank, clients can potentially earn up to $300. The qualification process involves two steps within the first 90 days of opening the account online:
Ensure at least two direct deposits totaling $6,000 or more
Register for online banking or download the U.S. Bank Mobile App
This promotional offer is subject to specific terms and restrictions and will remain valid until July 11, 2023. As a member of the FDIC, U.S. Bank ensures customer deposits are protected up to the FDIC’s established limits.
Fees:
$0 – $6.95
No-fee overdraft protection
Balance requirements:
$1,500 minimum balance or $1,000 direct deposit to qualify for free checking
$25 opening deposit
ATMs:
No ATM transaction fees at U.S. Bank ATMs
No surcharge fees at MoneyPass® Network ATMs
Interest rates:
Up to 4.50% APY on money market accounts
Up to 4.75% on fixed-rate CDs
Additional perks:
$300 bonus
Competitive rates on money market accounts & CDs
2. First Citizens Bank
Founded in North Carolina in 1898, First Citizens Bank has expanded over the years. You’ll find First Citizens Bank branches in 21 states, but the majority of its locations are in North Carolina and South Carolina.
If you frequently travel, though, check the service area. You’ll pay a $2.50 out-of-network ATM transaction fee if you can’t locate a First Citizens ATM while you’re away from home.
Fees:
No monthly fees
$10 overdraft fee
Balance requirements:
$50 minimum opening deposit
No minimum monthly balance
ATMs:
Fee-free at 500+ First Citizens Bank ATMs
$2.50 for out-of-network ATM transactions
Interest on balance:
0.03% APY on savings accounts
Up to 0.15% APY on CDs
Up to 0.15% APY on money market accounts
Additional perks:
Credit cards offer generous rewards
Robust mobile banking solutions
3. Chime
Chime is ideal for those who do most of their banking virtually. While you won’t find any brick-and-mortar locations, Chime does offer 24/7 phone support and access to cash through more than 60,000 ATMs nationwide. You can also deposit cash at more than 90,000 retail partners, including CVS and Walmart.
Fees:
No service fee
No overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 for each out-of-network ATM transaction
Interest on balance:
2.00% APY on savings account balances
Additional perks:
Access to direct deposits up to 2 days early
SpotMe covers up to $200 in overdrafts
4. CIT Bank
North Carolina residents interested in online banks should take a look at CIT Bank, which is based in Raleigh, North Carolina. This national bank recently merged with First Citizens Bank, which means CIT Bank customers can enjoy brick-and-mortar banking at any CIT location.
You’ll get everything you need to manage your money in CIT’s mobile banking app, as well as refunds of up to $30 in out-of-network ATM fees each month.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
$25 minimum deposit to open
No minimum daily balance required
ATMs:
No ATMs provided
Up to $30 in ATM fees reimbursed monthly
Interest on balance:
Up to 0.25% APY on checking
Up to 4.736% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.538% APY on money market accounts
Additional perks:
Competitive rates on business loans
Award-winning customer service
5. Coastal Federal Credit Union
Credit unions tend to offer perks you won’t find with banks, and Coastal Federal is no exception. You can qualify if you’re with one of the employers or associations approved for membership or if you live or work in one of the North Carolina cities CFCU services.
As with many credit unions, though, CFCU’s real value comes with its interest rates. Not only will you enjoy an interest checking account, but you can also find great rates on share certificates, which are the credit union version of CDs.
Fees:
No monthly service fees
$31 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at CFCU ATMs
Fee-free at CO-OP ATMs nationwide
$2 out-of-network ATM fee (waived for first five per month)
Interest on balance:
Up to 3.00% APY on savings account balances
Up to 5.00% APY on share certificates
Up to 3.50% APY on money market accounts
Additional perks:
Competitive rates on loans
Financial planning assistance available
6. GO2bank
Another online-only bank is GO2bank, which stands out for its cash accessibility. Not only can you withdraw cash, fee-free, at any Allpoint ATM, but you can deposit cash at more than 90,000 retailers nationwide.
