# LLMs.txt - Sitemap for AI content discovery

# The Truth About Mortgage

> Your guide to a smarter home loan.

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## Pages

- [What Is a Conforming Mortgage? A Loan That Meets the Guidelines of Fannie Mae or Freddie Mac](https://www.thetruthaboutmortgage.com/conforming-mortgage-loans/): A “conforming mortgage” is a home loan with a loan amount up to $806,500 that also meets the underwriting guidelines...
- [How Are Mortgage Rates Determined?](https://www.thetruthaboutmortgage.com/what-causes-mortgage-interest-rates-to-move/): See current mortgage rates and learn about the many factors that drive them higher and lower so you can get a better rate.
- [Which Mortgage Is Right For Me? Look Beyond the 30-Year Fixed If You Dare](https://www.thetruthaboutmortgage.com/which-mortgage-is-right-for-me/): An age old question: “Which mortgage is right for me? ” When shopping for a home loan, whether it’s a...
- [The Cash-Out Refinance: A Simple Way to Tap Your Home Equity](https://www.thetruthaboutmortgage.com/cash-out-refinance/): A cash-out refinance is a home loan where the borrower takes out additional cash beyond the amount of the existing loan balance. It can be used for things like home improvements, to pay for college tuition, or to pay off credit cards.
- [What Is a Mortgage Broker? Your Personal Rate Shopper and Loan Guide](https://www.thetruthaboutmortgage.com/what-is-a-mortgage-broker/): Unless you live under a rock (like I do), you’ve probably heard the term “mortgage broker” get thrown around on...
- [Par Mortgage Rate: An Interest Rate Without Points or Credits](https://www.thetruthaboutmortgage.com/mortgage-dictionary/par-rate-loan/): A par rate loan doesn't require the payment of discount points, nor does it come with lender credits.
- [Today's Mortgage Rates](https://www.thetruthaboutmortgage.com/todays-mortgage-rates/): Compare today's mortgage rates from dozens of banks, lenders, and credit unions.
- [Mission Statement](https://www.thetruthaboutmortgage.com/mission-statement/): You might be wondering what the point of this website is. Many websites sell a product or offer a service....
- [Editorial Standards](https://www.thetruthaboutmortgage.com/editorial-standards/): First a brief history. I created The Truth About Mortgage all the way back in 2006. My mission statement continues...
- [Rent vs. Buy Calculator](https://www.thetruthaboutmortgage.com/rent-vs-buy-calculator/): If you’re still determining if it’s time to move on from renting to homeownership, you may want to do the...
- [Mortgage Affordability Calculator](https://www.thetruthaboutmortgage.com/mortgage-affordability-calculator/): One of the most important things you can do when shopping for real estate is determine how much mortgage you...
- [Mortgage Payment Calculator](https://www.thetruthaboutmortgage.com/mortgage-payment-calculator/): If you’re looking for a basic mortgage payment calculator, you’ve come to the right place. The mortgage rate calculator below...
- [Early Mortgage Payoff Calculator](https://www.thetruthaboutmortgage.com/early-mortgage-payoff-calculator/): If you own real estate and are considering making extra mortgage payments, the “early mortgage payoff calculator” below could be...
- [Refinance Calculator](https://www.thetruthaboutmortgage.com/refinance-calculator/): Wondering if it makes sense to refinance your mortgage? Check out the refinance calculator below to determine the potential savings...
- [USDA Home Loans: Eligibility and Program Requirements](https://www.thetruthaboutmortgage.com/usda-home-loans-eligibility-and-program-requirements/): When you see or hear the acronym “USDA,” the first image that probably comes to mind is a big, juicy...
- [Purchase Money Mortgage: The Different Types and How They Work](https://www.thetruthaboutmortgage.com/purchase-money-mortgage/): A “purchase money mortgage” is a home loan used to purchase a piece of property, whether it be a principal...
- [How Balloon Mortgages Work](https://www.thetruthaboutmortgage.com/balloon-mortgage/): A “balloon mortgage” is a home loan that does not fully amortize over the life of the loan, leaving a...
- [Mortgage Discount Points: How They Can Lower Your Interest Rate and Save You Money](https://www.thetruthaboutmortgage.com/mortgage-discount-points/): I think it goes without saying that everyone with a mortgage (or thinking about getting one) wants the lowest interest...
- [How to Get a Mortgage: From Start to Finish](https://www.thetruthaboutmortgage.com/how-to-get-a-mortgage/): Mortgage Q&A: “How to get a mortgage? ” If you already know what a mortgage is, you may be wondering...
- [Mortgage Pre-Qualification vs. Mortgage Pre-Approval: The Ultimate Guide](https://www.thetruthaboutmortgage.com/pre-qualification-vs-pre-approval/): Mortgage Q&A: “Pre-Qualification vs. Pre-Approval” When you initially set out to purchase a new home, the real estate agent(s) and...
- [What Is a Short Refinance? A Reduced Mortgage Balance to Keep You in Your Home](https://www.thetruthaboutmortgage.com/what-is-a-short-refinance/): A “short refinance” is a transaction in which your bank or mortgage lender agrees to pay off your existing mortgage...
