In today’s volatile housing market, ensuring your home is protected against unexpected repairs and replacements is more crucial than ever. As homeowners seek peace of mind amidst the unpredictability of homeownership, home warranty companies have stepped up to offer a buffer against unforeseen expenses.
5 Best Home Warranty Companies
With so many options available, pinpointing the most reliable and value-packed home warranty company can be daunting. To help you choose, we’ve curated a list of the best home warranty companies to ensure your home’s systems and appliances receive the top-tier coverage they deserve. Take the time to discover which provider aligns best with your needs.
#1 Choice Home Warranty
There are plenty of reasons to go with Choice Home Warranty. First, they are a top-rated business according to ConsumerAffairs.com and have an average rating of 4.8 out of 5.
They have a five-star rating from Trust Pilot, and Inc. 5000 has recognized them as one of America’s fastest-growing private companies.
Choice has customer service available 365 days a year, 24 hours a day, 7 days a week. So if you’ve got a problem, don’t be afraid to pick up the phone and call them.
They are more than happy to answer any questions about your home warranty plan or, if need be, put in a request for a repair. A licensed, pre-screened, and continuously monitored technician will come to your house, usually within one or two business days.
The age of your home, its systems, and appliances is not relevant to Choice Home Warranty. They always cover items that have been properly maintained and were in well-working order when coverage was initiated.
If the item in question needs to be replaced but is no longer available on the market, they will give you a cash payment of the item’s replacement cost.
Another plus is that you don’t even have to get your home inspected before Choice Home Warranty will begin offering you coverage.
Choice also has a very reasonable $85 dollar service call, which makes them among the most competitive warranty providers for service calls.
Plan Options
1. Total Plan ($450 a year)
Includes coverage on the following —
AC
Heating
Electrical
Plumbing
Water Heater
Whirlpool
Refrigerator
Oven
Dishwasher
Microwave
Garbage Disposal
Washer and Dryer
Ductwork
Garage Door Opener
Ceiling and Exhaust Fans
2. Basic Plan ($378 a year)
Includes coverage on everything mentioned above, EXCEPT:
AC
Refrigerator
Washer and Dryer
Items that can be added at additional cost include:
Pool
Central Vacuum
Well and Sump Pump
Limited Roof Leak
Stand Alone Freezer
Second Refrigerator
Septic System
Septic Pumping
Read our full review of Choice Home Warranty
#2 Advanced Home Warranty
Advanced Home Warranty offers comprehensive coverage and a 24/7 claims hotline, making it a strong choice for anyone considering a home warranty.
Home warranties are available nationwide, so you can qualify for a plan, no matter where you live in the U.S. Plus, you can try it out without any risk by signing up to get your first month completely free of charge.
Trade service fees are reasonable at $60. If the cost of the repair is less, you’ll pay the smaller amount. This is one of the lowest service fees available among the providers on our list.
While they don’t offer a wide range of plans, you can get coverage on some of the big-ticket items associated with homeownership.
A low monthly fee can be much more manageable than paying for replacements outright every time an appliance breaks. There are also parts of even larger systems that are included in their coverage.
Here’s a breakdown of the two home warranty plans available from Advanced Home Warranty, how much you’ll pay, and what exactly they include.
1. Basic Plan ($370 a year, plus one month free)
Includes coverage on the following:
Heating System
Electrical System
Plumbing System
Dishwasher
Microwave
Garage Door Opener
2. Total Plan ($450 a year, plus one month free)
Includes coverage on everything above, PLUS:
Air Conditioning
Refrigerator
Washer/Dryers
Do read each home warranty plan for details on exactly how each specific item on the list is covered.
Read our full review of Advanced Home Warranty
#3 Liberty Home Guard
Liberty Home Guard offers a high degree of personalization for your home warranty coverage. For example, you can pick the plan and also how often you want to be billed.
You can choose monthly payments, annual payments, or for the most savings, multi-year home warranty plans.
Liberty Home Guard offers a service call fee of $60, which is a competitive service fee. You can also expect your service call to be delivered within 48 hours of making a claim.
You don’t need a home inspection to qualify for coverage with Liberty Home Guard. There’s also no limit to how many claims you can file within a year.
You can file your claims online for your ease and convenience. And with a 60-day satisfaction guarantee on service, you’re sure to be satisfied with the repair or replacement process.
If for some reason, you want to cancel your plan early, it’s entirely possible because there’s no annual contract. You’ll receive a prorated refund for any time you’ve paid for, except for a small administrative fee.
With Liberty Home Guard, there are three different coverage options you can choose from. You can also include optional add-ons in any plan.
1. Appliance Warranty for $39.99 Monthly or $399.99 Annually
Clothes washer
Clothes dryer
Refrigerator with ice maker dispenser
Built-in microwave oven
Dishwasher
Garbage disposal
Range/ oven/ cooktop
Ceiling and exhaust fans
Garage door opener
2. Systems Guard for $49.99 Monthly or $499.99 Annually
Air conditioning
Heating
Ductwork
Plumbing
Electrical
Water heaters
3. Total Home Guard for $59.99 Monthly or $599.99 Annually
This choice offers the most protection of all the plans and includes everything listed in the two plans above.
4. Optional Add-ons
Pool and spa: $17.00 monthly; $195.00 annually
Sump and pump: $3.00 monthly; $36.00 annually
Central vacuum: $3.00 monthly; $36.00 annually
Well pump: $9.00 monthly; $101.00 annually
Additional spa: $16.00 monthly; $188.00 annually
Septic system and septic sewage ejector pump: $11.00 monthly; $123.00 annually
Stand alone freezer: $4.00 monthly; $44.00 annually
Second refrigerator: $4.00 monthly; $44.00 annually
Read our full review of Liberty Home Guard
#4 Complete Protection
Complete Protection is another excellent home warranty company. Servicing all but nine states, this A+ Accredited Business is open 24/7.
Only slightly more expensive, this once small-scale, family-owned business offers some of the most comprehensive home warranties available in North America.
One of the many benefits offered by Complete Protection is their no-fee service call policy. With most quality providers charging at least $50 per service call, having no service call fee at all is a major perk.
They have five plans you can choose from:
Kitchen/Laundry: $32 a month/ $384 a year — covers your dishwasher, oven, refrigerator, and washer and dryer.
Heating/Cooling: $34 a month/ $408 a year — covers your furnace, AC, and water heater.
Basic Built-ins: $40 a month/ $400 a year — Furnace, AC, water heater, dishwasher, and oven.
Full House: $50 a month/ $600 a year — Furnace, AC, water heater, dishwasher, oven, refrigerator, and washer and dryer.
Full House Plus: $60 a month/ $720 a year — Includes everything mentioned in the first four plans, but also includes electrical wiring and in-bound water pipes.
What makes Complete Protection stand out even more:
There are a few other things that make Complete Protection stand out from its competitors. For one, their home warranties don’t have a deductible. As a result, you don’t have to pay any approved repair costs when something happens — this includes the initial service call, parts, and labor.
Secondly, CP pays for all preventative maintenance. Other home warranty companies mandate that their customers undergo preventative maintenance on items such as HVAC systems, but they won’t even pay for it. Instead, they force their customers to do so!
Thirdly, CP home warranties cover all the parts within an appliance. Most home warranty companies exclude parts like ice makers or washing racks within dishwashers. CP does not pick and choose which parts it will cover.
Lastly, Complete Protection allows you to choose your own service contract provider. So, if you have a certified contractor with whom you work, you can go to them whenever home repairs are needed.
They do this because they feel that their customers should always be comfortable with the person working in their house.
Read our full review of Complete Protection
#5: American Home Shield
The accolades American Home Shield has received are many. In addition to being a Better Business Bureau Accredited Business, they also received the Women’s Choice Award from 2014 to 2016.
On top of that, Home Warranty Reviews gave American Home Shield the Best in Service award in 2014 and ranked them as Top Rated from 2015-2017. Last but not least, they are Consumer Affairs Accredited.
Why so much recognition from the industry? For starters, they’re always open. You can always reach them regardless of what day or time it is. And, when you do, expect a local contractor to be at your home within no more than 24 hours. You don’t even have to get on the phone. You can request home repairs directly from their website.
Another reason American Home Shield is recognized as the best among the best is its versatility with its home warranty plans. They have four to choose from:
Systems Plan: Covers the replacement or repair of your home’s key systems, such as: plumbing, electrical, heating, air conditioning, and smoke detectors.
Appliances Plan: Includes coverage on common, everyday household appliances, such as refrigerators, built-in food processors, dishwashers, and washer and dryers.
Combo Plan: Get coverage on all of your primary home systems and appliances. Saves you $14 a month if you were to rather purchase the systems and appliances plans separately.
Build your own plan: Choose only what you want to be covered by selecting 10 or more items from their list of covered items. This way you get the coverage that you care about the most.
Another element of their customized service is their service fees. American Home Shield allows customers to choose from a service fees range of $75, $100 or $125 per service request. This allows you to get the plan you want without having to account for a high service call fee.
The ability to choose your own service call fee regardless of the plan you’re on separates American Home Shield from most other home warranty companies which carry a standard service call fee.
Additionally, American Home Shield can provide coverage for your pool, spa, well pump, and septic system (at additional costs) and can assist you during the moving process by covering your home while it’s listed. If the new owner decides they would like to upgrade service afterward, it’s an easy switch to do so at closing.
Read our full review of American Home Shield
Methodology: How We Chose The Best Home Warranty Companies
When researching the best home warranty companies, we analyzed over 20 of the most popular home warranty companies. Our team spent hours reviewing each home warranty company. We examined many factors, but mainly focused on the following:
Home warranty plans and options
Pricing
Reputation and trustworthiness
Customer reviews
Pros of Home Warranties
Peace of Mind
One of the major benefits of a good home warranty is peace of mind. A home warranty can bring some real financial security against unexpected home repairs. While getting your home in ideal shape can be tough, maintaining that level can be even more stressful. A good warranty coverage can cut away a big chunk of that worry.
Convenience
One of the biggest problems people can encounter when faced with unexpected breakdown at home is finding good help. But a home warranty also reduces some of that stress, as your provider can provide you with a relevant licensed expert within their network.
Potential Savings
In many cases, standard home repairs – such as a new boiler, for example – can be a lot cheaper if replaced under warranty. While home warranties can’t guarantee savings, chances are you will see the benefits speak for themselves over time.
Transferable
Many home warranties are transferable, meaning you could carry your plan to a new home if you decide to move. Be sure to check whether transferability is a feature of any warranty before signing if that’s important to you.
Cons of Home Warranties
Wait Times
Unfortunately, wait times for claims can sometimes keep you waiting. If you need a quick fix or emergency repairs at home, you may have to wait longer than you would like. One thing that can help here is looking for a provider that provides an online claims process. This is because online claims are often processed faster than those done over the phone.
Coverage Exclusions
Home warranties don’t cover everything, and it can be hard in an emergency to remember your exact coverage limits. It’s important to read the details carefully before signing up, and put a plan in place if you need work that falls outside your warranty coverage.