All you need to waive monthly maintenance fees is at least one direct deposit monthly, either from an employer or the government. Those looking to build credit should check out the secured credit card, which you can get with no credit check. Pay your bill on time each month and GO2bank will report your activity to the three credit bureaus, helping you boost your score.
Fees:
$5 monthly fee (waived with requirements)
$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum daily balance required
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Deposit cash at 90,000+ retailers nationwide
Secured credit card helps you build credit with no credit check required
7. Ally Bank
Ally Bank is an online and mobile banking option that puts a priority on budgeting and wealth building. The fee-free checking account comes with no minimum requirements and gives you access to more than 53,000 ATMs nationwide. But one of the best features of Ally Bank is its annual percentage yield on savings and CDs. You’ll earn 4.00% APY on savings and up to 5.00% APY on CDs.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum balance requirements
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
No out-of-network ATM fees
Up to $10 in ATM fee refunds monthly
Interest on balance:
Up to 0.25% APY on checking accounts
4.00% APY on savings accounts
Up to 5.00% APY on CDs
4.15% APY on money market accounts
Additional perks:
Spending buckets make it easy to save money
Robo Portfolios help automate investing
8. Chase
Like Bank of America, Chase Bank is one of the biggest banks in North Carolina, with more than 4,700 branches and 16,000 ATMs across the country. Currently, Chase is offering a $100 bonus for new checking account customers as long as you complete at least 10 qualifying transactions within the first 60 days.
Whether you go with Chase for your regular banking or not, though, take a look at Chase’s credit card offerings. Chase has multiple card options, with each offering perks like bonuses and cash back rewards.
Fees:
$12 monthly maintenance fee
$34 overdraft fee
Balance requirements:
No deposit to open
No minimum balance required
ATMs:
Fee-free at 16,000 Chase Bank ATMs nationwide
$3-$5 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 3.75% APY on CDs
Additional perks:
$100 bonus for new checking accounts
Multiple credit card options with bonuses and generous rewards
9. First Horizon Bank
First Horizon Bank is a regional bank with branches in 11 states across the Southeast, including a heavy presence in North Carolina. One standout feature of First Horizon is its money market rates, which currently go as high as 5.38%. You’ll find ATMs throughout the Southeast, but you can also use your debit card at any Allpoint ATM nationwide without a fee.
Fees:
No monthly service fee
$37 overdraft fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at more than 600 First Horizon ATMs
Fee-free at Allpoint ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 2.78% APY on savings accounts
0.10% APY on CDs
Up to 5.38% APY on money market account
Additional perks:
Business banking options available
Wealth management help available
10. Truist Bank
In 2019, BB&T and SunTrust Banks merged to become Truist Bank. Although Truist has a limited ATM footprint, the Truist One checking account makes it worth it. You’ll get a 10% loyalty bonus based on your monthly balance in addition to a 10% bonus if you choose a Truist credit card.
The interest rates also make Truist a suitable option, since you’ll earn 5.00% APY on 7-month CDs. To waive the $12 monthly service fee on your checking account, you’ll need at least $500 in direct deposit activity each month.
Other options include a combined daily balance of $500 across all your Truist accounts, a Truist credit card or qualifying loan, or a linked business checking account. Students 25 and younger also qualify for a fee-free checking account.
Fees:
$12 monthly service fee (waived with requirements)
No overdraft fees
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at Truist Bank ATMs
$1 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings accounts
Up to 5.00% APY on CDs
Additional perks:
Generous cash rewards with Truist Bank credit card
Checking balances earn rewards
11. Mechanics & Farmers Banks
You may know it as M&F Bank, but it actually started under the name of Mechanics & Farmers Bank in 1907. Throughout the 1900s, it was known as one of the most influential Black-owned businesses in the state of North Carolina. Today, M&F has locations throughout North Carolina and access to 44,000 ATMs nationwide, thanks to partnerships with Bank of America, JPMorgan Chase, and Wells Fargo.