- [What Is Title Insurance? Is It Required for Your Mortgage?](https://www.thetruthaboutmortgage.com/what-is-title-insurance/): Mortgage Q&A: “What is title insurance? ” When you apply for a mortgage, keep in mind you’ll need to pay...
- [What Do Mortgage Lenders Look For on Bank Statements and Tax Returns?](https://www.thetruthaboutmortgage.com/what-mortgage-lenders-look-for/): Mortgage Q&A: “What do mortgage lenders look for? ” Most banks and mortgage lenders are looking for the same basic...
- [Mortgages with No Money Down: There Are Many Options to Avoid a Down Payment](https://www.thetruthaboutmortgage.com/mortgages-with-no-money-down/): As of 2024, there are lots of options to get a mortgage with no money down, which is surprising given...
- [Loan Modification Programs: Options to Keep You in Your Home](https://www.thetruthaboutmortgage.com/loan-modification-programs/): Since the mortgage crisis took flight, “loan modification programs” have become all the rage. Instead of originating new loans, former...
- [What Caused the Mortgage Crisis? A Game of Hot Potato](https://www.thetruthaboutmortgage.com/what-caused-the-mortgage-crisis/): So, “what caused the mortgage crisis” anyway?   In case you hadn’t heard, we went through one of the worst...
- [Mortgage 101: All the Help Topics You Need to Read Under One Roof](https://www.thetruthaboutmortgage.com/mortgage-help/): An extensive list of mortgage help topics you can use to better understand the home loan process and get a better deal on your mortgage.
- [Payment Shock: How It Can Jeopardize Your Mortgage Approval](https://www.thetruthaboutmortgage.com/payment-shock/): You may have heard the phrase “payment shock” get thrown around by your loan officer or mortgage broker, and for...
- [Privacy Policy](https://www.thetruthaboutmortgage.com/privacy-policy/): The privacy of our visitors at TheTruthAboutMortgage. com is very important to us. As with most other websites, we collect...
- [What Is a Stated Income Home Loan? How The Liar's Loan Works](https://www.thetruthaboutmortgage.com/stated-income-loans/): Stated income loans allow borrowers to simply state their monthly income on a mortgage application instead of verifying their salary by furnishing pay stubs and/or tax returns.
- [Alt-A Mortgages: What Are They and How Do They Work?](https://www.thetruthaboutmortgage.com/alt-a-mortgages-alt-a-lending/): The term “Alt-A mortgage” gets thrown around a lot, and for good reason. It’s kind of the generic term for...
- [Fixed-Rate Mortgages: An Easy Option But Are They a Good Deal?](https://www.thetruthaboutmortgage.com/fixed-rate-mortgage/): A “fixed-rate mortgage” is the most basic and uncomplicated home loan available to borrowers today. It is far and away...
- [Biweekly Mortgage Payments: An Easy Trick to Do Them for Free](https://www.thetruthaboutmortgage.com/biweekly-mortgage-payments/): You’ve probably already heard the claims. That a “biweekly mortgage” can save you thousands of dollars. And that biweekly mortgage...
- [Second Mortgages Explained: The 80/20, Piggyback, and More](https://www.thetruthaboutmortgage.com/second-mortgages/): When you hear the phrase “second mortgage,” a negative connotation may come to mind. You could be thinking, “Why would...
- [What Is a Short Sale? Selling Your Home for Less Than the Mortgage](https://www.thetruthaboutmortgage.com/real-estate-short-sales/): When the mortgage crisis struck in the early 2000s, missed monthly payments and notices of defaults increased dramatically, leading to...
- [Negative Amortization Loans: How They Work](https://www.thetruthaboutmortgage.com/negative-amortization-loan/): You’ve probably heard the term “negative amortization” by now, as the subprime industry goes down the drain and option-arm mortgages...
- [PMI vs. Combo Loans: Which Is the Better Choice?](https://www.thetruthaboutmortgage.com/private-mortgage-insurance-vs-combo-loans/): Before the mortgage crisis, it was common practice for borrowers short on down payment funds or home equity to take...
- [What Is a Subprime Mortgage? Your Credit Score Is Key](https://www.thetruthaboutmortgage.com/subprime-lending-and-subprime-lenders/): “Subprime mortgage lending” is best defined as offering financing to an individual with poor credit, low income, limited documentation, or...
- [Seller Carryback Financing: When the Seller Becomes the Bank](https://www.thetruthaboutmortgage.com/seller-carryback-financing/): Let’s face it, selling your home can be pretty difficult, and even if you do find a willing buyer, who...
- [Hard Money Loans: Solutions for Hard to Close Mortgages](https://www.thetruthaboutmortgage.com/hard-money-loans/): A hard money loan is a mortgage with a higher-than-market interest rate that usually serves as a source of short-term...
- [The No Cost Refinance: How It Works and What It Really Costs](https://www.thetruthaboutmortgage.com/no-cost-refinance-loans/): A no cost refinance is a home loan where the lender pays all closing costs in exchange for a higher mortgage rate. Find out if it's a good deal.
- [Documents Needed for a Home Loan](https://www.thetruthaboutmortgage.com/documents-needed-during-the-loan-process/): Mortgages Are Very Paperwork Intensive If you plan to refinance your home loan or purchase a property with a mortgage,...
