Investing during a recession

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

When things get lean, it’s natural to want to tighten your belt and save money wherever possible. But should you stop investing completely? It’s an entirely personal decision. Get some facts and insights about investing during a recession below to help you determine what will work for you.

Is It a Good Idea to Invest During a Recession?

It depends on a few factors, including what you’re referring to when you say “investing.” If you’re talking about funding a 401(k), you probably want to continue doing so unless you would be unable to pay your necessary bills and living expenses.

But if investing means the stock market or other similar options, you should seriously consider your financial situation. If you already have emergency savings and have disposable income to risk, investing can be an option. This is especially true if you won’t be touching your portfolio for a while, so you have time to weather the ups and downs associated with a recession economy.

But you do want to be aware of the bear market trap so you don’t fall into it. Bear traps occur when a lot of investors have bought into certain stock. This increases the selling pressure, which just means that there are buyers for the stock but not a lot of stock to be had.

Institutions that want the stock to move higher may push prices lower via short sales or other strategies, making it appear as if the prices are falling. That can scare people into selling the stock. In the long run, however, the stock maintains its price or increases in value, so selling early can mean losing out on future gains. This is just one reason you might want to work with a professional advisor when investing.

7 Tips for Investing During a Recession

1. Be Patient and Think Long-Term

Buying and selling stocks rapidly to turn huge profits is mostly an event seen in movies and television. And while it’s not impossible for pros to luck into a big win, this is not typically how individuals should look at investing. It may take time for your investments to pay off, especially if the economy as a whole is struggling, so it’s important to avoid being guided by emotions and rely on logic and sound financial advice.

2. Commit to a Personal Investment Plan

A personal investment plan is a written document that includes your financial goals and what types of limitations you might have, such as what you can afford to spend on investing. Creating such a document ensures you have a logical, well-thought-out guide to turn to when things do get tricky. If you feel tempted by a seemingly perfect investment, for example, your plan can remind you what you can realistically put into this new investment.

3. Use the Dollar-Cost Averaging Strategy

Dollar-cost averaging is a strategy used by many investors, including some professionals. Its goal is to potentially reduce the volatile nature of a single purchase. The DCA strategy works like this:

  • You decide how much you’re going to invest in certain assets within a set period
  • You divide that budget over that time and make periodic purchases of the asset
  • You do this despite the price of the asset at any given time

The goal is to build up the investment for a long-term gain strategy. This is actually how most 401(k) investments are managed.

4. Focus on Quality Over Quantity

But don’t think that you have to buy tons of assets to be investing for the future. If you have limited funds to invest with, it can be tempting to buy up stock that is cheap just to get some quantity. But cheap stock isn’t always a great investment, and it might be better to buy a smaller number of shares in a well-trusted company with a history of strong stock performance.

5. Consider Funds Instead of Individual Stocks

Another option is to consider funds, which spread your investment over numerous stocks. You’ve probably heard that you have to diversify your portfolio. That just means investing in numerous types of assets so that if one doesn’t perform well, you have other gains to make up for the loss.

A mutual fund is an investment option that’s already diversified, for example. Plus, it’s a convenient way to add numerous assets to your equity portfolio without buying and managing numerous stocks yourself.

6. Rebalance When Necessary

While investing is a long-term strategy, active investing can’t be a set-and-forget strategy. You have to make efforts to rebalance your portfolio—or ensure someone is doing that for you—from time to time.

Rebalancing just means aligning your assets with your target goals. For example, you might have a goal of 60% in stocks and 40% in other assets. But if your stocks gain rapidly during a few years, outpacing the gains of your other assets, you could have a 70/30 split. If your goal is still 60/40, you would rebalance by selling stock, purchasing other assets or both.

7. Invest in Recession-Resistant Industries

Recession-resistant industries are those that don’t tend to succumb to downturns in the economy, often because they’re necessary. Examples of industries that have historically weathered recessions well include healthcare, technology, beauty, retail, construction and pet products.

Note that because a company is in a recession-resistant industry doesn’t mean that company itself is necessarily resistant. It’s always important to be discerning about which stocks you invest in. For example, if the company doesn’t have strong financial leadership or has known money problems, it may not matter what industry it’s in.

Review Your Finances and Decide What’s Best for You

Ultimately, only you can decide whether investing during a recession is right for you. Start by reviewing your own finances. Some things you might want to look at include:

  • What kind of savings you have. Having emergency savings is important, especially in a recession. Before you start investing, you may want to build yours.
  • Your income and expenses. You need disposable income before you can invest. That means that your income should be more than your expenses.
  • Your credit history. Buying stocks and investing typically doesn’t rely on you having good credit. But before you start building wealth, get a good look at your credit reports to ensure there’s nothing lurking that you might need to attend to. If you find any surprises, consider reaching out to Lexington Law for help disputing inaccurate items and working to make a positive impact on your credit.

And if you do decide to invest—during a recession or otherwise—consider working with a financial advisor to help you navigate the complexities of managing your portfolio.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

30-Year Fixed Mortgage Rate Hovers Above All-Time Low

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Abstract illustration of houses and charts

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Mortgage rates fall despite strong economic data reports.

“Mortgage rates fell again this week, continuing the downward trend they’ve exhibited for most of April,” said Zillow Economist Matthew Speakman. “In what was a relatively unremarkable week for mortgage rates, the modest movement was partially driven by discussions about a proposed increase in capital gains tax rates – which placed downward pressure on bond yields and thus rates – and anticipation of a key announcement by the Federal Reserve. Fed Chair Jerome Powell reiterated on Wednesday that the Central Bank has no immediate plans to increase interest rates or curb the purchases of mortgage-backed securities – a position that placed more downward pressure on bond yields and is likely to result in more mortgage decreases in the coming days. Looking ahead, with a slew of key economic reports on the horizon – including consumer spending and inflation data – the relatively muted mortgage rate activity from the past couple weeks may transition to more significant movements.”

Additionally, the 15-year fixed mortgage rate was 2.11%, and for 5/1 ARMs, the rate was 2.55%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.8% 2.85% 0.08%
20-Year Fixed 2.66% 2.73% 0.03%
15-Year Fixed 2.1% 2.19% 0.02%
10-Year Fixed 2.01% 2.15% -0.08%
7/1 ARM 2.28% 2.96% 0.22%
5/1 ARM 2.34% 3.1% 0.15%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.8% APR with a $75,000 down payment will have a monthly payment of $1,232. A 20-Year Fixed loan of $300,000 at 2.66% APR with a $75,000 down payment will have a monthly payment of $1,613. A 15-Year Fixed loan of $300,000 at 2.1% APR with a $75,000 down payment will have a monthly payment of $1,944. A 10-Year Fixed loan of $300,000 at 2.01% APR with a $75,000 down payment will have a monthly payment of $2,762. A 7/1 ARM loan of $300,000 at 2.28% APR with a $75,000 down payment will have a monthly payment of $1,151. A 5/1 ARM loan of $300,000 at 2.34% APR with a $75,000 down payment will have a monthly payment of $1,159. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.33% 2.99% 0.24%
30-Year Fixed VA 2.54% 2.81% 0.05%
15-Year Fixed FHA 2.11% 2.85% 0.17%
15-Year Fixed VA 2.53% 3.02% 0.04%
5/1 ARM FHA 2.6% 2.97% 0.02%
5/1 ARM VA 3.06% 2.75% -0.19%