Fees:
No service fee
$35 overdraft fee
Balance requirements:
$50 deposit to open
No minimum balance required
ATMs:
Fee-free at M&F Bank ATMs
Fee-free at Bank of America, JPMorgan Chase, and Wells Fargo ATMs
$3 for each out-of-network ATM transaction
Interest on balance:
Rates not publicly disclosed
Additional perks:
Rewards on debit card transactions
Robust business banking options
12. First National Bank
First National Bank has branches throughout North Carolina, as well as in DC, Maryland, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia. The free checking account is Freestyle Checking, but it does come with overdraft fees, and the exact fee amount isn’t disclosed until you sign up for an account.
You’ll also only get fee-free transactions at First National Bank ATMs, and they’re limited to the First National Bank service area.
Fees:
No monthly fee
Balance requirements:
$50 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 1,500+ First National Bank ATMs
Interest on balance:
Up to 0.05% APY on savings accounts
Up to 5.00% APY on CDs
Up to 1.25% APY on money market account
Additional perks:
Cash and check deposit available at Smart Deposit ATMs
The site makes ordering banking products and scheduling branch appointments easy
13. PNC Bank
PNC Bank has branches in 29 states, including 107 branches in North Carolina. Currently, new customers are eligible for bonuses of up to $400. You’ll get a $50 bonus simply for opening a Virtual Wallet with a basic checking package, but that bonus bumps up to $200 if you add a Performance Spend checking account and $400 if you upgrade to a Performance Select account.
The PNC Bank basic account only requires $500 in monthly direct deposits or a combined $500 balance between accounts.
Fees:
$7 monthly fee (waived with requirements)
$36 overdraft fee
Balance requirements:
$25 minimum deposit to open
No minimum balance required
ATMs:
Fee-free at PNC Bank ATMs
Fee-free at 60,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
Up to 0.03% APY on savings accounts
Up to 4.00% APY on CDs
Additional perks:
Up to $400 bonus for new virtual wallet customers
Financial planning tools built into the app
14. Fifth Third Bank
Fifth Third Bank focuses operations on the Midwest and Southeast U.S. regions, with 1,087 full-service locations in 11 states. You’ll find a variety of banking products, from savings and checking accounts to investment and retirement accounts. Fifth Third Bank offers competitive interest rates on CDs, with a 7-month CD currently offering 5.00% APY.
Fees:
No monthly maintenance fee
$37 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance required
ATMs:
Fee-free at 2,100+ Fifth Third Bank ATMs
Fee-free at 40,000+ partner ATMs nationwide
$3 for each out-of-network ATM transaction
Interest on balance:
0.01% APY on savings account balances
Up to 5.00% APY on CDs
Additional perks:
Early Pay gives you access to direct deposit two days early
Grace period to resolve overdrafts
15. Bank of America
If you prefer what national banks have to offer, you can’t go wrong with Bank of America, which is one of the biggest banks in the country. You’ll find ATMs and branches across the country, as well as a wide variety of services. Although Bank of America does have competitive interest rates on CDs, the basic checking account comes with a $12 monthly fee and a $100 deposit to open.
Fees:
$12 monthly fee
$10 overdraft fee
Balance requirements:
$100 deposit to open
No minimum balance required
ATMs:
Fee-free at 15,000+ Bank of America ATMs nationwide
$5 for each out-of-network ATM transaction
Interest on balance:
Up to 0.04% APY on savings account balances
Up to 4.75% APY on CDs
Additional perks:
Generous bonus on new credit cards
Wealth planning services available
Our Methodology: How We Chose the Best Banks in North Carolina
North Carolina has a large selection of banks, some paying more in interest than the national average. In putting together this list, we kept in mind that each person has different criteria when choosing savings and checking accounts. Your choice of bank will largely depend on your own banking habits. If you tend to do all your banking online, a user-friendly app might be a top priority, while those who prefer the in-person experience might put nearby branches first.