Cost
Home warranty coverage isn’t cheap, especially if you want to secure protection across your property. You won’t necessarily be covered by service fees, even if you choose a plan with a high service fee. And of course, some maintenance and repairs can come with further costs on top of your plan. These high costs can make it difficult to discern whether a home warranty is the right thing for you.
Other Home Warranty Companies to Consider
Here are a few other home warranty companies that didn’t make our top 5 that you may still want to look into.
Like so many things in our lives, a home warranty is something that we don’t often think about until we absolutely need it. Sure, you have home insurance, maybe even flood insurance, but that only covers certain situations.
Homeowners Insurance
Homeowners or renters insurance can cover damage to your home from things like fire, theft, storms, and some natural disasters. In addition to your homeowners insurance plan, you should choose to purchase a home warranty to protect your belongings in a way that insurance lacks.
If you’ve ever purchased a large appliance, a computer, or even a television from a retailer, then you’re probably familiar with the concept of a warranty.
However, those are warranties sold at the time of purchase and cover only one product. The benefit of home warranty protection is that it can cover every product in your home and more.
Choosing a Home Warranty Plan
What a home warranty plan covers will depend on the plan you choose, and there are many to choose from. A home warranty can cover anything from your microwave oven to your plumbing and your electrical systems.
Deciding which plan is right for you will determine what items and systems it covers and how much it will cost. Typically, home warranties charge either a small monthly or annual fee that can save you a lot of money in the long run.
How to Choose the Right Home Warranty
Choosing the right home warranty is key. Let’s run through all the details you need to consider before making your decision.
Determine Your Coverage Needs
At the very least, it’s important to get at least an idea of what sort of coverage you need. Take the time to decide which items in your home you want to protect before comparing offers. You’ll find plans that cover appliances, home systems, and plans that cover both.
Compare Quotes
It’s worthwhile to shop around. Try to acquire at least three different quotes from plans that you’re genuinely interested in. And use this time to also prioritize clearing up any questions you have about the policies you’ve been offered.
Don’t forget to pay close attention to the various prices you’ll see for service call fees. Some companies are much more competitive than others, and some even offer a service fees range which you can choose from depending on your needs and budget.
Review Sample Contracts & Liabilities
The next step is to review any sample contracts carefully. You’ll want to identify the limitations and exclusions in the contract, especially.
Furthermore, be sure to double-check cancellation policy just in case you decide your warranty isn’t working for you later on.
Check Reviews
Finding the best home warranty company for you will require some further research. You can read customer reviews online to find a company that provides great customer service as well as competitive plans.
Be sure to look out for any record of previous legal action taken against the company, too.
Home Warranty FAQ
What is a home warranty?
A home warranty is a type of service contract purchased to cover breakdowns, repairs, and replacements of home appliances and systems. Home warranties are designed to cover normal wear-and-tear damage on covered items and systems.
When a covered item breaks down or otherwise requires attention, you file a claim with your warranty provider. They then send a licensed technician to your home to assess the issue. Instead of paying for the full cost of the repair, being under warranty generally means paying only a small service fee for necessary repairs. The price of service fees varies between providers.
Home warranties are popular because they offer homeowners maintenance coverage and emergency repairs without having to rely on savings. The home warranty market today is huge and can provide terms for homes and budgets of many shapes and sizes.
What does a home warranty cover?
Home warranties can cover a whole range of systems and appliances within your home. You can decide how much you want to spend and determine what items will be covered by your home warranty.
Most home warranty companies break down their offerings into good, better, and best options. The good option, and least expensive, is one that covers most if not all of your appliances.
Major Home Systems
More expensive on an upfront basis are plans that cover major home systems. These home warranty plans cover the systems within your home. If you’re renting, this may not be of concern to you. However, if you own your home, you know that a plumber or electrician can cost a lot more than replacing your refrigerator.
If you’re less concerned with appliances and worried about what keeps your home humming along, then you may want to consider a system plan.
Appliances
Appliances like your microwave, washer and dryer, dishwasher, and often a lot more are covered by the best home warranty companies. These are great options for those who are renting or want to spend the least amount of money.
Systems & Appliances
The most expensive plans, of course, offer the most coverage. The best plans cover both systems and appliances. So while they’re the most expensive, they’re also the best value. Covering your systems and appliances together will typically save you around 20% to 30% of your total bill.
Basic plans from the best home warranty companies will cover the majority of systems and appliances in your home but don’t cover everything. If you have a pool, for instance, you may have to choose additional coverage.
Some home warranty companies even allow you to add coverage to cover your homeowners’ insurance deductible. Combining appliance and system coverage may also include these additions.
There are exclusions to what a home warranty will cover. Unfortunately, no plan is a blank check to have every item in your home replaced. These are repair plans and not replacement plans.
What is not covered by a home warranty?
The extent of your warranty coverage will vary greatly between companies and plans available. Having said that, however, here is a list of the ideas that are usually not covered by a home warranty:
Structural issues, paint and flooring
Commercial-grade equipment or systems
Pre-existing conditions
Rust, corrosion and sediment problems
Improper maintenance, installation, design, or manufacturer defect
Detection and removal of asbestos and mold
Building and zoning code violations
How much does a home warranty cost?
Home warranty pricing varies greatly depending on the coverage you choose, the home warranty company, and the area in which you live. In general, though, if you’re just covering appliances, expect to pay around $30 a month.
If you’re looking for only system coverage, you’ll probably pay around $35 a month. However, if you combine your coverage to include both systems and appliances, expect to pay around $45 per month.
Adding things not covered by a typical home warranty plan can also increase your monthly bill. If you have an atypical appliance or system, it’s possible that basic plans do not cover it. Not everyone has a swimming pool, a septic tank, a whirlpool tub, or a spa.
Check with your individual plan to ensure that all systems and appliances you want to have covered are actually included. If they aren’t, see if you can add them separately.
Service Fees
In addition to your monthly fee, you’ll also need to pay service fees for a service call. This cost can vary greatly.
The best home warranty companies offer plans that will cost you around $50 to $125 per repair. This is based on the home warranty company, the plan, and the item that needs to be fixed. While this may seem like a lot, consider the cost of the average repair without a warranty.
What can you expect to pay without a home warranty?
The average repair cost of a refrigerator is $275 to $325. The igniter on an oven or range may only cost $110 to $200 to repair, but a control board could cost you more than $260.
Replacing a rubber gasket on your washer will set you back between $200 to $300. These expenses can quickly add up compared to the fee home warranty companies charge for a visit.
Bottom line: They’ll address the issues with your current item but won’t give you a new one.
Pre-Existing Conditions
Pre-existing conditions are not covered either. Unfortunately, if one of your major appliances breaks, you can’t just sign up for coverage and expect to have it fixed.
Most home warranty companies will cover an unknown pre-existing condition. However, you can’t have an appliance covered if you or the home warranty provider knows that it’s already broken. This is why it’s a good idea to think about purchasing home warranty coverage before your appliances break.
Coverage Waiting Period
Most companies impose a 15 to 30 day waiting period before coverage can begin. There are, however, exceptions to this rule. For instance, if you have a home warranty that is ending soon, you may be able to begin on the date your coverage stops.
It’s important to read the fine print of your service contract. Each home warranty company will have very specific coverage details.
While all will most likely cover your refrigerator, not all of them will cover wear and tear on the gasket that seals it. Typically, the more expensive the plan, the more it covers, but this is not always the case.
What is the process for having an item repaired?
When something breaks, especially if you have a home warranty, you’ll want it fixed as quickly as possible.
Going without a microwave for a week or two may be acceptable, but if it’s your refrigerator, you may not be so patient. When an item malfunctions or breaks, you’ll need to contact your home warranty company’s customer service and explain the issue.
Make sure you report the problem as quickly as possible. The faster you make the call, the faster you’ll get an appointment and have your issue resolved.
Independent Contractors
The home warranty provider will most likely assign an independent contractor to inspect and repair the item. Obviously, system repairs can take longer and be more labor-intensive.
For example, replacing a part on your furnace will be a lot easier than repairing electrical wiring or plumbing inside your walls.
Depending on what is wrong, the contractor may have to order parts or return with specialized equipment. You’ll be required to pay a service fee for each item you wish to have repaired. However, the contractor should ensure that the item returns to working order.
Workmanship Guarantee
Once you’ve had an appliance or system repaired, that item is covered under a workmanship guarantee. Think of it as a warranty within your warranty.
The home warranty provider guarantees the parts and labor of that particular repair for a specified amount of time. This is usually around 90 to 180 days after the repair. So, even if you cancel your plan, they will still cover the repair during that time.
Who should pay for a home warranty?
Many times the seller will buy a home warranty to make the purchase of the home more appealing. Sometimes a real estate agent will even purchase a home warranty as a courtesy to the clients they’re representing. However, buyers, sellers, real estate agents, and current homeowners can all buy a home warranty. It’s also important to note that buying a home warranty can be done at any time, before or after closing.
What should you look for in a home warranty company?
A home warranty can save you a lot of hassle and headaches, not to mention money, down the road—as long as you do your homework and think it through.
A home warranty covers many things that homeowners insurance does not. Having peace of mind knowing that costly home repairs won’t spring up unexpectedly is a great feeling.
Choosing the right type of coverage for you is the next step. When you think about the type of coverage you want, think about the items you want to protect in your home.
Renters
If you’re just renting, then plumbing and electrical work is not a concern for you. Your homeowners insurance should cover things like theft and fire, but you still want to be covered when something breaks that you actually own. Choosing an appliance plan is probably the right option for you.
If you live in an older home that you own, a more comprehensive plan may be the right choice for you. It’s comforting to have your home inspected before purchasing, but things can still go wrong. You can avoid costly maintenance as long as you plan ahead.
Are home warranties worth it?
The answer to this question will depend largely on your unique circumstances. Two of the biggest factors are the age of your home and the quality of your appliances. In addition, your own ability and comfort with repair and maintenance is a factor.
Almost every home appliance and system will eventually require significant repair or even replacement. Depending on your own DIY skills, you might be comfortable taking responsibility for most repairs. Others might want more comprehensive coverage. But even still, there could be plenty of reasons why you would prefer to have a home warranty.
How do I cancel my home warranty?
Your first step should be to review your contract and make sure you understand the cancellation policy. Most companies will charge a cancellation fee that can range from 5% to 10% of the outstanding fee.
Thereafter, you can contact the company and tell them you’re considering cancelling your warranty. If possible, try to speak to a sales rep with whom you’re familiar.
Some companies require you to send a written notice of termination. Remember to cancel any automated payments from your credit card or bank account, if necessary. It might also be a good idea to request a written confirmation of the cancellation for your records.
Which home warranty company has the lowest service call fee?
Service call fees can vary widely between companies, but it’s important to try to find the most competitive service call fee available to you. Service fees generally range from $50 to $150 per service call.
The trick with finding a competitive service fee call is making sure you don’t sacrifice the quality of service calls. Some of the top-rated home warranty companies charge a higher service fee. However, it could be worth it to have the security and confidence of quality home service.
Final Thoughts
To find the best home warranty company, you will need to read the contract thoroughly. Every company that you investigate will have a contract. In that contract, they’ll spell out exactly what they do and do not cover.
