The 21 top recipients of TARP funds saw minimal increases in overall lending in February compared to a month earlier, according to data released today by the Treasury Department.
The median growth in total lending was actually negative two percent in February, with nine banks posting increases and 12 experiencing declines.
“Against a difficult economic backdrop, banks extended approximately the same level of loan originations in February as in January,” the Treasury said in a release.
“The relatively steady overall lending levels observed in February likely would have been lower absent the capital provided by Treasury through the CPP, an indication of the critical role this program has played in stabilizing markets and restoring the flow of credit to consumers and business.”
However, residential mortgage originations across the 21 banks increased by a median 35 percent, thanks to a flurry of refinance activity.
The median change in mortgage refinancing during the month was an increase of 42 percent from January, thanks in part to record low rates; home equity loan originations saw a median increase of 18 percent.
Wells Fargo was the top mortgage lender for the second month running with $34.8 billion in monthly loan originations, trailed by Bank of America with $28.6 billion and Chase with $13 billion, all substantial increases from January.
Meanwhile, loan originations for consumer loans, such as auto, student, and personal loans, decreased a median 47 percent, partially attributable to poor demand in these industries.
New credit card originations also slowed by a median three percent, while the average loan balance of credit accounts fell by a median one percent.
It appears as if the banks that received billions in TARP funds are only willing to originate low-risk, government-backed mortgages (FHA loans, VA loans), while cutting back on all other types of credit.
As we enter the second quarter of 2021, it’s time for the mortgage industry to reflect on the past 12 months and think about how to plan for the same period ahead. After all, it was mid-March of last year that the president declared a national emergency leading to school closures, the wearing of masks, and the emptying of office buildings across the country. A little over a year ago, we could have never imagined the actual implications of COVID’s impact to come on this nation, our communities, families and our business.
Take working remotely for example. In early 2020, Zoom was barely a known company in America. The impact of COVID made it a household name. By October, the market value of Zoom exceeded that of Exxon-Mobile, reflecting the dichotomy of an intransigent society staying at home and working remote. The stock value of Zoom grew 650% during this one year as many other aspects of the economy slowed or shuttered as a result of the shutdown.
But housing was the true bright spot in the economy. Low mortgage rates, driven by quantitative easing by the Federal Reserve helped fuel a boom in both mortgage refinancing and purchases, making 2020 the second-best year in U.S. history for mortgage origination volume. Augmenting the low rates was an increase in demand driven by the sudden surge of the millennials, finally now out to buy a home.
In fact, as reported in the Wall Street Journal in late August of 2020, “Millennials reached a housing milestone in 2020 when the group first accounted for more than half of all new home loans, and they consistently held above that level in the first months of 2021, the most recent period for which data are available, according to Realtor.com. The generation made up 38% of home buyers in the year that ended July 2019, up from 32% in 2015, according to the National Association of Realtors.”
Now, with the economy looking toward life past COVID, the focus is beginning to shift to a recovering economy, perhaps hotter than expected, driven by an excess in stimulus provided, and a likely end to the low single-digit mortgage rates seen over the previous year.
But a reminder to all is relevant now. Low rates are often the sign of a poor economy. As Bankrate’s Chief Economist Greg McBride, recently highlighted: “Bad economic news is often good news for mortgage rates. When concern about the economy is high, investors gravitate toward safe-haven investments like Treasury bonds and mortgage bonds, pushing bond prices higher but the yields on those bonds lower.”
So, the good news is that the economy will survive COVID and may actually catch on fire in the rebound with GDP forecasted to grow by 6.5% this year. Job growth will be the result of increased spending across every sector — from travel to goods and services. In fact, the pent-up demand can be reflected by the growth in retained savings after expenses during COVID, as Economist Mark Zandi of Moody’s Analytics highlights.
With 916,000 jobs created in March, many economists are bracing for what might be a spending spree from a nation that has been locked away for far too long and now recovering at a record pace. With summer on the horizon, look for the pace of spending to only grow with tourism augmenting what would already be a robust growth spree.
In fact, the recovery from the COVID pandemic is in stark contrast to that of the 2008 Great Recession. The fact that this recession was brought on by a virus versus weakening economic variables is key to the distinction. If you compare the employment growth between the two recessions there is truly no comparison.
Low interest rates, the demand surge from the millennials that are now reaching peak buying years, significant stimulus brought on by three large recovery bills, not to mention a potential infrastructure package, and massive pent-up demand from the lack of spending over the past year should have everyone simply bracing for lift off from the U.S. economic engine as it fires up.
So mortgage rates will likely continue to rise modestly as the Fed tapers from its intervention in the MBS (mortgage backed security) supply, which will slow refinancing and thus reduce mortgage volume overall in the market. Clearly, mortgage forecasts from the MBA and others reflect the expectation that overall volume will slow, but purchase activity will continue to grow.
For those that have focused on purchase lending, they will see less of a drop in total volume. But for those that have overly depended on refinancing, the impact will be more severe. Fortunately for lenders that were already more purchase-focused, the impact will be far less than many other refinance dependent operations given the strong purchase to refinance mix.
And one last perspective is important for everyone. The graph below from the Federal Reserve of St. Louis is the most important point about perspective. Look at 30-year mortgage rates as they stand today compared with any time going back decades when these rates were even captured on an aggregate basis. Rising mortgage rates will certainly be tolerated by the market.
In fact, small hikes in mortgage rates can lead to panic-buying periods which can drive small volume surges. Mortgage rates have never been this low and yet through previous cycles home sales have continued. In fact, the largest home purchase year in this nation’s history was 2005 when rates were near 7.5%.
The nation’s greatest obstacles ahead will come from the shortages in available single family home inventory across the county. But as America returns to work, supplies for builders will return to needed production levels, new home construction will continue to rise, and ultimately the supply-demand imbalance will rectify itself. The current proposed infrastructure bill includes funding for over 100,000 affordable housing units among many other housing initiatives, reflecting the recognition of the need to address access and supply to affordable homes.
For those in the mortgage banking industry, market corrections are part of the business. But in the year ahead, while having less mortgage volume overall, it will be met with a strengthening economy, a healthier nation, and enormous demand for home ownership. How lenders re-tool for this shift to a stronger economy and a purchase-dominated mortgage market will be the most important variables in long-term success. For companies that prepare for this, the market shift will be far less impactful compared to so many others.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Dave Stevens at [email protected]
To contact the editor responsible for this story: Sarah Wheeler at [email protected]
If you’re on the lookout for a full service online bank, you might come across CIT Bank. Founded in 2009, CIT Bank is now a division of First-Citizens Bank & Trust Company, which is a leading financial institution with more than $218 billion in assets.
The bank offers a variety of products, including savings and checking accounts, CDs, custodial accounts, and home loans. It stands out for its competitive interest rates that you may not find at traditional banks as well as no monthly maintenance fees or monthly service fees.
While there are no physical branches, live chat support on CIT’s website and mobile app as well as automated phone assistance is available 24/7. If you prefer to speak to a CIT representative directly, you can reach them during regular business hours: Monday through Friday, 9 a.m. to 9 p.m. ET, or Saturday from 10 a.m. to 6 p.m. ET.
CIT Bank doesn’t have an ATM network but it will reimburse you up to $30 per month if you incur out-of-network ATM fees. Rest assured that it’s insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 for an individual account or $500,000 for joint accounts, meaning your money will be safe, no matter what happens to the bank. Let’s take a closer look at CIT Bank so you can decide whether it makes sense for your unique situation.
CIT Bank Pros and Cons
Before you move forward and open an account with CIT Bank, it’s a good idea to consider the benefits and drawbacks.
Pros
Competitive rates: Since CIT Bank has less overhead costs than brick and mortar financial institutions, its yields on deposit accounts and several CIT Bank CDs are competitive. It can allow you to make the most out of your hard earned money.
No fees: Unlike other bank accounts, CIT deposit accounts do not have any monthly maintenance fees, or other common fees. You can use the money you save on fees to meet your financial goals faster.
ATM fee reimbursement: CIT Bank reimburses you up to $30 per month for out-of-network ATM fees. This means you can withdraw cash from any ATM without worrying about high costs.