Our top goal was to bring a variety of banking options to this list. We’ve combined local, regional, online, and national banks to help you choose. We also looked at fees and interest rates to help you protect and grow your earnings.
Frequently Asked Questions
You have questions, and we have answers. Here are some of the most frequently asked questions about banks in North Carolina.
What is the safest bank for your money?
Lately, financial security has been a top priority for account holders in search of a new bank. The top thing to look at is a bank’s Federal Deposit Insurance Corporation coverage. This insurance protects each deposit holder for up to $250,000 if a financial institution goes belly up.
Once you’ve verified a bank is FDIC insured, pay attention to any news of mergers or buyouts involving your bank. Selling can be a sign of financial distress.
See also: Safest Banks in the U.S. for 2023
What is the best bank in North Carolina?
That’s a tough question because the definition of “best bank” can vary from one person to another. If you think the best checking accounts come with an annual percentage yield and a mobile app to manage it all, you’ll be looking at different criteria from someone who wants a local bank with personalized customer service.
If you’re going for customer satisfaction ratings, J.D. Power gives high marks to both Capital One and Chase, which both have a heavy presence in North Carolina. But if you’re looking for that local banking experience, you can’t go wrong with First Citizens Bank or M&F Bank.
What is the best credit union in North Carolina?
There are several credit unions in North Carolina, but the one that impressed us most was Coastal Federal. CFCU’s fee-free checking and annual percentage yield on savings and share certificates makes it stand out. But it’s also important to take a look at the interest rates on personal loans and compare them to banks in the area to make sure you’re getting the best deal.
One issue with credit unions is that they tend to come with strict membership requirements. You may find you’re limited to only those that will accept your employer or city of residence, and those credit unions might not have financial accounts that meet your needs. However, there are also some credit unions that anyone can join.
Which bank has the most branches in North Carolina?
If you do most of your banking in North Carolina, you might not care if your debit card works at ATMs across the country. In that case, you’ll need a bank with plenty of branches and ATMs in the areas where you work and live.
When it comes to sheer branch numbers, take a look at Truist Bank and Wells Fargo. Both have a heavy branch presence throughout the state. For smaller banks, First Citizens and First Horizon both have substantial branch coverage in North Carolina.
However, you’ll also need to check your neighborhood. If you’re interested in that in-person bank experience, you’ll be disappointed if you have to drive a half hour or more to get to the closest branch.
What banks are in Charlotte, NC?
North Carolina isn’t just a thriving state filled with business opportunities. The state is a financial center in itself. Not only does Charlotte have smaller banks like M&F Bank and First Citizens Bank, but both Bank of America and Truist Bank are headquartered in North Carolina, as well.
This heavy financial presence has made North Carolina great for finding banking services. The many banks in the state are eager to win your business and offer competitive rates to ensure it happens. That means it’s more likely that checking accounts come with low fees and savings accounts earn top-dollar interest rates. When combined with the many online bank options, the biggest issue will be narrowing the list to just one.
From high-yield savings accounts to fee-free checking accounts, North Carolina has it all. Shopping around will help you choose from the best banks so that you can find the perfect banking partner for you.
Prices across the US economy continue to rise, but the pace of growth has slowed significantly since summer 2022. The housing sector has become a major driver of inflation, even as the Federal Reserve has pushed up interest rates and made taking out a mortgage more expensive.
Mortgage rates begin ticking up once again
On 1 June, the Fed reported that the average rate applied to a 15-year-and-30-year mortgage rose to 6.18 and 6.79 percent, respectively, from 5.76 and 6.39 percent a month earlier. This rise is attributable to the Federal Reserve’s move to increase rates by twenty-five basis points in early May. As the Federal Funds rate increased, it brought with it higher mortgage rates. This trend will continue if the Fed plans to continue hiking rates. The momentary fall in mortgage rates looks to be a result of a slowdown in the pace of the Fed’s rate increases.