They’ll also explain the cost, who will fix your items if they break, and more. Comparing two or more home warranty companies can give you a sense that you’ve made the right decision. Always make sure you do your homework.
Furthermore, check to see if a home inspection is required before qualifying for a home warranty with a specific company. Many don’t require this extra step, but it’s wise to be prepared in case they do. You definitely want to consider both cost and convenience as part of your ultimate decision.
Full Reviews of Home Warranty Companies
Looking for more options? Check out our other home warranty reviews below.
A $150,000 mortgage will cost a total of $341,318 over the lifetime of the loan, assuming an interest rate of 6.5% and a 30-year term. It might be tempting to think that a $150,000 mortgage will cost…well, $150,000. But lenders need to earn a living for their services and mortgage loans come with interest.
What’s the True Cost of a $150,000 Mortgage?
The specific price you will pay to borrow $150,000 depends on your interest rate — which, in turn, is based on a wide range of factors including your credit score, income stability, and much more. Here’s what you need to know to get an estimate of how much a $150,000 home mortgage loan might cost in your specific circumstances. 💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
Where Do You Get a $150,000 Mortgage?
Good news: There are many banks and institutions that offer $150,000 mortgages. For 2024, the maximum amount for most conventional loans is more than $750,000, so the loan you’re considering is well within reach. To see how your salary, debts, and down payment savings affect how much home you can afford, use a home affordability calculator.
However, it’s important to understand that even a $150,000 mortgage may cost far more than the sticker price after interest and associated fees. For instance, let’s say you purchase a $200,000 home with a 25% down payment and a $150,000 mortgage. If your interest rate is 7% and your loan term is 30 years, the total amount you’d pay over that time is $359,263.35 — which means you’d actually pay more than the home price ($209,263.35) in interest alone. (And that’s before closing costs, home insurance, property taxes, or mortgage insurance.)
At prices like that, it may seem like taking out a mortgage at all is a bad deal. Fortunately, property has a tendency to increase in value (or appreciate) over time, which helps offset the overall cost of interest. (Of course, nothing is guaranteed.)
Keep in mind that you can potentially lower the interest rate you qualify for by lowering your debt-to-income (DTI) ratio, improving your credit score, or increasing your cash flow by getting a better-paying job. Even a small decrease in interest can have a big effect over the lifetime of a loan. In our example above, with all else being equal, you’d pay only $139,883.68 in interest if your rate were 5% instead of 7% — a savings of nearly $70,000!
Recommended: The Best Affordable Places to Live in the U.S.
Monthly Payments for a $150,000 Mortgage
When you take out a $150,000 mortgage, you’ll repay it over time in monthly installments — of a fixed amount, if you have a fixed mortgage, or amounts that can change if you take out a variable rate loan.
Your monthly $150K mortgage payment includes both principal (the amount you borrowed) and interest (the amount you’re being charged), and may also wrap in your property taxes, homeowners insurance, and mortgage insurance if applicable. (You’ll only need to pay mortgage insurance if your down payment is less than 20%.)
But there is another caveat here that some first-time homebuyers don’t know about. Even if your mortgage payments are fixed each month, the proportion of how much principal you’re paying to how much interest you’re paying does change over time — a process known as the amortization of the loan. It’s a big word, but its bottom line is simple: Earlier on in the loan’s life, you’re likely paying more interest than principal, which increases the amount of money the bank earns overall. Later on in the loan, you’ll usually pay more principal than interest.
What to Consider Before Applying for a $150,000 Mortgage
Amortization is important to understand because it can affect your future financial decisions. For example, if you’re not planning on staying in your house for many years, you may find you have less equity in your home than you originally imagined by the time you’re ready to sell — because the bulk of your mortgage payments thus far have been going toward interest. It might also affect when it makes sense to refinance your mortgage.
Most lenders make it easy to make larger payments or additional payments against the principal you owe so that you can chip away at your debt total faster, but be sure to double-check that your lender doesn’t have early repayment penalties.
Of course, there are different types of home loans. Here are some sample amortization schedules for two $150,000 home loans. (You can also build your own based on your specific details with a mortgage calculator or an amortization calculator online.)
Amortization Schedule, 30-year, 7% Fixed
Years Since Purchase
Beginning Balance
Monthly Payment
Total Interest Paid
Total Principal Paid
Remaining Balance
1
$150,000
$997.95
$10,451.73
$1,523.71
$148,476.29
3
$146,842.42
$997.95
$10,223.47
$1,751.98
$145,090.44
5
$143,211.82
$997.95
$9,961.01
$2,014.43
$141,197.38
10
$131,574.29
$997.95
$9,119.73
$2,855.71
$128,718.58
15
$115,076.63
$997.95
$7,927.12
$4,048.33
$111,028.30
20
$91,689.13
$997.95
$6,236.43
$5,739.01
$85,950.12
30
$11,533.47
$997.95
$441.97
$11,975.44
$0.00
Notice that, for more than the first half of the loan’s lifetime, you’ll pay substantially more interest than principal each year — even though your mortgage payments remain fixed in amount.
Amortization Schedule, 15-year, 7% Fixed
Years Since Purchase
Beginning Balance
Monthly Payment
Total Interest Paid
Total Principal Paid
Remaining Balance
1
$150,000
$1,348.24
$10,314.21
$5,864.70
$144,135.30
3
$137,846.65
$1,348.24
$9,435.65
$6,743.26
$131,103.38
5
$123,872.65
$1,348.24
$8,425.46
$7,753.45
$116,119.20
7
$107,805.26
$1,348.24
$7,263.95
$8,914.96
$98,890.30
10
$79,080.41
$1,348.24
$5,187.43
$10,991.48
$68,088.93
12
$56,302.87
$1,348.24
$3,540.84
$12,638.07
$43,664.80
15
$15,581.80
$1,348.24
$597.11
$15,581.80
$0.00
While a shorter loan term may help you build equity in your home more quickly, it comes at the cost of a higher monthly payment.
How to Get a $150,000 Mortgage
To apply for a $150,000 mortgage, you can search for providers online or go into a local brick-and-mortar bank or credit union you trust. You’ll need to provide a variety of information to qualify for the loan, including your employment history, income level, credit score, debt level, and more.
The higher your credit score, lower your debt, and more robust your cash flow, the more likely you are to qualify for a $150,000 mortgage — and, ideally, one at the lowest possible interest rate. That said, mortgage interest rates are also subject to market influences and fluctuations, and sometimes rates are simply higher than others overall. 💡 Quick Tip: To see a house in person, particularly in a tight or expensive market, you may need to show the real estate agent proof that you’re preapproved for a mortgage. SoFi’s online application makes the process simple.
The Takeaway
A $150,000 mortgage can actually cost far more than $150,000. Depending on your interest rate and your loan term, you may spend more than you borrowed in principal in the first place on interest, and you’ll likely pay a higher proportional amount of interest per monthly payment for about the first half of your loan’s lifetime.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
How much is $150K mortgage a month?
A 30-year, $150,000 mortgage at a 7% fixed interest rate will be about $998 per month (not including property taxes or mortgage interest), while a 15-year mortgage at the same rate would cost about $1,348 monthly. The exact monthly payment you owe on a $150,000 mortgage will vary depending on factors like your interest rate and what other fees, like mortgage insurance, are rolled into the bill.
How much income is required for a $150,000 mortgage?
Those who earn about $55,000 or more per year may be more likely to qualify for a $150,000 mortgage than those who earn less. Although your income is an important marker for lenders, it’s far from the only one — and even people who earn a lot of money may not qualify for a mortgage if they have a high debt total or a poor credit score. (Still, the best way to learn whether or not you qualify is to ask your lender.)
How much is a downpayment on a $150,000 mortgage?
To avoid paying mortgage insurance, you’d want to put down 20% of the home’s purchase price, which if you are borrowing $150,000 would be $50,000 for a home priced at $200,000. Some lenders allow you to put down as little as 3.5% of the home’s price. So if you had a $150,000 mortgage and put down 3.5%, your down payment would be $5,440 and the home price would be $155,440. (Keep in mind these figures do not include closing costs.)
Can I afford a $150K house with $70K salary?
Yes, as long as you don’t have a lot of other debt, you can probably afford a $150,000 home if you’re making $70,000 a year. There’s a basic rule of thumb to spend less than a third of your gross income on your housing. With an income of $70,000 per year, you’re making about $5,833.33 per month before taxes — and a third of that figure is $1,925. A $150,000 mortgage might have a monthly payment of as little as $998 per month, even with a 7% interest rate, so it should be affordable for you as long as you don’t have other substantial debts.
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.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Economists have their favorite indices to measure the health of the economy. GDP, if men are buying underwear, CPI, RV shipments, GDP, plastic surgery appointments, PCE, hemlines… tomorrow on The Mortgage Collaborative’s Rundown Skylar Olsen, the Chief Economist of Zillow, will discuss some of this, and more, for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. Meanwhile, lenders are shifting the focus from things they can’t change to things they can: changing regional managers comp plans to incorporate profits instead of volume. Or honing marketing systems now, not when rates drop further and opening up refi opportunities. Or shifting to paying less for a refi and putting the difference into rate sheet pricing. And who’s buying the properties we’re lending on? Women. Okay, that was a bold generalization, but still… (Today’s Commentary podcast can be found here and this week’s is sponsored by Vesta, the new, modern Loan Origination System (LOS) which helps lenders reduce their costs to originate and improve their ability to integrate with new technologies in the ecosystem. Hear an interview with Ally Home’s Glenn Brunker on what’s happening in the housing market and what to expect going into spring homebuying season.)
Lender and Broker Software, Products, and Services
Matic, a digital home insurance platform built for the mortgage industry, recently announced an exclusive partnership with PRMG to extend their marketplace of over 40 A-Rated carriers into PRMG customer offerings. PRMG joins over 100 mortgage lenders, servicers and banks, representing 20 percent of home loans processed in the U.S., that partner with Matic to integrate the insurance shopping experience into the homeownership lifecycle. Now more than ever, mortgage leaders are turning to Matic to help them offer value to customers, generate revenue, and reduce costs in a tough housing market. Mortgage leaders, don’t miss out: book a demo with Matic to discover how to add an ancillary revenue stream that removes friction from the insurance process and keeps customers within your existing systems. And if you’re attending MBA’s Servicing Solutions Conference in two weeks, stop by booth 806 to learn more! Book a demo with Matic.
Only 60 days since launch and already 150+ mortgage originators have signed up to receive daily mandatory bids from MAXEX on bulk pools of Agency-eligible non-owner occupied (NOO) and second home loans. Moreover, we’re currently winning more than 10 percent of the loans bid! Why? Because our unique loan exchange model provides access to competitive pricing from five leading institutional buyers, allows you to underwrite to agency guidelines, and helps you avoid costly Agency LLPAs—all within a single contract and through a single, standardized clearinghouse. This seamlessly integrates with your existing bulk trading process. Visit here to learn more.
