variable Archives - Hanover Mortgages

Apache is functioning normally

May 29, 2023 by Brett Tams

Today we’re going to talk about the “home equity loan,” which is quickly becoming all the rage with mortgage rates so much higher.

In short, many homeowners have first mortgages with fixed interest rates in the 2-3% range.

Now that a typical 30-year fixed is closer to 6%, these homeowners don’t want to refinance and lose that rate in the process.

But if they still want to access their valuable (and plentiful) home equity, they can do so via a second mortgage.

Two popular options are the home equity line of credit (HELOC) and the home equity loan, the latter of which features a fixed interest rate and the ability to pull out a lump sum of cash from your home.

What Is a Home Equity Loan?

A home equity loan allows you to borrow against the value of your property to access needed cash.

That cash can then be used to pay for things such as home improvements, to pay off other higher-interest loans, fund a down payment for another home purchase, pay for college tuition, and more.

Ultimately, you can use the proceeds for anything you wish. The home equity loan simply allows you to tap into your accrued home equity without selling the underlying property.

Of course, like a first mortgage, you must pay back the loan via monthly payments until it is paid in full, refinanced, or the property sold.

Similarly, you can obtain a home equity loan from a bank, credit union, or direct mortgage lender.

The application process is comparable, in that you must provide income, employment, and asset documentation, but it’s typically faster and less paperwork intensive.

Additionally, your credit report will be pulled to determine your credit scores and overall creditworthiness.

Home Equity Loan Example

Property Value $650,000	First Mortgage	Home Equity Loan	Cash Out Refinance
Interest Rate	3.25%	6.75%	5.75%
Loan Amount	$450,000	$70,000	$520,000
Monthly Payment	$1,958.43	$532.25	$3,034.58
Total Cost		$2,490.68	$3,034.58

Home equity loans are typically second mortgages, taken out by an existing homeowner who already has a first mortgage.

This allows the borrower to access additional funds while maintaining the favorable terms of their first mortgage (and continue to pay it off on schedule).

Imagine a homeowner owns a property valued at $650,000 and has an existing home loan with an outstanding balance of $450,000. Their interest rate is 3.25% on a 30-year fixed.

Obviously they don’t want to lose that low, low rate, so they turn to a home equity product instead.

They would have $200,000 in home equity, though not all of it is necessarily available to tap into.

Most home equity loan lenders will limit how much you can borrow to 80% or 90% of your home’s value.

That means a maximum loan amount of $135,000 if maxed out at 90%.

But we’ll pretend you take out just $70,000, or 80% of your property’s appraised value.

Assuming the loan term is 20 years and the interest rate is 6.75%, you’d have a monthly payment of $532.25.

The loan would amortize like a traditional mortgage, with equal monthly payments until maturity.

Each payment would consist of a principal and interest amount, which would change as the loan was paid off.

You would make this payment each month alongside your first mortgage payment, but would now have an additional $70,000 in your bank account.

When we add the first mortgage payment of $1,958.43 we get a total monthly of $2,490.68, well below a potential cash out refinance monthly of $3,034.58.

Because the existing first mortgage has such a low rate, it makes sense to open a second mortgage with a slightly higher rate.

Do Home Equity Loans Have Fixed Rates?

A true home equity loan should feature a fixed interest rate. In other words, the rate shouldn’t change for the entire loan term.

This differs from a HELOC, which features a variable interest rate that changes whenever the prime rate moves up or down.

To that end, a home equity loan provides safety and stability, similar to a 30-year fixed mortgage.

However, home equity loans have higher interest rates to compensate for that lack of an adjustment.

Simply put, HELOC interest rates will be lower than comparable home equity loan interest rates because they may adjust higher.

You effectively pay a premium for a locked-in interest rate on a home equity loan. How much higher depends on the lender in question and your individual loan attributes.

Home Equity Loan Rates

Similar to mortgage rates, home equity loan rates can and will vary by lender. So it’s imperative to shop around as you would a first mortgage.

Additionally, rates will be strongly dictated by the attributes of your loan. For example, a higher combined loan-to-value (CLTV) coupled with a lower credit score will equate to a higher rate.

Conversely, a borrower with excellent credit (760+ FICO) who only borrows up to 80% or less of their home’s value may qualify for a much lower rate.

Also keep in mind that interest rates will be higher on second homes and investment properties. And maximum CLTVs will likely be lower as well.

All that being said, at the moment home equity loan rates may range from as low as 5% to as high as 12% or more.

As a rule of thumb, you should expect a rate 1-2%+ higher than a comparable 30-year fixed given the increased risk of a second mortgage.

But this spread can shrink or widen depending on market conditions.

Do Home Equity Loans Require a Down Payment?

Now let’s discuss some home equity loan requirements.

While no down payment is required on a home equity loan, since you already own the property, a required amount of home equity is necessary to get approved.

After all, the home equity loan relies upon your property as collateral, and if you don’t have any equity, there’s nothing to lend against.

In other words, you need to have a certain percentage of home equity available to get a home equity loan.

Typically, this is at least 20% of your property’s appraised value to allow for an additional loan against the property.

For example, if you own a home valued at $500,000, you’ll want to have at least $100,000 available.

This would mean an existing first mortgage with a balance of $400,000 or less to allow for more borrowing capacity.

Assuming the home equity loan only allowed for a CLTV of 80%, you’d need even more equity.

For example, a $350,000 existing first mortgage that would allow you to borrow an additional $50,000 via the home equity loan.

Do Home Equity Loans Require an Appraisal?

While it will depend on the company, an appraisal isn’t always required for a home equity loan.

The same is even true of first mortgages these days thanks to advancements in technology.

This may save you some money and make the home equity loan process significantly faster.

However, the bank or lender will still need to determine the value of the property to ensure it is a sound lending decision.

Whether you pay for an appraisal, or are paid a visit by a human appraiser, are entirely different questions.

Either way, understand that the company offering the home equity loan will base the loan amount and APR on some kind of appraised value.

This allows them to determine a LTV or CLTV for which to base pricing adjustments, interest rates, maximum loan amount, and so on.

Do Home Equity Loans Have Closing Costs?

As with the appraisal question, it may depend on the company offering the home equity loan.

Some charge origination fees and other closing costs, while others do not charge any fees.

For example, Discover Home Loans says it doesn’t charge appraisal fees or origination fees.

However, it’s important to look at the big picture, aka the interest rate, to determine what the best deal is.

Similar to a first mortgage, closing costs may not be charged, but the interest rate could be higher as a result.

You would then need to weigh the upfront cost versus monthly interest expense to determine what’s the better deal.

Also note that some lenders may ask that you reimburse them for any waived closing costs if you pay off your home equity loan within 36 months.

This is sort of like a prepayment penalty, though there may be a cap and certain states are exempt.

Just something to keep in mind if you pay off your loan ahead of schedule.

Some home equity loans may have a nominal annual fee, such as $50 per year. And if your loan amount is quite large, title insurance could even be required.

Minimum Credit Score for a Home Equity Loan

Chances are you’ll need at least a 620 FICO score to get approved for a home equity loan these days.

Some lenders may even require a higher credit score, such as a 660 FICO score, in order to get approved.

Also note that your borrowing capacity may be limited by your credit score.

For example, if you have a 620 FICO score, you might only be able to borrow up to 80% of your home’s value.

Meanwhile, a borrower with a 660 FICO might have access to up to 90% of their home’s value.

Additionally, the interest rate will also be dictated by your credit score.

Like a first mortgage, the higher your score, the lower the interest rate. And vice versa.

Do Home Equity Loans Affect Your Credit?

Yes, like a first mortgage, the home equity loan will appear on your credit report.

This includes when the loan was taken out, the outstanding loan balance, and the monthly payment.

Your payment history on the loan will also be tracked over time, which can help or hurt you.

Obviously, if you miss a payment (generally by more than 30 days) it can negatively impact your credit score.

Because it’s a home loan, the impact can be quite severe.

Conversely, if you exhibit a lengthy history of on-time payments, it can bolster your credit scores over time.

How to Get a Home Equity Loan

Similar to a mortgage, many banks and independent mortgage lenders offer home equity loans.

However, they aren’t as readily available as first mortgages, so you’ll need to dig a little deeper.

Simply put, just about all mortgage companies offer 30-year fixed mortgages, but only a handful offer home equity loans.

Chase and Wells Fargo, two of the biggest mortgage lenders out there, don’t offer them at the moment.

That could change as they become more popular, but chances are they’ll be a bit harder to come by.

Additionally, because the terms of home equity loans can vary quite a bit, it’s important to speak to several different companies during your search.

For example, some lenders may only offer home equity loans with loan terms as long as 20 years, or with a minimum credit score of 660. Or their loan amounts might be too small for your needs.

The Rocket Mortgage home equity loan recently launched, but requires a median qualifying FICO score of 680 or higher.

Others come with unique options. The PNC home equity loan allows borrowers to switch between a fixed and variable rate. In that sense, it works as a home equity loan and a HELOC in one loan.

Because this type of product can be a lot more diverse than a standard 30-year fixed, shopping around is probably a good idea.

Rates can also range quite a bit from lender to lender, so put in the time to speak with a local credit union, bank, online lenders, and even mortgage brokers.

Home Equity Loan Advantages

Fixed interest rate
Flexible loan terms (5 – 20 years)
Can borrow large amounts
Little or no closing costs
Fast approvals and fundings
Potential tax write-off
Doesn’t disrupt your first mortgage (e.g. a low rate)

Home Equity Loan Disadvantages

Entire loan amount must be borrowed upfront
You pay interest on the full lump sum
No additional draws permitted
Interest rates higher than HELOCs and first mortgages
Have to manage multiple loans
May have annual fee
Potential early closure fees

Are Home Equity Loans a Good Idea?

As seen in my example above, a home equity loan could be a great idea versus a cash out refinance.

But that assumes you need additional cash and your existing first mortgage features a super low interest rate that is fixed.

This might not always be the case, and it will also depend on the rate you receive on the home equity loan.

Additionally, there might be other options to consider instead of a HEL, such as a HELOC or even a 0% APR credit card.

In the past, I’ve made the argument that a credit card could be used to pay for home renovations.

At the end of the day, a home equity loan is still a loan, and likely an additional loan taken out on top of whatever you’re already paying.

So you need to consider if you really need more cash and if tapping your home equity is the way to go.

Read more: Cash Out vs. HELOC vs. Home Equity Loan

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 28, 2023 by Brett Tams

As of the end of 2022, nearly 45 million Americans collectively have over $1.7 trillion in student loan debt, and these numbers are growing. If you are one of the millions with some form of student debt, you may have considered student loan consolidation, which allows you to combine all of your student loans into one loan with one monthly payment.

Student Loan Consolidation Explained

Student loan consolidation is designed to combine some or all of your student loans and make repayment more manageable. There are both federal and private options when it comes to consolidating your student loans.

Private Student Loan Consolidation

A private student loan consolidation is when a lender pays off all or some of your student loan debt and creates a new loan, which you will then make payments on. If you consolidate or refinance through a private lender, the new loan will ideally have a lower interest rate and better terms than your previous student loans. With a private lender, you can consolidate both federal and private loans, and this is typically referred to as a student loan refinance.