A 30-Year Fixed FHA loan of $300,000 at 2.33% APR with a $75,000 down payment will have a monthly payment of $1,159. A 30-Year Fixed VA loan of $300,000 at 2.54% APR with a $75,000 down payment will have a monthly payment of $1,191. A 15-Year Fixed FHA loan of $300,000 at 2.11% APR with a $75,000 down payment will have a monthly payment of $1,946. A 15-Year Fixed VA loan of $300,000 at 2.53% APR with a $75,000 down payment will have a monthly payment of $2,004. A 5/1 ARM FHA loan of $300,000 at 2.6% APR with a $75,000 down payment will have a monthly payment of $1,200. A 5/1 ARM VA loan of $300,000 at 3.06% APR with a $75,000 down payment will have a monthly payment of $1,273. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 3.22% 3.27% 0.07%
20-Year Fixed Jumbo 3.29% 3.33% 0.24%
15-Year Fixed Jumbo 2.86% 2.94% 0.06%
10-Year Fixed Jumbo 2.52% 2.6% 0.1%
7/1 ARM Jumbo 2.68% 3.07% -0.25%
5/1 ARM Jumbo 2.61% 3.06% -0.09%
3/1 ARM Jumbo 2.14% 2.74% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 3.22% APR with a $150,000 down payment will have a monthly payment of $2,602. A 20-Year Fixed Jumbo loan of $600,000 at 3.29% APR with a $150,000 down payment will have a monthly payment of $3,414. A 15-Year Fixed Jumbo loan of $600,000 at 2.86% APR with a $150,000 down payment will have a monthly payment of $4,102. A 10-Year Fixed Jumbo loan of $600,000 at 2.52% APR with a $150,000 down payment will have a monthly payment of $5,660. A 7/1 ARM Jumbo loan of $600,000 at 2.68% APR with a $150,000 down payment will have a monthly payment of $2,427. A 5/1 ARM Jumbo loan of $600,000 at 2.61% APR with a $150,000 down payment will have a monthly payment of $2,406. A 3/1 ARM Jumbo loan of $600,000 at 2.14% APR with a $150,000 down payment will have a monthly payment of $2,259. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

30-Year Fixed Mortgage Rate Rises

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Abstract illustration of houses and charts

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Mortgage rates fall despite strong economic data reports.

“Mortgage rates fell again this week, continuing the downward trend they’ve exhibited for most of April,” said Zillow Economist Matthew Speakman. “In what was a relatively unremarkable week for mortgage rates, the modest movement was partially driven by discussions about a proposed increase in capital gains tax rates – which placed downward pressure on bond yields and thus rates – and anticipation of a key announcement by the Federal Reserve. Fed Chair Jerome Powell reiterated on Wednesday that the Central Bank has no immediate plans to increase interest rates or curb the purchases of mortgage-backed securities – a position that placed more downward pressure on bond yields and is likely to result in more mortgage decreases in the coming days. Looking ahead, with a slew of key economic reports on the horizon – including consumer spending and inflation data – the relatively muted mortgage rate activity from the past couple weeks may transition to more significant movements.”

Additionally, the 15-year fixed mortgage rate was 2.11%, and for 5/1 ARMs, the rate was 2.55%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.8% 2.85% 0.08%
20-Year Fixed 2.66% 2.73% 0.03%
15-Year Fixed 2.1% 2.19% 0.02%
10-Year Fixed 2.01% 2.15% -0.08%
7/1 ARM 2.28% 2.96% 0.22%
5/1 ARM 2.34% 3.1% 0.15%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.8% APR with a $75,000 down payment will have a monthly payment of $1,232. A 20-Year Fixed loan of $300,000 at 2.66% APR with a $75,000 down payment will have a monthly payment of $1,613. A 15-Year Fixed loan of $300,000 at 2.1% APR with a $75,000 down payment will have a monthly payment of $1,944. A 10-Year Fixed loan of $300,000 at 2.01% APR with a $75,000 down payment will have a monthly payment of $2,762. A 7/1 ARM loan of $300,000 at 2.28% APR with a $75,000 down payment will have a monthly payment of $1,151. A 5/1 ARM loan of $300,000 at 2.34% APR with a $75,000 down payment will have a monthly payment of $1,159. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.33% 2.99% 0.24%
30-Year Fixed VA 2.54% 2.81% 0.05%
15-Year Fixed FHA 2.11% 2.85% 0.17%
15-Year Fixed VA 2.53% 3.02% 0.04%
5/1 ARM FHA 2.6% 2.97% 0.02%
5/1 ARM VA 3.06% 2.75% -0.19%

A 30-Year Fixed FHA loan of $300,000 at 2.33% APR with a $75,000 down payment will have a monthly payment of $1,159. A 30-Year Fixed VA loan of $300,000 at 2.54% APR with a $75,000 down payment will have a monthly payment of $1,191. A 15-Year Fixed FHA loan of $300,000 at 2.11% APR with a $75,000 down payment will have a monthly payment of $1,946. A 15-Year Fixed VA loan of $300,000 at 2.53% APR with a $75,000 down payment will have a monthly payment of $2,004. A 5/1 ARM FHA loan of $300,000 at 2.6% APR with a $75,000 down payment will have a monthly payment of $1,200. A 5/1 ARM VA loan of $300,000 at 3.06% APR with a $75,000 down payment will have a monthly payment of $1,273. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 3.22% 3.27% 0.07%
20-Year Fixed Jumbo 3.29% 3.33% 0.24%
15-Year Fixed Jumbo 2.86% 2.94% 0.06%
10-Year Fixed Jumbo 2.52% 2.6% 0.1%
7/1 ARM Jumbo 2.68% 3.07% -0.25%
5/1 ARM Jumbo 2.61% 3.06% -0.09%
3/1 ARM Jumbo 2.14% 2.74% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 3.22% APR with a $150,000 down payment will have a monthly payment of $2,602. A 20-Year Fixed Jumbo loan of $600,000 at 3.29% APR with a $150,000 down payment will have a monthly payment of $3,414. A 15-Year Fixed Jumbo loan of $600,000 at 2.86% APR with a $150,000 down payment will have a monthly payment of $4,102. A 10-Year Fixed Jumbo loan of $600,000 at 2.52% APR with a $150,000 down payment will have a monthly payment of $5,660. A 7/1 ARM Jumbo loan of $600,000 at 2.68% APR with a $150,000 down payment will have a monthly payment of $2,427. A 5/1 ARM Jumbo loan of $600,000 at 2.61% APR with a $150,000 down payment will have a monthly payment of $2,406. A 3/1 ARM Jumbo loan of $600,000 at 2.14% APR with a $150,000 down payment will have a monthly payment of $2,259. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

5 Tips for Approaching the Open House

In this article:

For decades, sellers and their agents have been using open houses to help generate interest in their listings. Open houses give the general public the chance to view a home without scheduling a private showing. While open houses do get a lot of curious neighbors and casual browsers, they can be a good opportunity for serious buyers to decide if a home is worth pursuing further, or a way to get a better grasp on neighborhood home values. 

In fact, 59% of home buyers attended an open house during their shopping process last year and 43% of buyers said attending the open house was very or extremely important to determining if the home was right for them.* On average, home buyers attended 2.6 open houses before buying.

Whether you’re a sincere buyer or simply curious about the inside of a home, you should know how open houses work and understand how you can be a good open house attendee. 

Note: If open houses are restricted or unavailable due to public health concerns, work with your agent to arrange a private tour or video tour. All Zillow-owned homes include a self-tour option — just use our app to unlock the door and tour at your convenience.

What is an open house?

An open house is an event during which potential buyers can tour a home that’s on the market. It’s usually hosted by the seller’s listing agent, or by the seller themselves, in case of a for-sale-by-owner (FSBO) listing. Open houses usually take place on weekends, during a set range of hours typically midday.

Open house benefits for buyers

No scheduling required: Unlike a private showing, you don’t need to set up a specific appointment to see a home. Simply show up during the open house hours and view the home at your own pace. 

Scope out the competition: If you’re interested in a home, attending the open house can help you gauge interest from other buyers. This can be helpful when determining how quickly you need to submit an offer and how much you should offer. 