- [Mortgages on Investment Properties](https://www.thetruthaboutmortgage.com/investment-properties/): Investment properties, also known as non-owner occupied properties, can be very profitable for everyday homeowners and real estate investors alike....
- [Terms of Service](https://www.thetruthaboutmortgage.com/terms-of-service/): TheTruthAboutMortgage. com is a free Internet resource that provides information to consumers about residential mortgages and related financial products. The...
- [Mortgage Teaser Rates: Get a Low Start Rate on Your Home Loan](https://www.thetruthaboutmortgage.com/teaser-rates/): A “teaser rate” is a low, introductory interest rate that is typically offered for the first few months or years...
- [Interest-Only Mortgages: Pros, Cons, and How They Work](https://www.thetruthaboutmortgage.com/interest-only-home-loans/): An interest-only mortgage can make monthly payments a lot more affordable, but you won't actually pay down your principal balance.
- [No Documentation Mortgage Loans](https://www.thetruthaboutmortgage.com/no-doc-2nd-mortgage/): The housing market was on fire in the early 2000s before it eventually burnt to a crisp. This led to...
- [Private Mortgage Insurance (PMI): When It's Required and How to Remove It](https://www.thetruthaboutmortgage.com/pmi-private-mortgage-insurance/): I’m sure most prospective homeowners like the idea of putting little to nothing down when purchasing real estate, but doing...
- [How to Keep Your Home and Avoid Foreclosure](https://www.thetruthaboutmortgage.com/foreclosure-help/): If you fail to make your mortgage payments each month, your bank or mortgage lender may take action to repossess...
- [Adjustable-Rate Mortgage 101: How They Work and Why They Can Be a Cheaper Option](https://www.thetruthaboutmortgage.com/adjustable-rate-mortgage/): Learn how an adjustable-rate mortgage works and determine if one might be a good fit for you.
- [Bridge Loans: Why They're Needed and How They Work](https://www.thetruthaboutmortgage.com/bridge-loan/): A “bridge loan” is essentially a short term loan taken out by a borrower against their current property to finance...
- [Loan Officer Job Description - Expected Salary and What Your Day Will Look Like](https://www.thetruthaboutmortgage.com/loan-officer-jobs/): So you need a job and you’re thinking about becoming a residential mortgage loan officer? Or a mortgage loan originator...
- [How to Quickly Remove Mortgage Lates From Your Credit Report](https://www.thetruthaboutmortgage.com/how-to-remove-mortgage-lates/): So you got a “mortgage late. ” You thought you paid your home loan on time, but for some reason...
- [Buying Down Your Interest Rate: Determine If It's Worth the Cost](https://www.thetruthaboutmortgage.com/buying-down-your-interest-rate/): If you're working with a bank or broker, you can easily buy down your mortgage interest rate by expressing what rate you'd like to pay, and inquiring about the cost to acquire such a rate.
- [Homeowners Insurance: How It Works and What's Actually Covered](https://www.thetruthaboutmortgage.com/homeowners-insurance/): Homeowners Insurance provides coverage in the event that your home is damaged or destroyed, and also provides liability for injuries incurred by visitors to your property.
- [Prime Rate, Discount Rate, and the Federal Funds Rate: What It All Means to You and Your Mortgage](https://www.thetruthaboutmortgage.com/discount-rate-prime-rate-and-the-federal-funds-rate/): Ever wonder how the economy goes ’round? Or how inflation is controlled and recessions are avoided? Or at least attempted...
- [Types of Mortgage Lenders: Retail vs. Wholesale, Correspondents and More](https://www.thetruthaboutmortgage.com/types-of-mortgage-lenders/): There are a variety of different types of mortgage lenders out there that originate home loans, from small mom and...
- [Mortgage Calculators](https://www.thetruthaboutmortgage.com/mortgage-calculators/): The use of a “mortgage calculator” can be very helpful when trying to figure out monthly housing payments, how much...
- [Reverse Mortgages: Who They're For and The Pros and Cons](https://www.thetruthaboutmortgage.com/reverse-mortgage/): A “reverse mortgage” is a tax-exempt home loan that allows a homeowner to take cash-out of their home using their...
- [Tips for First-Time Home Buyers: What You Should Know Before You Buy a Property](https://www.thetruthaboutmortgage.com/tips-for-first-time-homebuyers/): So you’re thinking about buying your first piece of real estate? Congratulations! It’s an exciting time... and a nerve-racking one....
- [A Long List of Mortgage Stocks Grouped by Industry: Are Any Good Buys?](https://www.thetruthaboutmortgage.com/mortgage-stocks/): Let’s talk mortgage stocks for a moment, shall we? During the early and mid 2000s, the housing market was on...
- [The Rate and Term Refinance Explained: What It Is and How It Works](https://www.thetruthaboutmortgage.com/rate-and-term-refinance/): In the mortgage world, a “rate and term refinance” refers to the replacement of an existing mortgage(s) with a brand...
- [How Option ARM Mortgages Work](https://www.thetruthaboutmortgage.com/option-arm-mortgage/): An option ARM is a mortgage that gives homeowners four payment choices, including a 1% rate, interest-only, and a 15- or 30-year option.