We live in a world of autopay, Apple Pay, Venmo, Uber Eats… the list goes on. If borrowers can pay for a pizza online, why are we still asking them to share their credit card info over the phone? Get with the times and collect upfront fees via text with Fee Chaser by LenderLogix.
TPO Products for Broker and Correspondent
“Button Finance is a leading home equity lender specializing in HELOCs and Closed-End Seconds, offering lucrative opportunities for our partners. Correspondent partners can earn 7.85 percent of the loan balance, while brokers can make 5 percent. Additionally, we offer an attractive 3.5 percent Lender Paid Compensation on Texas 50a6 loans. Our services extend to lending against investment properties for brokers, ensuring a broad spectrum of lending solutions. With competitive 8 percent note rates on Closed-End Seconds and no appraisals up to a $250k loan balance, Button Finance is your go-to partner for all home equity lending needs. Email us for more information.”
Eighty percent of homeowners have first mortgage rates less than 4 percent. However, they are sitting on over $10 trillion of tappable equity. HELOC originations provide an outstanding opportunity for lenders and their LOs. Every homeowner receives HELOC solicitations. If it’s not from YOU, then WHO? Depending on YOUR borrowers, this may be the ideal time for them to make home improvements or pay off credit card debt. Or it may be the right time for that dream vacation. NFTYDoor, a division of Homebridge, is a proprietary digital HELOC platform that provides on-demand access to YOUR borrower’s equity. Customers want an experience that is simple and fast, and through NFTYDoor, HELOCs can close in a few days, not weeks or months. Embrace the “Customer for Life” strategy with NFTYDoor’s platform that is 100 percent branded to you. Stay in front of your customers and recapture future business. Contact NFTYDoor today.
STRATMOR and Operations
Forecasters are predicting modest growth in new and existing home sales in 2024, which means we can all look ahead with cautious optimism. Now’s the time to review your operations and prepare for this modest shift back toward normalcy. Senior Operations Executives: STRATMOR Group is hosting its virtual Operations Workshop next week, February 14-16, to help you do just that. Interact with STRATMOR advisors and your peer lenders to discuss improving operational efficiency, overcoming recent challenges and pain points, and current trends in mortgage operations. Contact STRATMOR Group to learn more and sign up.
Conventional Conforming News
The Federal Housing Finance Agency’s 2024 scorecard for the government-sponsored enterprises included a new provision for representations and warranties. “Explore opportunities to harmonize the enterprises’ processes supporting the single-family selling representations and warranties framework, including defect identification, remedies and repurchase alternatives,” the scorecard states.
Fannie Mae’s (FNMA/OTCQB) December 2023 Monthly Summary is now available and contains information about Fannie Mae’s monthly and year-to-date activities for our gross mortgage portfolio, mortgage-backed securities and other guarantees, interest rate risk measures, and serious delinquency rates. There’s also Fannie’s Home Purchase Sentiment Index® (HPSI) which increased to its highest level since March 2022, due primarily to increased consumer confidence in job security and another significant jump in the share of consumers expecting mortgage rates to decrease. An all-time survey-high 36 percent of respondents indicated that they expect mortgage rates to go down in the next 12 months, while 28 percent expect them to go up, and 35 percent expect rates to remain the same. (Seems pretty even to me.)
Fannie Mae is updating the Uniform Loan Delivery Dataset (ULDD) to provide further guidance on implementation and mandate dates associated with the data enhancements included in the ULDD Phase 5 specification published on Sept. 12, 2023. Review the announcement for an overview on the implementation and mandate dates associated with business-critical and UAD 3.6 alignment data enhancements for the Phase 5 data requirements.
Pennymac is aligning with Freddie Mac Bulletin 2023-19, announcing updates to their rental income requirements. The updates are effective with loan deliveries on or after 03/15/2024. Details are available in Pennymac Correspondent Announcement 24-06.
National MI announced updates to the TrueGuide which include the following changes and clarifications: AUS Loans Automated Tools have been updated as follows: Fannie Mae Appraisal Waiver has been updated to reflect the name change to “Value Acceptance.” Fannie Mae Income Calculator for self-employment income has been added as an approved income and asset tool. Non-AUS Loans have been updated as follows: Jumbo and Medical Professional Program loan limit increases. Verbal Verification of Employment updated to align with the GSEs’ requirements. Underwriting Guidelines detailing these changes and clarifications will be posted to nationalmi.com in the near future.
AmeriHome Mortgage Announcement 20240111-CL summarizes previously published changes made during January, additional changes made with this announcement, and recent Agency and regulatory news.
Citizens Correspondent National Bulletin 2024-02 includes information on Value Acceptance + Property Data – DU (Delegated Transactions only). Effective February 1st, Conventional Conforming Updates and Disaster Tax Filing Relief. See the bulletin for additional information and all lock, delivery, and purchase by dates, if required.
Capital Markets
Need a crash course in Assignment of Trade (AOT) executions? In this blog post, Assignment of Trade Executions 101, MCT experts delve into the process of AOT executions, the impact of bid tape AOT on to-be-announced (TBA) positions, and how automation is moving the industry forward. The blog also reviews the cost savings associated with bid tape AOT executions and the MCT Marketplace technology used to complete these transactions. To learn more about MCT Marketplace, view the recent video with MCT’s CEO & President, Curtis Richins. In the video, Mr. Richins reviews key features of MCT Marketplace, opportunities within the platform for buyers and sellers, and a roadmap for the future.
Even with all the selling in the bond markets last Friday after January’s payrolls data came in much stronger than expected, yields have merely moved back to where they had been for most of the year so far. Most security prices are determined by supply and demand, and yesterday witnessed a strong sale of 10-year Treasuries at the record $42 billion 10-year Treasury auction.
But bonds barely budged! Sentiment was dominated by fears surrounding NY Community Bank. Do you remember when the spreads between Treasury securities and MBS “blew out” last March with the banks having to sell MBS? We may see that again with the NYCB possibly selling part or all of Flagstar’s billions in mortgage holdings. In news of interest to loan originators, FNMA’s Home Purchase Sentiment Index recorded another impressive gain for the second straight month to post the highest level since March 2022.
Today’s calendar kicked off with weekly jobless claims (218k, about as expected, 1.871 million continuing claims… the job market continues to be strong). Later are wholesale inventories and sales for December, several Treasury auctions that will be headlined by $25 billion 30-year bonds, Freddie Mac’s Primary Mortgage Market Survey, and remarks from Richmond Fed President Barkin. We begin the day with Agency MBS prices about .125-.250 worse, the 10-year yielding 4.13 after closing yesterday at 4.15 percent, and the 2-year is at 4.44.
Jobs and Transitions
“Direct nationwide lender Kwik Mortgage, based out of Parsippany NJ, is hiring Distributed Retail Sales. We have outstanding support, and our platform is built for you, featuring Blend, Encompass, HubSpot, Loan Vision and Optimal Blue! We offer a full suite of correspondent buyers inclusive of Fannie Mae and Freddie is on the table for 2024! From FHA and VA to Non-QM we have it all! We have a very flat leadership structure which means customers are not paying for more and getting less! We invest in our people and our process, and we have 27 years of company owned and operated success! We are always competitively priced. Don’t worry about fulfillment execution we owned and operated one of the best loan fulfillment for pay businesses in the country, Equilibrium Mortgage Solutions! Contact Paul Campbell, EVP of Lending, (760-774-7704), Paul Campbell, LinkedIn! We are connected: a Fannie Mae diverse minority advisory board lender, The Mortgage Collaborative lender board member, MBA Policy, Servicing and Compliance committee participant! A Depository DE&I advisory board member! Get Kwik come join us! NY, NJ, PA, CT, MA, RI originators welcome.”
Stronghill Capital, LLC, an Austin, TX-based Wholesale and Correspondent lender, is NOW HIRING across the country! If you’re a relationship-focused Account Executive with experience in Non-QM and Investor Financing, including multi-family and mixed-use properties, we’d love to speak with you! Stronghill’s Account Executives enjoy open territories, multi-channel opportunities to work with clients as correspondents or brokers, and consistent communication and collaboration with the Executive Leadership team. If you’re looking to join a rapidly-growing, dynamic organization with a focused commitment to growth and expansion in Non-QM, reach out to our SVP of Sales, Matt Brammer at 440.382.3183 to learn more.
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Settling into your dream home should be a time of joy, not stress over unexpected appliance or system failures. Whether it’s an air conditioner failing in the heat of summer or a dishwasher flooding your kitchen, these are real challenges homeowners often face.
A home warranty acts as a safeguard against the financial and emotional strain of such breakdowns, covering the repair or replacement costs of major systems and appliances due to wear and tear. More than just a policy, a home warranty serves as a protective friend for your home, preventing unexpected issues from draining your savings.
This guide explores the essentials of home warranties, including coverage details and the benefits of securing one. Whether you’re moving into your first home or aiming to protect your existing one, understanding the importance of a home warranty is key to ensuring peace of mind and financial stability.
How do home warranties work?
Home warranty plans provide a form of protection for homeowners by covering the costs associated with repairing or replacing major appliances and systems within your home, such as heating, cooling, electrical, and plumbing systems, as well as refrigerators, ovens, and washers. These plans are especially beneficial for mitigating unexpected expenses that arise from normal wear and tear.
When you purchase a home warranty, you have the flexibility to tailor your plan to fit your specific needs. This means you can choose to cover just your major appliances, systems, or a combination of both, depending on what you deem most critical to your home’s functionality and comfort.
The cost of your home warranty, known as the premium, will vary based on the scope of coverage you select. Plans that offer more comprehensive coverage for multiple systems and appliances will generally have higher premiums than more basic plans.
In addition to the annual or monthly premium, home warranty plans typically require a service fee or deductible to be paid each time a repair person is dispatched to your home to address a covered issue. This fee is predetermined in your home warranty contract and remains constant, regardless of the actual cost of the repair or replacement, providing a predictable expense for homeowners.
Home Warranty Coverage: What’s Included and What’s Not
When it comes to home warranties, knowing what is covered and what isn’t can save you a lot of time and prevent frustration when you need to use your policy. Home warranties are designed to offer homeowners peace of mind by covering the costs associated with repairing or replacing major systems and appliances due to wear and tear. However, coverage can vary significantly from one plan to another, making it crucial to understand the specifics of your policy.
What does a home warranty cover?
Most home warranty plans offer coverage for a core set of systems and appliances that are essential for daily living. This usually includes:
Heating and cooling systems: Central air conditioning and heating systems, including furnaces, are often covered because they’re crucial for maintaining a comfortable home environment.
Kitchen appliances: Built-in microwaves, dishwashers, refrigerators, ranges, and ovens are usually covered. These appliances are considered essential for food storage and preparation.
Electrical and plumbing systems: Comprehensive coverage typically extends to the guts of your home – the electrical wiring and plumbing systems that make modern living possible.
Water heaters: Given their importance in providing hot water for bathing, cleaning, and cooking, water heaters are commonly included in home warranty plans.
What’s Often Excluded
While home warranties cover many systems and appliances, certain items and scenarios are typically not covered:
Pre-existing conditions: Issues that were present before the start of the warranty period are usually not covered.