The Federal Reserve’s Beige Book compiles the economic outlook of the various ‘districts’ that make up the US central bank and points out the conflicts the bank is facing as housing prices remain high.
A look at what is happening in New England
The Federal Reserve Bank of Boston reported that while the number of houses sold in March and April increased, they are much lower than they were a year ago. For the Fed, fewer houses are being sold in the First District because of “low inventories,” not “weak demand,” stating that the fall in rates seen earlier this year “helped bring more buyers to the market” when the number of houses on the market was still very low.
In terms of how the issue of low inventory impacted the prices paid by homeowners, the Fed said that “house price appreciation [had] slowed on average but remained slightly positive, with the exception that home prices in Massachusetts (not including Boston) experienced modest declines from a year earlier.”
What is driving the low inventory?
Low inventory was also cited as a problem with the housing market by the Federal Reserve Banks of New York, Richmond, and San Fransisco.
There are a few factors that help to explain why housing inventory is so low in the US and how that is creating inflationary pressure in the economy. According to the United Way, sixteen million homes in the US are unoccupied, meaning that there are twenty-eight homes for each of the 538,000 people experiencing homelessness in the US. These unoccupied properties create an allusion of scarcity which drives up the price of homes that are on the market.
MetLife has reported that while until recently, institutional investors on Wall Street only owned around five percent of single-family homes, this number is projected to rise to thirty percent by 2030. Housing experts have expressed concern about the rising share of single-family homes being owned by investors in the US. These financial institutions may be motivated to keep the homes unoccupied to increase the collective value of their holdings.
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Additionally, once the property has been acquired, it may be left empty, a choice that is made when housing ceases to be right and, instead, is valued more as a financial asset. Eliminating the issue of homelessness may not be as profitable as forcing half a million people to live on the streets. That fact shouldn’t bother us so much. And, if the market is capable of setting prices that allow for a perfect or near-perfect distribution of resources, housing is a major prime example of the market mechanism failing in that goal.
One mortgage lender that’s been around a while, but is beginning to shake things up is Loan Simple.
As the name suggests, they’re all about simplicity, whether it’s simple talk or a simple loan process.
They consider themselves a boutique mortgage lender, striving for relationships and quality customer service over sheer volume.
However, they still managed to fund half a billion in home loans in 2019 via the retail channel, with even more slated for 2020 and beyond.
One thing I like about Loan Simple is their effort to increase mortgage literacy by offering free classes powered by EverFi.
So they actually want you to know more about mortgages before/when you apply, which is a rarity in this industry or any other for that matter.
Additionally, they donate to charities they care about each time a loan funds, including Feeding America, Water.org, and the World Wildlife Fund.
Loan Simple Quick Facts
Direct mortgage lender located in Englewood, Colorado
Founded by Roland Dozois more than 20 years ago (son Jason is current CEO)
Licensed to lend in 30 states nationwide
Launched a wholesale lending division in late 2020
Donate to charities for each loan funded
Also a licensed loan servicer
Loan Simple did about half a billion in loan volume last year, which makes them one of the smaller fish, but a growing one.
They did more than half their total loan volume in their home state of Colorado, so if you’re from the Centennial State, you’ve likely heard of them.
Another big mortgage lender in Colorado is Cherry Creek Mortgage, FYI.
A good chunk of their remaining volume came from the states of Arizona, California, and Texas, but they’re also expanding in other states nationwide.
About two-thirds of their loans were used to finance a home purchase, with the remaining mortgage refinances.
Aside from operating a retail lending channel, they also recently launched a wholesale lending division for mortgage brokers, and they service their own loans.
Where Is Loan Simple Available?
At the moment, they appear to be licensed to do business in 30 states nationwide.
Those states include Arizona, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.
Some notable missing states include Alaska, Connecticut, Hawaii, Massachusetts, New Jersey, New York, and North Carolina.
Hopefully they’ll continue to roll out to new states in the near future.