- [Mortgage Appraisals and Appraised Value: How the Lender Values Your Home](https://www.thetruthaboutmortgage.com/appraisals-and-appraised-value/): A “home appraisal” is a comprehensive report that determines the value of your property based on a number of factors,...
- [Loan Origination Fee: What Is It and Do I Need to Pay It?](https://www.thetruthaboutmortgage.com/mortgage-dictionary/loan-origination/): The phrase “loan origination” refers to the initiation/completion of the home loan process, while the “loan origination fee” is the...
- [Predatory Mortgage Lending: What to Watch Out For](https://www.thetruthaboutmortgage.com/predatory-mortgage-lending/): Predatory mortgage lending is hard to define, but essentially occurs any time a borrower is taken advantage of, whether it be an inflated interest rate or higher than usual fees.
- [How a HELOC Works: Tap Your Home Equity for Cash](https://www.thetruthaboutmortgage.com/home-equity-line-of-credit-heloc/): A “HELOC” or “home equity line of credit,” is a type of home loan that allows a borrower to open...
- [Right of Rescission Period: When It Starts and Ends and Why It's Necessary](https://www.thetruthaboutmortgage.com/right-of-rescission/): Have you ever made a decision you later regretted, only to wish you could have taken it all back? Well,...
- [Jumbo Loans: What Are They and Do They Still Cost More?](https://www.thetruthaboutmortgage.com/jumbo-mortgage-loans/): A jumbo loan is a mortgage that exceeds the maximum loan amount (conforming loan limit) set by the Federal Housing Finance Agency (FHFA).
- [10 Mortgage Mistakes to Avoid for a Smooth Home Loan Experience](https://www.thetruthaboutmortgage.com/mortgage-mistakes/): Common Mortgage Mistakes Borrowers Make Not getting pre-approved for a mortgage Not shopping around for a lower interest rate Failing...
- [FHA Loans: Everything You Need to Know](https://www.thetruthaboutmortgage.com/fha-loans/): What Is an FHA Loan? “FHA loans” are government-backed mortgages insured by the Federal Housing Administration (FHA). Congress established the...
- [What Is an Islamic Mortgage? How Interest Is Avoided](https://www.thetruthaboutmortgage.com/islamic-mortgage/): Mortgage Q&A: “What is an Islamic mortgage? ” There are a variety of different types of home loans out there,...
- [VA Loans: All Your Veteran Mortgage Questions Answered](https://www.thetruthaboutmortgage.com/va-mortgage-loans/): A VA loan is a mortgage guaranteed by the Dept. of Veterans Affairs that features no down payment or minimum credit score requirement.
- [Why It's Super Important to Lock Your Mortgage Rate](https://www.thetruthaboutmortgage.com/mortgage-rate-lock/): A “mortgage rate lock” is essential to ensure you actually receive the interest rate you are quoted by a bank...
- [Asset and Reserve Requirements for Mortgages: How Much Money Do You Need?](https://www.thetruthaboutmortgage.com/assets-and-reserve-requirements/): If you choose to verify assets, banks and lenders will ask for a certain reserve requirement that must be met to qualify for the loan, including a mortgage down payment
- [1031 Exchange: How You Can Avoid or Offset Capital Gains](https://www.thetruthaboutmortgage.com/1031-exchange-help-rules/): A “1031 exchange,” also known as a real estate exchange or a tax-deferred exchange, was created by the IRS in...
- [Mortgage Indexes: They Determine Your Rate When Your ARM Adjusts](https://www.thetruthaboutmortgage.com/mortgage-indexes/): If you have an adjustable-rate mortgage, your interest rate may vary from month-to-month, or year-to-year, based on the index associated...
- [Debt-to-Income Ratio (DTI): What It Is and How to Calculate It](https://www.thetruthaboutmortgage.com/dti-debt-to-income-ratio/): The debt-to-income ratio, or DTI, is an important calculation used by banks to determine how large of a mortgage payment you can afford based on your gross monthly income and monthly liabilities.
- [Mortgage Pricing Adjustments: How to Read a Mortgage Rate Sheet](https://www.thetruthaboutmortgage.com/mortgage-pricing-adjustments/): If you ever get your hands on a mortgage lender rate sheet, you’ll probably get confused in a hurry. The...
- [Mortgage Amortization: Learn How Your Mortgage Is Paid Off Over Time](https://www.thetruthaboutmortgage.com/amortization/): How Mortgage Amortization Works While your mortgage payment stays the same each month The composition changes over time as the...
- [What Is a Prepayment Penalty? Hard vs. Soft and More](https://www.thetruthaboutmortgage.com/prepayment-penalty-mortgage/): Many people don’t seem to understand what a “prepayment penalty” is, much to their own detriment months or years after...
- [Types of Mortgages to Choose From: Learn About the Many Options Available Today](https://www.thetruthaboutmortgage.com/mortgage-loan-types-home-loan-types/): Quickly learn about the different types of mortgages available to home buyers today. Options include fixed-rate loans, ARMs, and many more.
- [Risk-Based Pricing: Your Level of Risk Determines Your Rate](https://www.thetruthaboutmortgage.com/mortgage-dictionary/risk-based-pricing-loan/): When shopping for a home loan, you may come across the term “risk-based pricing”. It’s a method the mortgage industry...