Small minimum deposit requirements: You don’t need a lot of cash to open up CIT Bank accounts. Many. of the accounts only require $100 to start.
24/7 customer service: CIT’s live chat and automated phone support is available round-the-clock. If you have a question or concern, you’ll be able to receive assistance right away.
Cons
No physical branch locations: CIT is an online only bank, meaning there are no branches for an in-person banking experience. If you decide to bank with CIT, you should feel comfortable with online banking and mobile banking.
Limited product selection: Compared to other financial institutions, CIT’s product line is slim as there are no credit cards, car loans, or IRAs. Fortunately, its lineup of checking accounts, savings accounts, custodial accounts, CDs, and mortgages is still impressive.
Low rates on select CD accounts: Some CDs have lower rates than you may be able to find elsewhere. The good news is you can calculate your returns in advance and won’t have to worry about fluctuations in the market.
No checkbooks: CIT’s eChecking accounts do not include checkbooks. However, you can use CIT to pay other individuals and businesses electronically via Zelle, Apple Pay, and Samsung Pay.
CIT Bank Products
CIT Bank offers a variety of products to help you meet different financial goals. Here’s an overview of each of its current offerings.
Checking Accounts
You can open the CIT Bank eChecking account with as little as $100. It’s unique in that it offers interest on your balance. To earn as much interest as possible, you’ll need to keep at least $25,000 in your account.
As an online checking account holder, you’ll get a debit card with chip technology and 24/7 account access. Plus, you’ll be able to deposit checks and make unlimited withdrawals with the CIT Bank mobile app. In addition, you’ll have access to Zelle, Apple Pay, and Samsung Pay. Unfortunately, the eChecking account doesn’t come with paper checks.
Savings Accounts
CIT Bank offers a few CIT Bank savings accounts you might want to explore., including the CIT Bank Savings Connect, the Savings Builder account, and Platinum Savings account. The CIT Bank Platinum Savings account provides an interest rate of up to 12 times the national average.
There are no fees and interest compounds daily so that you can earn as much as possible. All you need is $100 to open this account. This account is ideal if you’d like to meet your savings goals quickly without a lot of effort.
With the CIT Savings Connect account, you can reap the benefits of a great interest rate and enjoy easy access to your funds. Several noteworthy perks of the Savings Connect include an interest rate of up to 11 times the national average, online banking and mobile banking, remote check deposit, and no monthly service fees.
The CIT Savings Builder is a two-tiered CIT savings account with an interest rate that’s twice the national average. As long as you make at least one $100 deposit per month or maintain a balance of $25,000 or more, you can earn a competitive rate on it. Since the Saving Builder account earns daily compounding interest, you’ll be able to maximize your earning potential. Just like the other CIT saving accounts, the Savings Builder doesn’t have any account opening or maintenance fees.
CIT Money Market Account
The CIT Bank money market account is the way to go if your ultimate goal is to grow your savings and stash your emergency fund. With a minimum opening deposit of $100, you can earn more than two times the national average.
In addition, there is no monthly service fee and you can deposit checks and transfer money using the CIT Bank mobile app. In addition, you’ll be able to earn twice the national average. Just like with the other accounts, you may only make six transactions per statement cycle and can deposit checks and make transfers with the CIT mobile banking app.
CDs
Certificates of Deposit (CDs) might be worth exploring if you like the idea of guaranteed returns. CIT offers several types of CDs, including:
Term CDs: Term CDs are traditional CDs that are widely seen at other banks and range from six months to 60 months. With a term CD, you can lock in an interest rate for a certain time period, regardless of what happens to the market. The longer term you choose, the more interest you’ll earn. You’ll need at least $1,000 to open a term CD.
No-Penalty CDs: Most CDs require you to lock up your money for a set period of time. If you’d like to access it before, you’ll have to pay a penalty. A no-penalty CD is exactly what it sounds like: a CD that doesn’t charge a penalty if you withdraw funds before your term is up. It requires a $1,000 minimum opening deposit and you may be able to access your money after seven days.
Jumbo CDs: If you have a lot of cash saved up, a jumbo CD might make sense. It requires $100,000 to open and doesn’t come with any account opening or monthly maintenance fees. Its terms range from two to five years and the longer you keep your money in one, the higher rate you can lock in.
RampUp CDs: RampUp CDs are for current CIT Bank customers with CDs. With a RampUp CD, you can increase your rate one time during your term if CIT Bank raises rates after you have already opened your account. You’ll need to reach out to CIT Bank directly to learn more about what type of rate you might qualify for.
Custodial Accounts
Custodial accounts are opened under the Uniform Transfers to Minors Act (UTMA). If you have a child under 18, a CIT custodial account can help you save money for their future. You’ll serve as the custodian and have complete control of the account until your child turns 18 or a later age that you designate.
You can contribute as much money as you’d like and may not have to pay federal taxes on part of the earnings. With a custodial account, your child may enjoy money for college, a vehicle, home down payment, and other expenses that can steer them toward a bright future.
Home Loans
CIT Loans does offer mortgages but you have to submit your contact information on its website to start the process and learn more about your options. You’ll need to state the value of the home you’re interested in, your desired loan amount, your zip code, and your credit score range. If you already bank with CIT, you may be eligible for two relationship discounts that lead to a lower rate.
Ten percent of your balance in a CIT bank account may give you 0.1% off your rate. If you keep 25% of your balance in a qualifying cit bank savings account, you might lock in a 0.2% discount. Since the CIT website has limited information about its mortgages online, it’s a good idea to fill out the form and request further details.
CIT Bank Fees
As we mentioned above, CIT Bank doesn’t charge any opening fees or monthly maintenance fees. Also, you can open most accounts with only $100. The bank won’t charge any domestic ATM fees and will reimburse you up to $30 per month for any fees you incur for using other ATMs. If you use an international ATM, however, CIT Bank will charge a monthly fee of 1% plus the fee imposed by the ATM provider. Other fees you should be aware of include:
Debit card replacement fee: 100
Overdraft fee: $30
Returned deposit fee: $10
Bill stop payment fee: $30
Outgoing wire transfer fee: $10
CIT Mobile App
With the CIT mobile banking app, you can bank on the go from just about anywhere. The mobile app is versatile so you can use it to log into our accounts via a password or fingerprint. You can also transfer funds between CIT accounts and an external bank account and take a photo to deposit checks.
Plus, the app allows you to check your balances and transaction history, send and receive money via Zelle, and make secure payments with Samsung Pay and Apple Pay. If you’d like, you can sign up for text banking, which will give you the chance to check your account balances and transactions through text. Many reviewers state that the CIT mobile app is very intuitive so you shouldn’t have any trouble using it, even if you don’t consider yourself tech savvy.
CIT Bank Reputation
Before you go ahead and open a CIT Bank account, you might want to know about its reputation. It has an A- rating on the Better Business Bureau (BBB). On TrustPilot, CIT earned 2.3 out of 5 stars due to negative customer reviews.
Most of the negative reviews have to do with poor customer service and difficulty opening deposit accounts. The majority of the five-star reviews praise CIT for a convenient banking experience and fast response times from the customer service team. You can always try out CIT Bank and move on to another financial institution if you’re unsatisfied for any reason.
How to Access Your Money
Even though there are no physical branches, CIT Bank makes it easy to fund your account and withdraw money.
Deposits
You can fund your account through these methods.
Mobile app: With the mobile app, you can deposit checks and make transfers quickly and conveniently.
ACH transfer: The simplest way to fund your account is to transfer funds electronically from your external bank accounts. Note that it may take up to two business days for the money to show up.
Check: You can mail a physical check to CIT Bank.
Wire transfer: CIT Bank accepts funds via wire transfer.
Withdrawals
Here’s how you can make withdrawals:
CIT Savings Connect: The CIT Savings Connect allows you to make up to six withdrawals or transfers per statement cycle. Keep in mind that any withdrawal and transfer requests you submit via mail don’t count toward this limit. The same goes for telephone requested withdrawals and transfers.