Consolidating through a private lender, though, means you lose access to federal forgiveness programs, such as income-driven repayment plans. If you plan on using one of these programs now or at some point in the future, it’s best to hold off on consolidating through a private lender.

Federal Student Loan Consolidation

If you are hoping to consolidate federal loans only and want to keep access to federal forgiveness programs, you can consolidate with a Direct Consolidation Loan through the U.S. Department of Education.

Recommended: Types of Federal Student Loans

Consolidating through the federal student loan system doesn’t usually save you money; it simply combines multiple loans into one. Your new interest rate is a weighted average of all your loans’ interest rates, rounded up to the nearest eighth of a percentage point. No application fees are charged for Direct Consolidation Loans, and the loans remain federal loans.

This could be particularly useful for borrowers who are pursuing federal loan forgiveness or who are enrolled in one of the more flexible federal student loan repayment plans, such as an income-driven repayment plan.

As you ask yourself, Should I consolidate my federal student loans? And when should I consolidate my student loans? The answers depend on a number of factors.

Benefits of Consolidating Student Loans

There are a few reasons to consider student loan consolidation either with a Direct Consolidation Loan or refinancing through a private lender.

Simplified Repayment

Whether you choose a Direct Consolidation Loan or choose to refinance through a private lender, your loan repayment should be simplified. Managing multiple student loan payments may increase your chances of missing a payment. If you miss even one payment, you risk your credit score being lowered. Late payments also stay on your credit profile for up to seven years.

Thus, consolidating multiple loans into one can help eliminate the margin of error and may make repayment more manageable.

Fixed Interest Rate

When an applicant is interested in refinancing through a private lender, their interest rate and terms will be based on their credit score, payment history, type of loan they’re seeking, and other financial factors. While requirements may vary by lender, applicants who meet or exceed the lender’s criteria may qualify for better interest rates and terms, thus saving money over the life of the loan. Borrowers can also switch from a variable to a fixed interest rate when refinancing through a private lender.

With federal Direct Loan Consolidation, as mentioned earlier, a borrower’s interest rate is a weighted average of current loan rates rounded up to the nearest one-eighth of a percentage point, which means this doesn’t typically result in savings for the borrower. The borrower does, however, keep their access to federal loan forgiveness programs.

Federal and Private Loans May Qualify

Both federal and private student loans can be refinanced. For a borrower who exclusively has federal loans, a Direct Consolidation Loan may work best, especially for those who plan to take advantage of federal forgiveness or repayment programs. Those who have a combination of federal and private loans can partner with a private lender to refinance.

Flexible Loan Terms

Student loan consolidation allows you to change the duration of your loan. You may currently have a 10-year repayment plan, but when you consolidate or refinance, you might choose to shorten or lengthen the term of your loan. Typically, lengthening the term of your loan will reduce your monthly student loan payment (but add up to more total interest).

Considerations for Student Loan Consolidation

Even though there are benefits of student loan consolidation, there are also drawbacks. Here are a few considerations to be aware of before consolidating student loans.

You Can’t Lower Interest Rates on Federal Student Loans When Consolidating

If you choose the Direct Consolidation Loan, generally you won’t see any savings. Because your new interest rate is a weighted average of your current loans rounded up to the nearest one-eighth of a percentage point, you will probably pay around the same amount you would have paid if you didn’t consolidate. You are, however, condensing multiple monthly payments into one more manageable payment.

If you extend your term, you may see your monthly payment decrease, but your total interest payments will increase.

On the other hand, if borrowers choose to refinance with a private lender, they could end up reducing their interest, thus saving money over the term of the loan. They could also opt to lower monthly payments by extending their term. But as mentioned above, this increases the total amount of interest paid.

Possible Disqualification from Federal Repayment Programs

Refinancing federal student loans with a private lender disqualifies you from federal repayment programs, including the Public Service Loan Forgiveness Program (PSLF) and income-driven repayment plans.

Borrowers will also be disqualified from federal benefits such as forbearance and deferment options, which allow qualifying borrowers to pause payments in the event of financial hardship.

Some private lenders have hardship programs in place, but policies are determined by individual lenders.

Fees May Be Charged With Private Lenders

While there is no application fee for the federal Direct Consolidation Loan, private lenders may charge a fee to refinance loans. Fees associated with refinancing student loans are determined by the lender.

Refinancing vs Consolidating

Consolidating or refinancing student loans are terms that are thrown around interchangeably, but they are actually two different types of loans. A federal student loan consolidation is when you combine federal loans only through a Direct Consolidation Loan. This is done by the U.S. Department of Education only. A student loan refinance, on the other hand, allows you to combine both federal and private loans into one new loan and is done by a private lender. Below are some differences and similarities between refinancing vs. consolidating student loans.

Student Loan Refinancing vs Consolidating
Refinance	Consolidation
Combines multiple loans into one	Combines multiple loans into one
Can refinance federal and private loans	Can consolidate federal loans only
Private refinance lenders may charge a fee	No fees charged
Credit check required	No credit check
Interest rate could be lowered	Interest rate is a weighted average of prior loan rates, rounded up to nearest one-eighth of a percent
Term can be lengthened or shortened	Term can be lengthened or shortened
Can no longer qualify for federal forgiveness or repayment programs	Remain eligible for federal forgiveness and repayment programs
Saves money if interest rate is lowered	Typically not a money-saving option

Refinancing Student Loans With SoFi

Understanding student loan consolidation and refinance options can help in making an informed decision about repaying student loans.

Borrowers interested in refinancing student loans might want to consider evaluating a few options, because requirements — as well as interest rates and loan terms — can vary from lender to lender.

Refinancing student loans with SoFi comes with no origination fees or prepayment penalties. SoFi offers competitive rates, flexible terms, and an easy online application that can be completed in just a few minutes.

Prequalify for a refinance loan today.

FAQ

Can your student loans still be forgiven if you consolidate them?

Possibly. If you consolidate your federal student loans with a Direct Loan Consolidation, you are still eligible for federal loan forgiveness programs. If, however, you choose to consolidate your loans through a private lender, you will no longer be eligible for federal programs.

When is consolidating student loans worth it?

Consolidating student loans is worth it if you’re looking to combine multiple student loan payments into one or you’re looking to lower your interest rate. You can use a Direct Consolidation Loan for your federal loans and keep access to federal benefits, or you can refinance through a private lender. Refinancing through a private lender could give you a lower interest rate and lower monthly payment, but you do lose access to federal forgiveness programs.

What are some advantages of consolidating student loans?

Advantages to consolidating student loans include combining multiple loans into one loan with one monthly payment, possibly accessing a lower interest rate, switching your rate from variable to fixed, and possibly extending your loan term to reduce your monthly payment.

SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

CLICK HERE for more information.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
SOSL20022

Source: sofi.com

Apache is functioning normally

May 28, 2023 by Brett Tams

Westpac has lifted both its fixed and floating home loan interest rates in response to the Reserve Bank of New Zealand (RBNZ) hiking the Official Cash Rate (OCR) yesterday.

Westpac’s standard six-month and one-year rates will increase 20 basis points to 7.69 per cent and 7.59 per cent respectively, effective today.

Its three-year rate will increase 10bp to 6.69 per cent. However, its two-year rate will drop 14bp to 7.05 per cent.

The move comes despite RBNZ Governor Adrian Orr saying at a press conference yesterday following the OCR announcement that he didn’t expect to see any movement in fixed mortgage rates.

“We anticipate none, in the sense that what we are doing today is what we’re foreshadowing for some time,” he said.

The RBNZ’s 25bp increase to the OCR to 5.5 per cent was largely expected, but the central bank surprised the market by saying it would stop at 5.5 per cent.

Core Logic NZ’s chief property economist Kelvin Davidson also said yesterday he would be very surprised to see short-term mortgage rates change much, if at all, as a direct response to the OCR shift itself, as this has largely been priced in.

Westpac’s floating rate will increase 25bp to 8.64 per cent from June 1 for new customers and June 15 for existing customers.

Sarah Hearn, Westpac general manager of product, sustainability and marketing, said the changes were driven by movements in wholesale rates and the OCR announcement.

“The OCR has increased 25bp and as a result, we’re lifting interest rates on some of our variable lending and savings products,” she said.

“Separately, we’ve seen an overall rise in wholesale interest rates over the past month. These are the rates we pay when obtaining funding to support borrowers with fixed-term lending.

“As a result, we are now lifting some of the interest rates on our fixed home loans and term deposits.”

Hearn said while most households were coping well with the higher interest rates, some borrowers will be feeling the strain.

“We are writing to all customers on fixed-term home loans that are approaching expiry to let them know their options. We’re also telephoning customers who may be in need of extra support,” she said.

“It’s really important that anyone who is feeling financial stress comes and talks to our experienced team early so we can discuss their options.”

The bank also made changes to its term investment rates. Its five, six and nine-month rates have all been bumped up 20bp.

Orr yesterday didn’t stray from his message that he would still like to see bank deposit rates rise.

Westpac is the second major bank to make changes to its home loan rates since the OCR announcement.

Yesterday, ASB said its housing variable rate would move from 8.39 per cent to 8.64 per cent, while the Orbit home loan rate would increase from 8.49 per cent to 8.74 per cent.

Source: nzherald.co.nz

Apache is functioning normally

May 27, 2023 by Brett Tams

By Evlin DuBose · Wednesday, 24 May 2023
· 8 min read

Fact Checked

Advertiser disclosure

Mortgage experts answering questions about home loans

Look, we’ve all had a moment wondering something bonkers, bizarre, random – you name it. And nothing can be more confusing than the wide world of property and home loans.

So let’s look at some of the silliest and awkwardly-phrased mortgage questions asked on Google, seriously answered by an expert writer.

How home loan works

Want buy house. Not enough money. What do? Ask bank nicely. Bank let you borrow money. If it think you good for it. Then you buy house. Or unit. Pay bank back. It take long time. You give bank extra money, too. This called interest. That how home loan works.

Other stuff too. Less important.

Is home loan same as mortgage

Sort of? Mostly? Yes. Ish. A home loan is the financial product banks and lenders offer. Your mortgage is a home loan that you are currently paying off.

However, finance writers will often use terms like “home loan borrowers” and “mortgage borrowers” interchangeably, since when you’re making repayments, a home loan and mortgage are functionally similar.

So yes, a home loan is basically the same as a mortgage. (Unless you’re pedantic and write about them for a living).

Woman learning about home loan on laptop collage

Is home loan interest tax deductible in Australia

Yes! If you’re a property investor in Australia, you can claim the interest from your home loan on your taxes. In fact, landlords get a whole bunch of tax perks. Lucky them!

(Just make sure you talk to a tax expert before filing).

How is home loan interest calculated

Good question! Home loan interest is calculated and compounded daily. Your monthly mortgage repayment therefore incorporates interest from the last 30 – 31 days.