- [Yield Spread Premium (YSP)](https://www.thetruthaboutmortgage.com/mortgage-dictionary/yield-spread-premium/): The “yield spread premium,” or YSP as it was known in the industry, was a fee paid by a mortgage...
- [Mortgage Dictionary: Key Terms You Should Know Before You Own](https://www.thetruthaboutmortgage.com/mortgage-dictionary/): Use this mortgage dictionary to quickly define mortgage terminology you may encounter when buying a home or refinancing your loan.
- [What Are Mortgage Points?](https://www.thetruthaboutmortgage.com/mortgage-dictionary/mortgage-loan-points-mortgage-discount-points/): A "mortgage point" is a fancy term used in the industry to describe a percentage point of the loan amount. So if you're paying one point on a $100,000 mortgage, it's simply $1,000. Learn more about how it works and why it's charged.
- [What Is a Mortgage? First Let's Define the Word](https://www.thetruthaboutmortgage.com/what-is-a-mortgage-definition/): A mortgage is a loan offered by a bank to a borrower that allows them to acquire a piece of real estate, such as a house or condo.
- [About Me...](https://www.thetruthaboutmortgage.com/about-the-author/): In the early 2000s, I worked as an Account Executive for a large wholesale mortgage lender based in Los Angeles,...
- [How Much House Can I Afford: How the Math Works and Rule of Thumb](https://www.thetruthaboutmortgage.com/how-much-can-i-afford/): If the term mortgage has crossed your mind recently and you’re in the market to purchase a new home, you’ve...
- [What Is My Home Worth?: Free Internet House Values and Math Behind Them](https://www.thetruthaboutmortgage.com/home-value-house-value/): When considering a home purchase, or a mortgage refinance for that matter, knowing the true value of the subject property...
- [Mortgage Brokers vs. Banks: Which Is Better?](https://www.thetruthaboutmortgage.com/mortgage-brokers-vs-banks/): There are a variety of different ways to obtain a mortgage, but let’s focus on two specific channels, “mortgage brokers...

## Posts

- [The Fight for Control of Real Estate Listings Heats Up as Zillow Plays Hardball](https://www.thetruthaboutmortgage.com/the-fight-for-control-of-real-estate-listings-heats-up-as-zillow-plays-hardball/): A new battle, or perhaps war, is underway for control of real estate listing data. Depending on who you ask,...
- [Where Would Mortgage Rates Be Without Liberation Day?](https://www.thetruthaboutmortgage.com/where-would-mortgage-rates-be-without-liberation-day/): In case you haven’t heard, the tariffs levied against China are now 145%. Yes, you read that right. Not the...
- [Mortgage Rates Back to 7% as Tariff Day Rattles Bond Market](https://www.thetruthaboutmortgage.com/mortgage-rates-back-to-7-as-tariff-day-rattles-bond-market/): Welp, the question I asked recently, would mortgage rates hit 5. 99% or 7% next, has been answered. And unfortunately,...
- [Mortgage Rates Can Change In an Instant](https://www.thetruthaboutmortgage.com/mortgage-rates-can-change-in-an-instant/): If you’ve been paying attention to mortgage rates lately, you might be wondering what on earth is going on. Mortgage...
- [A Good Reminder That Lenders Are Always Quick to Raise Mortgage Rates](https://www.thetruthaboutmortgage.com/a-good-reminder-that-lenders-are-always-quick-to-raise-mortgage-rates/): I keep hearing that lower mortgage rates are the silver lining of a global trade war. That despite the stock...
- [What the Heck Is Going on with Mortgage Rates?](https://www.thetruthaboutmortgage.com/what-the-heck-is-going-on-with-mortgage-rates/): There’s a lot going on right now with mortgage rates so I’m dedicating a very long post to it. First...
- [Top Mortgage Lenders of 2024: UWM Beats Rocket for Second Straight Year, But Will It Last?](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-of-2024/): Like the year before, United Wholesale Mortgage (UWM) was the top mortgage lender in 2024. It marked their second year...
- [Fannie Mae Now Expects Mortgage Rates to Be 30 Basis Points Lower By Year End](https://www.thetruthaboutmortgage.com/fannie-mae-now-expects-mortgage-rates-to-be-30-basis-points-lower-by-year-end/): The latest mortgage rate forecast from Fannie Mae is a good one, assuming you’re a prospective home buyer or an...
- [Mortgage Rates Appear to Be Falling as Recession Fears Rise](https://www.thetruthaboutmortgage.com/mortgage-rates-appear-to-be-falling-as-recession-fears-rise/): As always, it’s been hard to determine the path forward for mortgage rates. They’re never easy to predict, but since...
- [Rocket Buying Nation's Largest Loan Servicer Mr. Cooper to Reclaim Top Mortgage Lender Title](https://www.thetruthaboutmortgage.com/rocket-buying-nations-largest-loan-servicer-mr-cooper-to-reclaim-top-mortgage-lender-title/): I’ve been saying for a year or two, maybe longer, that recapture was the next big thing in mortgage. Instead...