Improper installation or maintenance: Appliances or systems that haven’t been installed correctly, or that have been neglected, might not be eligible for coverage.
Cosmetic damage: Aesthetic issues that don’t affect the functionality of an appliance or system are generally excluded.
Structural components: Items like your home’s foundation, walls, and roof are not covered by a standard home warranty and are typically addressed by homeowners insurance policies.
Unusual Coverage Options
Some home warranty providers offer unique coverage options that can be added to your plan for an additional fee. These might include:
Pool and spa equipment: Coverage for pool pumps and heaters can be added, perfect for homeowners who enjoy their backyard oasis.
Second refrigerator or wine cooler: For those with multiple refrigerators or specialized cooling appliances, additional coverage is available.
Septic systems and well pumps: Homes with these features can often add specific coverage to address repairs or replacements.
Making Sense of Your Coverage
To truly understand what your home warranty covers, take the time to read your policy’s fine print. Look for a clear breakdown of covered items, and pay attention to any limits on coverage amounts or the number of claims you can file within a certain period. If your policy includes a comparison chart or sidebar summarizing coverage, use it to quickly reference what’s included and what’s not.
Remember, the goal of a home warranty is to protect you from unexpected repair costs for essential home systems and appliances. By thoroughly understanding your coverage, you can make informed decisions about your home maintenance and prepare for any issues that might arise.
Evaluating the Cost of Home Warranties
When considering a home warranty, it’s essential to weigh the cost against the potential savings and peace of mind it offers. A home warranty isn’t just another expense; it’s a strategic investment in protecting your home and budget from unexpected repair or replacement costs. Let’s break down the cost of home warranties and compare it to the potential out-of-pocket expenses without one.
The Annual Cost of Home Warranties
The price of a home warranty can vary widely depending on several factors, including the coverage scope, your home’s size, and its location. On average, homeowners can expect to pay between $300 and $600 per year for a home warranty plan. This fee can be paid upfront annually or in monthly installments, making it a flexible addition to your financial planning.
Potential Savings with a Home Warranty
To truly appreciate the value of a home warranty, consider the cost of repairing or replacing major systems and appliances without one. Here are a few examples:
Air conditioning system repair/replacement: Without a warranty, fixing or replacing an AC unit can cost anywhere from $150 for minor repairs to over $5,000 for a full replacement.
Refrigerator repair/replacement: Repairing a fridge can cost between $200 to $400, while buying a new one can set you back $1,000 or more.
Plumbing issues: Addressing plumbing problems can easily cost hundreds to thousands of dollars, depending on the severity.
In contrast, with a home warranty, you would typically only be responsible for a service call fee ranging from $75 to $125 each time you report an issue, regardless of the actual cost of the repair or replacement.
Variability in Cost
The cost of a home warranty is influenced by several factors:
Home size: Larger homes may have higher warranty costs due to the greater number and size of systems and appliances.
Location: Pricing can vary by state or region, reflecting the local cost of living and the availability of service technicians.
Age of home: Older homes might incur higher home warranty costs due to the increased likelihood of systems and appliances failing.
Making an Informed Decision
When evaluating whether a home warranty is worth the investment for you, consider your financial ability to handle unexpected repairs or replacements. If a single significant repair could strain your budget, a home warranty could offer valuable protection and peace of mind.
Additionally, think about the age and condition of your home’s systems and appliances. Newer homes with newer appliances might not benefit immediately from a home warranty, but as systems begin to age, the potential for savings increases.
Ultimately, a home warranty can be a wise investment, offering significant savings and convenience compared to the potential high costs of repairs and replacements. By carefully considering your home’s specific needs and circumstances, you can decide if a home warranty is the right financial safety net for you.
How to Choose the Right Home Warranty Company
Selecting the ideal home warranty company requires careful consideration of several key factors to ensure you get the best protection for your home. Here’s what to evaluate to make an informed choice:
Assess the Claims Process
The efficiency and ease of the claims process are crucial. Inquire about how to initiate a claim with the home warranty company and the average time it takes to get a response. A reliable provider should offer 24/7 support to assist you whenever issues arise. Ensure the company has a reputation for a straightforward claims process, minimizing stress and inconvenience during urgent situations.
Examine Coverage and Exclusions
Understanding what is covered by the home warranty plan is vital. Check if the home warranty provider covers all essential home systems and appliances, or if you’ll need additional coverage for comprehensive protection. Be wary of exclusions that could affect key components of your home, and ask about options for supplemental coverage if necessary.
Compare Costs and Fees
Evaluate the affordability of the home warranty plan by comparing the cost of premiums and service fees with other providers. A competitive monthly or annual premium, along with reasonable service call fees, indicates a good value proposition. However, the lowest price isn’t always the best choice; balance cost-effectiveness with the extent of coverage and service quality.
Research the Provider’s Reputation
The credibility and reliability of the home warranty company are paramount. Look for accreditation by the Better Business Bureau (BBB) and review their ratings and customer feedback.
Checking with your state’s insurance commissioner can provide additional insights into the provider’s standing and history. Avoid companies with a track record of evasive behavior or those known for disappearing when a claim is filed.
Read the Fine Print
Before making your final decision, thoroughly review the contract. Confirm that the plan’s terms, including coverage details and limitations, match what was advertised or quoted. Understanding the fine print can save you from surprises down the line.
How to File a Home Warranty Claim
To ensure your home warranty claim is processed efficiently, follow these steps:
Review your coverage: Check your home warranty contract to confirm the issue is covered, noting any exclusions or limitations.
Initiate the claim: Contact your home warranty provider as soon as possible using their provided channels, such as online portals, email, or phone.
Provide details: Offer clear information about the problem, including model numbers and a description of the issue, to expedite the repair process.
Schedule the service: The company will arrange for a technician to assess and address the issue. Communicate any scheduling preferences you have.
Prepare for the visit: Ensure the area around the appliance or system is accessible for the technician.
Understand the outcome: After evaluation, the technician will repair or, if necessary, recommend replacement based on your warranty’s terms.
Tips for a Smooth Claims Process
Keep all warranty documents and maintenance records for reference.
Follow up with the company if updates on your claim are delayed.
Be aware of the service fee required for each claim to avoid surprises.
Bottom Line
A home warranty, combined with regular upkeep, represents a smart investment for safeguarding your home and budget. It offers peace of mind by covering repair or replacement costs of major home systems and appliances, potentially saving you substantial amounts in the face of unforeseen breakdowns.
While it requires an upfront cost, the long-term savings and convenience can far outweigh initial expenses, making it a worthwhile consideration for homeowners looking to minimize financial surprises.
Frequently Asked Questions
How long does a home warranty last?
When you choose home warranty coverage, it will come with a service contract for a set period of time. In most cases, it lasts for one year. You’ll then be able to renew your plan annually to keep your coverage intact. Cancellation policies will vary depending on which home warranty company you choose to work with.
Is a home warranty the same as home insurance?
No, they serve different purposes. Home insurance covers damage to your property from unforeseen events, while a home warranty covers repairs and replacements of major systems and appliances due to normal wear and tear.
How do I purchase a home warranty?
Research and compare different home warranty providers to find one that suits your needs. Reputable home warranty companies include Choice Home Warranty and Advanced Home Warranty. You can view a comprehensive list of top home warranty companies here.
Once you’ve chosen a provider, apply for coverage and pay the fee once your application is approved. Coverage typically lasts for one year and can be renewed annually.
Do home warranties cover all repair costs?
Home warranties usually require you to pay a service fee for each repair visit, but this fee is often significantly lower than the full cost of repairs. The warranty covers the rest, up to your contract’s limits.
Isn’t it cheaper to just use homeowners insurance?
Not necessarily. Your homeowners insurance policy covers damages from events like natural disasters, theft, and fire, but it doesn’t cover the cost of repairing or replacing appliances and systems due to wear and tear. That’s where a home warranty comes in, covering those gaps.
Is a home warranty part of closing costs?
A home warranty can be included in your closing costs if you choose to purchase one when buying a home. Sometimes, the seller or your real estate agent can negotiate a one-year home warranty into the deal.
Can I buy a home warranty after closing?
Yes, you can purchase a home warranty at any time, not just when buying a home. However, pre-existing conditions may not be covered, so it’s advantageous to get a warranty as soon as possible.
Are home warranties transferable?
Yes, most home warranty plans can be transferred to new homeowners if you sell your home, making your property more attractive to potential buyers.
What should I do if my claim is denied?
If your home warranty claim is denied, review the reason for denial and check your contract for coverage details. You can often appeal the decision by providing additional information or clarification about the issue.
How often can I use my home warranty?
There’s generally no limit to how many times you can use your home warranty within the contract period, but there may be limits on the amount covered for certain items or systems. Check your contract for details.
Can I choose my own repair technician?
Most home warranty companies require you to use their network of approved service providers. However, some plans may allow you to choose your own technician, subject to approval and reimbursement policies.
What happens if a covered item can’t be repaired?
If a covered item cannot be repaired, your home warranty plan typically covers its replacement. The specifics, such as whether you’ll receive a new model or the depreciated value in cash, depend on your contract’s terms.
Are home warranties tax-deductible?
No, home warranties are generally not tax-deductible for your primary residence. However, if you use part of your home for business, like a home office, or if you rent out a portion, you may be able to deduct a fraction of the home warranty cost. This fraction corresponds to the percentage of your home used for business purposes.
Looking for the Best Home Warranty Company?
Check out our reviews of the top home warranty companies.
Who doesn’t think swearing parrots are funny? Although you wouldn’t want your parrot talking about the clap when Aunt Beatrice comes over for Sunday dinner. I’m sure that every LO has heard their share of salty words, and they deal with much more for their clients than just a loan. Working with their client’s debts, assets, rental insurance until they buy a home, even servicing after the loan funds, you name it. Everyone across the nation is feeling the brunt of seemingly usurious homeowner insurance rates, and The Mortgage Collaborative’s Rundown tomorrow has Andrew Hellard, SVP of Products with Matic, discussing why homeowner’s insurance costs have skyrocketed. IMBs have not been retaining servicing. They needed the cash. Companies like Freedom, AmeriHome, Pennymac, and Planet Home have been buying up servicing. They will retain that customer if and when refinancing kicks in. Rate and term refis will probably go to the aggregators. They bought the servicing; they want to keep that customer. What percentage of customers will go back to the original lender, increasing the recapture rate? It may very well depend on what the customer service was like initially. (Today’s podcast can be found here and this week’s is brought to you LoanCare, successfully navigating clients and homeowners through market change for 40 years. The mortgage subservicer delivers superior customer experience through personalization and convenience via its portfolio management tool, LoanCare Analytics™, supporting MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Angel Oak Mortgage Solutions’ Tom Hutchens on his real estate market outlook for 2024 and securitizations in the Non-QM space.)