Understand current home values: Seeing what homes are selling for in your area and what you can buy at a particular price point can be helpful if you’re just starting your search. 

Redefine your nonnegotiable home features: Checking out homes in person can help you redefine your list of must-haves: Do you really need that extra bedroom? What does a backyard of this size really look like?

How do open houses work?

Not every seller or listing agent will hold one, but here’s the typical process for sellers setting up an open house:

  1. The seller and their agent determine a day and time for the open house.
  2. The agent lists the open house on the local MLS.
  3. The agent advertises the open house on social media, online and with print ads or flyers. 
  4. The agent prepares for the open house — purchasing refreshments, printing flyers, setting up signs and adding little touches to make the home feel welcoming to buyers. (Yes, as a shopper, you can eat the cookies.)
  5. The agent hosts the event, greeting buyers and answering questions about the property and community.
  6. Buyers remove their shoes, tour the home, take pictures and video (if allowed) and jot down important notes. 
  7. Any buyer who liked the house will contact their own agent. They’ll then set up a private showing to see the home again or they’ll submit an offer right away — the latter is common in fast-moving real estate markets.

Who hosts an open house?

The person hosting an open house could be any one of the following: 

  • Listing agent: As the person hired to sell the home, the listing agent should be an expert on the property. 
  • Listing agent’s team member or associate: A busy listing agent may also send another agent in their place — either someone on their team or another agent in their office. They should be experts in the local market, but may not be as familiar with the individual home. 
  • Homeowner: If a home is for sale by owner (FSBO), the homeowner will be hosting their own open house. They’re undoubtedly the expert on the home, but their local market expertise may be limited. 

How to prepare for an open house

There are times when you might just stumble upon an open house while you’re on a walk or running errands. But if you’re intentionally looking for open houses as part of your home-buying strategy, try these tips.

Seek out relevant open houses

If you plan to visit multiple open houses in one day, make sure you’re focusing on listings that fit your criteria for budget and location. It’s not worth wasting time looking at homes outside your budget or those that are too far from your work or school. 

Tip: With Zillow’s home search tool, buyers can filter by homes with upcoming open houses (this filter can be applied in addition to other search filters like price, bedrooms, bathrooms, square footage and location). When you use the open houses filter in conjunction with filters for your other criteria, you can easily find the right open houses for your search.

A map of home listings on Zillow.

You can also tour most Zillow-owned homes any time between 6 a.m. to 8 p.m., any day of the week — just select the tour option on the listing. Although the listing agent will not be present, you can avoid a busy open house and rest assured the property is in move-in ready condition.

Do research on the market beforehand

With help from your agent or on your own, find out how each home you’re planning to visit stacks up against others nearby. Is the price in line with similar listings in the area? Are there any defects? Has it gone under contract recently and then returned to the market? Are there a lot of other interested buyers? Has it been sitting on the market for a long time? (“Days on market” is an indicator of a stale listing, but the standard number of days on market can vary based on where you live.)

Stay open-minded

If you’re searching on a tight budget in a hot neighborhood, there’s a good chance that the home that fits the bill will need some TLC. Fortunately, attending an open house can give you a better idea of the home’s condition and potential, while also giving you the opportunity to ask renovation-related questions — e.g., the location of load bearing walls and the details of local regulations. 

How to attend an open house

Now that you’ve done your research and are prepared to add some open houses to your home search, here’s what you should do once the day arrives. 

Ask questions

An open house is your best opportunity to ask the listing agent (or their associate) your questions — don’t be shy. Ask questions that you wouldn’t be able to answer just by reading a home’s listing description, such as:

  • What are the HOA restrictions?
  • Has the seller done a property tax appeal?
  • Have there been any recent renovations or repairs?

Tip: If you’re not currently working with an agent and you ultimately decide you aren’t interested in a particular home you tour, the open house could help you see if the listing agent might be the right person to represent you — many agents represent both buyers and sellers. 

Be honest

If anyone other than the listing agent or the homeowner is hosting the open house, they’re likely an agent hoping to find potential buyer clients. If you’re already working with an agent (or if you have no real interest in buying), be honest.

Check for damage and disrepair

Professional or edited photos can make a home look a lot better online than it is in person. At an open house, take the opportunity to closely evaluate a home’s condition and take note of any potential defects that would factor into your offer price. 

Assess the windows: Look for flaking paint, misaligned sashes and condensation due to air leaks. These could be signs of windows that need replacement. 

Check for water damage: Look for warped baseboards, ceiling stains and musty smells. 

Make note of cracks: Noticeable cracks in the ceiling or drywall could indicate foundation issues. 

Test functions: Open cabinets, doors and drawers. Run the faucets. Check the water pressure. An open house is a good opportunity to make sure every part of the home is in good working order. 

Gauge potential renovation needs: Home improvements can really add up. As you walk through a home, keep an eye out for urgent renovation needs like floors, fixtures or large repainting projects.

Open house tips for buyers

Whenever you attend an open house, put yourself in the seller’s shoes — you’re letting a bunch of strangers walk through your home while you’re not there. While every seller wants their open house to net a buyer, they also want to keep their home safe and their furnishings free of damage.

Do

  • Take off your shoes or wear booties if requested.
  • Greet the host and provide your name.
  • Sign in if necessary or requested (this is a safety issue for the seller and their agent).
  • Take notes on your phone about your likes, dislikes and follow-up questions.
  • Ask if you can capture a video (if the listing doesn’t already include a video).
  • Respect other buyers and guests. 
  • Wait for others to exit a room before you enter.
  • Provide feedback if requested.
  • Thank the person hosting the event.

Don’t

  • Refuse to comply with an agent or homeowner’s house rules.
  • Criticize the home or the owner’s style.
  • Listen in on other visitors’ conversations.
  • Touch the owner’s belongings.
  • Let kids run around without supervision.
  • Bring food or beverages in (except water).
  • Reveal information that would compromise your negotiating power, like your budget or level of interest in the home.
  • Bring pets.

*Zillow Group Consumer Housing Trends Report 2019 survey data

Source: zillow.com

Stock Market Today: Dow Leads in a Mixed May Start for Stocks

The Dow Jones Industrial Average kicked off the month with a 0.7% gain to 34,113 on Monday that came despite a weaker-than-expected Institute of Supply Management manufacturing report.

Supply bottlenecks resulted in an April reading of 60.7 – a slower rate of expansion than March’s 64.7 reading indicated, but expansion nonetheless.

“Although the composite was a fair bit below expectations (Barclays 64.5; consensus 65.0), the decline comes off of a robust March reading that was the highest since 1983,” says Barclays economist Jonathan Millar. “Indeed, components of the composite continue to point to very strong growth, which comes as no surprise, given highly favorable demand conditions amid fiscal stimulus, easing of social distancing restrictions, and ongoing progress in vaccinations.”

We’re glad to see that at least some investors heeded our advice to ignore the urge to “sell in May and go away.” But stocks weren’t exactly up across the board. The Nasdaq Composite (-0.5% to 13,895) struggled, thanks to weakness in mega-cap tech and tech-esque names such as Tesla (TSLA, -3.5%), Amazon.com (AMZN, -2.3%) and Salesforce.com (CRM, -2.9%).

“For the first time in a while there is a clear value/cyclical bias while growth/tech is under pressure,” says Michael Reinking, senior market strategist for the New York Stock Exchange. “Tech wobbled last week despite blowout numbers from the mega-cap stocks. This is especially concerning as the rate environment remains in check.”