ACH transfer: Free ACH transfers between your account and an external bank account are available.
Check: You can call CIT and ask them to mail you a check without paying a fee.
How to Get Started
To open an account with CIT Bank, visit their website and click the green “Open Account” button on the home page. You can complete the application in 5 minutes or less. Be prepared to provide the following information:
Your home address
Your phone number
Your email address
Your Social Security number
You’ll also need to fund your new account. You can transfer funds from an external checking or savings account, wire funds to your new account, or mail a check to the following address: CIT Bank, N.A. Attn: Deposit Services, P.O. Box 7056, Pasadena, CA 91109.
Lastly, CIT will make two test micro-deposit to your account. You’ll receive an email within three business days that asks you to verify them. The bank will process your transaction as soon as you do.
CIT Bank Alternatives
While CIT Bank offers a lot of benefits, it’s not right for everyone. If you decide CIT isn’t the best choice for your unique needs and preferences, consider these alternative options. Some are online banks while others are traditional financial institutions with brick and mortar locations.
Ally Bank
Like CIT Bank, Ally Bank is an online only bank that offers low fees and high rates. Its product lineup includes checking accounts, savings accounts, CDs, credit cards, mortgages, car loans, personal loans, and retirement accounts. Perhaps the greatest benefit of Ally Bank is that it doesn’t charge any fees.
Capital One
Capital One has approximately 300 branches in select states and more than 50 Capital One Cafes that allow customers to open accounts, deposit cash and checks, and hang out. It also offers no-fee access to more than 70,000 ATMs and attractive rates on savings accounts and CDs. This bank might make sense if you want competitive rates but prefer the option of an in-person banking experience that is not available with CIT.
Chime
Chime isn’t a traditional bank or online bank like CIT. It’s a mobile banking app that provides banking services through Bancorp Bank, N.A. and Stride Bank. The Chime checking account comes with exciting perks like automated savings tools, early direct deposits and free access to over 60,000 fee free ATMs across the country. The Chime high yield savings account is also a solid choice thanks to its competitive interest rate and lack of monthly fees as well as minimum balance requirements.
Citibank
Citibank sounds like CIT Bank but is one of the largest banks in the world. It has hundreds of locations in the U.S. and thousands overseas. If you frequently travel abroad for business or pleasure and want access to branches and ATMs, it should be on your radar. It offers a plethora of accounts but they do come with fees. The good news is many of the fees can be waived if you meet certain balance or direct deposit requirements.
Discover Bank
When most people think of Discover, credit cards come to mind first. But Discover is actually an online bank that’s similar to CIT Bank. Its plethora of products include checking and savings accounts, personal loans, student loans, home equity loans, and mortgage refinancing. Discover also offers cash back on debit card purchases and, of course, credit cards with various rewards.
PNC Bank
PNC Bank is a traditional bank with brick and mortar locations. Some of its most popular products are the PNC Standard Savings account and Virtual Wallet, which combines a traditional checking and savings account. PNC also offers numerous CDs and free budgeting tools. It offers online banking, like CIT Bank, plus a robust mobile app.
Huntington Bank
Huntington Bank is a leading bank in the Midwest with branches in states like Ohio, Michigan, and Indiana. It provides checking and savings accounts, personal loans, auto loans, mortgages, credit cards, insurance, and investment options. Other perks include a 24-hour grace period, all day deposits, and online bill pay. You can download the Huntington app and bank on the go, like you’d be able to with CIT.
Bank of America
Known as one of the largest banks in the country, Bank of America has more than 6,000 locations throughout the U.S. Just like CIT Bank, it has a highly rated mobile banking app. In addition to checking and savings accounts, it has a Preferred Rewards program, which comes with perks like higher interest rates, waived fees, and cash back for certain transactions.
TD Bank
TD Bank has a strong presence in the Eastern part of the U.S. It offers many of the same products as CIT, such as personal checking accounts, personal savings accounts, and mortgages accounts. TD stands out for its generous bonuses and minimal fees. We can’t forget its intuitive mobile app, which makes it a breeze to bank on the go.
Citizens Bank
Citizens Bank is a national bank with locations in the New England, Mid-Atlantic and Midwest regions. Just like CIT Bank, it doesn’t charge monthly maintenance fees as long as you meet specific criteria, like making one deposit per month.
Additionally, many accounts are free of minimum balance requirements. In addition, Citizen offers the Peace of Mind overdraft protection program which will send you an alert if you overdraft your account. Other perks include an overdraft fee grace period and early paycheck deposit and early paycheck deposit.
Bottom Line
If you feel comfortable with online banking and would like to take advantage of the best annual percentage yield APY available, CIT Bank is a great choice. You’ll enjoy access to a plethora of products and watch your money work for you. While you won’t get to bank in-person, you can perform pretty much any banking task online or on your mobile phone via the CIT banking app.
CIT Bank FAQs
What types of products does CIT Bank offer?
CIT Bank offers deposit accounts, like checking accounts, high yield savings accounts, and money market accounts. It also provides CDs and home loans.
Who is CIT Bank for?
CIT Bank is a good fit if you’re looking for an online bank with high interest rates and low fees. You’ll be able to open and manage CIT Bank’s savings accounts and checking accounts from the comfort of your own home. If you prefer a traditional bank with physical locations, you might want to explore other options, like Bank of America, PNC Bank, and Huntington Bank.
Is CIT Bank FDIC insured?
Yes, CIT Bank is insured by the Federal Deposit Insurance Corporation. This means that if the bank fails for any reason, the federal government will protect your money up to $250,000 per depositor. The FDIC insurance can give you the peace of mind of knowing your money will be safe and sound, regardless of what happens to CIT.
Do I need a lot of money to open a CIT Bank account?
Each CIT account has its own requirements. However, many of its deposit accounts can be opened with as little as $100. This is great news if you’d like to start your savings journey but don’t have a lot of cash at your disposal.
Is it safe to bank with CIT?
CIT makes security a top priority. If you open an account with the bank, it will be protected with safety measures like antivirus protection, SSL encryption, firewalls, and account monitoring. With CIT, you don’t have to be skeptical about entering your personal information.
Is CIT Bank legitimate?
CIT Bank is a division of First Citizens Bank, which dates back to the 1800s. Plus it’s FDIC-insured.
Where can I go to find CIT Bank’s routing number?
Log into your online account to find your CIT Bank routing number. For online-only accounts, this number is 124084834.
Does CIT Bank have physical branches?
CIT Bank is a digital bank. This means there are no branches and you must do all your banking on your laptop, computer, or mobile device. Many reviewers state that the CIT website and mobile app are very easy to use so you don’t have to worry about a learning curve.
Is CIT Bank compatible with Zelle?
Yes. You can use Zelle to quickly send and receive money through the CIT Bank mobile app. Fortunately, you won’t have to pay any fees to do so as Zelle is free to use.
Should I open an account with CIT Bank?
You might benefit from a CIT Bank account if you’re looking for a financial institution that offers high interest rates and low fees. However, you should feel comfortable with online and mobile banking as you won’t be able to step into a local branch to deposit a check or ask a question.
Mortgage Q&A: “Does refinancing hurt your credit score?”
Consumers seem to be obsessed with their credit scores and what impact certain actions may have on them.
Perhaps the credit bureaus and credit score distributors are to blame, as they’re constantly urging us to check our scores for any changes.
Let’s cut right to the chase. When it comes to mortgage refinancing, your credit score probably won’t be negatively impacted unless you’re a serial refinancer. Like anything else, moderation is key here.
When you refinance your home loan, the bank or mortgage lender will pull your credit report and you’ll be hit with a hard credit inquiry as a result.
It’ll stay on your credit report for two years, but only affect your scores for the first 12 months.
The credit inquiry alone won’t necessarily lower your credit score, but if you’re constantly refinancing and/or applying for other types of new credit, the inquiries could add up to a point where they’re deemed unhealthy.
The credit score scientists found out long ago that individuals who apply for a ton of new credit are often more likely to default on their obligations.
But that doesn’t mean you can’t apply for mortgages and other types of credit if and when you feel it’s necessary.