This is actually why making more frequent home loan repayments can sometimes save you interest in the long run. By shortening the number of days included in your repayment (fourteen instead of thirty) while keeping your principal in consistent chunks, you can pay off your mortgage faster with less interest over time.

However, this hack will depend on how your lender calculates a fortnightly vs. monthly payment size. If your fortnightly repayments pay less than half of the principal amount you would in a monthly repayment, it actually slows down how fast you pay off your mortgage. (Math involved, but that’s how the sausage sizzles).

Does home loan include GST

GST, or the “Goods and Services Tax”, is a government charge applied to most transactions in Australia. From lattes to Uber, most things you buy will have GST built into the final price. Financial services and bank products, however, do not include GST – therefore, neither will your home loan.

But: this doesn’t mean buying a home is tax-free. When you first purchase a property, you may have to pay stamp duty or an annual land tax. Later when you sell your home, you may also have to pay capital gains tax.

Always seek help from a tax professional and financial advisor.

Man struggling under credit card collage

Home loan spouse has bad credit

Ruh-roh. Spouse buy too many things on Amazon. Maybe get screwed with BNPL. Whoops. Work on credit score together. (But don’t control their money – that financial abuse).

Also. Could apply for home loan as just you? Think about joint tenancy vs. tenancy in common. Talk to financial planner.

Remember: team work make dream work.

Do home loans look at TransUnion or Equifax

TransUnion and Equifax are credit score reporting bodies, along with Experian and Illion. Whenever you apply for a home loan, lenders will run a credit check to assess your risk as a borrower. If your credit score isn’t good, they may reject your application.

Equifax, Experian, and Illion are the main credit bureaus in Australia, so your lender may check with one, two, or all of them when assessing your borrowing power.

Before applying for a home loan, send for a free credit report from one or more of these agencies so that you can see your score for yourself. Not happy with your results? Give your application a boost by improving your credit score.

Can mortgage be paid with credit card

NO! Technically, yes – but don’t do this! BAD IDEA. A credit card may buy things in the short term (and have more money on it than your debit card), but you’ll still have to pay it back with interest – and the interest rates on credit cards are much, much steeper than those on home loans.

By using a credit card to make mortgage repayments, you’re doubling down on the interest you’re paying overall. This could also potentially hurt your credit score and ability to refinance, because if you miss either a mortgage payment or a credit card payment, it goes down on your credit report.

If you’re really struggling with your mortgage repayments, talk to your lender. You may be able to negotiate a lower interest rate and work out a repayment plan that works best for your situation.

Recent law changes also mean that it’s far, far better for your credit score to declare financial hardship than skip payments altogether. You actually get rewarded for asking for help. Huzzah!

Just whatever you do: don’t put your home loan on credit.

Can I pay an auction deposit with a credit card

NOOOO! If you’re paying a housing deposit at auction, do not put it on your credit card. Not only will vendors not accept this as a valid form of payment, but putting a deposit on your credit card defeats the whole purpose of a deposit.

A deposit is a down payment: your home loan will cover the remaining cost of the property. Your deposit is therefore the only part of your home loan you don’t pay interest on (besides money in your offset account). By using your credit card, you create interest on the only interest-free part of your loan – and at a much steeper rate than mortgage interest.

Bad idea. BAD. No. Don’t put your home loan on credit.

Collage of a man walking up his home loan repayment timeline arrow.

Is mortgage a liability or an asset

A financial liability is something that drains your finances, such as debt, while an asset is something that improves or holds your wealth. A mortgage is therefore a liability, because it is a kind of debt.

However, the property you own, i.e. your equity, is an asset, since it can provide a source of wealth and security. Your equity can be unlocked to do many things for you, like refinance your mortgage or finance another property.

Does mortgage cover stamp duty

Stamp duty is a government charge for transferring property from one owner to another. For those who have to pay it, stamp duty can cost tens of thousands of dollars.

Your mortgage, however, won’t cover stamp duty, so when budgeting to buy a home, you’ll need to factor it in as an extra cost, on top of any conveyancing, agent, settlement, and valuation fees.

Does mortgage mean death grip

Fun fact: sort of! The word “mortgage” comes from the Old French mort + gage, meaning “death” and “pledge”. In mediaeval times, land that was mortgaged was fully pledged to the lender until the borrower fully paid it off or was dead.

So, same as today – basically.

Whose property am I on

Depends, but the safest answer is, “Whoever owns it.” Not sure who owns it? Follow this handy flowchart.

Have interest rates gone up

Yes – due to high inflation, the Reserve Bank of Australia has tightened its monetary policy and made 3.75% worth of increases to the official cash rate since May 2022, which in turn drives up the interest rates on home loans, term deposits, and savings accounts.

Do interest rates rise in a recession

No, interest rates do not rise during a recession. In fact, the opposite is true. Whenever the economy enters a recession, the central bank will cut interest rates to encourage people to spend money.

As a result, home loan interest rates will fall, making financing a property cheaper, while savings accounts and term deposits won’t be as attractive, so people will be less inclined to park their money.

Interest rates rise whenever there is high inflation, and high inflation is not the same thing as a recession. High inflation (usually) means demand is out of control and consumers are driving up prices, thus raising the cost of living.

To discourage spending, the central bank will raise interest rates, therefore making savings accounts a better place to stash cash while mortgage repayments become more expensive.

Who owns the Reserve Bank of Australia

Australia.

Can you bank with the Reserve Bank of Australia

No. The Reserve Bank of Australia, also known as the RBA, is a central bank in charge of monitoring the Australian economy and setting Australia’s monetary policy. Unless you are the Australian government, the RBA cannot manage your finances.

If you are in the market for a new bank, however, you can compare bank accounts using our hub page.

Will housing prices drop

While the housing market may experience temporary dips and falls, studies show that long-term, property prices will always rise. This is primarily due to inflation, but increased competition doesn’t help, either.

Hurray…

How buy first home

Try government help. Move away from big city. Maybe buy unit instead? Cry. But no give up.

In all seriousness, first home buying can be a daunting task, but there are still plenty of ways to break into the housing market – even with the odds stacked against you.

You’ll need to navigate the hurdle of rising interest rates, outrageous prices, and the cost of living, but with careful planning and research, these can all be managed.

For more information on how to get started, head over to our first home buyer hub.

LVR what? LMI who? Learn home loan terms with our handy glossary.

Compare low-interest rate offers in the table below.

Compare low interest rate home loans

– last updated 27 May 2023

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure

Featured Product

Unloan Variable

Owner Occupier, Refinance Only, LVR <80%

interest rate

comparison rate

Initial monthly repayment

4.99% p.a. variable

4.90% p.a.

For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

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Details
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Unloan Variable

For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

interest rate

4.99% p.a. variable

comparison rate

4.90% p.a.

interest rate

4.99% p.a. variable

comparison rate

4.90% p.a.

Upfront fees

$0

Ongoing fees

$0.00

Discharge Fee

$0.00

Extra repayments

yes – free

Redraw facility

yes – free

Offset account

no

Maximum loan to value ratio

80.00%

minimum borrowing amount

$10,000

maximum borrowing amount

$3,000,000

type of mortgage

Variable

Repayment types

Principal & Interest

Availability

Owner Occupier

Repayment options

Weekly, Fortnightly, Monthly

Special Offers

–
Express Home Loan

Owner Occupier, Principal & Interest

interest rate

comparison rate

Initial monthly repayment

5.47% p.a. variable

5.62% p.a.

Get fast approval online in as little as one hour with the Bendigo Bank Express Home Loan. Available for new home loans only. Optional offset account to save even more. Flexible repayment options. 10% deposit required.

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Details
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Express Home Loan

Get fast approval online in as little as one hour with the Bendigo Bank Express Home Loan. Available for new home loans only. Optional offset account to save even more. Flexible repayment options. 10% deposit required.

interest rate

5.47% p.a. variable

comparison rate

5.62% p.a.

interest rate

5.47% p.a. variable

comparison rate

5.62% p.a.

Upfront fees

$384

Ongoing fees

$10.00 monthly

Discharge Fee

$350.00

Extra repayments

yes – free

Redraw facility

yes – free

Offset account

yes

Maximum loan to value ratio

90.00%

minimum borrowing amount

$5,000

maximum borrowing amount

$3,000,000

type of mortgage

Variable

Repayment types

Principal & Interest

Availability

Owner Occupier

Repayment options

Weekly, Fortnightly, Monthly

Special Offers

–
Own Home Loan

Owner Occupier, Principal & Interest, LVR <60%

interest rate

comparison rate

Initial monthly repayment

5.54% p.a. variable

5.79% p.a.

Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

Compare

Compare

Details
Close

Own Home Loan

Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

interest rate

5.54% p.a. variable

comparison rate

5.79% p.a.

interest rate

5.54% p.a. variable

comparison rate

5.79% p.a.

Upfront fees

$250

Ongoing fees

$250.00 yearly

Discharge Fee

$300.00

Extra repayments

yes – free

Redraw facility

yes – free

Offset account

yes

Maximum loan to value ratio

60.00%

minimum borrowing amount

–

maximum borrowing amount

–

type of mortgage

Variable

Repayment types

Principal & Interest

Availability

Owner Occupier

Repayment options

Weekly, Fortnightly, Monthly

Special Offers

–
Offset Home Loan

Package, Owner Occupier, LVR<60%, Principal & Interest

interest rate

comparison rate

Initial monthly repayment

5.54% p.a. variable

5.79% p.a.

Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

Compare

Compare

Details
Close

Offset Home Loan

Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

interest rate

5.54% p.a. variable

comparison rate

5.79% p.a.

interest rate

5.54% p.a. variable

comparison rate

5.79% p.a.

Upfront fees

$350

Ongoing fees

$248.00 yearly

Discharge Fee

$400.00

Extra repayments

yes – free

Redraw facility

yes – free

Offset account

yes

Maximum loan to value ratio

60.00%

minimum borrowing amount

$150,000

maximum borrowing amount

$10,000,000

type of mortgage

Variable

Repayment types

Principal & Interest

Availability

Owner Occupier

Repayment options

Monthly

Special Offers

–
Solar Home Loan

Owner Occupier, Principal & Interest, LVR <90%

interest rate

comparison rate

Initial monthly repayment

5.39% p.a.variable for 60 months and then 6.23% p.a. variable

5.98% p.a.

Enjoy a lower interest rate for the first 5 years if you have solar panels or plan to get them. Get up to a 30 year loan term. Unlimited additional repayments. Option offset sub-account. No ongoing fees to pay. Free unlimited redraws.

Compare

Compare

Details
Close

Solar Home Loan

Enjoy a lower interest rate for the first 5 years if you have solar panels or plan to get them. Get up to a 30 year loan term. Unlimited additional repayments. Option offset sub-account. No ongoing fees to pay. Free unlimited redraws.

interest rate

5.39% p.a.variable for 60 months and then 6.23% p.a. variable

comparison rate

5.98% p.a.

interest rate

5.39% p.a.variable for 60 months and then 6.23% p.a. variable

comparison rate

5.98% p.a.