Sign up for Kiplinger’s FREE Closing Bell e-letter: Our daily look at the stock market’s moves, and what moves investors should make

Other action in the stock market today:

  • The S&P 500 gained 0.3% to 4,192.
  • The small-cap Russell 2000 also finished in the black, up 0.5% to 2,277.
  • Berkshire Hathaway (BRK.B, +1.7%) held its 2021 annual shareholder meeting this weekend. Chairman and CEO Warren Buffett and Executive Vice Chairman Charlie Munger addressed a number of topics, including trimming Berkshire’s stake in Apple (AAPL) in Q4 2020. “It was probably a mistake,” said Buffett, adding that AAPL’s stock price is a “huge, huge bargain” given how “indispensable” the company’s products are to people. Also of note: Berkshire grew fourth-quarter operating income by 20%, to $5.9 billion, while cash grew 5% to $145.4 billion.
  • Domino’s Pizza (DPZ, +2.6%) was a notable winner today. The pizza chain revealed an accelerated stock buyback program, saying in a regulatory filing that it will pay Barclays $1 billion in cash for roughly 2 million DPZ shares.
  • U.S. crude oil futures jumped 1.4% to end at $64.49 per barrel.
  • Gold futures snapped a four-day losing streak, adding 1.4% to settle at $1,791.80 an ounce.
  • The CBOE Volatility Index (VIX) declined 2.3% to 18.18.
  • Bitcoin prices improved by 1.1% to $57,530.32. More impressive was the 18.6% improvement in Ethereum, to $3,300.64 (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
stock chart for 050321stock chart for 050321

Another Big Week of Reports … And Dividends

What should investors be looking forward to this week?

On Thursday and Friday, we’ll get the latest weekly unemployment filings and April jobs data, respectively, but throughout the week, another heaping helping of earnings reports, anchored by the likes of General Motors (GM), Pfizer (PFE), Under Armour (UAA) and PayPal (PYPL).

And given that many companies tend to synchronize their dividend and buyback actions with their earnings reports, you also can expect plenty of news on the dividend-growth front.

In some cases, those raises might be token upticks meant to secure current or future membership in the Dividend Aristocrats. But others are bound to compete with this year’s most explosive payout hikes – improvements of 15%, 20% or even 30% that drastically change the income aspect of current shareholders’ investments. Ideally, of course, investors want the best of both worlds: income longevity and generosity.

These 10 dividend stocks just might fit the bill. This group of mostly blue-chip household names offer a strong history of payout increases, a sharp level of recent hikes compared to their peers, and the operational quality to continue affording these annual raises.

Kyle Woodley was long AMZN, CRM, PYPL and Ethereum as of this writing.

Source: kiplinger.com

Dear Penny: Am I Wrong to Make My Unemployed Niece Pay Rent?

Dear Penny,

Recently, we had to move our mom to a nursing home. Prior to the move, my niece had moved in with her. My mom has dementia and is not likely to return to living at home. 

The niece was living rent-free when Mom was here. She is still staying here and still not paying. She is unemployed but has been getting unemployment. She has been there since last September. Mom went to the nursing home in February.

My brother is the durable power of attorney and in charge of expenses. We are hoping to hang onto the house. There are some savings to pay for the nursing home for a few years. When the savings are gone, we will have no choice but to sell the house.

My niece was paying a roommate a substantial sum before she moved in with Mom. She has had many months to save, and her expenses are low since she pays no rent or utilities. My brother turned off the cable, but the internet is still on. Plus there are expenses for gas, oil, electric, property taxes and maintenance. I live out of state but come back for extended visits and work remotely while I am there. I plan to send a check for the internet, electric etc. to my brother. I usually stay for three weeks or so.

Someone needs to tell the niece she needs to start paying for some of the expenses. I don’t quite know how to bring it up to her. When I mentioned it to my sister (the niece’s mother’s twin), she seemed indignant that we would expect money from an unemployed person. 

I guess I need to figure out how to bring it up to her. Before Mom went to the nursing home, there was a big argument because after Mom said she could move in, Mom then decided she didn’t want her here. After Mom was moved to the nursing home, it was my idea for the niece to be able to stay. So, I feel like I should be the one to tell her the free ride is over.

-L.

Dear L.,

When you offered to let your niece stay in your mom’s home, you didn’t absolve her of rent for life. The conversation you’re about to have shouldn’t come as a shock. Note that I say “shouldn’t” rather than “won’t” here. I suspect shock is exactly the reaction you’ll get.

Think about it from your niece’s perspective. After eight months of living rent-free, why should she have different expectations for months nine or 10?

I do think that since this arrangement was your idea, you should be part of this conversation. But as durable power of attorney, your brother is the one making the decisions. So I think the two of you should talk to your niece together.

What’s good is that you seem to be feeling moderate frustration, rather than full-blown rage at this point. Don’t let things reach a boiling point with your niece. This conversation needs to happen soon.

First, talk with your brother on what a good outcome looks like. Do you want your niece out altogether? Are you OK with her staying if she pays for upkeep and utilities, even if she wouldn’t pay rent? Or are you hoping she’ll stay and eventually pay rent at fair market value?

I’m guessing the ideal scenario is somewhere between the second and third options. It’s reasonable to expect her to pay something for rent but probably not what you’d charge a stranger, especially since you stay at the home on occasion. You and your brother should agree on a dollar amount that she’ll be responsible for and any other duties you need her to take on.

Regardless of your ideal outcome, give her a heads-up that this discussion is coming. Schedule a time to talk about how to handle expenses moving forward so that she doesn’t feel blindsided.

Try not to lecture her about all the money she should have been saving since September. I get your frustrations. But really, it’s irrelevant at this point.

Keep the conversation forward looking. Show your niece what it’s costing to maintain the home and ask her what she can afford to contribute. She’s getting unemployment, so she should be able to kick in something, even after groceries and other expenses. You can offer to help her make a budget or revamp her resume. But ultimately, you need to set a very clear expectation for what you need from her going forward.

What I’m hoping is that a little pressure will give your niece some much-needed motivation and that more extreme measures, like eviction, won’t be necessary. Sometimes a looming deadline forces us to act.

This will be a tough conversation. You had good intentions, but now you have to be the bad guy. Please don’t kid yourself by thinking this situation will change on its own.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

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Source: thepennyhoarder.com

30-Year Fixed Mortgage Rate Falls to New Record Low

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Abstract illustration of houses and charts

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Mortgage rates fall despite strong economic data reports.

“Mortgage rates fell again this week, continuing the downward trend they’ve exhibited for most of April,” said Zillow Economist Matthew Speakman. “In what was a relatively unremarkable week for mortgage rates, the modest movement was partially driven by discussions about a proposed increase in capital gains tax rates – which placed downward pressure on bond yields and thus rates – and anticipation of a key announcement by the Federal Reserve. Fed Chair Jerome Powell reiterated on Wednesday that the Central Bank has no immediate plans to increase interest rates or curb the purchases of mortgage-backed securities – a position that placed more downward pressure on bond yields and is likely to result in more mortgage decreases in the coming days. Looking ahead, with a slew of key economic reports on the horizon – including consumer spending and inflation data – the relatively muted mortgage rate activity from the past couple weeks may transition to more significant movements.”