You Could See a Credit Score Ding When Refinancing Your Mortgage
All 3 of your credit scores may fall temporarily
As a result of a mortgage refinance application
But the impact is usually quite minimal, say only 5-10 points
And fleeting, with score reversals happening in a month or so
Because a mortgage refinance is a new credit application, your credit score(s) could see a bit of a ding, though it probably won’t be anything substantial unless you’ve been applying anywhere and everywhere for new credit.
By a “ding,” I mean a drop of 5-10 points or so. Of course, it’s impossible to say how much your credit score will drop, or if it will at all, because each credit profile is completely unique.
Simply put, those with deeper credit histories will be less affected by any credit harm related to the mortgage refinance inquiry, while those with limited credit history may be see a bigger impact.
Think of throwing a rock in an ocean vs. a pond, respectively. The ripples will be a lot bigger in the pond.
But in either case, the ripple shouldn’t be much of a ripple at all, and nowhere close to say a late payment because it’s not a negative event in and of itself.
[What credit score is needed to buy a house?]
You Get a Special Shopping Period for Mortgages
FICO ignores mortgage-related inquiries made in the 30 days prior to scoring
And treats similar inquiries made in a short period (14-45 day window) as a single hard inquiry
Instead of counting multiple inquiries against you for the same loan
This may help you avoid any negative credit impact related to your mortgage search
First off, note that when it comes to FICO scores, mortgage-related inquiries less than 30 days old won’t count against you.
And for mortgage inquiries older than 30 days, they may be treated as a single inquiry if multiple ones take place in a small window.
For example, shopping for a refinance in a short period of time (say a month) may result in a large number of credit pulls from different lenders.
But they will only count as one credit hit because the credit bureaus know the routine when it comes to shopping for a mortgage.
And they actually want to promote shopping around, as opposed to scaring borrowers out of it.
After all, if you’re only looking to apply for one home loan, it shouldn’t count against you multiple times, even if you inquire with multiple lenders.
This differs from shopping for multiple, different credit cards in a short period of time, which could hurt your credit score more because you’re applying for different products with different card issuers.
Even if you shop for a mortgage refinance with different lenders, if it’s for the same single purpose, you shouldn’t be hit more than once.
However, note that this shopping period may be as short as 14 days for older versions of FICO and as long as 45 days for newer versions.
If you space out your refinance applications too much you could get dinged twice. Even so, it shouldn’t be too damaging, and certainly not enough to prevent you from shopping different lenders.
The potential savings from a lower mortgage rate should definitely trump any minor credit score impact, which as noted, is short-lived.
The mortgage, on the other hand, could stay with you for the next 30 years!
You Lose the Credit History Once the Account Is Closed
When you refinance it results in the closing of the old loan
That account will eventually fall off your credit report (in 10 years)
And closed accounts are less beneficial than active ones
But the new account should make up for the lost history on the old account
Another potential negative to refinancing is that you’d lose the credit history benefit of the old mortgage account, as it would be paid off via the new refinance.
So if your prior mortgage had been with you for say 10 years or more, that account would become inactive once you refinanced, which could cost you a few points in the credit department as well.
Remember, older, more established tradelines are your credit score’s best asset, so wiping them all out by replacing them with new lines of credit could do you harm in the short-term.
Additionally, it could affect the average age of all your credit accounts (credit age), which is also seen as a negative.
But the savings associated with the refi should outweigh any potential credit score ding, and as long as you practice healthy credit habits, any negative effect should be minimal.
[Does having a mortgage help your credit score?]
Cash Out Refinance Means More Debt, Possibly a Lower Credit Score
A cash out refinance could hurt even more
Because you’re taking on more debt as a result
And larger amounts of outstanding debt
Along with higher monthly payments can make you a riskier borrower
Also consider the impact of a refinance that results in a larger loan balance, such as a cash-out refinance.
For example, if your current loan balance is $350,000, and you take out an additional $50,000, you’ve now got $400,000 in outstanding debt.
The larger loan balance will increase your credit utilization, and it could result in a higher monthly payment, both of which could push your credit score lower.
In short, the more credit you’ve got outstanding, the greater risk you present to creditors, even if you never actually miss a monthly payment.
In summary, a refinance should have a compelling enough reason behind it to eclipse any credit score concerns, so focus on why you’re refinancing your mortgage first before worrying about your credit score.
Ultimately, I’d put it on the no-worry shelf because chances are the refinance won’t lower your credit score much, if at all. And score drops related to new credit typically reverse very quickly.
So even if your credit score fell 20 points, it would probably gain those points back within a few months as long as you made on-time payments on the new loan.
And most people are only concerned about their credit scores right before applying for a mortgage, so what happens shortly after your home loan funds may not matter much to you.
But to ensure you don’t get denied as a result of a credit score drop, it’s helpful to have a buffer, such as an 800 credit score in case your score does drop a bit while shopping around.
If you’re right on the cusp of a credit scoring threshold and your score dips slightly, you could wind up with a higher interest, or at worst, be denied a mortgage outright.
An online lender called “Owning” is looking to shake up the mortgage industry with what it refers to as “ridiculously low rates.”
In the past, they doubled as a mortgage lender and real estate company, offering mortgage refinancing at low rates and a variety of home buying and selling tools including iBuying.
But in early 2021, Owning was acquired by Chicago-based Guaranteed Rate, and will act as its lead generator going forward.
The company now focuses on helping aspiring home buyers finance a property and existing homeowners interested in securing a lower rate on their home loan.
Aside from attempting to make the process easier via new technology, they also offer an on-time closing guarantee. Read on to learn more.
Owning Fast Facts
Direct-to-consumer mortgage lender offering home purchase loans and refinances
Founded in 2018, headquartered in Orange, California
Acquired by Guaranteed Rate in early 2021
Licensed to lend in 43 states and the District of Columbia
Specialize in low-rate mortgage refinances and home purchases
BBB accredited with an ‘A+’ rating at the moment
4.9-star rating on Google based on over 2,100 customer reviews
Not available in Alaska, Kentucky, Nevada, New York, Rhode Island, Utah, or Vermont
What Owning Offers
Home purchase loans
Refinance loans (rate and term and cash out)
Conventional loans backed by Fannie Mae and Freddie Mac
Jumbo loans that exceed the conforming limit
FHA/VA/USDA loans
Fixed-rate and adjustable-rate options
Lend on primary, second, and investment properties
The Orange, CA-based company offers two core products to consumers looking for a home loan.
A refinance product for existing homeowners. And a home purchase product for those looking to purchase a property.
In the past, they offered more, including a no cost refinance, a zero-down home purchase, an iBuyer service, and a real estate agent rebate.
But since being acquired by Guaranteed Rate in 2021, they essentially became the online lead generator for their parent company.
This means keeping things simple, leading with their mortgage rates, and leaning on the latest technology to do things quickly and efficiently.
It’s unclear if Owning will still refinance your existing home loan with no closing costs, including third-party fees like appraisal, credit report, escrow, title insurance, and more.
That offering was similar to CashCall’s No Closing Cost Mortgage and the companies appeared to compete in the SoCal market.
But nowadays many lenders require borrowers to pay discount points to keep interest rates at reasonable levels.
Anyway, my guess is you can utilize a lender credit to keep closing costs down if that’s your desire.
Owning Mortgage Rates
As noted, Owning has become a streamlined, online-only mortgage lender. This means they offer a fully-digital process and in their words, “low rates.”
But you don’t have to take their word for it. If you visit their website, you’ll see their mortgage rates front and center at the top of the page.
They also have a calculator that lets you adjust a couple inputs to generate a real-time quote.
Both a 30-year fixed and 15-year fixed are listed as options, though other loan types may also be available depending on market conditions.
If you click on “rates,” you can access the more robust version of their online rate calculator.
Be sure to click on the loan assumptions to see what they’re basing rates on, e.g. purchase price, down payment, FICO score, discount points required, etc.
How to Apply
To get started, simply visit their website from your computer or smartphone. From there, you can use their rate calculator to determine today’s rates.
Or you can click on “get started” to fill out a short online lead form. You’ll also see a phone number and email address if you want to reach out directly.