Upfront fees

$530

Ongoing fees

$0.00

Discharge Fee

$300.00

Extra repayments

yes – free

Redraw facility

yes – free

Offset account

yes

Maximum loan to value ratio

90.00%

minimum borrowing amount

$50,000

maximum borrowing amount

$1,500,000

type of mortgage

Variable

Repayment types

Principal & Interest

Availability

Owner Occupier

Repayment options

Weekly, Fortnightly, Monthly

Special Offers

–

^*
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

^**
Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don’t consider your personal objectives, financial situation or needs and we aren’t recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don’t cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Source: mozo.com.au

Apache is functioning normally

May 27, 2023 by Brett Tams

The latest non-QM player to feel the pain of the interest rate volatility afflicting the nation’s housing market this year is a Pasadena, California-based real estate investment trust called Western Asset Mortgage Capital Corp.

The REIT, which is managed by investment advisor Western Asset Management Co. LLC, recently announced that it is exploring a potential company sale or merger in the wake of posting a $22.4 million net loss for the second quarter ended June 30, — on the heels of posting a $22.2 million loss in the first quarter. WMC, with some $2.8 billion in assets, has a diverse portfolio of residential and commercial real estate assets.

A closer look at WMC’s books, however, shows that as of June 30 its residential whole loan portfolio, nearly all of which is comprised of non-QM loans, was underwater by some $44 million. That’s based on a comparison of the principal balance of the loans on the books and their fair market value as reported by the REIT as of that date.

The principal balance of WMC’s residential whole loan portfolio at June 30 stood at $1.24 billion, representing nearly half of the company’s consolidated total assets, according to WMC’s balance sheet. The REIT lists the fair value of those loans, however, at about $1.19 billion — which means the portfolio is underwater to the tune of $44 million.

In addition, more than 60% of the 3,097 non-QM mortgages by count and volume in the REIT’s whole loan portfolio — totaling 3,102 loans — bear interest rates at 5% or less.

The dreaded discount

Because non-QM (or non-prime) mortgages are deemed riskier than prime loans, in a normal market they typically command an interest rate about 150 basis points above conforming rates, according to Thomas Yoon, president and CEO of non-QM lender Excelerate Capital. As of last week, according to Freddie Mac, the interest rate for a 30-year fixed conforming purchase mortgage stood at 4.99%, down from 5.3% a week earlier.

“The legacy non-QM coupons are like 4.5%, so we have 4.5% coupons floating around out there from earlier in the year that haven’t moved and are starting to age on warehouse lines,” said John Toohig, managing director of whole loan trading at Raymond James in Memphis. “And they have to sell them now [in the whole loan market or via securitization when we are seeing] 6%, 6.5% or 7% deals.

“It’ll be a very different buyer that comes to the rescue … and it will be at a pretty significant discount [in the whole-loan trading market]. I’m swagging it without being at my screen, but maybe in the 90s [100 is par], but certainly underwater.”

So far this year, WMC has undertaken two securitization deals through its Arroyo Mortgage Trust conduit (ARRW 2022-1 in February and ARRW 2022-2 in July). Both deals involved non-QM loans, according to bond-rating reports form S&P Global Ratings.

Why non-QM lending is not going away

Non-QM lenders have been going through a turbulent time in the past few months. HousingWire recently spoke with John Jeanmonod, Regional Vice President of Sales at Angel Oak, about non-QM lending and the outlook for the second half of 2022.

Presented by: Angel Oak

Combined, the closing loan-pool balance for the two securitization deals was $834.2 million, with the weighted average interest rate for the loan pools at 4.4% for the February offering and 5.5% for the most recent deal. Keith Lind, CEO of non-QM lender Acra Lending, said rates for non-QM loans through his company were “in the high 7% [range]” for July” up from 4.5% early in the year — with Acra moving rates 18 times, mostly up, over that period.

“There’s good liquidity at that [higher] rate,” Lind added. “I don’t think investors are jumping to buy bonds backed by coupons [rates on loans] that can’t even cover the coupon on the bonds … and securitization [costs].”

In other words, lower-rate loans are at a competitive disadvantage in terms of pricing in securitization and loan-trading liquidity channels because they are worth less than the newer crop of higher-rate mortgages. Lind put it this way: “These aren’t bad loans, just bad prices.”

Non-QM mortgages include loans that cannot command a government, or “agency,” stamp through Fannie Mae or Freddie Mac. The pool of non-QM borrowers includes real estate investors, property flippers, foreign nationals, business owners, gig workers and the self-employed, as well as a smaller group of homebuyers facing credit challenges, such as past bankruptcies.

It’s volatile out there

WMC’s struggles with the impact of red ink in recent quarters are forcing it to consider “strategic alternatives” going forward, including a possible “sale, merger or other transaction,” CEO Bonnie Wongtrakool said in the company’s Q2 earnings announcement.

Wongtrakool added that the REIT’s recent quarterly results are reflective of “the ongoing challenges of interest rate volatility and fluctuating asset values.” She noted that WMC has made “significant progress in the last two years toward strengthening our balance sheet and improving our liquidity and the earnings power of the portfolio.”

Still, that has not been enough for the market, and the company’s stock price. “We do not believe that these actions are being reflected in our stock price,” Wongtrakool said.

At press time, shares of WMC were trading at $15.50, compared to a 52-week high of $29.20 and a low of $11.00.The stock-value pressure is prompting the WMC to explore alternatives going forward, including a possible sale of the company.

“Today the company … announced that its board of directors has authorized a review of strategic alternatives for the company aimed at enhancing shareholder value, which may include a sale or merger of the company,” Wongtrakool said. “JMP Securities … has been retained as exclusive financial advisor to the company.

“No assurance can be given that the review being undertaken will result in a sale, merger, or other transaction involving the company, and the company has not set a timetable for completion of the review process.”

Coping with a liquidity squeeze

WMC isn’t alone in dealing with the pain sparked by volatile rates.

Non-QM lender First Guaranty Mortgage Corp. filed for Chapter 11 bankruptcy protection at the end of June — leaving four warehouse lenders on the hook for more than $415 million. Then, in early July, another non-QM lender, Sprout Mortgage, shuttered its doors suddenly, leaving employees out in the cold.

Just weeks later, a text message leaked to the media revealed that Flagstar Bank is ramping up scrutiny of non-QM lenders prior to advancing warehouse funding. Flagstar will now require advance approval for funding advances.

The bank also indicated it may adjust “haircuts” — the percentage of the loan the originator must fund itself to ensure it has skin in the game. The leaked message included a list of 16 non-QM lenders that would be affected by the changes.

Tom Piercy, managing director of Incenter Mortgage Advisors, points to yet another facet of the liquidity squeeze facing originators across the housing industry — in this case both prime and non-prime lenders. And that variable is the current compression of the yield curve as short-term interest rates rise faster than long-term rates — such as those for mortgages.

“Our short-term rates have increased substantially,” Piercy explained. “If you look at the mortgage industry right now, with this [short-term/long-term rate] inversion, it’s going to create even more heartburn because everyone’s going to be upside down on their warehouse lines [which, he said, are based on short-term rates].

“So, the cost of your warehouse facilities is increasing while the long side [mortgage rates] is staying low. If you originate mortgages at 5%, and you may have a cost at a warehouse line of 5.25% or 5.5%, then you’re losing money if you keep loans in the pipeline.

And, for some lenders, particularly non-QM loan originators, they also face the prospect of losing money when they seek to move loans out of their pipelines via whole-loan sales or securitizations because of the higher returns demanded by investors — who also want to stay ahead of interest-rate risks.

“It’s going to be interesting to see how this all plays out,” Piercy added.

Source: housingwire.com

Apache is functioning normally

May 27, 2023 by Brett Tams

Written by

Updated Mar 09, 2023

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this post may contain references to products from our partners. Here’s an explanation for
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MetLife could be a good choice for various life, health or other medical insurance policies. However, its options are only sold as employer-provided group insurance plans. Additionally, MetLife no longer sells auto or home insurance policies; those products are now provided by Farmers Insurance.

Extra benefits, including financial planning and grief counseling, are available
Numerous other types of medical coverage available

Info

What’s new with MetLife?

In April 2021, Farmers Insurance finalized the acquisition of MetLife’s home and auto insurance divisions. Going forward, MetLife Insurance will focus on life, health and pet insurance, as well as financial products like Health Savings Accounts (HSAs) and employer-sponsored retirement plans.

MetLife life insurance

MetLife life insurance could be a good choice if the company provides your employer’s group life or health offerings. MetLife got its start in 1863 and has grown tremendously in the time since. Although Farmers Insurance purchased MetLife’s auto and home business, Metropolitan Life Insurance Company continues to operate independently. The company provides life insurance through employer-sponsored plans and groups.

However, the life insurance coverage types are relatively limited. Additionally, MetLife uses numerous underwriting companies, so your coverage may not actually come directly from MetLife. Our MetLife life insurance review breaks down the company’s offerings, to help you choose the right type of life insurance for your needs:

Term: MetLife offers basic, supplemental and dependent term life coverage. Some types of coverage are employer-paid, while others are paid by the employee. Term life insurance may be especially popular with young families or for those who only need coverage for a short period of time, usually 10, 20 or 30 years.
Permanent: MetLife offers two types of permanent life insurance coverage: group universal and group variable universal life. There is no whole life insurance. Permanent policies may be a better choice for older adults who need the coverage to last the rest of their lifetimes.

Group universal: Universal life insurance offers flexible options, allowing you to adjust your death benefit and premium as your needs change. MetLife’s universal life insurance offering is only available as a group plan.
Group variable universal: Variable universal life is similar to a standard universal life policy, but it includes an investment component that makes it a more complex financial product. To learn more about MetLife’s group variable universal life policy, contact the company directly.

MetLife life insurance endorsements

If you’re searching for the best life insurance, you may want to consider adding endorsements to your policy to more closely align your coverage with your needs. Unfortunately, MetLife does not list any information about riders on its website. This may be because MetLife focuses on employer-sponsored plans; different endorsement options might be available based on the agreement with each employer. To learn about life insurance riders from MetLife, contact the company directly or discuss your options with your employer (if MetLife provides your group life insurance options).

Keep in mind that riders will likely increase the cost of your life insurance, so you may not get the cheapest life insurance policy if you add them. However, the added protection may be well worth the extra cost, depending on your situation.

MetLife life tools and benefits

In addition to life insurance, MetLife also offers additional services to its members. Beneficiaries may be able to take advantage of the company’s grief counseling and checklists to help foster a sense of stability when a loved one passes. The company also offers funeral discounts, funeral planning services, will preparation services and transition planning.

MetLife customer satisfaction

If you’re shopping around and comparing life insurance quotes, customer satisfaction is an important area to consider. Life insurance rates may not vary between companies as much as home or auto insurance rates do — rates mostly depend on your age, health, the policy type you choose and how much life insurance you need — so looking at other aspects of each company can help you find the right option.

J.D. Power is a consumer data analytics company that puts out several service-oriented studies each year. MetLife has an above-average score in the 2022 J.D. Power U.S. Individual Life Insurance Study. Remember that MetLife no longer sells individual life insurance policies, so this score reflects its service to the customers who already own individual policies. However, it could still be a helpful metric, knowing that individual life customers seem to be generally satisfied with the service experience.