Broker and Lender Products, Programs, and Software
Mortgage leaders: The home insurance market is facing unprecedented volatility with carriers declining new business and increasing premiums to an all-time high. This can delay closings and even lead to DTI exceeding acceptable limits once insurance costs are factored in. Matic, a home insurance marketplace built for the mortgage industry, helps borrowers save time by shopping multiple A-rated carriers at once and providing transparent pricing and coverage options. With flexible integration options, Matic adds visibility and control, allowing lenders to foresee potential issues that could result in delayed closings. To learn how mortgage enterprises like New American Funding and PRMG are partnering with Matic, book a demo today.
Ready to help more borrowers tackle affordability? Click n’ Close has provided more than 1.5 billion dollars in DPA-related financing to over 6,000 borrowers through its SmartBuy suite of products, with an average of nearly $12,500 in assistance per transaction. Unlike state or municipal DPA programs, SmartBuy isn’t subject to budgetary shortfalls and offers tremendous flexibility to accommodate a wider range of borrower scenarios, making it ready to help your borrowers achieve homeownership. From start to finish, SmartBuy offers a streamlined process for all parties. With lower capital requirements and short turn times, Lenders can be up and running with SmartBuy in a snap. In addition, wholesale loan program information is available in today’s leading product pricing engines (PPEs), including Optimal Blue, MeridianLink’s Price My Loan, Lender Price, and Polly. Reach out to our wholesale (Adam Rieke, Kerry Webb and Soliman Martinez) or correspondent team (Julas Hollie) to learn more.
‘App’ [noun] – an application designed for a mobile device. ‘Optimal Blue PPE’ [proper noun] – the mortgage industry’s most widely used product, pricing, and eligibility engine. These terms probably aren’t new to you, even if vocabulary wasn’t your best subject in school. But one piece of information you won’t find in a dictionary is that the Optimal Blue PPE is now available in a native mobile app for Android and iOS. That’s right: Loan officers can put “pricing in their pocket” with complete access to scenario pricing and more, the exact moment they need it. It’s time to leave your dictionary AND your laptop behind and take the power of the Optimal Blue PPE wherever business takes you. The enhanced iOS app even includes publicly accessible pricing analysis from the Optimal Blue Mortgage Market Indices. Simply have your company’s account admin enable access today.
“Planet Management Group is your trusted and proactive partner for residential and commercial asset management. Our private clients gain access to specialized technology, expert advisory services, and clear insights into residential and commercial market opportunities. Embrace performance. Experience PMG. email or call (585) 512-1030 and discover the PMG difference today.”
Successfully managing MSR portfolios can be a lucrative endeavor, but navigating regulatory compliance, risk management, and understanding market values can be daunting. Join MQMR and MCT for a webinar on February 15th at 11am PT entitled MSR Risk Management, Compliance, and Current Market Strategies, where panelists will dive into operational and regulatory best practices, share invaluable tips to avoid common MSR management pitfalls, and provide insights into current pricing trends. The joint webinar will also explore crucial topics such as servicing regulatory developments (FHFA, GSEs, NCUA, GAAP compliance), a bulk MSR market update, trends in retained vs. released vs. co-issue, and understanding the value of your portfolio. Don’t miss this opportunity to enhance your portfolio management skills and elevate your lending income. Register today for a comprehensive session that will empower your financial strategies.
STRATMOR on Profitability
In his 1943 paper, “A Theory of Human Motivation,” Abraham Maslow identified five levels of human needs, from the most basic to the most advanced. In STRATMOR Group’s January Insights Report, Senior Partner Jim Cameron borrows from Maslow’s famed “hierarchy of needs” theory to offer mortgage lenders a real-world approach to shaping their strategies in 2024. STRATMOR’s January InFocus article, “Maslow and Mortgages – The Path to Actualization in Today’s Market,” outlines a similar hierarchy that recommends lenders get back to consistent profits before embarking on their longer-term strategic goals. Check out STRATMOR’s full January Insights Report here.
News and Industry Updates
“AnnieMac Home Mortgage is delighted to share a momentous announcement that symbolizes our commitment to progress and innovation: the unveiling of our new brand… Our new brand is a reflection of AnnieMac’s journey, capturing the spirit of adaptability and forward momentum that has defined our organization. At the heart of this evolution is the distinctive chevron symbol.” (Editor’s note: Cynics would say that “momentous” might be a stretch, reserved for things like landing on the moon, finding Amelia Earhart’s plane, or scaling Mt. Everest. But hey, if it gets more business…!)
Pennymac was recently alerted to an appraiser fraud scheme where appraisal reports were completed by an unlicensed appraiser unlawfully using the identities of other actively licensed appraisers. The appraisal reports were completed over the past two-year period and there is no evidence the appraisers whose identities were used were aware of or involved in the activity. Details are posted on the in Pennymac Announcement 24-04.
Do your clients need to access home equity? Kind Lending offers Closed End Seconds (CES) financing through piggyback and standalone programs. CES financing allows borrowers to access cash from their home equity without impacting their original loan rate.
Per the Pennymac Announcement 24-02, Jumbo LLPAs will be updated effective for all Best Efforts Commitments taken on or after Monday, January 8, 2024 as follows: Improving values on the ‘Occupancy Adjustments’ LLPA grid. Updating values for the ‘Purchase’ LLPA on the ‘Loan Purpose Adjustments’ LLPA grid.
Capital Markets
The United States cannot be an island of prosperity. This week has been an excellent example of how international events can impact domestic mortgage rates. Germany’s economy is in the doldrums. Houthi rebel attacks on ships and allied responses in the Red Sea have resulted in a spike in producer costs that is likely to be passed along to consumers, hurting the Fed’s quest to return U.S. inflation to its 2 percent target. China has ramped up stimulus, saying it will reduce the reserve requirement ratio for banks by 50 basis points in early February, a move that will add $139 billion in liquidity to the market, but also stoked fears of larger contagion. The release of flash Manufacturing and Services Purchasing Manager Indices readings from major world economies mostly showed an ongoing contraction, providing markets ammo for pricing in early and deep Fed rate cuts. And quarterly corporate earnings results for companies around the globe, with a particular focus on forward looking guidance, has investors less convinced of signs that the Fed’s historic tightening cycle will tilt the economy into recession.
In this country, bond prices, and therefore rates, are based on supply & demand and we learned yesterday that the Treasury sold $61 billion in 5-year notes to weak demand. Part of that stems from stock market highs and consumer sentiment in January rebounding to the highest level since mid-2021, but also from cautious “Fed speak” recently and stronger than expected data. Attention now turns to GDP from Q4 of last year. Real GDP growth is seen slowing from Q3’s unsustainably robust 4.9 percent annualized increase and is expected to show that the economy expanded at a 2 percent annual rate in the final three months of 2023. Household spending is expected to be the main driver of both stronger growth and overall spending than was anticipated at the start of the quarter. Those factors may keep the economy from dipping into a recession even if there isn’t much help from other sources of growth. In fact, household incomes are now outpacing inflation.
Today’s economic calendar begins a deluge of data over the next several sessions and was kicked off by advanced Q4 Gross Domestic Product (+3.3 percent). GDP was expected to increase 1.3 percent versus 4.9 percent previously, with final sales 2.5 percent higher versus 3.6 percent in Q3. The core Personal Consumption Expenditure (PCE) Deflator registered +2.0 percent, unchanged from last month’s reading. The Price Index +1.5 percent.
We’ve also received Durable Goods Orders (flat on the month, ex-transportation +.6 percent), weekly jobless claims (+214k, 1.833 million continuing), advanced indicators for December (previous goods balance…, retail inventories …, and wholesale inventories…), and the Chicago Fed National Activity Index for December. Later today brings December new home sales, KC Fed manufacturing for January, the Treasury auctioning off $41 billion 7-year notes, and Freddie Mac’s latest Primary Mortgage Market Survey. Norges Bank was out with its latest monetary policy decision overnight (no change), as well as the European Central Bank’s decision (no change) with ECB head Lagarde’s press conference. We begin the day with Agency MBS prices a few ticks (32nds) better, the 10-year yielding 4.14 after closing yesterday at 4.18 percent, and 4.35 on the 2-year.
Jobs
“Attention Mortgage Brokers: Are you feeling isolated? Are you lacking support or struggling to establish relationships in this shifting market? Take your career to new heights with RWM Home Loans, a trusted name in home financing with over 30 years of excellence. With our FNMA, FREDDIE and GNMA approvals, we offer a wide range of products and direct loan servicing, empowering our sales team to fund both in-house and with brokered solutions. Whether you’re assisting first-time homebuyers, navigating Jumbo, Non-QM, reverse mortgages, or managing construction loans, we have the solutions to meet your clients’ needs. Do you want a voice at the table and the ability to provide 5-star service, best in class technology, and competitive pricing for your borrowers? If you are evaluating your options and looking for a top tier lending partner, contact us now for a confidential conversation.”
A strategic CFO is available on short notice. Experience in conventional/conforming markets, non-QM, Fix & Flip, and DSCR products, in distributed retail and wholesale channels in public and private lenders, backed by PE and venture capital. 15+ years’ experience in start-up, high growth middle market and public companies. Fintech lender experience including AI, machine learning and predictive modeling. Comfortable working at both a strategic level and a hands-on operational level. Also open to work on M&A transactions or restructurings. Interested companies should contact Chrisman LLC’s Anjelica Nixt to forward your note.
“PrimeLending offers Branch Managers the flexibility to structure their branch for maximum growth and profitability. As a Branch Manager at PrimeLending, you’ll have the power to make operational decisions, construct your team and truly lead. Branch structures range from a traditional Retail Model to our Modern Originator Model leveraging both retail and virtual production teams to our Expense Management Model giving you unparalleled control over how you invest in your business. Don’t settle for the status quo… Explore all your options and take more control over your future. We’re looking for talented, driven Branch Managers and Loan Originators! Contact Nic Hartke today!”
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Mortgage rates began dropping steadily in the last months of 2023, down to 6.61% for a 30-year, fixed-rate loan in the last days of the year, according to data from Freddie Mac.
But 85% of American homeowners remain locked into pre-pandemic mortgage rates of 5% and lower, making them hesitant to sell their home only to purchase another when both home prices and interest rates remain elevated.
Mortgage experts, however, predict that the market may shift in 2024, although not as dramatically as some would hope.
“Mortgage rates will fall to about 6.6% by the end of 2024. The gradual decline in rates combined with the small dip in prices will bring homebuyers some much-needed relief,” Redfin Chief Economist Daryl Fairweather told USA Today.
Jeff Taylor, founder and managing director at Mphasis Digital Risk, agreed that 30-year fixed rates will stay will in the “mid-6%” range.
National Association of Realtors chief economist Lawrence Yun made a bold prediction regarding the market. “A marked turn can be expected as mortgage rates have plunged in recent weeks,” he said.
However, even with interest rates falling, the lack of single-family homes on the market may keep prices elevated.
“While single-family housing starts have steadily increased throughout 2023, it will take years of accelerated new home construction to narrow the supply shortage gap from more than a decade of underbuilding,” Odeta Kushi, Deputy Chief Economist at First American, told USA Today.
Further, with existing homeowners refusing to sell because interest rates won’t match what they secured pre-pandemic, the housing shortage is destined to continue through 2024.