Once you move forward, their loan process is mostly paperless. It allows for the e-signing of disclosures, importing bank account information, and uploading documentation.
All in all, they appear to make it easy to apply for a home loan. And they aim to close in as few as 14 days.
On Time Closing Guarantee
If you’re concerned about timing, take comfort in Owning’s On Time Closing Guarantee.
Simply put, if your loan does not close by the original specified closing date (purchase or refinance) the company will mail a check for $2,000 within 90 days of the request being submitted.
Eligible borrowers must request a refund check in the mail by submitting a request to [email protected] within 30 calendar days of loan closing.
However, there a lot of exclusions. The borrower’s down payment must be 5%+, it can’t be a USDA loan, and the borrower can’t own two or more properties.
It’s unclear if that total includes the subject property. And of course the standard exclusions apply like appraisal delays, force majeure events, and so on.
Be sure to speak to your loan officer ahead of time to iron out these details.
Owning Reviews
On Google, Owning has a stellar 4.9/5-star rating from over 2,100 customer reviews at last count (March 2023).
Over at Zillow, they’ve got a 4.80/5 from about 265 reviews, and at Bankrate a 4.9/5 from roughly 40 reviews.
They aren’t Better Business Bureau (BBB) accredited, but they do hold an ‘A+’ rating based on customer complaints.
And they have a solid 4.81/5 rating from nearly 100 customer reviews on the BBB website, which is pretty impressive.
To sum things up, this streamlined, no-frills online lender offers the basics that most consumers are probably looking for.
A possible negative might be a lack of physical locations, but for those savvy enough to go the online route, they could be a breath of fresh air.
Assuming their mortgage rates are competitive, they could be a good option for those refinancing or even a prospective home buyer.
Just be sure to take the time to compare Owning to other companies to ensure you get the best deal and quality service.
Owning Pros and Cons
The Good
Advertise their mortgage rates online
Offer a fully-digital home loan process
Can apply online or via smartphone
Plenty of loan programs to choose from
Excellent customer reviews
A+ BBB rating
On-time closing guarantee
Staff also speak Spanish and Vietnamese
The Maybe Not
Aren’t licensed in Alaska, Kentucky, Nevada, New York, Rhode Island, Utah, or Vermont
Mortgage refinancing gives homeowners flexibility as their financial circumstances and needs change.
When you refinance your mortgage, you may be able to lock in a lower interest rate and get rid of private mortgage insurance, which can lead to significant savings over the life of the loan. It also allows you to switch from an adjustable-rate mortgage to a fixed-rate mortgage (and vice versa) or go from a government-backed loan to a conventional loan.
You can even shorten your loan terms by refinancing your mortgage, so you can pay off your loan even faster. Or, you can use refinancing to tap into the equity in your home to pay off debt, pay for a huge renovation or purchase another property.
CNBC Select evaluated home loan lenders based on the types of loans offered, customer support and minimum down payment amount, among others (see our methodology below).
The best mortgage refinance lenders
Best for cashing out full equity
Rocket Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA Interest Rate Reduction Refinance Loan (IRRRL) and jumbo loans
Fixed-rate Terms
8 – 29 years
Adjustable-rate Terms
Not disclosed
Credit needed
580 if opting for FHA loan refinance or VA IRRRL; 620 for a conventional loan refinance
Pros
Can use the loan to refinance a single-family home, second home or investment property, or condo
Can get pre-qualified in minutes
Rocket Mortgage app for easy access to your account
Allows borrowers to cash out 100% of their home’s equity
Cons
Doesn’t offer USDA loans, HELOCs, construction loans, or mortgages for mobile homes
Rocket Mortgage is a great option to consider if you’re looking to maximize the equity you can cash out of your home.
One of the advantages of refinancing is being able to tap into your home’s equity to pay for large expenses, like home improvements or a second property, or to consolidate debt. This is called a cash-out refinance. The total amount you’re able to borrow will depend on your home’s value and equity.
Most lenders only allow homeowners to cash out 80–90% of their home’s equity. But according to its website, Rocket Mortgage allows borrowers who are refinancing to cash out 100% of their equity, as long as they have a minimum FICO score of 620. This means you’ll have access to more cash when you refinance. Rocket Mortgage also offers a fast, online pre-approval process.
Best for no lender fees
Ally Home
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Fixed-rate, adjustable-rate and jumbo loans available
Fixed-rate Terms
15 – 30 years
Adjustable-rate Terms
5/6 ARM, 7/6 ARM, 10/6 ARM
Credit needed
Not disclosed
Pros
Doesn’t charge lender fees (no application, origination, processing, or underwriting fees)
Provides custom quotes in just a few minutes with no impact to your credit score
Online support available
Existing Ally customers can receive a discount that gets applied to closing costs
Cash-out refinancing available
Cons
Doesn’t offer FHA loans, USDA loans, VA loans or HELOCs, however, Ally allows borrowers to refinance from an FHA, USDA, or VA loan to a conventional loan
Mortgage loans are not available in Hawaii, Nevada, New Hampshire, or New York
As with its home purchase loans, Ally Bank’s mortgage refinances don’t come with lender fees. In other words, borrowers won’t pay application, origination, processing, or underwriting fees. Keep in mind, however, that you’ll still have to pay other charges like title checks and appraisal fees. Still, cutting lender fees out of the equation still gives borrowers a chance to save some money on an already-expensive process.
Ally offers both fixed-rate and adjustable-rate loans in addition to jumbo loans for refinancing. While this lender doesn’t offer any FHA, VA, or USDA loans, borrowers who currently have these loan types and wish to refinance to a conventional loan may do so through Ally Bank.
Best for a no-frills lender
Better.com Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loan, FHA loan and jumbo loan
Fixed-rate Terms
15–30 years
Adjustable-rate Terms
Not disclosed
Credit needed
Not disclosed
Pros
No origination fee
No prepayment penalties for refinance
Receive a loan estimate in as little as 3 days
The Better Buying Guarantee provides up to $3,500 in lender paid credits to offset “covered fees,” which include: Lender’s Title Insurance Policy Fees; Owner’s Title Insurance Policy Fees; Appraisal Fees (includes second appraisal fee, appraisal re-inspection fee and appraisal recertification fee, if applicable); Flood Certification Fees; Credit Report Fees; and Other Settlement Fees (discount points are excluded)
Cons
Doesn’t offer VA loans or USDA loans
The Better Buying Guarantee is not available in Washington state
Better.com offers a straightforward refinance service with a few ways for borrowers to save money. This lender doesn’t charge any origination fees on the loan, and individuals who are refinancing their mortgage won’t be charged prepayment penalties for paying off the new loan early. Its pre-approval process can be completed in as little as three minutes and won’t impact your credit score.
This lender also offers a Better Buying Guarantee, which provides borrowers with up to $3,500 in lender-paid credits to offset “covered fees.” Those fees include: Lender’s Title Insurance Policy Fees; Owner’s Title Insurance Policy Fees; Appraisal Fees (includes second appraisal fee, appraisal re-inspection fee and appraisal recertification fee, if applicable); Flood Certification Fees; Credit Report Fees; and Other Settlement Fees (discount points are excluded). See their Terms and Conditions for rules around eligibility.
Better.com offers mortgage refinance terms that range from 15 to 30 years, and boasts the ability to provide potential borrowers with a loan estimate in as little as three days.
Best for saving money
SoFi Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans and jumbo loans
Fixed-rate Terms
10 – 30 years
Adjustable-rate Terms
Not disclosed
Credit needed
Pros
Provides access to Mortgage Loan Officers for guidance
Access to account via the mobile app
Members save $500 on processing fees for a cash-out refinance
Cons
Doesn’t offer FHA, VA or USDA loans
Available in all states except Hawaii
SoFi is known for offering a plethora of savings opportunities to members who use their financial products and services. When it comes to mortgage refinancing, this lender gives members the opportunity to save $500 on the loan processing fee as long as they also have a SoFi Personal Loan, SoFi Student Loan or have a minimum balance of $50,000 in their SoFi Invest accounts at the time of their application submission.