The National Association of Insurance Commissioner (NAIC) does give MetLife a complaint index for group life policies, which may be more helpful. A complaint index of 1.00 represents a normal or average number of complaints. MetLife’s group life insurance product has a score of 0.61. This means that the NAIC received fewer complaints about MetLife than average, which indicates a high level of service.

Finally, a company’s financial strength can be a useful tool, as it showcases a company’s historical ability to pay claims. MetLife has several different AM Best financial strength ratings, based on the underwriting companies it uses. Two of its companies, Metropolitan Life Insurance Company and Metropolitan Tower Life Insurance Company, have A+ (Superior) AM Best financial strength ratings. American Life Insurance Company and MetLife Insurance K.K. (which operates in Japan) are not rated by AM Best.

How to file a claim with MetLife

Filing a life insurance claim is an emotional endeavor, but MetLife seeks to make it as seamless as possible. If you are the beneficiary of a MetLife life insurance policy and need to file a claim, you can:

If you call for help, you’ll likely still have to fill out a claim form, but you may be guided by a licensed agent to ensure you choose the correct one. You may also need to provide additional documentation, such as a death certificate.

MetLife availability

MetLife is available in all 50 states and Washington, D.C. Product offerings may vary by state and MetLife’s agreement with your employer.

Other MetLife perks worth considering

MetLife’s product offerings are more limited as it no longer sells personal lines insurance coverage, but you may be interested in a few of its additional offerings:

Dental insurance: MetLife offers a number of dental insurance plans, including PPO plans, HMO/managed care plans and plans for veterans.
Vision insurance: MetLife’s various vision insurance options may help you save on exams, glasses and contacts. Some plans even offer discounts on LASIK eye surgery.
Pet insurance: Pet insurance is like healthcare coverage for your animal. This is one of the few plans that MetLife sells both individually and through employers.
Retirement solutions: In addition to insurance products, you might be able to use MetLife for your retirement plan too, if your employer offers this perk.

Keep in mind that MetLife doesn’t sell individual policies any longer. If your employer offers group life insurance through MetLife, you’ll need to work with your employer to gain access to these products.

MetLife corporate sustainability

MetLife could be a great option for consumers who are looking for companies with strong social responsibility programs. Since 1976, the MetLife Foundation has donated nearly $1 billion to help strengthen communities. The company is also focused on sustainability and has won numerous awards for its sustainability program. Finally, MetLife is focused heavily on diversity, equity and inclusion (DEI), outlining priorities to help foster a more diverse environment.

Not sure if MetLife is right for you?

Finding the right life insurance company for your needs involves doing some research to see which carriers closely align with your situation. One of the first steps is figuring out how much coverage you need, which you can do with the help of a licensed agent or even a life insurance calculator. Next, take a look at your needs and decide what policy type is best for you. Then you can start to look at carriers to see if they offer what you need. If you’re not sure if MetLife is right for you, these companies could be good options:

MetLife vs. Nationwide

If you’re looking for universal life coverage, Nationwide could be a good fit. The carrier offers high coverage limits and highly customizable policies that could fit a wide range of needs. Nationwide also offers auto and home insurance, along with numerous other insurance and financial products, and its life insurance products are available to individuals.

Learn more: Nationwide Insurance review

MetLife vs. MassMutual

If you need whole life insurance, which MetLife does not offer, MassMutual could be worth a look. The company has the highest AM Best financial strength rating possible and a long list of whole life insurance riders for personalization. MassMutual also offers universal and variable universal life, if you’re looking for those options without having to be part of a group plan like you would with MetLife.

Learn more: MassMutual Life Insurance review

MetLife vs. State Farm

The insurance behemoth could be a great choice for those seeking the best term life insurance. Additionally, the availability of local offices may be appealing to those who like to handle their insurance needs in person. State Farm offers numerous other insurance products and banking products, too, so it could be a good choice if you want to keep all your financial products in one place.

Learn more: State Farm Insurance review

Is MetLife a good insurance company?

MetLife might be a good life insurance company if your employer offers coverage for you. The company has generally high customer satisfaction reviews and offers helpful tools to beneficiaries, like funeral planning services and grief counseling. However, MetLife no longer sells individual policies like many of the other life insurance carriers we’ve reviewed, so it won’t be an option unless you can purchase coverage through your employer.

Clock Wait

10+

years of industry experience

carriers reviewed

15+

product types analyzed

states examined

Source: thesimpledollar.com

Apache is functioning normally

May 27, 2023 by Brett Tams

Savings may be essential for financial health, but building a savings account is easier said than done. Between regular expenses and well…life in general, it’s often hard to figure out what you can actually afford to save, let alone prioritize planning for the future.

Fortunately, the best money-saving apps on the market today promote saving techniques that work around your regular spending habits – sometimes so smoothly you save money without even noticing.

What’s Ahead:

Overview of the best money-saving apps

App	Fees	Investing included	Account minimum	Savings account APY	Checking/spending account
Acorns	$1-$5/month	Yes	$0 ($5 for round-ups)	N/A	Yes
Digit	$5/month	Yes	$0	N/A	No
Stash	$3-$9/month	Yes	$0 ($1 for certain investment accounts)	N/A	Yes
Chime	N/A	No	$0	2.00%	Yes
Twine	0.6%/year for investment accounts	Yes	$5 for investment accounts	1.05%	No
Qapital	$3/$12-month	Yes	$10 for investment accounts	0.1%	Yes

Best for first time investing – Acorns

Cost – $3 or $5/month.
Options – Saving, investing, and checking accounts, retirement accounts, children’s UTMA/UGMA accounts, cash back extension.
Savings techniques – Round-ups, automatic paycheck deposits, cash back shopping extension.

Acorns gets its name from the idea that small “acorns” of spare change can grow into big savings if you give them a little time. As a combo savings/investing app, Acorns makes things simple for the brand new investor and doesn’t require much money to get started.

The $3/month “Personal” plan gets you an Independent Retirement Account (IRA) and an “Acorns Spend” checking account. For $5/month, you can tack on investment accounts for children as well.

If savings are your main goal, the basic account will probably be enough to get you rolling. When you link a credit or debit card to your investment account, Acorns “rounds up” your purchases to the nearest dollar and invests the difference for you once it hits $5 or higher – a popular auto-savings technique. You can add a “multiplier” feature if you want Acorns to double or triple the amount of investment with every transaction.

Learn more about Acorns or read our full review.

Best for flexible savings – Digit

Cost – $5/month (first 30 days are free).
Options – Savings, investment, and retirement accounts.
Savings techniques – Automatic fund transfers, credit card debt reduction.

For $5/month, Digit’s algorithms analyze your spending patterns and cash flow, then make a savings plan tailored to you. When you can spare a little extra, Digit transfers some cash to a linked savings account. When you have just enough to pay the bills, Digit skips the transfer.

This method can work well for people with fluctuating incomes or anyone who has trouble deciding in advance how much to save. If Digit does overdraft your account (which they promise not to), they’ll reimburse fees for up to two overdrafts.

Like most money apps, Digit lets you pick your own savings goals, and if you’re paying down credit card debt, Digit can automatically send the amount you’ve saved to the credit card company on your behalf.

Learn more about Digit or read our full review.

Best for lots of investment options – Stash

Cost – $3 or $9/month.
Options – Savings, investment, and retirement accounts, checking accounts, individual stocks and fractional shares, life insurance.
Savings techniques – Round-ups, stock-back, automatic saving.

For people who want to watch their savings grow, Stash offers over 150 ETFs, stocks, and other micro-investment vehicles. You have more control over your portfolio picks with Stash than you do with Acorns – you can design your own portfolio or pick a pre-selected one from Stash. You can even pick ETFs that align with your values.

Savings options are flexible, too: you can choose an amount to put in savings each month, invest your spare change with the “round-up” method, or let Stash’s “Smart Stash” feature figure out what you can afford to save based on your cash flow.

Stash comes with a debit card, something a lot of savings apps offer, and its own unique “stock-back” incentive. Whenever you use the Stash bank card to buy something at a publicly-traded company, Stash gives you a small fractional share of company stock to add to your portfolio.

The app’s cost depends on how many extra features you want. Most everyday savers will be fine with the $3/month Growth plan, which includes a debit card, an investment account, and stock-back perks. You can also add a tax-advantaged retirement plan (a good idea if you haven’t opened a retirement account yet). Serious investors can upgrade to the $9/month “Stash+” for 2x stock-back returns and extra market info.

Learn more about Stash or read our full review.

Disclaimer – Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures.

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

¹For securities priced over $1,000, purchase of fractional shares start at $0.05.

²Debit Account Services provided by Green Dot Bank, Member FDIC and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC. pursuant to a license from VISA U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.” because the article mentions the debit card.

³You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.

⁴Other fees apply to the debit account. Please see Deposit Account Agreement for details.

⁵Stock-Back® is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A, or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.

Best for low fees – Chime®

Cost – No monthly fees.
Options – Savings and checking accounts.
Savings techniques – Round-ups, automatic transfers to savings, paycheck transfers.

Chime is a mobile app that takes advantage of the lower-cost online-only financial app model to pass savings on to customers. They don’t charge a monthly fee, so you keep any money you save.²

Chime’s free checking and savings accounts offer plenty of the features you’ll find at a bank*, like:

A Chime Visa® Debit Card.
Check deposit options.⁴
Bill-paying functions.
Two-day advance on directly deposited paychecks.³

Checking and savings are linked; whenever you make a purchase with your checking account, Chime rounds up to the nearest dollar and adds the difference to savings.^{^} Or you can have Chime auto-deposit 10% of every paycheck into savings before the rest hits checking.¹ Either way, the app does all the work.

Learn more about Chime or read our full review.

* Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC.
^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
¹ Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.
² There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
³ Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
⁴ Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.

Best for joint savings – Twine

Cost – No fees for saving, 0.6% of invested assets/month for investing.
Options – Interest-bearing savings account, investment accounts, joint accounts.
Savings techniques – Automatic fund transfers.

Twine is ideal for people who are saving for a goal together (though you can use it on your own, too!). It combines savings-app automation with robo-advisor guidance, which can be helpful if you have more than one savings goal.

The basic free Twine savings account earns you a little interest – there’s a 1.05% variable Annual Percentage Yield (APY). They encourage you to earmark accounts for certain financial goals, either “general savings” or specific goals like a vacation or a down payment on a house, and pick a monthly goal deposit amount so you can track your progress. If you’re saving with someone else, you’ll pick a joint goal but open individual accounts.

Investment portfolios are optional if you want to take your savings to the next level. Twine pre-selects diverse portfolios for you, and they only require $5 to get started.

Learn more about Twine or read our full review.

Best for creative saving techniques – Qapital

Cost – $3, $6, or $12/month.
Options – Interest-bearing spending account, “goals” savings account, investment accounts.
Savings techniques – Round-ups, automatic fund transfers, “triggering activities” savings, “guilty pleasure” savings, 52-week savings, “spend less” savings, payday savings.