Additionally, the 15-year fixed mortgage rate was 2.11%, and for 5/1 ARMs, the rate was 2.55%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.84% 2.9% -0.05%
20-Year Fixed 2.72% 2.79% -0.04%
15-Year Fixed 2.13% 2.21% -0.03%
10-Year Fixed 2.02% 2.14% -0.12%
7/1 ARM 2.65% 3.25% -0.1%
5/1 ARM 2.49% 3.19% 0.02%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.84% APR with a $75,000 down payment will have a monthly payment of $1,239. A 20-Year Fixed loan of $300,000 at 2.72% APR with a $75,000 down payment will have a monthly payment of $1,621. A 15-Year Fixed loan of $300,000 at 2.13% APR with a $75,000 down payment will have a monthly payment of $1,948. A 10-Year Fixed loan of $300,000 at 2.02% APR with a $75,000 down payment will have a monthly payment of $2,762. A 7/1 ARM loan of $300,000 at 2.65% APR with a $75,000 down payment will have a monthly payment of $1,208. A 5/1 ARM loan of $300,000 at 2.49% APR with a $75,000 down payment will have a monthly payment of $1,183. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.33% 2.99% 0.53%
30-Year Fixed VA 2.6% 2.89% -0.21%
15-Year Fixed FHA 2.06% 2.84% -0.06%
15-Year Fixed VA 2.62% 3.13% 0%
5/1 ARM FHA 2.69% 3% -0.14%
5/1 ARM VA 2.35% 2.45% 0.09%

A 30-Year Fixed FHA loan of $300,000 at 2.33% APR with a $75,000 down payment will have a monthly payment of $1,158. A 30-Year Fixed VA loan of $300,000 at 2.6% APR with a $75,000 down payment will have a monthly payment of $1,200. A 15-Year Fixed FHA loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $1,939. A 15-Year Fixed VA loan of $300,000 at 2.62% APR with a $75,000 down payment will have a monthly payment of $2,017. A 5/1 ARM FHA loan of $300,000 at 2.69% APR with a $75,000 down payment will have a monthly payment of $1,214. A 5/1 ARM VA loan of $300,000 at 2.35% APR with a $75,000 down payment will have a monthly payment of $1,162. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 3.27% 3.32% -0.03%
20-Year Fixed Jumbo 3.71% 3.76% -0.3%
15-Year Fixed Jumbo 2.86% 2.94% -0.06%
10-Year Fixed Jumbo 2.63% 2.7% 0%
7/1 ARM Jumbo 2.59% 2.81% 0.04%
5/1 ARM Jumbo 2.39% 2.73% 0.19%
3/1 ARM Jumbo 2.14% 2.74% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 3.27% APR with a $150,000 down payment will have a monthly payment of $2,618. A 20-Year Fixed Jumbo loan of $600,000 at 3.71% APR with a $150,000 down payment will have a monthly payment of $3,545. A 15-Year Fixed Jumbo loan of $600,000 at 2.86% APR with a $150,000 down payment will have a monthly payment of $4,101. A 10-Year Fixed Jumbo loan of $600,000 at 2.63% APR with a $150,000 down payment will have a monthly payment of $5,690. A 7/1 ARM Jumbo loan of $600,000 at 2.59% APR with a $150,000 down payment will have a monthly payment of $2,400. A 5/1 ARM Jumbo loan of $600,000 at 2.39% APR with a $150,000 down payment will have a monthly payment of $2,336. A 3/1 ARM Jumbo loan of $600,000 at 2.14% APR with a $150,000 down payment will have a monthly payment of $2,259. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

How to Refinance Your Home Mortgage – Step-by-Step Guide

Deciding to refinance your mortgage is only the beginning of the process. You’re far more likely to accomplish what you set out to achieve with your refinance — and to get a good deal in the meantime — when you understand what a mortgage refinance entails.

From decision to closing, mortgage refinancing applicants pass through four key stages on their journey to a new mortgage loan.

How to Refinance a Mortgage on Your Home

Getting a home loan of any kind is a highly involved and consequential process.

On the front end, it requires careful consideration on your part. In this case, that means weighing the pros and cons of refinancing in general and the purpose of your loan in particular.

For example, are you refinancing to get a lower rate loan (reducing borrowing costs relative to your current loan) or do you need a cash-out refinance to finance a home improvement project, which could actually entail a higher rate?

Next, you’ll need to gather all the documents and details you’ll need to apply for your loan, evaluate your loan options and calculate what your new home mortgage will cost, and then begin the process of actually shopping for and applying for your new loan — the longest step in the process.

Expect the whole endeavor to take several weeks.

1. Determining Your Loan’s Purpose & Objectives

The decision to refinance a mortgage is not one to make lightly. If you’ve decided to go through with it, you probably have a goal in mind already.

Still, before getting any deeper into the process, it’s worth reviewing your longer-term objectives and determining what you hope to get out of your refinance. You might uncover a secondary or tertiary goal or benefit that alters your approach to the process before it’s too late to change course.

Refinancing advances a whole host of goals, some of which are complementary. For example:

  • Accelerating Payoff. A shorter loan term means fewer monthly payments and quicker payoff. It also means lower borrowing costs over the life of the loan. The principal downside: Shortening a loan’s remaining term from, say, 25 years to 15 years is likely to raise the monthly payment, even as it cuts down total interest charges.
  • Lowering the Monthly Payment. A lower monthly payment means a more affordable loan from month to month — a key benefit for borrowers struggling to live within their means. If you plan to stay in your home for at least three to five years, accepting a prepayment penalty (which is usually a bad idea) can further reduce your interest rate and your monthly payment along with it. The most significant downsides here are the possibility of higher overall borrowing costs and taking longer to pay it off if, as is often the case, you reduce your monthly payment by lengthening your loan term.
  • Lowering the Interest Rate. Even with an identical term, a lower interest rate reduces total borrowing costs and lowers the monthly payment. That’s why refinancing activity spikes when interest rates are low. Choose a shorter term and you’ll see a more drastic reduction.
  • Avoiding the Downsides of Adjustable Rates. Life is good for borrowers during the first five to seven years of the typical adjustable-rate mortgage (ARM) term when the 30-year loan rate is likely to be lower than prevailing rates on 30-year fixed-rate mortgages. The bill comes due, literally, when the time comes for the rate to adjust. If rates have risen since the loan’s origination, which is common, the monthly payment spikes. Borrowers can avoid this unwelcome development by refinancing to a fixed-rate mortgage ahead of the jump.
  • Getting Rid of FHA Mortgage Insurance. With relaxed approval standards and low down payment requirements, Federal Housing Administration (FHA) mortgage loans help lower-income, lower-asset first-time buyers afford starter homes. But they have some significant drawbacks, including pricey mortgage insurance that lasts for the life of the loan. Borrowers with sufficient equity (typically 20% or more) can put that behind them, reduce their monthly payment in the process by refinancing to a conventional mortgage, and avoid less expensive but still unwelcome private mortgage insurance (PMI).
  • Tapping Home Equity. Use a cash-out refinance loan to extract equity from your home. This type of loan allows you to borrow cash against the value of your home to fund things like home improvement projects or debt consolidation. Depending on the lender and jurisdiction, you can borrow up to 85% of your home equity (between rolled-over principal and cash proceeds) with this type of loan. But mind your other equity-tapping options: a home equity loan or home equity line of credit.

Confirming what you hope to get out of your refinance is an essential prerequisite to calculating its likely cost and choosing the optimal offer.


2. Confirm the Timing & Gather Everything You Need

With your loan’s purpose and your long-term financial objectives set, it’s time to confirm you’re ready to refinance. If yes, you must gather everything you need to apply, or at least begin thinking about how to do that.

Assessing Your Timing & Determining Whether to Wait

The purpose of your loan plays a substantial role in dictating the timing of your refinance.

For example, if your primary goal is to tap the equity in your home to finance a major home improvement project, such as a kitchen remodel or basement finish, wait until your loan-to-value ratio is low enough to produce the requisite windfall. That time might not arrive until you’ve been in your home for a decade or longer, depending on the property’s value (and change in value over time).

As a simplified example, if you accumulate an average of $5,000 in equity per year during your first decade of homeownership by making regular payments on your mortgage, you must pay your 30-year mortgage on time for 10 consecutive years to build the $50,000 needed for a major kitchen remodel (without accounting for a potential increase in equity due to a rise in market value).

By contrast, if your primary goal is to avoid a spike in your ARM payment, it’s in your interest to refinance before that happens — most often five or seven years into your original mortgage term.