Getting a Mortgage with Loan Simple
To get started, you literally click on “Get Started” from their website. From there, you select a state where they do business and you’ll see a corresponding list of loan officers licensed there, along with any branch locations.
Once you select a loan officer, you can apply for a home loan right on their website. Like many other lenders, they utilize fintech company Blend for their digital mortgage application.
It allows you to complete most of the process online from your computer or smartphone in just minutes.
You can e-sign documents, scan and upload paperwork, see personalized mortgage rates, track loan progress, and receive status updates.
Loan Simple says they’re big on technology and their overarching goal is to keep things simple, hence their name and slogan, “The Simple Way to Home.”
So you should expect a fast and easy home loan experience if you choose to go with Loan Simple, complemented by a human touch.
Types of Mortgages Offered by Loan Simple
Home purchase loans and mortgage refinance loans
Conforming loans backed by Fannie Mae and Freddie Mac
FHA loans, USDA loans, and VA loans
Jumbo home loans
Fixed-rate and adjustable-rate mortgage options available
What’s somewhat strange is the lack of a lending menu on then Loan Simple website. They don’t appear to mention what types of loans they offer anywhere.
Perhaps they took this whole simple thing a little too seriously…
Fortunately, we can look at their HMDA data to see that they offer all the typical stuff you’d expect from a big mortgage lender like home purchase loans and mortgage refinances, likely including cash out refinances.
They appear to originate mostly conventional loans, such as those backed by Fannie Mae and Freddie Mac, along with jumbo loans that exceed the conforming limit. It’s unclear how high you can go in the jumbo department.
Loan Simple also does a good share of FHA loans, along with VA loans and some USDA home loan lending, so all major loan types are covered.
Most of their borrowers tend to go with the 30-year fixed, like most other lenders, though they also offer the 15-year fixed, 5/1 ARM, 7/1 ARM, and so on.
While it’s unclear if they offer construction or home renovation loans, there’s a good chance they do the latter at least.
They don’t seem to offer any sort of second mortgages, such as home equity loans or lines.
Hopefully they’ll update their website so we know exactly what they offer to their customers.
Loan Simple Mortgage Rates
Unfortunately, they do not publicize their mortgage rates on their website or elsewhere as far as we know.
As a result, it’s unclear how competitive their interest rates are compared to other lenders. The same goes for lender fees, which aren’t disclosed on their website.
The one hint we have about their pricing comes from their Zillow reviews, which are generally favorable, and many customers have remarked about rates/fees being lower than anticipated.
But you’ll need to get in touch with a loan officer in order to get pricing, then you can shop their rate and closing costs with other lenders to determine where they stand.
Loan Simple Reviews
On Zillow, they’ve got a 4.95-star rating out of 5, which is pretty darn close to perfection. It’s based on over 600 customer reviews.
Many customers indicated that the interest rate and closing costs were lowered than expected, and overall there a lot of positive comments.
They are accredited with the Better Business Bureau, and currently enjoy an A+ rating with the company.
At the moment, there are no customer complaints, but they have a 1-star rating based on five customer reviews. Typically, BBB customer reviews aren’t very good because they’re complaint-driven.
Loan Simple Pros and Cons
The Good Stuff
Can apply for a home loan directly from their website
Also have brick-and-mortar branches in select states
Offer a digital loan process via Blend technology
Excellent reviews from past customers
A+ BBB rating
Donation to a charity for every loan closed
Offer free mortgage literacy classes
They service their own loans
The Maybe Not-So-Good Stuff
Not licensed in all states
Do not publicize their mortgage rates or lender fees
Website is a little too simple
Lacks information regarding available loan types, calculators, etc.
So you want to build a new home — but you’ve got sticker shock. In researching cost-effective options, you may have discovered modular and manufactured homes.
These home types are typically more affordable than traditional new construction, known as “site-built” homes. The Manufactured Housing Institute reports that a manufactured home costs half as much per square foot as a site-built home. For modular builds, a 2017 study by the Terner Center for Housing Innovation at the University of California, Berkeley estimates construction savings of at least 20%.