Qapital runs on behavioral economics – their multiple savings strategies use your routines, habits, and everyday purchases to help bulk up your savings.

Here’s how it works: you get a spending account that earns you 0.1% in compounded monthly interest, and a “goals” account to grow your savings. To fund your goals, you can transfer regular, set amounts from a linked bank account to your goals account, or pick one of Qapital’s “rules” or savings tricks.

There’s the “round-up” rule, which lots of apps use. There’s the “trigger” rule which saves a specific amount every time you engage in a certain activity (something simple you do regularly, whether it involves spending money or not).

The “guilty pleasure” rule moves a little cash into savings whenever you indulge in your favorite pricey latte, takeout, etc. The “52-week” rule lets you gradually increase the amount you stash in savings over a year. Qapital has other rules, too, and you’ll probably find one that works for you.

Their pricing is higher than most money-saving apps – a $3/month basic plan has all the savings tools, while the $6/month plan unlocks pre-selected investment portfolios and gives you a Qapital debit card. The $12/month master plan lets you open joint savings with a partner, similar to Twine.

Learn more about Qapital or read our full review.

Why should you use money-saving apps?

You’re just starting to build savings

The idea of building a savings account might be intimidating, but it’s much simpler to stash away 50 cents whenever you buy a cup of coffee or a dollar whenever you refill your gas tank. That’s mostly what these apps do – take the work out of savings one small amount at a time, so your regular budget isn’t disrupted.

Read more: The Pros And Cons of ‘Spare Change’ Investment Apps

You struggle to make savings a habit

If your money management style is on the “spend now, save later” side, it may be unrealistic to overhaul your habits right away and heap everything into savings. That’s not how habits work; they take time to develop.

A free 30-day trial of Digit or Qapital, for instance, could be enough to show you how much the app can grow your savings in a typical month; and after 30 days, you’ll be more used to putting a little cash aside.

You’re curious about small-scale investing

Investing can be a great way to save, but it’s inherently risky, and you don’t want to launch yourself right into an investment account without knowing what you’re doing.

These apps make micro-investing as easy as sticking to an automated savings plan and assessing your risk comfort level. And they let you start with small balances, so you don’t have much to lose.

Read more: 7 Easy Ways To Start Investing With Little Money

Why shouldn’t you use money-saving apps?

You have a savings pattern that works for you

If you’re already saving money on a timeline that fits with your goals and income, a savings app could help you skim a little more off the top of everyday purchases, but it might not be worth the fees.

You already have substantial savings

The savings accounts built into money-saving apps are great tools to get started, but they’re not the highest-yield accounts out there. You’ll earn more money keeping your savings in a bank or investment account that offers a higher APY (Annual Percentage Yield), especially if you have decent credit.

Most important features of money-saving apps

Automated saving

Money-saving apps take the “how much can I afford” guesswork out of savings by putting them on autopilot. You won’t see a huge interruption to your regular cash flow, which is nice – saving money doesn’t have to feel like a penalty or a punishment.

And most apps make the automation flexible; if you’re having a lean month or two, you can temporarily stop withdrawals (or, as with Digit, the app stops them for you).

Most importantly, you’ll get into the savings habit after a while.

Saving for short- and long-term goals

Sometimes it’s easier to save if you have something to look forward to. Money-saving apps keep you motivated by letting you choose your goals and showing you how much your savings have progressed.

“Rounding up” purchases

This auto-savings technique is available on almost every app now. By rounding up your purchases to the nearest dollar (or two dollars, or three – some apps let you multiply) you’re saving small, manageable, regular amounts while you spend.

Checking accounts

Several apps set you up with a checking account and debit card, though you can usually link an existing checking account as well.

Everyday money management

For elaborate budgeting templates, look for a budgeting app specifically (you can find our recommendations here). But savings apps have plenty of tools to keep your finances in line, especially if you tend to be disorganized and overdraft your accounts by accident. You can observe your spending patterns, set up payment reminders for bills, and get regular balance alerts all through the app.

Investing options

While investment accounts aren’t available with every savings app, they seem to be becoming more of a standard offering. “Micro-investing” lets you start out with spare change. Once you really get the hang of it, you may choose to switch to a higher-yield investment account elsewhere.

Summary

Money-saving apps are a great starting point, but they’re only one aspect of a solid financial management plan.

Think of them as a helpful tool to analyze your spending behavior and nudge you into the next steps, whether that means breaking down a monthly budget or working towards financial freedom.

Source: moneyunder30.com

Apache is functioning normally

May 26, 2023 by Brett Tams

The home-buying process can seem daunting for first-time homebuyers. The good news is there are some mortgage lenders that offer home loan products designed to provide more ease with the process, which can be very appealing to many first-time future homeowners.

To help you get started, CNBC Select rounded up a list of the best mortgage lenders first-time homebuyers should consider. We evaluated home loan lenders based on the types of loans offered, customer support, credit score requirements and minimum down payment amount, among others (see our methodology below.)

Beyond just the lowest rates, it’s important to go with the lender that offers the best loan terms to suit your needs. There’s a learning curve when it comes to homeownership, but we’ve included an FAQs section below to help you get a better understanding of some aspects of the process.

The best mortgage lenders for first-time homebuyers

Best for loan variety

PNC Bank

Annual Percentage Rate (APR)

Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans

Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan
Terms

10 – 30 years
Credit needed
Minimum down payment

0% if moving forward with a USDA loan

Pros

Offers a wide variety of loans to suit an array of customer needs
Available in all 50 states
Online and in-person service available

Cons

Doesn’t offer home renovation loans

Who’s this for? PNC Bank has a wide variety of home loan options, making it easy for first-time homebuyers to find a loan that suits their circumstances. This lender offers conventional loans, FHA loans, VA loans, jumbo loans and HELOCs. On top of that, PNC Bank offers USDA loans, which can be tougher to find among some lenders. PNC Bank also has some specialized loan options, like the Community Loan, which is meant for individuals with lower cash reserves and allows for a down payment as low as 3% and no PMI (private mortgage insurance).

It also offers a Medical Professional Loan for interns, residents, fellows or doctors who have completed their residency in the last five years. Eligible borrowers for this loan can borrow up to $1 million and won’t have to pay PMI, regardless of their down payment amount.

In addition to all these offerings, PNC Bank gives eligible borrowers the chance to qualify for a $5,000 grant to be used toward closing costs. Eligible borrowers must have an income at or below 80% of the median household income for the metropolitan statistical area (MSA), or their desired property must be located in a low- or moderate-income census tract as designated by the FFIEC, according to PNC’s website.

Best for educational offerings

Bank of America Mortgage

Annual Percentage Rate (APR)

Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans

Conventional loans, FHA loans, VA loans, jumbo loans, doctor loans and the Affordable Loan Solution mortgage
Terms

15 – 30 years
Credit needed

Not disclosed
Minimum down payment

0% if moving forward with a VA loan; 3% if moving forward with the Affordable Loan Solution mortgage

Pros

Offers a wide variety of loans to suit an array of customer needs
Offers an Edu-Series for educating first-time homebuyers as well as other learning resources and materials
Online and in-person service available
Fixed-rate and adjustable-rate mortgages offered
Reduced cost of mortgage insurance

Cons

Doesn’t offer USDA loans

Who’s this for? Bank of America stands out for its first-time homebuyer educational resources. Aside from home loan calculators, which are typical for mortgage lenders to provide on their websites, Bank of America has an online “Edu-Series” for first-time home buyers. There are also guides on its website that break down key terms and a list of FAQs geared toward first-time home buyers.

Bank of America also offers a variety of loan options, including a home loan for medical professionals. With this loan, doctors, dentists, residents and fellows can make down payment minimums that are tiered based on the size of the loan they’re applying for. They’ll put down at least 3% on mortgages up to $850,000, at least 5% on mortgages up to $1 million, at least 10% down on mortgages up to $1.5 million and at least 15% down on mortgages to $2 million. If you’re a medical professional, Bank of America will also exclude your student loan debt from your total debt when you’re applying for the loan. This could bring down your debt-to-income ratio for the purposes of applying for the loan and make it easier for you to qualify.

Even if you aren’t a qualifying medical professional, you can still potentially take advantage of tiered down payment terms through the Affordable Loan Solution mortgage option. With this loan, eligible borrowers can make a down payment as low as 3% on loan amounts up to $726,200, and as low as 5% on mortgages up to $1,089,300. Mortgage insurance would be required if making down payments lower than 20%, but according to Bank of America’s website, the mortgage insurance would come at a reduced cost compared to that of other conventional loans.

Best for lower credit scores

Rocket Mortgage

Annual Percentage Rate (APR)

Apply online for personalized rates
Types of loans

Conventional loans, FHA loans, VA loans and Jumbo loans
Terms

8 – 29 years, including 15-year and 30-year terms
Credit needed

Typically requires a 620 credit score but will consider applicants with a 580 credit score as long as other eligibility criteria are met
Minimum down payment

3.5% if moving forward with an FHA loan

Pros

Can use the loan to buy or 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

Cons

Runs a hard inquiry in order to provide a personalized interest rate, which means your credit score may take a small hit
Doesn’t offer USDA loans, HELOCs, construction loans, or mortgages for mobile homes
Doesn’t manage accounts for jumbo loans after closing

Who’s this for? First-time homebuyers tend to be younger and may not have a long credit history, which can make it harder to qualify for a good mortgage rate. Rocket Mortgage stands here because it accepts applicants with credit scores as low as 580. The lender also has a program called the Fresh Start program that’s aimed at helping potential applicants boost their credit score before applying.

Rocket Mortgage offers conventional loans, FHA loans, VA loans and jumbo loans but not USDA loans, which means this lender may not be the most appealing for potential homebuyers who want to make a purchase with a 0% down payment. Rocket Mortgage doesn’t offer construction loans (if you want to build a brand new custom home) or HELOCs, but if you’re a homebuyer who only plans to purchase a single-family home, a second home, or a condo that’s already on the market, this shouldn’t be a drawback for you.

This lender offers flexible loan repayment terms that range from 8 – 29 years in addition to standard 15-year and 30-year terms.

Best for no lender fees

Ally Bank Mortgage

Annual Percentage Rate (APR)

Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans

Conventional loans, HomeReady loan and Jumbo loans
Terms

15 – 30 years
Credit needed
Minimum down payment

3% if moving forward with a HomeReady loan

Pros

Ally HomeReady loan allows for a slightly smaller downpayment at 3%
Pre-approval in just three minutes
Available in all 50 U.S. states
Online support available
Doesn’t charge lender fees

Cons

Doesn’t offer FHA loans, USDA loans, VA loans or HELOCs

Who’s this for? Ally Bank doesn’t charge any application fee, origination fee, processing fee or underwriting fees. These are what’s collectively known as “lender fees” and they can cost you anywhere from a few hundred to a few thousand dollars, and eat into the money you put aside for buying your home. When you’re a first-time home buyer, going through the process as affordably as possible is often top-of-mind, so saving on these fees will let you keep more of your money for other things, like renovations or moving costs.