But other factors can also influence the timing of your refinance or give you second thoughts about going through with it at all:

  • Your Credit Score. Because mortgage refinance loans are secured by the value of the properties they cover, their interest rates tend to be lower than riskier forms of unsecured debt, such as personal loans and credit cards. But borrower credit still plays a vital role in setting their rates. Borrowers with credit scores above 760 get the best rates, and borrowers with scores much below 680 can expect significantly higher rates. That’s not to say refinancing never makes sense for someone whose FICO score is in the mid-600s or below, only that those with the luxury to wait out the credit rebuilding or credit improvement process might want to consider it. If you’re unsure of your credit score, you can check it for free through Credit Karma.
  • Debt-to-Income Ratio. Mortgage lenders prefer borrowers with low debt-to-income ratios. Under 36% is ideal, and over 43% is likely a deal breaker for most lenders. If your debt-to-income ratio is uncomfortably high, consider putting off your refinance for six months to a year and using the time to pay down debt.
  • Work History. Fairly or not, lenders tend to be leery of borrowers who’ve recently changed jobs. If you’ve been with your current employer for two years or less, you must demonstrate that your income has been steady for longer and still might fail to qualify for the rate you expected. However, if you expect interest rates to rise in the near term, waiting out your new job could cancel out any benefits due to the higher future prevailing rates.
  • Prevailing Interest Rates. Given the considerable sums of money involved, even an incremental change to your refinance loan’s interest rate could translate to thousands or tens of thousands of dollars saved over the life of the loan. If you expect interest rates to fall in the near term, put off your refinance application. Conversely, if you believe rates will rise, don’t delay. And if the difference between your original mortgage rate and the rate you expect to receive on your refinance loan isn’t at least 1.5 percentage points, think twice about going ahead with the refinance at all. Under those circumstances, it takes longer to recoup your refinance loan’s closing costs.
  • Anticipated Time in the Home. It rarely makes sense to refinance your original mortgage if you plan to sell the home or pay off the mortgage within two years. Depending on your expected interest savings on the refinance, it can take much longer than that (upward of five years) to break even. Think carefully about how much effort you want to devote to refinancing a loan you’re going to pay off in a few years anyway.

Pro tip: If you need to give your credit score a bump, sign up for Experian Boost. It’s free and it’ll help you instantly increase your credit score.

Gathering Information & Application Materials

If and when you’re ready to go through with your refinance, you need a great deal of information and documentation before and during the application and closing processes, including:

  • Proof of Income. Depending on your employment status and sources of income, the lender will ask you to supply recent pay stubs, tax returns, or bank statements.
  • A Recent Home Appraisal. Your refinance lender will order a home appraisal before closing, so you don’t need to arrange one on your own. However, to avoid surprises, you can use open-source comparable local sales data to get an idea of your home’s likely market value.
  • Property Insurance Information. Your lender (and later, mortgage servicer) needs your homeowners insurance information to bundle your escrow payment. If it has been more than a year since you reviewed your property insurance policy, now’s the time to shop around for a better deal.

Be prepared to provide additional documentation if requested by your lender before closing. Any missing information or delays in producing documents can jeopardize the close.

Home Appraisal Blackboard Chalk Hand


3. Calculate Your Approximate Refinancing Costs

Next, use a free mortgage refinance calculator like Bank of America’s to calculate your approximate refinancing costs.

Above all else, this calculation must confirm you can afford the monthly mortgage payment on your refinance loan. If one of your aims in refinancing is to reduce the amount of interest paid over the life of your loan, this calculation can also confirm your chosen loan term and structure will achieve that.

For it to be worth it, you must at least break even on the loan after accounting for closing costs.

Calculating Your Breakeven Cost

Breakeven is a simple concept. When the total amount of interest you must pay over the life of your refinance loan matches the loan’s closing costs, you break even on the loan.

The point in time at which you reach parity is the breakeven point. Any interest saved after the breakeven point is effectively a bonus — money you would have forfeited had you chosen not to refinance.

Two factors determine if and when the breakeven point arrives. First, a longer loan term increases the likelihood you’ll break even at some point. More important still is the magnitude of change in your loan’s interest rate. The further your refinance rate falls from your original loan’s rate, the more you save each month and the faster you can recoup your closing costs.

A good mortgage refinance calculator should automatically calculate your breakeven point. Otherwise, calculate your breakeven point by dividing your refinance loan’s closing costs by the monthly savings relative to the original loan and round the result up to the next whole number.

Because you won’t have exact figures for your loan’s closing costs or monthly savings until you’ve applied and received loan disclosures, you’re calculating an estimated breakeven range at this point.

Refinance loan closing costs typically range from 2% to 6% of the refinanced loan’s principal, depending on the origination fee and other big-ticket expenses, so run one optimistic scenario (closing costs at 2% and a short time to breakeven) and one pessimistic scenario (closing costs at 6% and a long time to breakeven). The actual outcome will likely fall somewhere in the middle.

Note that the breakeven point is why it rarely makes sense to bother refinancing if you plan to sell or pay off the loan within two years or can’t reduce your interest rate by more than 1.5 to 2 percentage points.


4. Shop, Apply, & Close

You’re now in the home stretch — ready to shop, apply, and close the deal on your refinance loan.

Follow each of these steps in order, beginning with a multipronged effort to source accurate refinance quotes, continuing through an application and evaluation marathon, and finishing up with a closing that should seem breezier than your first.

Use a Quote Finder (Online Broker) to Get Multiple Quotes Quickly

Start by using an online broker like Credible* to source multiple refinance quotes from banks and mortgage lenders without contacting each party directly. Be prepared to provide basic information about your property and objectives, such as:

  • Property type, such as single-family home or townhouse
  • Property purpose, such as primary home or vacation home
  • Loan purpose, such as lowering the monthly payment
  • Property zip code
  • Estimated property value and remaining first mortgage loan balance
  • Cash-out needs, if any
  • Basic personal information, such as estimated credit score and date of birth

If your credit is decent or better, expect to receive multiple conditional refinance offers — with some coming immediately and others trickling in by email or phone in the subsequent hours and days. You’re under no obligation to act on any, sales pressure notwithstanding, but do make note of the most appealing.

Approach Banks & Lenders You’ve Worked With Before

Next, investigate whether any financial institutions with which you have a preexisting relationship offer refinance loans, including your current mortgage lender.

Most banks and credit unions do offer refinance loans. Though their rates tend to be less competitive at a baseline than direct lenders without expensive branch offices, many offer special pricing for longtime or high-asset customers. It’s certainly worth taking the time to make a few calls or website visits.

Apply for Multiple Loans Within 14 Days

You won’t know the exact cost of any refinance offer until you officially apply and receive the formal loan disclosure all lenders must provide to every prospective borrower.

But you can’t formally apply for a refinance loan without consenting to a hard credit pull, which can temporarily depress your credit score. And you definitely shouldn’t go through with your refinance until you’ve entertained multiple offers to ensure you’re getting the best deal.

Fortunately, the major consumer credit-reporting bureaus count all applications for a specific loan type (such as mortgage refinance loans) made within a two-week period as a single application, regardless of the final application count.

In other words, get in all the refinance applications you plan to make within two weeks, and your credit report will show just a single inquiry.

Evaluate Each Offer

Evaluate the loan disclosure for each accepted application with your objectives and general financial goals in mind. If your primary goal is reducing your monthly payment, look for the loan with the lowest monthly cost.

If your primary goal is reducing your lifetime homeownership costs, look for the loan offering the most substantial interest savings (the lowest mortgage interest rate).

Regardless of your loan’s purpose, make sure you understand what (if anything) you’re obligated to pay out of pocket for your loan. Many refinance loans simply roll closing costs into the principal, raising the monthly payment and increasing lifetime interest costs.