- [Should I Wait for Mortgage Rates to Drop Before Buying a Home?](https://www.thetruthaboutmortgage.com/should-i-wait-for-mortgage-rates-to-drop-before-buying-a-home/): I’ve seen a lot of posts lately on social media talking about waiting for mortgage rates to drop before buying...
- [Non-Permanent Residents No Longer Eligible for FHA Loans](https://www.thetruthaboutmortgage.com/non-permanent-residents-no-longer-eligible-for-fha-loans/): A sweeping change took place this morning that blocks non-permanent residents from taking out FHA loans. After conforming loans backed...
- [Mortgage Rates Could Go Up If Foreign Countries Dump Their MBS Holdings](https://www.thetruthaboutmortgage.com/mortgage-rates-could-go-up-if-foreign-countries-dump-their-mbs-holdings/): File this one under unintended consequences of a global trade war. When you start a trade war, or at least...
- [Veterans United the Top VA Loan Lender in 2024 for Third Straight Year](https://www.thetruthaboutmortgage.com/veterans-united-the-top-va-loan-lender-in-2024/): Well, another year is in the books at the VA, and like prior years, Veterans United topped the list as...
- [Where Would Mortgage Rates Be Today If Kamala Harris Won?](https://www.thetruthaboutmortgage.com/where-would-mortgage-rates-be-today-if-kamala-harris-won/): A couple weeks ago, I wrote about how mortgage rates hadn’t really done much since the U. S. presidential election...
- [If Mortgage Rates Don’t Move, They’ll Be Better in a Month](https://www.thetruthaboutmortgage.com/if-mortgage-rates-dont-move-theyll-be-better-in-a-month/): Lately, mortgage rates have been pretty flat. They enjoyed a nice string of six or seven weeks where they tumbled...
- [If You Have a Mortgage, You Are Not Rich](https://www.thetruthaboutmortgage.com/if-you-have-a-mortgage-you-are-not-rich/): I’ve been a lot more active on social media over the past few years. And one of my observations is...
- [Higher Mortgage Rates Mean Principal Repayment Has Slowed to a Crawl](https://www.thetruthaboutmortgage.com/higher-mortgage-rates-mean-principal-repayment-has-slowed-to-a-crawl/): I remember when I wrote my mortgage myths post, I pointed out that mortgages aren’t mostly interest. But I did...
- [2025 Home Selling Tips to Get Top Dollar: How to Navigate a Cooler Housing Market](https://www.thetruthaboutmortgage.com/12-home-selling-tips-for-2019/): Let’s talk home selling tips. While still-high mortgage rates will undoubtedly make prospective home buyers feel stretched, there’s still plenty...
- [Mortgage Rate History: Check Out These Charts from the Early 1900s](https://www.thetruthaboutmortgage.com/check-out-these-mortgage-rate-charts-from-the-early-1900s/): Today we’ll take a brief look at some mortgage rate history to gain a little context for where we stand...
- [If You’re Buying a Home Today, Expect to Keep It for a Long Time](https://www.thetruthaboutmortgage.com/if-youre-buying-a-home-today-expect-to-keep-it-for-a-long-time/): It seems pretty clear that the housing market has cooled, and is now more of a buyer’s market than a...
- [Can the Housing Market Stomach a Return to 7% Mortgage Rates?](https://www.thetruthaboutmortgage.com/can-the-housing-market-stomach-a-return-to-7-mortgage-rates/): Yesterday, I wrote about how the uncertainty surrounding tariffs was hurting mortgage rates. In short, the market doesn’t know what...
- [How to Reduce Closing Costs on Your Mortgage](https://www.thetruthaboutmortgage.com/how-to-reduce-closing-costs-on-your-mortgage/): Closing costs can be very expensive. Fortunately, there are a number of ways to reduce out-of-pocket costs and hold onto more of your money.
- [The Trade War Matters More to Mortgage Rates Than Cool Economic Data](https://www.thetruthaboutmortgage.com/the-trade-war-matters-more-to-mortgage-rates-than-cool-economic-data/): It’s clear that the trade war is now the biggest driver of mortgage rates today. Prior to the arrival of...
- [2025 Could Be the Year of the Rate and Term Refinance](https://www.thetruthaboutmortgage.com/2025-could-be-the-year-of-the-rate-and-term-refinance/): So far, 2025 is shaping up to be a bit better when it comes to mortgage rates. While the 30-year...
- [Rocket to Acquire Redfin to Boost Home Purchase Lending and Take Back #1 Spot](https://www.thetruthaboutmortgage.com/rocket-to-acquire-redfin-to-boost-home-purchase-lending-and-take-back-1-spot/): Just a week after Rocket Mortgage exited Canada, parent company Rocket Companies has announced its intent to acquire Redfin. The...
- [Navy Federal Mortgage Review: Rates Appear Low and They Keep Your Loan](https://www.thetruthaboutmortgage.com/navy-federal-mortgage-review-rates-appear-low-and-they-keep-your-loan/): One of the oldest and largest credit unions in the nation, Navy Federal FCU, happens to be a big player...
- [Don’t Be Surprised If Mortgage Rates Go Up Tomorrow](https://www.thetruthaboutmortgage.com/dont-be-surprised-if-mortgage-rates-go-up-tomorrow/): Tomorrow is a big day for mortgage rates, potentially. I say that because tomorrow is the release of the monthly...