Depending on land costs and the model you choose, a new manufactured or modular build might even cost less than the average existing home.
Modular and manufactured homes are both types of prefabricated, or “prefab,” homes. That means they’re built indoors at a factory, then transported to the building site. But just because they both start out in a factory doesn’t mean they’re the same thing.
Let’s explore the differences between these two home types.
Definitions: Modular vs. manufactured homes
What is a modular home?
A modular home is factory-built in large, three-dimensional pieces known as modules. When the modules leave the factory, they are up to 90% complete. The finishing touches happen at the building site, where the modules are attached to a permanent foundation and each other. Then, the finished home is inspected to ensure it meets local building codes.
What is a manufactured home?
A manufactured home is what you might think of when you hear the term “mobile home” or “trailer.” However, that terminology is considered outdated. Today’s manufactured homes come in a wide range of designs and styles.
Like modular homes, manufactured homes are built in factories. Depending on their size, they are transported to the building site in one piece, known as a single-wide, or several pieces, known as a double- or triple-wide.
Unlike modular homes, manufactured homes are attached to a permanent chassis. This is a metal frame that can be attached to wheels; that’s where the term “mobile home” comes from. The chassis cannot be removed, but you can remove or cover up the wheels.
Manufactured homes are built to national building standards set by the U.S. Department of Housing and Urban Development (HUD), called the HUD Code.
Did you know…
Technically, the term “mobile home” only applies to factory-constructed homes built prior to June 15, 1976. That’s when the HUD Code went into effect. The HUD Code set federal standards for safety and durability of manufactured homes.
Pros, cons and differences
Compared to new site-built construction, modular and manufactured homes are a more affordable path to homeownership. Here are some things to consider when deciding between the two:
Cost and resale value: A manufactured home typically costs less than a modular home. While manufactured homes have come a long way in terms of quality, they still can depreciate in value over time, similar to an automobile. Modular homes generally change in value with the market similar to site-built homes.
Building codes: Manufactured homes are built to the HUD Code. Modular homes follow the same state and local building codes as site-built houses.
Size and durability: Available sizes vary, although modular homes offer more ability to customize layouts. Manufactured homes don’t hold up as well in high winds or hurricanes compared to modular homes.
Portability: Manufactured homes must be affixed to a steel chassis. Depending on their size, they can be built and transported in full from the factory. Modular homes do not have a chassis. They are built in pieces, transported and assembled on-site.
Construction efficiency: Modular and manufactured homes share some advantages over site-built homes. Indoor construction pretty much eliminates weather delays. Assembly-line construction is also faster and cheaper. Less construction waste saves home buyers money, and with efficiency gains, you’ll likely move in sooner.
Loans and financing
Modular homes
While a modular home is being built, you might have to make up-front or installment payments to the builder. These can be paid in cash or through a construction loan. Once construction is complete on a modular home, it can be financed with a traditional mortgage — just like a site-built home.
Manufactured homes
Manufactured homes are not always eligible for traditional mortgages. Here are some options:
Traditional mortgages: To qualify for a mortgage, you must own the underlying land and have the manufactured home titled as real property.
FHA Title 1 loans: If your home doesn’t qualify for a mortgage, the Federal Housing Administration (FHA) offers Title 1 loans to finance manufactured homes. With an FHA Title 1 loan, the buyer is permitted to lease the land where the home resides, such as in a manufactured home community — sometimes called a mobile home park.
Chattel loans: Often, buyers finance manufactured homes using chattel loans. A chattel loan is a direct form of financing for personal property, similar to an auto loan. However, these loans typically have higher interest rates than traditional mortgages. The Consumer Financial Protection Bureau reports that around 42% of manufactured home owners use a chattel loan to finance their purchase.
Summary: Key differences
Manufactured home
Modular home
Site-built home
Cost to build
Type of foundation
Semipermanent (e.g. pier and ground anchors) or permanent.