Keep in mind, though, that Ally Bank may still charge appraisal fees and recording fees and may charge for the title search and insurance. As long as you have all the necessary documents handy and submit complete and accurate information, you can get pre-approved for a loan in as little as three minutes online and submit your application in just 15 minutes.

Best for no PMI

CitiMortgage®

Annual Percentage Rate (APR)

Apply online for personalized rates
Types of loans

Conventional loans, FHA loans, VA loans and Jumbo loans
Terms

15 – 30 years
Credit needed
Minimum down payment

Terms apply.

Pros

Citi’s HomeRun Mortgage program allows for a downpayment as low as 3%
Citi’s Lender Assistance program gives eligible homebuyers a credit of up to $5,000 to use toward closing costs
Ability to choose between fixed-rate and adjustable-rate mortgages
New and existing Citi bank customers can qualify for closing cost discounts based on their account balance
HomeRun mortgage program allows for a downpayment of less than 20% without PMI
Provides homeownership education and counseling

Cons

No options for a 0% downpayment
Existing customers need high account balances to receive some of the highest interest rate discounts

Who’s this for? CitiMortgage gives homebuyers a chance to save big-time by waiving the PMI (private mortgage insurance) requirement on loans with down payments below 20%. This can be done by applying for a mortgage through Citi’s HomeRun program, which also allows for down payments as low as 3%.

PMI is typically a required monthly charge with other home loans if you make a down payment of 20% or less. But PMI can cost you tens of thousands of dollars extra over the entire life of the loan. The money you save from not paying PMI could potentially go towards saving for a second property, a home renovation, or any other financial goal you have. HomeRun mortgages also allow borrowers to lock in a fixed rate on their mortgage so they won’t have to worry about their rate increasing down the line.

FAQs

How do mortgages work?

A mortgage is a type of loan you can use to purchase a home. This agreement essentially says you can purchase a home without paying for it in full, upfront — you’ll just need to put some of the money down — usually between 3% and 20% of the home price — and pay smaller, fixed monthly payments over a certain number of years, plus interest and potentially other charges. Having a mortgage allows you to own the property even if you don’t have the hundreds of thousands of dollars in cash needed to purchase it outright.

What is a conventional loan?

A conventional loan is a home loan that’s funded by private lenders and sold to government enterprises such as Fannie Mae and Freddie Mac. It’s a very common loan type and some lenders may require a down payment as low as 3% or 5%.

What is an FHA loan?

A Federal Housing Administration loan, or FHA loan, is a loan program that has some slightly looser requirements. For example, this loan program may allow some borrowers to be approved for a loan with a lower credit score or be able to get away with having a higher debt-to-income ratio. You’ll typically only need to make a 3.5% down payment with this type of loan.

What is a USDA loan?

A USDA loan is offered through the United States Department of Agriculture and is aimed at borrowers who want to purchase a home in a qualifying rural area. USDA loans don’t require a minimum down payment, so borrowers can use this loan to purchase a home for almost no money upfront (you’ll still likely pay fees, though).

What is a VA loan?

VA mortgage loans are provided through the U.S. Department of Veterans Affairs and are meant for service members, veterans and their spouses. They typically require a 0% down payment and borrowers don’t have to pay private mortgage insurance.

What is a jumbo loan?

A jumbo loan is meant for home buyers who need to borrow more than $647,200 to purchase a home. Jumbo loans usually have stricter credit score and debt-to-income ratio requirements, and they also typically require a larger minimum down payment.

How is my mortgage rate decided?

Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. However, your specific mortgage rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.

Be sure to submit the necessary information for more personalized rate estimates from your desired lender.

What is the difference between a 15- and 30-year term?

A 15-year mortgage gives homeowners 15 years to pay it off in fixed, equal amounts plus interest, while a 30-year mortgage gives homeowners 30 years to pay it off. Monthly payments are generally lower with a 30-year mortgage since you’ll have a longer period of time to pay off the loan. However, you’ll wind up paying more in interest over the life of the loan since it is charged on a monthly basis. A 15-year mortgage, on the other hand, lets you save on interest but you’ll likely have to make a higher monthly payment.

How does private mortgage insurance (PMI) work?

Lenders charge private mortgage insurance (PMI) to protect themselves in the event that a borrower defaults on their loan. PMI is assessed to your account if you choose to make a down payment of less than 20%. You’ll be responsible for paying this in addition to your monthly mortgage payments.

However, you can usually have the PMI waived after you’ve made enough payments to build 20% equity in your home.

Bottom line

If you need to take out a mortgage to purchase your first home, you have options. Certain mortgage lenders stand out for first-time homebuyers by considering applicants with lower credit scores, offering lower down payments and providing useful educational resources.

Keep in mind that mortgage interest rates fluctuate often and the rate you receive will vary depending on your location, credit score and credit report. While lenders may post general interest rate ranges on their websites, the best way to get a more accurate estimate of your rate is to provide the necessary information to check your rate.

Our methodology

To determine which mortgage lenders are the best for first-time homebuyers, 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 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. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to cater to a wider range of applicant needs. We have 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 in which a particular 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 loan variety, educational offerings, lower redit scores, no lender fees and no PMI.

Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee the 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.

Catch up on Select’s in-depth coverage of personal finance, tech and tools, wellness and more, and follow us on Facebook, Instagram and Twitter to stay up to date.

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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.

Source: cnbc.com

Apache is functioning normally

May 26, 2023 by Brett Tams

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Rates on savings accounts and certificates of deposit are seeing highs not seen for at least a decade. But what exactly impacts the rate of your bank account?

Let’s break down a few factors.

Fed rate increases push up savings rates

From March 2022 to May 2023, the Federal Reserve has steadily increased its federal funds rate, or Fed rate, from nearly zero to around 5%. These ongoing rate increases are the Fed’s attempt at curbing high inflation. The rate itself is the one U.S. banks use to borrow or lend money overnight between each other, and a higher rate means higher borrowing costs.

Banks and credit unions, in turn, take their cue from Fed rate increases to raise their rates on certain loans as well as savings accounts and certificates of deposit. Banks often fund new loans and investments using the money in customers’ bank accounts, and higher savings rates help attract more customers.

But banks don’t typically follow the Fed rate immediately, and their rates typically remain far lower. From April 2022 to May 2023, national average rates only rose from 0.06% to 0.40% for savings accounts and 0.13% to 1.59% for one-year CDs, based on a NerdWallet analysis. The biggest banks, in particular, can often lag behind most in raising savings rates.

“Historically, bank deposit rates move with other interest rates, but not very much. A lot of bank deposits are ‘sticky,’” meaning most depositors stay with a bank even if rates don’t keep up with the market, said Philip Dybvig, economist and professor of banking and finance at Washington University in St. Louis, in an email. “As a result, banks have little incentive to increase rates with the market.”

Online banks compete with higher rates

National average rates don’t tell the full story, though. If you’re an avid saver, you’re probably familiar with high-yield savings accounts and high-yield CDs. These accounts often have rates several times the national average and are mostly available at online banks and online credit unions. These branchless institutions don’t have the overhead costs of brick-and-mortar banks, so they can provide — and compete for — customers with higher rates.

In June 2022, high-yield savings rates at some online banks were around 1% to 1.25% annual percentage yield, and competitive one-year CD rates were hovering around 1.50% to 2% APY, based on NerdWallet data. In May 2023, top savings rates are closer to 4.75% APY while some one-year CD rates have surpassed 5% APY.

To take advantage of rates, compare high-yield savings accounts as a potential place for emergency savings or other short-term money goals. Rates are variable so they can change, but adding regular contributions will boost your savings and help you see the effects of compound interest over time. If you have a portion of savings that can stay untouched for months to years, high-yield CDs can offer competitive, fixed rates that also compound interest.

Other factors that affect rates

The type of bank account matters

Banks typically raise rates quickly on CDs followed by savings accounts and money market deposit accounts, Federal Reserve Bank of New York researchers said in an email.

CDs lock up funds for a fixed term, while savings and money market accounts allow for ongoing access, though they can have a monthly limit on certain withdrawals. The type of account with the most access to funds — a checking account — typically earns minimal, if any, interest. The national average for interest checking has barely budged in the past decade, based on NerdWallet analysis.

Consumers may seek higher returns outside banks

Banks have an incentive to keep interest rates on various savings accounts low to save on costs, says Daniel Talley, professor of economics and statistics at Dakota State University. But banks also have to be competitive with other opportunities that savers have.

Talley says money market mutual funds are a good example currently of getting high returns that are relatively safe and accessible as far as investments go, though they’re not federally insured like bank accounts are. Money market funds consist of short-term, high-quality investments such as U.S. Treasurys.

New York Fed researchers also called out money market funds as an example of an attractive nonbank option for depositors. Consumers may opt to take more money out of banks, which puts pressure on banks to raise their rates to keep those consumers.

Economic forecasts can play a role

The only type of bank account with fixed rates is a CD, and typically the longer a CD term, the higher the rate. You ideally get a bigger reward for keeping funds inaccessible for longer. However, CD rates in the first half of 2023 — both national average and high-yield rates — experienced an inverted yield curve, a phenomenon that originated with bonds such as Treasurys, in which long-term interest rates are lower than short-term interest rates. This type of yield curve can reflect banks’ beliefs that interest rates are headed downward, so they’re adjusting CD rates accordingly. Talley says banks might be betting that the Fed will cut rates soon to fight a possible recession.

A rising rate environment tends to be good news for saving money in bank accounts, but remember that other factors can determine the rate you get.

Source: nerdwallet.com

Apache is functioning normally

May 25, 2023 by Brett Tams

IMB Wanted; 1% Down, Compliance Products; Training and Webinars Next Week; STRATMOR on Brokers

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IMB Wanted; 1% Down, Compliance Products; Training and Webinars Next Week; STRATMOR on Brokers

By:
Rob Chrisman

2 Hours, 50 Min ago

My notes from the MBA’s conference this week continue, including talk about new home sales being +4.1 percent for the month (+11 percent year over year, bringing a smile to builders everywhere). Although most of the focus of the conference was on the secondary markets (although let’s face it, there isn’t a plethora of new investors or products), the primary markets continue to be a discussion topic. Some lenders have seen LOs move into the broker world, some have seen them come back. The transition to being a broker is not always “rainbows and unicorns.” It appears to have better “top line” revenue but what about the “bottom line” when a shop has to pay for their own benefits, marketing, IT support, etc. (STRATMOR has a fine write up on the subject below.) Lenders continue to examine the branch model, whether it is traditional or P&L (revenue) based. The MBA defines an “expense management” branch. These have a high upside, as long as they’re compliant, and hire whoever they want. But cutting back is tough, and management has to do a good job of setting expectations. (Today’s podcast can be found here and this week’s is sponsored by Black Knight. From point-of-sale through post-closing, the company’s trusted loan origination system, Empower, as well as its integrated, end-to-end origination solutions deliver unmatched capabilities, functionality, and support to increase processing efficiencies and lower operational costs for lenders. Hear an interview with Aidium’s Spencer Dusebout on CRM differentiators and ROI.)