- [Have Trump and Bessent Actually Lowered Mortgage Rates At All?](https://www.thetruthaboutmortgage.com/have-trump-and-bessent-actually-lowered-mortgage-rates-at-all/): There’s been a lot of optimism about mortgage rates under Trump. After all, rates have fallen for the past six...
- [Renting vs. Buying a Home: 55 Pros and Cons](https://www.thetruthaboutmortgage.com/renting-vs-buying-55-pros-and-cons/): It’s time for yet another mortgage match-up, so without further ado, here’s a biggie: “Renting vs. buying a home. ”...
- [Mortgage Rates Are Now Back to October Levels. How Could They Move Even Lower?](https://www.thetruthaboutmortgage.com/mortgage-rates-are-now-back-to-october-levels-how-could-they-move-even-lower/): Today was yet another good day for mortgage rates, which came down an additional 10 bps (0. 10%), per the...
- [Are Mortgage Rates Going to 5.99% or 7% Next?](https://www.thetruthaboutmortgage.com/are-mortgage-rates-going-to-5-99-or-7-next/): It’s no secret mortgage rates are falling. I’ve argued they never really stopped falling since the 30-year fixed hit 8%...
- [Mortgage Rates Are Down About Half a Percent in the Past Six Weeks](https://www.thetruthaboutmortgage.com/mortgage-rates-are-down-about-half-a-percent-in-the-past-six-weeks/): What a run it has been for mortgage rates lately. In just the past six weeks, the 30-year fixed has...
- [Locking vs. Floating Your Mortgage Rate: Which Is Better and Why?](https://www.thetruthaboutmortgage.com/locking-vs-floating-your-mortgage-rate/): Trying to decide between locking and floating your mortgage rate? Discover the pros and cons of each, and how to make the right choice.
- [A Weakening Economy Might Bring Lower Mortgage Rates, But What Else?](https://www.thetruthaboutmortgage.com/a-weakening-economy-might-bring-lower-mortgage-rates-but-what-else/): It’s been a great week for mortgage rates. You can’t argue that. The 30-year fixed is now averaging around 6....
- [Mortgage Rates Back Below Year-Ago Levels as We Head into Spring](https://www.thetruthaboutmortgage.com/mortgage-rates-back-below-year-ago-levels-as-we-head-into-spring/): As anticipated, mortgage rates are back below their year-ago levels. I had suspected they would be, despite a rough couple...
- [How to Pay Off the Mortgage Early: 30+ Methods You Can Use Right Now](https://www.thetruthaboutmortgage.com/how-to-pay-off-the-mortgage-early/): Mortgage Q&A: “How to pay off the mortgage early. ” If you’re looking to pay off your mortgage quickly, now...
- [Buying a Home in 2025? Supply Is Finally Rising and Some Are Calling It a Buyer's Market. Here Are 11 Tips to Help Make It Happen!](https://www.thetruthaboutmortgage.com/buying-a-home-in-2018-11-tips-to-get-it-done/): If you’ve yet to enter the housing market, but are thinking of buying a home in 2025, there’s a lot...
- [FHA Layoffs: 40% of Staff to Be Let Go in Latest Government Cuts](https://www.thetruthaboutmortgage.com/fha-layoffs-40-of-staff-to-be-let-go-in-latest-government-cuts/): Less than a week after a task force was launched to “eliminate waste, fraud, and abuse” at HUD, it appears...
- [RocketRentRewards Offers 10% Back on Rent to Use Toward Closing Costs on a Home Purchase](https://www.thetruthaboutmortgage.com/rocketrentrewards-offers-10-back-on-rent-to-use-toward-closing-costs-on-a-home-purchase/): In a bid to help more renters make the leap to homeownership, Rocket Mortgage has launched a new program called...
- [Is Trump’s Plan to Lower Mortgage Rates Mass Government Layoffs?](https://www.thetruthaboutmortgage.com/is-trumps-plan-to-lower-mortgage-rates-mass-government-layoffs/): I got to thinking the other day that Trump’s plan to lower mortgage rates might be through increased unemployment. While...
- [Can You Use a Credit Card for a Down Payment on a House?](https://www.thetruthaboutmortgage.com/can-you-use-a-credit-card-for-a-down-payment-on-a-house/): One of the biggest hurdles to homeownership is the down payment. After all, the typical American has barely anything in...
- [Trump Wants to Lower Mortgage Rates without the Fed](https://www.thetruthaboutmortgage.com/trump-wants-to-lower-mortgage-rates-without-the-fed/): You’ve likely heard that one of President Trump’s goals is to lower mortgage rates. He talked about it on the...
- [Is It Better to Refinance with Your Current Mortgage Lender?](https://www.thetruthaboutmortgage.com/is-it-better-to-refinance-with-your-current-mortgage-lender/): If you already have a mortgage, you might be curious about refinancing, and more specifically if you have to use...
- [The Release of Fannie and Freddie Could Come Down to Mortgage Rates: But Should It?](https://www.thetruthaboutmortgage.com/bessent-says-release-of-fannie-and-freddie-depends-on-mortgage-rates/): If you’re hoping for a quick release of Fannie Mae and Freddie Mac, you might want to exercise some patience....