If your goal is to get the lowest possible monthly payment and you can afford to, try paying the closing costs out of pocket.

Choose an Offer & Consider Locking Your Rate

Choose the best offer from the pack — the one that best suits your objectives. If you expect rates to move up before closing, consider the lender’s offer (if extended) to lock your rate for a predetermined period, usually 45 to 90 days.

There’s likely a fee associated with this option, but the amount saved by even marginally reducing your final interest rate will probably offset it. Assuming everything goes smoothly during closing, you shouldn’t need more than 45 days — and certainly not more than 90 days — to finish the deal.

Proceed to Closing

Once you’ve closed on the loan, that’s it — you’ve refinanced your mortgage. Your refinance lender pays off your first mortgage and originates your new loan.

Moving forward, you send payments to your refinance lender, their servicer, or another company that purchases the loan.


Final Word

If you own a home, refinancing your mortgage loan is likely the easiest route to capitalize on low interest rates. It’s probably the most profitable too.

But low prevailing interest rates aren’t the only reason to refinance your mortgage loan. Other common refinancing goals include avoiding the first upward adjustment on an ARM, reducing the monthly payment to a level that doesn’t strain your growing family’s budget, tapping the equity you’ve built in your home, and banishing FHA mortgage insurance.

And a refinance loan doesn’t need to achieve only one goal. Some of these objectives are complementary, such as reducing your monthly payment while lowering your interest rate (and lifetime borrowing costs).

Provided you make out on the deal, whether by reducing your total homeownership costs or taking your monthly payment down a peg, it’s likely worth the effort.

*Advertisement from Credible Operations, Inc. NMLS 1681276.Address: 320 Blackwell St. Ste 200, Durham, NC, 27701

Source: moneycrashers.com

One-Tap Online Shopping Savings Compared: Capital One Shopping Vs. Honey

There’s no sense in paying full price when shopping online — not when there are two truly legit discount apps that will save you money: Capital One Shopping and Honey.

The question is, which one to go with? Since I do at least 75% of my shopping exclusively online, I decided to run some tests to find out which coupon app was going to come out on top.

If you’re ready to save some serious cash on your next shopping trip, read on.

What’s Ahead:

Capital One Shopping vs. Honey summary

Features Capital One Shopping Honey
Format App
Browser extension
Website
App
Browser extension
Website
Partners Not specified, but most major name brands, plus Amazon 30,000 participating merchants including Amazon and
Watchlist Yes Yes (called Droplist)
Automatic coupon codes Yes Yes
Lowest Amazon price No Yes
Membership required No, except for credits No, except for Gold program
Local offers Yes No

About Capital One Shopping

One-Tap Online Shopping Savings Compared: Capital One Shopping Vs. Honey - Capital One Shopping

One-Tap Online Shopping Savings Compared: Capital One Shopping Vs. Honey - Capital One ShoppingCapital One Shopping is a discount and savings app owned by Capital One. It bills itself as the best option for discounts, loyalty perks, and deals.

To use Capital One Shopping, simply download the app, install the browser extension, or just visit the web site. Using Capital One Shopping gets you better prices on your online shopping, automatic discount codes at checkout, and tracks your must-have items to find the best price.

About Honey

One-tap Savings Compared: Wikibuy Vs. Honey - Honey

One-tap Savings Compared: Wikibuy Vs. Honey - HoneyHoney is an app dedicated to finding you the best deals and promos on all your online shopping. Installing the browser extension or downloading the app gets you great discounts and automatic coupon codes when you’re shopping online.

You don’t even have to lift a finger, Honey will add the best coupon they find right to your cart, or they’ll let you know that you have the best deal. 

Capital One Shopping vs. Honey savings

As major players in the discount code space, it may be tough to tell what sets Capital One Shopping and Honey apart. They’re both extremely effective at finding deals and applying codes. So let’s compare them in terms of savings. 

Capital One Shopping savings

Capital One Shopping helps you save in two main ways. First, it runs a comparison for the item you’re looking at, showing you if there’s a better price somewhere else. So, if you’re browsing Walmart.com for a particular camera, Capital One Shopping checks Amazon, Best Buy, B&H Photo Video, and other stores to see if you’re really getting the best possible deal.

Capital One Shopping shows you who has the lowest price, so that you can make the best choice for your wallet. They even spell out how long to expect for shipping at each alternative store and how much it costs to ship — so you get the true total price.

Then, at checkout, Capital One Shopping will scan all available coupon codes for you — automatically. No more Google searches or saving endless store emails; just have Capital One Shopping work its magic and you get the savings.

A word of warning, though: sometimes the savings you get are just cash back credits, and you can’t cash those out immediately. They may need to be verified and then can be redeemed for gift cards at some of your favorite retailers. 

Honey savings

Honey also automatically scans and applies coupon codes for you when you shop online. You don’t have to waste time with coupons that don’t work, because Honey only applies valid promo codes. 

Honey also saves you money by notifying you when items in your Droplist have changed price. The Droplist is Honey’s version of a watchlist; it’s where you save items you’re interested in. Not only will the Droplist notify you when prices drop, but you can see the price history, too.

Like Capital One Shopping, Honey also offers a cash back program, called Honey Gold, which requires a sign-up. Similar to Capital One Shopping, you have to save up a certain dollar amount (in this case, $10 of “gold”) before you can cash out in the form of a gift card. 

Capital One Shopping vs. Honey savings summary

Both Capital One Shopping and Honey will show you deals and automatically apply promo codes. The real difference comes down to the way you shop. Are you mostly an Amazon shopper? Then Honey is going to help you out. Do you want to take a moment to compare prices across a bunch of different retailers and go with the lowest cost? Then Capital One Shopping is for you. 

Here’s an example: I am in the market for a new pressure cooker. I found one I liked on Amazon. The Honey extension notified me that I found the lowest price of all the sellers on Amazon. I could check out with confidence. But the Capital One Shopping extension showed me that I could actually save $5.99 by taking advantage of a 7% cash back deal at Macy’s. I never would have known about that offer otherwise. 

However, while I may technically be saving $5.99 by purchasing my pressure cooker at that particular department store, I do not actually see those savings immediately; I have to save up the credits and apply them to a gift card, choosing from 32 different stores. Sometimes, you’d just rather have the cash.

Capital One Shopping vs. Honey pros

Capital One Shopping pros:

  • Detailed price history and insights – You’ll get insights into each product you shop for.
  • Compare prices at multiple stores – You can find the best deal at a large number of big-box retailers. 
  • Shipping included in price comparison – Easily see how much you’ll pay for everything, including shipping. 

Honey pros:

  • Finds the lowest offers on Amazon – There are thousands of shops on Amazon, so knowing which has the lowest price can be a huge help.
  • The website is more pleasant and transparent to use – Honey is as simple as downloading a Google Chrome extension.
  • Honey Gold program rewards you with gift cards – After earning a set amount of gold, you can cash out for gift cards. 

Capital One Shopping vs. Honey cons

Capital One Shopping cons:

  • Discounts are sometimes in the form of cash back, not lower prices – Not everyone wants to deal with cash back, some folks would prefer straight cash. 
  • Local deals require linking a credit card – If you want local deals, you’ll need to link your credit card, which could be a problem for those worried about privacy issues. 

Honey cons:

  • “Cash back” is in the form of gift cards at select retailers – Just like Capital One Shopping, cash back comes in the form of gift cards, rather than just cash. 
  • Doesn’t always find a valid code to apply – Honey isn’t perfect, and sometimes they miss coupon codes. 

Why choose Capital One Shopping?

Multiple store comparisons

Since both Capital One Shopping and Honey automatically apply coupon codes, one of the biggest differences might be that Capital One Shopping compares prices across multiple stores. You can also use the Mobile Price Comparison tool if you’re on mobile; text an Amazon link to PRICE1 and Capital One Shopping will text you back if there are lower-priced options available.  