The rising costs of home insurance is also deterring new homebuyers, according to a recent Newsweek article. Real estate investors told the publication that it may be harder to get a mortgage in states like Florida, which is prone to extreme weather such as hurricanes, floods and tornadoes. If you can’t insure a home, you can’t secure a mortgage for its purchase. Current homeowners may experience rate hikes, too, but once a home is insured, it’s easier to maintain a policy than to write a new one.
California, Louisiana, Texas and Colorado also experienced rate hikes in 2023, as previously reported by GoBankingRates. Other states may be susceptible to future rate hikes, according to HUB Private Client research. These states include Minnesota, Missouri, Indiana and South Dakota, which is alarming as they were not previously considered areas at high-risk of weather-related claims.
But even with rising costs, 2024 could be the first year the U.S. sees an uptick in new home construction, as predicted by Robert Dietz, Chief Economist for the National Association of Home Builders.
“Due to low existing inventory, new construction has increased to approximately one-third of total single-family inventory in recent months when historically it was only 10% to 15%,” he said.
After declines in 2022 and 2023, the increase in new construction could help alleviate some of the housing shortage. But even an increased inventory of new homes won’t make a significant difference in the housing market for 2024. “Home prices keep marching higher,” Yun told USA Today. “Only a dramatic rise in supply will dampen price appreciation.
Regional insurer that sells home insurance in three New England states.
Coverage options
About average
Average set of discounts
NAIC complaints
Far fewer than expected
Safety Insurance
Regional insurer that sells home insurance in three New England states.
Coverage options
About average
Average set of discounts
NAIC complaints
Far fewer than expected
About Safety home insurance
Boston-based Safety Insurance sells homeowners insurance in select parts of New England. It earned a NerdWallet rating of 4.5 stars out of 5 for overall performance, standing out for its ultra-low number of consumer complaints. Safety home insurance is worth considering if you live in New England and want to work with a local independent agent to find coverage.
How we rate homeowners insurance companies
Our star ratings are based on consumer complaint data from the National Association of Insurance Commissioners; financial strength grades from AM Best; coverage and discounts available; and the overall consumer experience. See our criteria for evaluating home insurance companies.
Why you can trust NerdWallet
Where Safety stands out
Consumer complaints. Safety draws very few complaints to state regulators for a company of its size, indicating that most policyholders are satisfied with their coverage.
Optional coverage packages. Safety offers bundles of valuable add-ons such as guaranteed replacement cost coverage for your home and water backup coverage.
Where Safety falls short
Availability. Safety serves only three states in New England. Homeowners elsewhere will need to find a different carrier.
Website. Although Safety’s site has some basic functions like online bill payments, it doesn’t allow you to get a quote or offer easily accessible information about the company’s policy options.
State availability
Safety sells homeowners insurance in Maine, Massachusetts and New Hampshire.
Safety home insurance coverage
You can customize your homeowners policy with numerous add-ons, but below are the types of coverage that generally come standard:
Type of coverage
What it does
Pays to repair or rebuild the structure of your home.
Covers damage to unattached structures such as sheds or fences.
Pays to repair or replace personal belongings such as furniture or clothing.
Pays for hotel stays, restaurant meals or other expenses if you have to live elsewhere while your home undergoes covered repairs.
Covers legal expenses and damages if you’re responsible for injuries to other people or their property.
Covers injuries to guests in your home, regardless of fault.
Besides these basics, you may also be able to add:
Equipment breakdown coverage in case a major appliance or system fails. This could include things like HVAC systems, generators and kitchen appliances.
Service line coverage,which can pay for damage to underground lines that connect your home to public utilities.
You can also bolster coverage with optional upgrade packages, including:
Safety Supreme Plus. This package comes with:
Higher limits for jewelry and silverware.
Water and sewer backup coverage in case a sump pump fails or a drain backs up into your home.
Service line coverage.
Extra liability coverage.
Guaranteed replacement cost coverage, which will pay the full price to rebuild your home even if it’s above your policy limit.
Broader coverage for your belongings.
Personal injury coverage for things like slander and libel.
Safety Complete. Coverage for this package includes everything in the Supreme Plus package along with identity theft reimbursement, increased water backup and equipment breakdown limits, and coverage for business property on the premises.
Safety home insurance rates
The average cost of Safety homeowners insurance in New Hampshire is $815 per year, according to NerdWallet’s rate analysis. That’s slightly less than the state average of $865 per year.
In Massachusetts, Safety homeowners insurance costs an average of $1,185 per year, below the state average of $1,320 per year.
Rate data wasn’t available for Safety Insurance in Maine.
Discounts
Depending on where you live, you may be able to save on your Safety homeowners insurance premium by:
Bundling your policy with Safety auto insurance.
Signing up to receive documents electronically.
Buying a new home.
Not having any recent claims.
Having a fire or burglar alarm in your home.
Being a loyal Safety customer.
Consumer complaints
Safety had far fewer than the expected number of complaints to state regulators relative to its size for home insurance, according to three years’ worth of data from the National Association of Insurance Commissioners.
Consumer experience
Website: You can’t get a quote or find many details about Safety’s homeowners insurance coverage on the company website. However, you can log in to your online account to pay bills, view your policy information and find agent contact details.
App: Safety’s app offers the same services as your consumer web portal, including bill payments, claim reporting and seeing agent information.
Claims: You can report a home insurance claim by contacting your agent or calling Safety directly at 800-951-2100. You can also file and track claims through your account on the website or in the app.
Customer service: For help, you can reach out to your local agent or call Safety at 800-951-2100.
The bottom line
Safety Insurance may be right for you if you’re a New Englander who wants to work with a local agent to find the best coverage. But it’s not the best option if you prefer to shop for insurance online.
Current Product
Complaints to NAIC
Far fewer than expected
Complaints to NAIC
Far fewer than expected
Complaints to NAIC
Far fewer than expected
Coverage options
About average
Coverage options
About average
Coverage options
More than average
Discounts
Average set of discounts
Discounts
Average set of discounts
Discounts
Average set of discounts
Bottom line
Regional insurer that sells home insurance in three New England states.
Bottom line
Well-established insurer known for great customer service.
Bottom line
Best for homeowners looking for many ways to customize their policy.
Other home insurance companies to consider
Not ready to make a decision? You may be interested in these other homeowners insurance companies:
Frequently asked questions
What other types of insurance does Safety sell?
In addition to homeowners insurance, Safety products include auto, umbrella, dwelling fire and business policies.
How long has Safety Insurance been in business?
Safety Insurance was founded in 1979.
How do I get Safety homeowners insurance?
Safety policies are sold through independent agents across Maine, Massachusetts and New Hampshire.
Good news, home buyers — expect both lower mortgage rates and home prices in 2024, which could ease the cost of homeownership, Redfin
RDFN,
+5.32%
says.
In its housing outlook for 2024, the real-estate brokerage said that next year would not only be “a year of change” but one where aspiring homeowners will finally be “catching a break.”
“2024 will be neither a buyers’ nor a sellers’ market, but we think that the market will be tilting in favor of buyers with lower rates, lower prices, and more inventory as sellers get tired of waiting for rates to drop,” Chen Zhao, Redfin’s economics research lead, told MarketWatch.
“The increase in supply is likely to exceed the increase in demand, creating a market more friendly for buyers than 2023,” she added.
Home prices and mortgage rates to fall in 2024, according to Redfin
The brokerage expects home prices to fall 1% on a year-over-year basis in the second and third quarter of 2024. Aside from a brief drop in the first half of this year, the decrease would be the first time prices would have fallen since 2012, Redfin added, “when the housing market was recovering from the Great Recession.”
The median price of a home sold in October 2023 was $391,800, according to the National Association of Realtors. Prices were up 3.4% from last October.
Redfin expects home prices to fall in part because it expects the “lock-in” effect to subside. The lock-in effect refers to people who don’t want to sell their current home because of their relatively low mortgage rate.
“We’ve recently seen a double-digit annual increase in homeowners contacting Redfin for help selling their home, alongside a small drop in requests from prospective buyers,” the company noted.
Some homeowners are warming up to the idea of borrowing at a rate of 7%, Redfin said, because they may not see mortgage rates fall to the 3% – 4% range any time soon. Others see an opportunity to cash out on their equity and move to a more affordable place, the company added.
Redfin’s forecast also expects mortgage rates to drop. The rate on the 30-year fixed-rate mortgage was averaging 7.22% as of Nov. 30, according to Freddie Mac. The 30-year will fall throughout the year, Redfin said, and drop to 6.6% by the end of 2024. Even though Redfin expects the U.S. Federal Reserve will keep interest rates at their current level for the time being, it’s expecting a rate cut two or three times starting in the summer, which would bring mortgage rates down, they explained.
A separate 2024 housing forecast by Realtor.com predicted that mortgage rates will drop to 6.5% by the end of 2024.
Redfin also expects home prices to fall more significantly in certain parts of the nation, such as in parts of coastal Florida. Considering the run-up in home prices in places like North Port and Cape Coral, Redfin explained, there’s a “lot of room to fall.” Additionally, there’s the rising risk of climate disasters, such as hurricanes and storm surges, which make it more expensive to own homes in such areas given the rising cost of home insurance and other associated repair and rebuilding costs.
“At the same time, affordable and climate resilient places such as Albany, N.Y., Rochester, N.Y., and Grand Rapids, Mich., could see more rapid price appreciation,” Zhao added.
Political and legal developments to watch for in 2024
Redfin also noted that buyers and sellers will be more aware of the commissions they pay to real-estate agents next year, on the back of a landmark jury verdict in 2023 which upended a decades-long arrangement. Redfin is one of the defendants named in another class-action suit by home sellers, and is accused of engaging in a price-fixing conspiracy to inflate commissions.
Instead of the home seller bearing the 5-6% fee paid to their broker, which has historically been shared between the listing agent and the buyer’s agents, the arrangement may change. “Home buyers in 2024 will become even more aware of how much an agent costs,” Redfin said, “and less apologetic about negotiating commissions.”
Buyers may also forgo working with their own agent and work directly with the listing agent, Redfin suggested.
Additionally, Redfin expects the Biden administration to focus more efforts on housing, given how rapidly affordability has deteriorated in the last year. Considering the fact that home prices are up more than 20% since the president took office, Redfin said, “high housing costs are making many Americans feel poor.”
The Biden-Harris campaign did not respond immediately to a request for comment.
“We expect President Biden and his opponents to make splashy housing policy proposals to try to lure voters who are unhappy with their economic prospects,” Redfin said.
“Democrats are likely to focus on subsidizing down payments for first-time homebuyers, promoting inclusionary zoning and funding housing vouchers, which are all popular with liberal voters,” the company added. “Republicans are more likely to focus on reducing regulations that limit development.”
Top 10 builder now offering model home tours at Maggy’s Ridge Estates, selling from the mid $200s
LAFAYETTE, La., Nov. 30, 2023 /PRNewswire/ — Century Communities, Inc.—a top 10 national homebuilder, industry leader in online home sales, and the highest-ranked homebuilder on Newsweek’s list of America’s Most Trustworthy Companies 2023—is excited to announce the debut of Century Complete’s new model home at Maggy’s Ridge Estates in Sulphur, showcasing the community’s single-story Douglas floor plan. Maggy’s Ridge Estates boasts a prime location with convenient proximity to cultural hotspots and business hubs in the Lake Charles area—with quick access to McNeese State University, outdoor recreation and more. The location also comes with a desirable Flood Zone X rating, meaning a lower risk of flooding and thus lower insurance rates compared to higher-risk zones.