Mortgage refinance terms range from 10 years to 30 years, and SoFi offers an app to help customers have easy access to managing their account details.
Best for availability
PNC Bank Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Fixed-rate, adjustable-rate, FHA loans, VA loans and jumbo loans
Fixed-rate Terms
10 – 30 years
Adjustable-rate Terms
Available in periods of 7 and 10 years for a fixed rate, followed by an adjustment period when the interest rate may increase or decrease on an annual or semi-annual basis
Credit needed
Not disclosed
Pros
Refinance available for primary and secondary homes, and investment properties
Offers a wide variety of loans to suit an array of customer needs
Offers refinancing for VA and FHA loans
Available in all 50 states
Online and in-person service available
Cons
Doesn’t offer home renovation loans
PNC Bank is one of the most accessible lenders on this list since it provides services and mortgage products in all 50 states — both in-person and online. This lender offers fixed-rate loan terms that range from 10 years to 30 years. For jumbo loans, though, the loan terms go from 15 years to 30 years. Adjustable-rate terms are also available.
To make sure you’re fully prepared to begin the application process, PNC Bank has an application checklist on their website that lists all of the documents you’ll need if you want to refinance your mortgage.
Best for a credit union
PenFed Credit Union Mortgage Refinance
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Rate-and-term refinance (for conventional, FHA and VA refinances), VA Interest Rate Reduction Loan (IRRRL), cash-out refinance, home equity line of credit (HELOC)
Fixed-rate Terms
Not disclosed
Adjustable-rate Terms
Credit needed
Not disclosed
Pros
Covers cost of VA funding fees, title fees, recording fees, transfer taxes, appraisal fee, credit report and flood certification where applicable
Offers jumbo loan refinance up to $3 million
Online support available
Available in all 50 states
Cons
Doesn’t offer USDA loans
Doesn’t offer adjustable-rate terms
PenFed cuts out some major closing costs for homeowners looking to refinance their mortgage. It will cover the cost of VA funding fees, title fees, recording fees, transfer taxes, appraisal fee, credit report and flood certification wherever applicable. This could save borrowers anywhere from hundreds to thousands of dollars in closing costs.
Of course, you’ll want to make sure you have a PenFed membership in order to apply for this lender’s mortgage products. Membership is open to everyone but you’ll need to open a savings account and make an initial deposit of at least $5.
FAQs
What do you need to refinance your mortgage?
As with any other line of credit, mortgage refinancing requires a decent credit score. Lenders typically like to see a minimum credit score of 620 or higher. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate. Borrowers should also have at least 20% equity in their home in order to refinance. You’ll also need to provide documents, such as bank statements, pay stubs, W-2s, 1099s, tax returns, employment verification and proof of homeowner’s insurance.
How do you refinance your mortgage?
To refinance your mortgage, you’ll want to make sure you have all the required financial documents and meet your desired lender’s qualifications. You’ll use this information to submit an application (either online or in-person, depending on the lender you’d like to go with). Lenders typically also offer the help of mortgage refinance experts who can walk you through the process, answer any questions you have and make sure you submit a complete application.
How often can you refinance your mortgage?
There is no limit on the number of times you can refinance a home loan. Refinancing can be valuable when your circumstances change. For instance, if you were to change careers and take a pay cut, refinancing into a mortgage with a longer loan term would allow you to receive lower monthly payments.
Just be aware that refinancing is not free and every time you refinance, you’ll have to pay a slew of closing costs and other fees, and your credit score could take a hit every time the lender runs a hard inquiry.
What are the different types of mortgage refinances?
A rate-and-term refinance is one of the most common types of mortgage refinancing since it involves simply changing the loan term (how long you have to repay the balance) or the interest rate.
Borrowers can also do a cash-out refinance where the borrower takes out a loan that’s larger than what they currently owe and can use the difference between the two loans to receive cash. Borrowers can then use that cash for a large expense, a down payment on another property, debt consolidation and more.
As the name suggests, FHA Streamline Refinance is meant for borrowers who are looking to refinance their FHA loan. A VA Streamline Refinance is similar except it’s meant for VA loan borrowers.
Does refinancing hurt your credit?
As with any other form of credit you apply for, applying for a mortgage refinance means the lender will run a hard inquiry on your credit. Hard pulls do temporarily lower your credit score by a few points. However, making on-time monthly payments and avoiding applying for too many new lines of credit all at once can help your credit score recover.
Reasons not to refinance your mortgage
Refinancing isn’t for everyone. If you already have a low, fixed interest rate with affordable monthly payments, refinancing your mortgage might not save you money. In fact, due to closing costs, refinancing can actually wind up costing you more than you anticipated.
You should also avoid refinancing if you have bad or fair credit since you could end up with a higher interest rate, which will make the loan even more expensive.
It’s also not a good idea to refinance if you’re already several years into a mortgage. Refinancing essentially replaces your loan with a new one and you’ll have to start all over with payments. So if you’re already, say, 15 years into a 30-year mortgage, refinancing to another 30-year mortgage means you’ll still be on the hook with the mortgage for another 30 years.
Bottom line
Refinancing can be instrumental for those who want to have lower monthly payments or a lower interest rate, or want to tap into some of the cash in their home. Just make sure you run the numbers so you can be sure they make sense for your situation, since there are some instances when refinancing may not be a good idea.
Our methodology
To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best mortgages, we focused on the following features:
Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you’ll lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. Lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can to cater to a wider range of applicants. We’ve also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does.
Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.
After reviewing the above features, we sorted our recommendations by best for overall financing needs, quick closing timeline, lower interest rates and flexible terms.
Note that the rates and fee structures advertised for mortgage refinances are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee your interest rate and monthly payment remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
There are lots of different ways to get a mortgage these days – you can walk into a physical bank branch, call a mortgage broker, or even start a loan application on your smartphone.
While the mortgage broker model isn’t new by any means, a company called “Credible” is shaking things up on that front, promising real-time mortgage rates from multiple mortgage lenders without the “annoying calls or emails.”
They also let you compare rates and close your loan all in one place. Let’s learn why this company is different and if they make sense for your mortgage needs.
Credible Launched Back in 2012
Company founded by former investment banker in 2012
Initially focused on student loan refinancing
Has since delved into personal loans, credit cards, and mortgages
Lets you compare personalized loan offers from multiple lender partners anonymously
Acquired by Fox Corp. in late 2019
The company is relatively new, having been founded less than a decade ago in San Francisco.
But that didn’t stop it from being acquired by none other than Fox Corp., better known for TV shows like The Simpsons rather than finances.
Originally a student loan marketplace, the company has since expanded to personal loans, mortgages, and credit cards.
Our focus will be the mortgage piece of the pie, this being a mortgage blog and all.
In late 2018, Credible announced a “first-of-its-kind mortgage marketplace” that offers actual rates to consumers in just two or three minutes, all without affecting the applicant’s credit score.
But that’s not all – you also get a streamlined origination platform that allows you to complete much of the loan process without leaving Credible’s website, similar to Rocket Mortgage.
Their digital process utilizes “smart logic” to cut down on the number of questions asked to borrowers, as well as documentation requests, by making sure they are pertinent to your unique situation.
Additionally, the Credible platform automates the collection of things like pay stubs, bank statements, and tax documents, making the application process both faster and easier to complete.
Many of these items can be gathered electronically by simply granting access to your financial institution, without having to exit the Credible website.
However, they also have licensed loan officers available to those who would like additional support along the way. And they don’t work on commission, so they should have your best interests in mind.
How Credible Works to Get a Mortgage
First, you tell them a little about yourself and your property, just like most other mortgage companies.
This includes your property address, whether it’s a primary, second, or investment home, property type, estimated value, and mortgage balance.
Next, they ask if you have a second mortgage or if you’re looking to take cash out in addition to refinancing your existing loan balance.
One neat feature is they provide estimates of your property taxes and homeowners insurance for you, but you can adjust those numbers if needed.
They then ask for a source of income and average annual income, along with how much you have in assets.
If it’s a home purchase loan, they’ll ask you how far along you are in the process (just looking or found a home, etc.), and what your down payment will be.