Effective discounts

Capital One Shopping frequently finds a way to save on shopping trips, whether it’s a promo code, cash back offers, or lower shipping. Based on my usage, it seemed to deliver lower prices in some format more often than Honey.

Detailed product pages

The product pages showed a great deal of detail. In addition to the price, you’ll also be able to see a detailed price history, 180-day price insights, price volatility ratio, YouTube reviews, related products, and top alternatives.

Why choose Honey?

Get the lowest Amazon price

Having to sort through all the different prices offered by different Amazon sellers on the same product can be a pain in the neck. Honey does a great job of reducing that workload for you, simply showing the lowest-priced Amazon seller for what you’re looking for. So if you do most of your online shopping with your Amazon Prime subscription, the Honey browser extension will be a big boon.

Or avoid Amazon altogether

If you’re more of a mobile shopper and you tend not to shop on Amazon, the Honey mobile app (as opposed to the desktop browser extension) is a way to find thousands of great deals when you’re on your phone — no Amazon required. In fact, the mobile app doesn’t show Amazon products at all, which could be a good fit for you if you’re not a fan of the behemoth site.

Summary

Overall, choosing either Capital One Shopping or Honey is better than shopping online without them. Each will scour the internet for valid coupon codes, which can save you lots of money. You don’t need a membership with either one unless you want to start earning credits (or “gold”) to be redeemed for cash back. Not to mention, signing up for cash back offers could be worth your while, especially if you don’t mind turning over some of your privacy and letting these extensions track where you shop in exchange for saving a little bit of dough.

However, all that being said, Capital One Shopping does edge out the competition by a nose if you’re looking for the overall lowest price. If you’re primarily interested in coupon codes and Amazon deals, Honey is your better bet.

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Source: moneyunder30.com

Here Are 8 Home Repairs You Can’t Afford to Ignore

During preparations for her nightly baths, Laura Starrett noticed the water pressure wasn’t as strong as it once was. She had also received an alert from her utility company that she had used more water that month than she had before.

“Then I realized I’d left my sprinklers on and they were running every day, so I thought that’s why I got an alert that I was using a lot of water,” said the recently retired homeowner in Jacksonville, Florida.

So she turned the sprinklers off.

Then Starrett got another alert saying her water bill was going to be $1,000. A plumber came out, listened to the pipes and heard water running. Turns out, a backyard pipe was leaking.

“You just hope it will go away,” Starrett said. “But I knew there had to be something because your water just doesn’t just disappear.”

According to a survey by Travelers insurance company, 42% of homeowners put off a needed repair during 2020. Much of it was the concern about having someone in their house during the pandemic. Of those, 19% said they tried to fix the problem themselves and failed, and 22% just left it broken.

That can lead to a bigger and often more expensive problem, says Angela Orbann, vice president of property and personal insurance at Travelers.

“I typically think of this as what’s cosmetic versus really critical, and sometimes that can be a fine line for a homeowner,” she said. “You shouldn’t delay things that can lead to bigger issues.”

8 Home Repairs You Can’t Afford to Put Off

1. Anything Involving Water

A water spot on the wall or ceiling can mean a leaky roof or a leaky pipe. If not fixed, the leak will just get bigger and can destroy floors, walls, furniture and more.

“Any time you notice a stain, those should be addressed immediately because that indicates you potentially have moisture entering your home. Moisture in small amounts will not turn into mold, but if left, mold and continued damage will occur so it is important to address these situations when they occur,” said home inspector John Wanninger. He and his INSPECTIX team in Nebraska have inspected more than 30,000 homes..

The same goes for a leaky faucet, running toilet or dripping water heater.

“The cost of allowing a running toilet to run will cost more over the course of a month or two than it would have cost to fix it up front,” he said.

Don’t ignore higher-than-normal water bills. As Starrett realized, they were a sign something was wrong somewhere.

2. Anything Involving Electricity

Do you have lights that flicker? Switches or outlets that stopped working? Breakers tripping? GFI outlets that won’t reset?

These can be signs of electrical problems.

“A flickering light can be something as easy as a loose light bulb or it could be something as severe as a loose wire,” Wanninger said. “Any of those things when it comes to electricity should be considered important and time sensitive.”

In houses built between 1965 and 1974, connections in some older aluminum wiring may be failing. Older houses built in the 1950s and before had knob and tube wiring. The connections could be going bad.

Circuits can be overloaded. Sometimes when people update their homes, they don’t update the wiring.

Electrical problems can lead to fires, and fires can lead to injury or property damage.

3. Pests

Bugs and rodents might be small, but they can cause big issues.

“Termites can do an extensive amount of damage over a period of time. If they go undetected for three or four years, minor damage becomes pretty heavy damage,” Wanninger said.

There’s no telling how long pests like termites and carpenter ants have been chewing before you noticed them, so taking immediate action is important.

Be on the lookout for signs of termites and carpenter ants and what they leave behind:

  • Sawdust or wood damage.
  • Mud tubes.
  • Discarded wings near closed windows, doors or other access points.
  • Large black ants.
  • Faint rustling noises in walls.
  • Holes in cardboard boxes, especially on the bottom.

As for furry pests, they can spread diseases with their droppings and can chew through insulation.

“When you hear noises in your attic, it’s often either mice, rats, squirrels, or raccoons. In any case, it’s something that should be addressed immediately because left unattended they can all cause an extensive amount of damage,” Wanninger said.

4. Peeling Caulk and Paint

See #1: Water.

If caulk comes loose and peels away, water gets in and you know what happens then and it isn’t good.

“We don’t think about cracked joints in your tile bathroom. It doesn’t look severe and it doesn’t look like a big issue, but as time goes on, moisture gets in there and deteriorates the shower board and the material behind the wall. Before you know it, you get yourself a $2,000 or $3,000 repair,” Wanninger said.

The same for paint. Paint is like skin for the house. It protects it from water and pests. Removing that protection can cause problems.

5. Broken or Malfunctioning HVAC

Having a lack of climate control isn’t just an uncomfortable inconvenience, it can lead to bigger issues.

“If the humidity is too high in the home, it will pass through the drywall and enter the attic area,” Wanninger said. “If you get moisture on your windows in the wintertime on the inside of the glass in your house, it is an indication your humidity level is too high.”

In the winter, that moisture can freeze and eventually melt, causing a leak. In the summer, excess moisture can lead to mold and mildew.

If you notice your HVAC isn’t working as it should, taking care of it before it breaks can reduce stress on the system and possibly prevent a bigger issue.

6. Cracks

Some cracks in walls and foundations are harmless, but they aren’t something to ignore.

“One thing concrete does is crack, it’s pretty standard,” Wanninger said. “If you get cracks in foundation walls or floors that are considered expansive or starting to displace at a greater level, that may be the indication that you are having structural issues or movements that need to be reviewed before they become a bigger issue.”

Keep an eye on the size of the cracks. Measure the length and width periodically and note any changes.

7. Smoke Alarms and Carbon Monoxide Detectors

It sounds simple, but replacing batteries in smoke alarms and carbon monoxide detectors should happen immediately after they begin chirping, even if it happens in the middle of the night.

“At two o’clock in the morning when the thing does start chirping, your mind says you’ll fix it tomorrow and tomorrow never comes,” Wanninger said.

Better yet, replace your batteries annually when you change your clocks for Daylight Saving Time.

8. Darkening Ceilings Near Fireplaces

If you notice darkening on your ceiling or a sooty smell in your house, it could mean your fireplace isn’t drafting properly. That could bring deadly gasses into the house.

“There’s no second-guessing that. It would cause carbon monoxide poisoning,” Wanninger warned.

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.

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Source: thepennyhoarder.com