Lender and Broker Products, Software, and Services

“Master speed to lead and boost your lead conversion rates with Black Knight’s new webinar series and resource guide combo! Discover insights, innovative strategies, and practical tips in our latest video, “Mastering Speed to Lead in a Digital Era,” to excel in today’s competitive landscape. Don’t miss the comprehensive resource guide, providing actionable steps and valuable resources for immediate implementation. Responding quickly to leads can set you apart from the competition and earn you more business. Start implementing these speed to lead techniques today and watch your conversion rates soar!”

ACES Quality Management unveils ACES PROTECT® Mortgage Compliance Testing Module. Historically, regulatory compliance checks have been complex and cumbersome, making it challenging to perform them quickly and accurately. With the introduction of the first fully integrated compliance engine within a quality control software solution, ACES PROTECT ensures compliance on more loans in less time. With this fully transparent and configurable tool, you will increase productivity while saving time, only pay for the compliance tests you need, and benefit from trusted independent verification, because transparency and accuracy matter. Learn more.

Rocket Mortgage and Rocket Pro TPO have introduced ONE+ by Rocket Mortgage, an exciting new 1% down home loan program that will dramatically increase access to homeownership for millions of Americans. ONE+ is available for qualifying homebuyers whose income is equal to or less than 80% of their area median income (AMI) for single-family homes, including manufactured homes, potentially saving more than 90 million Americans thousands of dollars. Plus, Rocket Mortgage provides a 2% grant towards the down payment! The best part? ONE+ completely covers the expensive monthly mortgage insurance fee for the client, saving up to an estimated $245 per month. Want to learn more about ONE+? Partner with Rocket Pro TPO to take advantage of ONE+ today!

“Turn fixed costs into variable costs on a dime. When the market zigs, lenders need the flexibility to zag. Richey May Advisory brings the mortgage industry expertise and agility you need to convert fixed costs into variable costs. Our difference maker is your ability to outsource services to highly trained experts in a model that fits your needs. Whether that means loan-level accounting, advisory, business intelligence, compliance support, cyber services, internal audits or underwriting automation, we have the tools, knowledge, and experience to deliver value and improve your financial performance unlike any competitor, anywhere. You’ll feel it almost immediately in your day-to-day operations. Even better, you’ll notice the difference in your bottom line. Reach out or visit our website to learn more about how we can help your operation pivot to a better place, no matter which direction the market goes.”

STRATMOR on Brokers

Retail originators, do you find yourself wondering if now is the time to become a broker? Mortgage brokers, are you wondering if you are better off working for a retail lender? Originators scrambling to generate new business with refinances all but gone and purchase volumes down may be considering a change. And lenders in search of additional revenue and cash flows may find the idea of entering the wholesale channel appealing. In the just-released May Insights Report from STRATMOR Group, Senior Partner Jim Cameron digs into the specifics for the wholesale channel. Cameron analyzes trends and offers guidance to lenders considering expansion into the channel and to originators looking at which model is best for them: retail loan officer, corporate or P&L branch manager or maybe becoming a broker. Don’t miss Cameron’s article, “Thinking About Wholesale? Considerations for Mortgage Originators and Lenders” in the May Insights Report.

Webinars and Training

On Wednesday, 5/31, at 11AM Pacific, is a treat for loan originators. James Cameron sold the original Terminator script for just one dollar, a costly mistake that he has regretted ever since. Dave Savage and Todd Bookspan understands the value of foolproof scripts for loan officers, and, unlike Cameron, has no regrets about bringing these conversation frameworks to you completely FREE at SCRIPT-A-PALOOZA 2023. Join top mortgage professionals to learn the best scripts from industry leaders who closed billions in volume last year. Hosted by TrustEngine’s Dave Savage and Win by Noon’s Todd Bookspan plus featuring advice from bestselling author Phil M. Jones, this live event will give you the winning words to close more loans, win referrals and overcome market challenges. Register and say “hasta la vista, baby,” to tired, unproductive interactions!

Join MCT on June 1st at 10am PT for its upcoming webinar discussing Strategies to Improve Profitability in the Current Market. In this webinar, MCT’s Phil Rasori and Paul Yarbrough will provide a current market overview and include actionable insights to improve profitability for lenders. Attendees will receive key hedging, trading, best execution, and MSR recommendations, as well as how to leverage technology to improve profitability and efficiency. MCT also recently released a new whitepaper on Mortgage Pipeline Hedging 101. The whitepaper reviews information on moving to mandatory, the strategy of hedging, the benefits of hedging, and how to determine if you are ready. Read the whitepaper to learn how you can use hedging as a tactic to mitigate risk and optimize profitability when selling mortgage loans.

Class is back in session, June 1, noon ET, for lenders who want to understand more about mortgage servicing rights (MSR) assets. Optimal Blue industry experts are hosting a complimentary webinar, MSR 201: The Impact of Interest Rate Moves on Servicing Valuations, on June 1. This session will focus on how interest rates impact the valuation of servicing and how you can measure the sensitivity of servicing to moves in interest rates.

Make sure your business advertising is compliant at the MMLA Thursday, June 1 luncheon 11:30 a.m. – 1:00 pm at the Traverse City Country Club. The cost is $35 per member and $40 per non-member. Melissa Bridges, Attorney at Bodman, will discuss compliance rules for advertising, social media posts, gifts, and other promotional items.

Class is back in session for lenders who want to understand more about mortgage servicing rights (MSR) assets. Optimal Blue industry experts are hosting a complimentary webinar, MSR 201: The Impact of Interest Rate Moves on Servicing Valuations, Thursday, June 1, 9-10AM PT. This session will focus on how interest rates impact the valuation of servicing and how you can measure the sensitivity of servicing to moves in interest rates. Today more than ever, it’s critical to understand the drivers of servicing profitability and how the current state of the rate market impacts that valuation. Understanding the sensitivity of your portfolio can help arm decision makers at your organization with the right intel to make the right decisions.

IMN’s Annual Non-QM & Non-Agency Mortgage Forum is June 1-2 at the Waldorf Astoria Monarch Beach, in Dana Point, CA. This forum will be constructed from both the loan origination and investor perspectives, diving deep into the critical issues facing the industry. At this event, you will meet senior professionals in the market consisting of Correspondents, Wholesale Originators, Investors/Capital Market Leaders, Servicers, Brokers, and many more at this two-day event. Check out a sample of panel topics of past registered companies, view The 4th Annual Non-QM & Non-Agency Mortgage Forum.

Capital Markets

The Fed Funds futures market, like oddsmakers in Las Vegas, are now saying there’s a 38 percent chance of another 25-basis point (.25 percent) hike in June as employment continues to be strong, banking issues quiet down, and inflation continues to be relatively high. Speaking of which, home prices peaked around June of last year, so we should start seeing the decline in prices percolate through to the yearly inflation indices. Investors were also focused on the FOMC Meeting Minutes from May yesterday, which showed that policymakers believe that there is an upside risk to the baseline inflation forecast and there is an expectation among officials that a “mild” recession will begin later this year. Throwing a curveball in the mix were hawkish comments from Fed Governor Waller, who indicated that the Fed could pause at the June meeting only to re-start in July should inflation continue to come down slower than expected.

Even with some intraday volatility yesterday, bond prices dropped by the close as debt ceiling negotiations continued to dominate headlines. We are one day closer to the June 1st deadline Treasury Secretary Yellen identified as the date when the U.S. Treasury would potentially run out of money.

The second look at Q1 GDP (+1.3 percent, up from +1.1 percent; +4.2 percent annually, stronger growth than forecast; core PCE +5.0 percent annually) and weekly initial jobless claims (229k, up 4k from a revised 225k) led off today’s calendar. GDP was expected to increase 1.0 percent versus 1.1 percent previously, with the core PCE deflator unchanged at 4.9 percent year-over-year. Later today brings the Pending Home Sales Index for April, KC Fed manufacturing for May, and a Treasury auction of $35 billion 7-year notes. Two Fed Presidents are also scheduled to speak, Richmond’s Barkin and Boston’s Collins. We begin the day with Agency MBS prices worse a solid .125 and the 10-year yielding 3.75 after closing yesterday at 3.72 percent; the 2-year is up 50 basis points in 10 days to 4.39 percent!

Employment

A well-capitalized bank is searching for a mortgage banking shell with Agency approval that has had no, or minimal, residential production, over the last three years. Confidential inquiries can be sent to me for forwarding.

A Title Insurance Agency located in a prestigious office building in Melville, Long Island, with a staff of 12 has an empty corner office with additional desk space in the main area. Any individual or individuals looking for a satellite office or primary space will have access to all employees as well as all the office equipment. Let’s discuss an arrangement that will benefit all parties. If interested, please reach out to Anjelica Nixt and specify this opportunity.

A regional independent mortgage banker, based in the Midwest, is looking for a compliance officer. The lender has Fannie, Freddie, and Ginnie tickets, servicing, and a full suite of products including bridge loans, DPA, and renovation. The perfect candidate will have at least ten years’ experience working at a multi-billion dollar IMB, including Disclosures, QC, Vendor Management, Exams, and State/Federal reporting. If you are interested, please send your confidential resume to Chrisman LLC’s Anjelica Nixt for forwarding.

Are you a loan officer or mortgage banker frustrated with the constraints of retail lending? Tired of competing against lower rates, fees and closing costs? Then now’s the time to take control of your pipeline and career by making the switch to wholesale lending as an independent mortgage broker. Whether you’re looking to open your own brokerage or join a team as a loan officer, you can get up and running without missing a beat with support from the team at BeAMortgageBroker.com. You have nothing to lose and only clients, greater flexibility and compensation to gain.

“Things are heating up and we are adding to our team. At AFR Wholesale®, we are looking to expand our Account Executive teams for both our Wholesale and Correspondent Divisions! We have been streamlining procedures, developing more communication channels, and overall speeding up our loan processes. Now we need more hands-on deck to join our family! We like to offer a close community that feels like home to thrive and make dreams become a reality. We are looking for experienced candidates because at AFR, we recognize that some scenarios can be challenging, and we want to provide a home for all possible circumstances. That is why we do what we do. At the end of the day, it’s about being proud, we made it possible to turn a house into a home. AFR is an equal opportunity employer. APPLY NOW! Contact AFR by going here, email us or call 1-800-375-6071.”

“PrimeLending delivers LOs award-winning support from day one and beyond. Just last week, our national training team struck gold two times at the Association for Talent Development Annual Axis Awards, winning first place for programs designed to help LOs gain the skills needed to excel in today’s marketplace. Our training team won the Technology Application award for revolutionizing remote learning with innovative tech like NovoEd, and the Performance Improvement award for demonstrating the positive impact training programs have on production. What does that mean for LOs? Easier onboarding. Faster productivity. Better efficiency. More confidence. Our training team understands the unique challenges and opportunities in the industry, ensuring loan officers stay ahead of the curve. For your professional growth and achievement, reach out to Nic Hartke today and discover how PrimeLending can pave the way to success.”

Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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