Permanent.
Permanent.
Portability
Yes. (Has a chassis that can be attached to wheels to move the home.)
No. (Once modules are delivered, they are permanently attached to each other and the foundation.)
No. (Built entirely on-site.)
Building code
International Residential Code (local building codes).
International Residential Code (local building codes).
Options to customize
Durability
Financing (after construction)
Chattel loan, FHA Title 1 loan or traditional mortgage.
Traditional mortgage.
Traditional mortgage.
Value over time
Typically decreases.
Typically increases.
Typically increases.
Modular vs. manufactured: Which is right for me?
A manufactured home is less expensive and can get you to your goal of homeownership sooner, especially if you live in a rural area where affordable housing is scarce. Citing January 2023 data, the U.S. Census Bureau reports that the average cost of a new manufactured home is $126,100. However, future home equity is less predictable for manufactured homes. Typically, their value depreciates over time. But it also could hold steady, depending on your local real estate market. Other factors, such as if you own the land underneath — and how you landscape it — affect long-term value, too.
A modular home is a larger up-front investment, but the home value typically grows over time, like that of a site-built home. Modular construction is sturdier than that of manufactured homes, too. If you finance a modular home using a construction loan, you might need a higher credit score and lower debt-to-income ratio to qualify, compared to credit score requirements to buy an existing home. That’s because you don’t have a finished home to use as collateral, like you can in a traditional mortgage.
Alternatives to modular and manufactured homes
If you’re looking for an affordable path to homeownership, here are other options to consider:
Townhouses or condominiums: If you don’t mind sharing walls with your neighbors, buying a townhouse or condo can help you build equity at an affordable price point. You might have to pay homeowners association fees, though, so account for that when budgeting.
Site-built homes: If you’re committed to a new build, you’ll pay more per square foot for traditional construction compared to a modular or manufactured home. However, you can cut costs by building a smaller home and opting for modest finishes.
Tiny houses: Sized around 400 square feet or less, tiny houses can be set on wheels or a permanent foundation. Minimalist living is a lifestyle shift, so consider the pros and cons before you downsize.
Kathy Robb always knew she wanted to do interior design, back as far as high school.
While her degree is in accounting, she took classes focused on upholstery and interior design in hopes of one day breaking into the business.
She started by selling at Round Top Texas Antiques, one of the largest flea markets in the world, in her native Texas. Interior designers would come from other countries and set up shop. She also did vetted pop-up shows between Texas and Charleston, South Carolina.
When she moved to Birmingham, she met Tom Findlay of Thomas Andrew Art Gallery, who invited her and her daughter, Penelope Baggett, to open their own shop, The Blended Bungalow, in the front of his store.
Their ideal customer is someone buying their first or second home, Robb said, and they want to help blend new pieces with any family heirloom pieces that are coming into the home. If every piece of furniture is new, it looks staged, she said, but if everything is an heirloom, it looks old.
The pair also want to avoid giving people “sticker shock,” with affordable pieces that don’t break the budget, Robb said.
The store offers furniture, home decor, candles and some women’s clothing as well, Robb said. There are also fun seasonal items and vintage china, she said.
Baggett, who lives in Texas, handles the behind-the-scenes work, social media and more, Robb said, and will fly in to help at times. Baggett opened her own business focused on refinishing furniture nine years ago, before joining her mother at The Blended Bungalow. The store features her “uniquely refinished dining sets” and Robb’s custom-upholstered chairs blended with “new, traditional pieces for a blended home that’s unique to the owner,” Robb said.
“Our mission and our goal is to bring affordable, gorgeous furniture to the public,” she said.
The store is located at 1925 29th Ave. S. and is open from 10 a.m. to 5 p.m. Wednesday through Friday and from 9 a.m. to 4 p.m. on Saturday.
For more information, visit the shop online at The Blended Bungalow on Facebook and Instagram and at their website, blendedbungalow.myshopify.com.