Available through Century Complete’s streamlined online homebuying process, the community is now selling an inspired lineup of single-story floor plans on wide homesites from the mid $200s—with each plan offering a versatile open-concept layout with exceptional included features, such as brick exteriors, stainless-steel appliances, granite countertops, and white cabinets. Buyers will also appreciate an inviting covered patio on each plan for a seamless flow between outdoor and indoor living spaces.
Learn more & view available homes at www.CenturyCommunities.com/MaggysRidgeEstates.
“We’re excited for area homebuyers and real estate agents to come tour our beautiful new Douglas model at Maggy’s Ridge Estates,” said Greg Huff, president of Century Complete. “Offering generous homesites, this community provides the opportunity to be the first to live in a quality-built new home at an affordable price, which is why we anticipate these homes to sell quickly.”
Wednesday, December 6: Homebuyer Webinar With Dinner at Maggy’s Ridge Estates
Homebuyers are invited to attend a special event at the community’s model home to enjoy complimentary dinner and watch a webinar livestream with information about home financing options with affiliate lender, Inspire Home Loans®!
MORE ABOUT MAGGY’S RIDGE ESTATES Now selling from the mid $200s
Conveniently situated near I-10 W/US-90 in Calcasieu Parish, Maggy’s Ridge Estates boasts a desirable location with easy access to restaurants, shopping, entertainment, museums and year-round community events. Exuding small-town charm, Sulphur offers a slower pace of life and an abundance of recreational opportunities, including recreation at nearby Lake Charles, the Creole Nature Trail, and more.
Three single-story floor plans
Three-sided brick exteriors
Up to 4 bedrooms, up to 3 bathrooms, 2-bay garages
Covered patios (per floor plan)
1,684 to 2,020 square feet
Model Home Address: 4987 Carlyss Drive Sulphur, LA 70665 337.210.2050
OTHER AREA COMMUNITIES
Maggy’s Ridge | Sulphur Now selling from the low $200s
Adjacent to Maggy’s Ridge Estates
2 single-story floor plans
4 bedrooms, 2 bathrooms, 2-bay garages
1,684 to 1,773 square feet
Learn more & view available homes at www.CenturyCommunities.com/MaggysRidge.
Mills Terrace | Scott Now selling from the low $200s
2 single-story floor plans
4 bedrooms, 2 bathrooms, 2-bay garages
1,684 to 1,773 square feet
Learn more and view available homes at www.CenturyCommunities.com/MillsTerrace.
Timberstone Estates | New Iberia Now selling from the low $200s
3 single-story floor plans
Up 4 bedrooms, 2 bathrooms, 2-bay garages
1,416 to 1773 square feet
Learn more and view available homes at www.CenturyCommunities.com/TimberstoneEstates.
Copper Oaks | Baton Rouge Now selling from the mid $200s
2 single-story plans, 2 two-story plans
4 bedrooms, up to 3 bathrooms, 2-bay garages
1,684 to 2,014 square feet
Learn more and view available homes at www.CenturyCommunities.com/CopperOaks.
VISIT OUR LOUISIANA SALES STUDIO IN BROUSSARD! While our industry-leading online homebuying process allows you to buy on your terms—24 hours a day, 7 days a week, 365 days a year—we also offer in-person assistance from local experts at our sales studio.
481 Albertson Parkway, Suite 2 Broussard, LA 70518 337.210.2050
DISCOVER THE FREEDOM OF ONLINE HOMEBUYING: Century Complete is proud to feature its industry-first online homebuying experience on all available homes in Louisiana.
How it works:
Shop homes at CenturyCommunities.com
Click “Buy Now” on any available home
Fill out a quick Buy Online form
Electronically submit an initial earnest money deposit
Electronically sign a purchase contract via DocuSign®
Learn more about the Buy Online experience at www.CenturyCommunities.com/online-homebuying.
About Century Communities Century Communities, Inc. (NYSE: CCS) is one of the nation’s largest homebuilders, an industry leader in online home sales, and the highest-ranked homebuilder on Newsweek’s list of America’s Most Trustworthy Companies 2023. Through its Century Communities and Century Complete brands, Century’s mission is to build attractive, high-quality homes at affordable prices to provide its valued customers with A HOME FOR EVERY DREAM®. Century is engaged in all aspects of homebuilding — including the acquisition, entitlement and development of land, along with the construction, innovative marketing and sale of quality homes designed to appeal to a wide range of homebuyers. The Company operates in 18 states and over 45 markets across the U.S., and also offers title, insurance and lending services in select markets through its Parkway Title, IHL Home Insurance Agency, and Inspire Home Loans subsidiaries. To learn more about Century Communities, please visit www.centurycommunities.com.
View original content to download multimedia:https://www.prnewswire.com/news-releases/online-homebuying-leader-century-complete-unveils-new-model-home-near-lake-charles-la-302002687.html
Today we’ll take a hard look at “HomeAmerican Mortgage,” yet another home builder affiliated mortgage lender.
They offer home purchase financing to Richmond American Homes customers, which is a top-10 home builder nationally.
Because they are operated by the same parent company, they can offer a streamlined process and home buying experience.
And perhaps more importantly, extend special financing offers like big mortgage rate buydowns.
Read on to see if you should use their in-house lender or look elsewhere for a better deal.
HomeAmerican Mortgage Fast Facts
The affiliated mortgage lender of Richmond American Homes
Offers home purchase financing on newly-built homes
Founded in 1983, headquartered in Denver, Colorado
Licensed to do business in 16 states and Washington D.C.
Funded $2.75B in home loans last year
Most active in Arizona, California, and Colorado
Also operate a title/escrow company and insurance agency
HomeAmerican Mortgage is a full-service, direct lender based out of Denver, Colorado.
They got their start way back in 1983 and are a subsidiary of MDC Holdings, Inc., which is a publicly-traded company (NYSE: MDC).
MDC also owns Richmond American Homes, which builds single-family residences in more than a dozen states throughout the country.
Simply put, HomeAmerican Mortgage exists to serve these home buyers, offering purchase loans only (no refinances).
This is similar to Lennar Mortgage and DHI Mortgage, which exist to serve Lennar and D.R. Horton home buyers, respectively.
They are currently licensed to do business in 16 states and D.C., including Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New Mexico, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Washington.
These are also the states where their new home communities are located.
At last glance, they have about 50 sponsored mortgage loan officers working at the company, per the NMLS.
And like many other builder-affiliated lenders, they also operate related subsidiaries to control the entire home buying process.
This includes a title and escrow company, American Home Title and Escrow Co., along with an insurance agency, American Home Insurance Agency, Inc.
Last year, HomeAmerican Mortgage funded about $2.75 billion in home loans, per HMDA data.
They are most active in their home state of Colorado and in California, with the two states accounting for nearly half of total loan production.
The company also does a lot of lending in Arizona, Florida, and Nevada.
How to Apply
To get started, you can visit a new home sales office at one of their communities or simply head to their website and click on “Apply.”
Before you apply, you may want to discuss pricing and loan options with a licensed loan officer.
Their digital mortgage application is powered by fintech company Blend. It allows you to complete the app from any device, whether it’s a computer, tablet, or smartphone.
And you can link financial accounts to save time, upload necessary documents, and eSign disclosures.
Once your loan is submitted, you’ll be asked to provide supporting documentation to generate a commitment letter, which may be subject to final underwriting approval.
You’ll be able to check loan status 24/7 and get in touch with your loan team if and when you have questions.
It’s also possible to generate a mortgage pre-approval letter via their online application, though if buying a new home via their parent company this may not be necessary.
Loan Programs Offered by HomeAmerican Mortgage
Home purchase loans
Conforming loans backed by Fannie/Freddie
FHA loans
VA loans
Homebuyer assistance
Fixed-rate and adjustable-rate options
As noted, HomeAmerican Mortgage is a purchase-only mortgage lender. So they’re entirely focused on getting home buyers into new homes.
There are no mortgage refinances offered, but they have a wide array of available loan programs to suit different preferences and needs.
You can get a conforming loan backed by Fannie Mae and Freddie Mac, or a jumbo loan if purchasing a more expensive property.
In addition, they offer both FHA loans and VA loans, though USDA loans appear to be absent from their lending menu.
Of course, their new homes may not be located in rural areas anyway, so this is moot.
They also mention the availability of bond loans and rural housing loans, which sounds like homebuyer assistance via state, city, and municipal housing agencies.
They offer both fixed-rate and adjustable-rate loans, including a 5/1 ARM on FHA loans, and a 7/6 ARM for conventional loans.
HomeAmerican Mortgage Rates
While they don’t list their daily mortgage rates online, they do say they offer competitive rates This is apparently because they don’t rely on brokers or a middleman.
Of course, the real reason they might be able to beat the competition is because home builders often offer huge incentives if you use their affiliated lender.
The Richmond Homes website typically features special financing offers if you get under contract and close your loan by a certain date.
At last glance, I saw rates as low as 4.875% on select adjustable-rate mortgages, and 5.75% for 30-year fixed rates.
These deals are often hard to beat because the builder can offer a large amount of closing cost assistance that can be toward a permanent interest rate buydown.
However, be sure to pay attention to all lender fees and the mortgage APR, which takes into account all (or most) of the loan costs.
And put in the time to gather other quotes from third-party lenders and independent mortgage brokers as well.
Aside from potentially finding a better deal, having other quotes can help you negotiate more effectively.
HomeAmerican Mortgage Reviews
While they appear to have the latest technology, a good selection of loan programs, and low mortgage rates, their reviews are a little less convincing.
They’ve got a poor 1.4/5-star rating from about 120 Google reviews, which obviously is questionable.
A similarly low score of 1.5/5 can be found at Yelp, though it’s from a smaller sample size of about 30 reviews.
Ultimately, they don’t have a ton of reviews online. So take the time to read through them to see what the issues were.
But they do hold an ‘A+’ rating with the Better Business Bureau (BBB) and have been an accredited business since 2009.
And there are only seven customer complaints over the past three years on the BBB website, with just one in the last 12 months.
To summarize, HomeAmerican Mortgage could be a good option if you’re buying a Richmond American Home because they offer below-market mortgage rates.
But it sounds like the service can sometimes experience some hiccups. Still, if you can stomach it, the savings might be worth it.
Just be sure to gather outside mortgage rate quotes as well to see what else is out there, and to give yourself leverage when negotiating.
HomeAmerican Mortgage Pros and Cons
The Good Stuff
Digital mortgage application powered by Blend
Can apply for a home loan online via their website
Special mortgage rate deals for Richmond American Homes customers
A+ BBB rating and few customer complaints
Mortgage checklist and glossary on their website
Affiliated title/escrow/insurance companies for one-stop shopping