You can generate a pre-approval letter instantly and see how much you can afford based on your inputs.
Lastly, you enter your name, date of birth, and phone number, agree to their terms and conditions, and get your loan options.
They note that they take privacy seriously, and that they’ll NEVER sell your information to external companies, nor will you receive phone calls from lenders.
A Soft Credit Check Provides Accurate Rates
Once you click “See My Rates,” a soft credit check (doesn’t affect your credit score) is conducted to look up your credit history and credit scores to ensure your pre-qualified rates are accurate.
If any of their partner lenders have home loan options that fit your profile, you’ll see a notification on your Credible Dashboard within minutes.
Credible will also reach out via email, phone, or text, but only once they have received responses from all potential lenders.
Note that these are just pre-qualified rates, and you’ll still need to qualify, like you would any other mortgage.
Once you select a loan option, you will be asked to provide additional information, and a hard credit pull will take place (these do affect your credit).
If your credit and application pass muster, the mortgage lender partner will provide you with an offer that you can review.
Then you’ll begin the loan process by signing disclosures, providing financial and personal documentation, and so on.
What Types of Home Loans Does Credible Mortgage Offer?
They offer home purchase and refinance loans
Including conventional conforming and jumbo loan amounts
FHA, VA, and USDA loans don’t seem to be available at the moment
Credible has two main mortgage options available – Home Loans, which is designated for purchase transactions, and Mortgage Refinancing, which as the name implies is for refinancing an existing home loan.
This means both prospective home buyers and current homeowners can take out a mortgage using Credible.
In terms of loan types available, I’ve been told that they only offer conventional loans, aka non-government. That means no FHA, VA, or USDA. It’s unclear if that will change soon, but I assume it will.
They also offer jumbo loans, those that exceed the conforming loan limit.
So if your loan scenario fits those criteria, there’s a good chance their lender partners will provide you with pre-qualified rates.
Which Mortgage Lenders Does Credible Work With? And How Do They Get Paid?
The first two lenders to join Credible were Quicken Loans and UWM
There are now several others including loanDepot and Stearns
Credible acts as a mortgage broker and only gets paid if the loan funds
They receive a percentage of the loan amount from the lender who closes your loan
While they don’t list all the mortgage lenders they work with, they do displays the logos of Caliber Home Loans, JMAC Lending, loanDepot, Quicken Loans, Stearns Lending, and UWM.
Originally, they started with just Quicken Loans and UWM, so it’s possible there are even more lender partners today.
As noted, you don’t need to work with those companies directly, or talk to anyone at those companies.
Instead, you can continue to complete your loan application on the Credible website, or ask for assistance from a Credible loan officer.
This is similar to how a mortgage broker works – they handle everything and you never actually deal with the wholesale lender providing the financing.
In terms of how Credible gets paid, it’s also like how a mortgage broker gets paid. If and only if the loan funds, they receive compensation from the corresponding lender.
That means they don’t charge you any fees directly, but rather take a cut, which is a flat percentage of your loan amount, such as say 1% or 2%.
For example, on a $500,000 loan they might make $5,000 to $10,000, depending on the terms they have with their lender partner.
Should I Use Credible to Find a Mortgage?
If you like the idea of a mortgage broker in terms of shopping around
But don’t actually want to deal with a human being
Credible could be a good option for your home loan needs
Just note that they may not offer all loan types at this time
However they do come highly rated by both Trustpilot and the BBB
If you live in one of the states where Credible offers mortgages, you might be wondering if they’re a good choice.
They refer to themselves as “Your trusted online mortgage broker,” which highlights the fact that they aren’t a direct-to-consumer lender. Nor are they a mortgage lender at all.
Rather, they connect you to trusted lender partners and earn a commission if your home loan funds.
As noted, they don’t charge any fees directly, nor do they hit your credit report with a hard inquiry. Despite this, you get to compare real, pre-qualified rates from a variety of lenders in minutes.
So if you aren’t the type to shop around, but still want the benefit of shopping around, you could give them a whirl.
And you can take advantage of their digital platform, which should make the loan process easier, smoother, and quicker.
However, you’re still at the mercy of one of the lenders they match you up with, so customer experiences will certainly vary based on your unique loan scenario and the lender you’re paired with.
Another potential negative is they don’t seem to offer all types of mortgages – those looking for an FHA, VA, or USDA loan may want to search elsewhere until they add those loans to their stable of offerings.
In terms of customer satisfaction, they have an excellent rating on Trustpilot and an A+ rating with the Better Business Bureau.
They could be a good alternative to LendingTree, which provides a similar shopping experience without the ability to complete the loan process on their own website.
Credible vs. LendingTree
Credible
LendingTree
Type of business
Online mortgage broker
Mortgage lead provider
Compare mortgage rates from multiple lenders
Yes
Yes, but after providing contact info
Get pre-approved
Yes
No
Credit check
Soft pull
Soft pull
Do they sell your information?
Keep your data private
Share with lenders you are matched with
How they get paid
When your loan funds
After you fill out lead form
How to apply for a mortgage
Digital process via their own website
Depends on lender you match with
If you’ve checked out Credible, you might be wondering how it compares to LendingTree.
While the pair sound similar, they’re actually pretty different. Credible is an online mortgage broker that matches you up with wholesale mortgage lenders.
And LendingTree is merely a lead generation service that matches you with retail mortgage lenders.
The key difference is that Credible will be your loan guide throughout, and only gets paid once your loan funds.
LendingTree will simply share your information with multiple lenders, at which point you’ll need to pick one to work with. After that, LT is out of the picture.
Credible’s pitch is that you can shop anonymously, whereas LendingTree will provide your contact to multiple lenders upfront.
Additionally, Credible allows you to complete the entire loan process online with the latest digital tools, and even generate pre-approval letters instantly.
However, both services may match you with the same lender. For example, if you use either you could wind up getting your home loan from Rocket Mortgage.
House Numbers, an AI-enabled home wealth management platform, announced on Tuesday that it has raised $3.75 million in pre-seed funding.
Resolute Ventures led the round, with participation from Maven Ventures and Uncommon Capital.
“The U.S. Census reports 62% of U.S. households have home equity, compared to just 25% of whom hold stocks and mutual funds. Yet, homeowners still don’t have a trusted source to optimize the financial opportunities around their greatest long-term asset, their home,” said Jeff Levinsohn, co-founder and CEO of House Numbers.
House Numbers’ goal is to empower homeowners and help them achieve financial independence by providing AI-tailored recommendations for home equity-based products. The platform analyzes homeowners’ financial situations and goals to guide them toward the best product options.
The landscape of financial opportunities available to homeowners has also expanded significantly, encompassing home equity products, mortgage refinancing, short-term rentals, accessory dwelling units (ADUs), home insurance, solar, electrification, and tax optimization.
In turn, navigating this complex terrain can be overwhelming for the average homeowner.
“Most homeowners aren’t aware that there are five different ways to access their home equity, let alone how to analyze which financial product is best suited to meet their goals or find the best product offer from dozens of financial service providers. House Numbers is aiming to address this gap,” Levinsohn said.
Founded in 2021, House Numbers is a home wealth management platform that helps homeowners achieve financial independence by optimizing their largest asset – their home. The platform leverages cutting-edge technology, personal financial information, stated owner-specific goals, and market data to provide highly personalized and actionable opportunities.
This content was generated using AI and was edited by HousingWire’s editors.
The average 30-year-fixed mortgage rate rose 13 basis points to 3.01% for the week ending Sept. 30, according to Freddie Mac’s latest PMMS survey. Mortgage rates had been roughly flat for seven weeks, and this is the first time it rose above 3% since June.
Sam Khater, Freddie Mac’s chief economist, said in a statement that rates rose across all loan types, in conjunction with the 10-year U.S. Treasury yield, which also reached its highest point since June.
“Many factors led to this increase, including the Federal Reserve communicating that it will taper its support of the capital markets, the broadening of inflation and emerging energy supply shortages which compound other labor and materials shortages,” Khater said.
According to Khater, mortgage rates are expected to continue to rise modestly which will likely have an impact on home prices, causing them to moderate slightly after increasing over the last year.
The previous week, rates increased slightly to 2.88% from 2.86%, essentially the second consecutive month of consistent mortgage rates.
Lenders – Now is the time to prioritize lead generation
HousingWire Editor-in-Chief Sarah Wheeler and Deluxe Senior Business Development Executive Mark McGuinn discuss the challenges lenders are facing to optimize lead generation, even as mortgage rates continue to drop.
Presented by: Deluxe
A year ago at this time, the 30-year fixed-rate mortgage averaged 2.88%. The 15-year fixed-rate mortgage averaged 2.28%, up from last week when it averaged 2.15%.
Mortgage rates have remained low in large part because of the Federal Reserve’s consistent monthly purchases of $120 billion in U.S. Treasury bonds and mortgage-backed securities. Last week, the central bank signaled it would reduce the program when substantial progress is made in the labor market.
On Thursday, the Mortgage Bankers Association (MBA) showed that the central bank’s announcement quickly led to a rise in mortgage rates, impacting the behavior of buyers seeking their dream home or looking to reduce their monthly payments through mortgage refinancing.
According to the MBA, the mortgage loan application volume declined by 1.1% for the seven days ending Sept. 24. Joel Kan, associate vice president of economic and industry forecasting at MBA, said that Treasury yields increased due to optimism about the strengthening economy. In response, “mortgage rates rose across all loan types, with the benchmark 30-year fixed rate reaching its highest level since early July 2021,” he said.
Kan noted that the appreciation of home prices, which have steadily been going up for over a year now, had also depressed mortgage applications though the purchase market is still strong overall.
Previously known as Advanced Financial Services Inc. before name change in 2009
Located in Middletown, Rhode Island
Fannie/Freddie, FHA, VA, and USDA-approved direct mortgage lender
Licensed in 49 states and the District of Columbia (not available in Hawaii)
Loan servicing portfolio exceeds $6 billion
I always like to read up on the history of specific mortgage lenders to see how they got their start.
And the Embrace Home Loans story is an interesting one, having started all the way back in 1983, which is a lifetime in the mortgage industry.
Originally known as Advanced Financial Services Inc., direct-to-consumer mortgage lender Embrace Home Loans began after founder Dennis Hardiman watched mortgage interest rates “fall a whopping 5 points.”
Back then, mortgage rates were nothing like they are today. In 1982, they were hovering around 17% for a 30-year fixed, and a year later had fallen to around 12%.
While neither of those rates sounds very appealing, Hardiman realized that no one refinanced their mortgages in those days.
Instead, homeowners took out a mortgage when they purchased a home, and either kept it until maturity or paid it off when they moved.
Fast forward to 2020 and most borrowers don’t keep their mortgage for more than a few years.
Oh, and the lenders that originate them don’t keep them for more than a month before they’re bundled into mortgage-backed securities on Wall Street.
So that’s how Embrace got its start – today they offer mortgage refinances and home purchase loans nearly nationwide, with roughly 700 employees and about 60 physical branches.
I tried to determine how large they are by digging into HMDA data, which put 2018 loan volume at roughly $2.3 billion.
But they also have a correspondent lending channel that launched in 2013, so it’s hard to say how much volume they do.
Anyway, let’s learn more about them.
Update: Embrace Home Loans recently partnered with Ameriprise Financial to provide its wealth management advisors and clients with mortgage financing solutions.
Applying for a Mortgage with Embrace Home Loans
You can apply for a mortgage directly on their website
Or use their loan officer directory to work with someone specific
They also offer the ability to get pre-qualifed via text message
Once approved you can track loan progress via the Embrace Home Loans Mobile App
One plus to Embrace Home Loans is the ability to apply for a mortgage directly on their website without having to speak to anyone.
However, you’re also able to call them directly or use their loan officer directory if you’ve been referred by someone specific. Or simply want to look up loan officers in your area.
You can also request a mortgage rate quote by filling out a shorter form on their website, in which case a loan officer will reach out to you.
One unique offering they have is the ability to get pre-qualified via text message.
Once you’re approved, you can use the customer portal to upload documents, e-sign disclosures, and connect your bank statements via Finicity.
You can also download the Embrace Home Loans Mobile App for free and track your loan progress without having to call or email your loan officer.
It sends real-time updates and helpful reminders, including upcoming events like your home appraisal and closing date.
So they do offer some digital mortgage attributes, similar to Rocket Mortgage.
What Types of Mortgages Does Embrace Home Loans Offer?
Home purchase, refinance, renovation
Conventional loans (Fannie/Freddie)
Government loans (FHA, USDA, VA)
Unconventional loans (self-employed and poor credit)
Jumbo loans
Higher LTV refinance
No down payment mortgages
Fixed-rate mortgages (30-year and 15-year fixed)
Adjustable-rate mortgages (5/1 and 7/1 ARMs)
Embrace offers just about every type of mortgage you can think of, including home purchase loans, refinance loans (cash-out and rate and term), and renovation loans.
You can get a conforming mortgage backed by Fannie Mae or Freddie Mac, along with a jumbo loan up to $3 million.
They offer all the main government home loan options, including FHA loans, USDA loans, and VA loans.
Additionally, you can get a renovation loan via the FHA 203k program.
Their so-called “unconventional loans,” which are known as “beyond by Embrace,” include some unique programs other lenders may not offer.
This includes mortgages for the self-employed (12-month bank statement program), jumbo loans with high LTVs, poor credit down to 580 FICOs, and financing on non-warrantable condos with a higher concentration of commercial units.
You can also get a no down payment mortgage (up to 101% CLTV) that features an interest-only piggyback second mortgage with no need for mortgage insurance.
And they offer a “higher LTV refinance,” which is the permanent replacement of the Home Affordable Refinance Program (HARP) offered by Fannie Mae and Freddie Mac.
Lastly, you can get a mortgage just one day after a settled Chapter 7 or 13 bankruptcy, assuming your credit score is at least 580.
They’ve basically got anything a borrower could wish for, so you shouldn’t be limited in any way with regard to loan program.
Embrace Approved to Move Pre-Approval
The company also offers a fully underwritten approval known as “Approved to Move” that can come in handy in a competitive housing market.
Instead of a mere pre-qualification, or run-of-the-mill pre-approval, your loan file is actually processed by a loan underwriter upfront.
Aside from providing you with the assurance that you’re approved for a mortgage, it gives the home seller peace of mind that you’re a serious and qualified buyer.
It’s good for a full 90 days and Embrace says “it’s virtually as good as a cash offer.”
Embrace Home Loans Mortgage Rates
While they don’t advertise their mortgage rates, you can find rate assumptions at the bottom of most pages on their website.
Their rates seem competitive, but they make a lot of strong assumptions, including a loan-to-value ratio of 70% or less. If your LTV is higher, expect a higher interest rate.
Additionally, they charge two discount points in their mortgage rate examples, meaning 2% of the loan amount comes via closing costs.
So be sure to consider the closing costs and take a look at the mortgage APR, not just the rate, when comparing their offer to other lenders.
Embrace Home Loans Reviews
The company seems to be very highly regarded, with solid reviews across a number of different platforms.
On SocialSurvey, they have a 4.9 rating out of 5 based on roughly 25,000 customer reviews. Additionally, they have been named #1 large mortgage company in terms of customer satisfaction on SocialSurvey.
On Zillow, they have a 4.97 star rating out of 5 based on 2,500 customer reviews. Most customers seem to indicate that rate and fees are lowered than expected.
They are an accredited company with the Better Business Bureau (since 2009) with an A+ rating.
Embrace Home Loans Pros and Cons
The Good
Tons of loan programs (including no down payment and low credit score options)
Excellent customer reviews
‘Approved to Move’ fully underwritten pre-approval
Ability to get pre-qualified via text message
Can apply directly on website
Free mortgage calculators on site
Free mobile app
Services its customers’ loans via a sub-servicer
The Potential Bad
Not licensed in Hawaii
Do not advertise their mortgage rates
Don’t disclose lender fees upfront on their website
Does not offer home equity products (such as HELOCs)