- [What Is Mortgage Matchup? And Why Did UWM Create It?](https://www.thetruthaboutmortgage.com/what-is-mortgage-matchup/): If you’ve seen commercials for “Mortgage Matchup” lately, perhaps during an NBA game, or on the court itself, you might...
- [Mortgage Rates Back Below 7%, But Pricing Remains Cautious](https://www.thetruthaboutmortgage.com/mortgage-rates-back-below-7-but-pricing-remains-cautious/): It’s been a good couple of weeks for mortgage rates, which benefited from a delay on tariffs and some favorable...
- [Better Forever Program Waives Loan Origination Fees for Life](https://www.thetruthaboutmortgage.com/better-forever-program-waives-loan-origination-fees-for-life/): A new loyalty program has been launched by Better Mortgage that waives loan origination fees for life. Known as the...
- [Can You Refinance an Adjustable-Rate Mortgage?](https://www.thetruthaboutmortgage.com/can-you-refinance-an-adjustable-rate-mortgage/): If you have an adjustable-rate mortgage you’re looking to get out of, the good news is it’s usually as simple...
- [Treasury Secretary Bessent Becomes Acting Director of CFPB: How Will It Affect Mortgages?](https://www.thetruthaboutmortgage.com/treasury-secretary-scott-bessent-becomes-acting-director-of-the-consumer-financial-protection-bureau/): The Consumer Financial Protection Bureau (CFPB) has a new acting director, none other than Treasury Secretary Scott Bessent. The news...
- [Housing Inventory Expected to Normalize by Mid-2026](https://www.thetruthaboutmortgage.com/housing-inventory-expected-to-normalize-by-mid-2026/): It’s no secret for-sale inventory has been in short supply for a long time now, making it increasingly difficult to...
- [Home Builders Urge Trump to Rethink Tariffs That Could Drive Home Prices Up Further](https://www.thetruthaboutmortgage.com/home-builders-urge-trump-to-rethink-tariffs-that-could-drive-home-prices-up-further/): If you haven’t heard, the Trump administration imposed tariffs on imports from Mexico, Canada, and China today. As of February...
- [Mortgage Rates vs. Tariffs: What's the Impact?](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-tariffs/): I knew I was going to have to write this post at some point during Trump’s second term. And here...
- [Non-Mortgage Housing Costs Nearly Exceed the Mortgage Itself](https://www.thetruthaboutmortgage.com/non-mortgage-housing-costs-nearly-exceed-the-mortgage-itself/): If you’re an existing homeowner who purchased your property as recently as 2022, you probably have a really low, fixed...
- [What Is a Cash-In Refinance? Lower Your Loan Balance and Your Mortgage Rate](https://www.thetruthaboutmortgage.com/what-is-a-cash-in-refinance/): A home loan where you bring money to the table to lower your loan balance and your mortgage rate at the same time.
- [What Happens If the Appraisal Comes In Low?](https://www.thetruthaboutmortgage.com/what-happens-if-the-appraisal-comes-in-low/): With home prices dare I say a little frothy these days, low appraisals are becoming a concern again for home...
- [Down Payment Assistance Programs May Be Affected by Federal Funding Pause](https://www.thetruthaboutmortgage.com/down-payment-assistance-programs-may-be-affected-by-federal-funding-pause/): While it appears that Trump’s funding freeze won’t affect home buyers who use a government-backed mortgage, there’s now another concern....
- [Trump’s Funding Freeze Causes Uncertainty for Government-Backed Mortgages](https://www.thetruthaboutmortgage.com/trumps-funding-freeze-causes-uncertainty-for-government-backed-mortgages/): Yesterday, President Trump released a memo calling for the temporary pause of grants, loans, and other financial assistance programs. The...
- [Trump May Get His Wish of Lower Mortgage Rates Granted, But Not for the Right Reasons](https://www.thetruthaboutmortgage.com/trump-may-get-his-wish-of-lower-mortgage-rates-granted-but-not-for-the-right-reasons/): Last week, President Donald Trump demanded that “interest rates drop immediately” while addressing the World Economic Forum in Davos, Switzerland...
- [Existing Home Sales Fall to Lowest Level Since 1995](https://www.thetruthaboutmortgage.com/existing-home-sales-fall-to-lowest-level-since-1995/): To say it’s been a bad 12 months for home sales would be a massive understatement. Today, the National Association...
- [The Largest HELOC Lenders in the Nation (Updated for 2025)](https://www.thetruthaboutmortgage.com/top-heloc-lenders/): Now that tapping home equity is back in fashion, I figured it’d be helpful to see who the top HELOC...
- [FHA Life of Loan Premiums Might Be Scrapped Under Trump](https://www.thetruthaboutmortgage.com/fha-life-of-loan-premiums-might-be-scrapped-under-trump/): Well, we’re just one day into Trump’s second term and there are already rumblings of new residential housing policy. While...
- [Mortgage Rates Begin Above 7% to Start Trump’s Second Term in Office](https://www.thetruthaboutmortgage.com/mortgage-rates-begin-above-7-to-start-trumps-second-term-in-office/): Well, President Donald Trump is officially back in office after the long-awaited inauguration took place today in Washington D. C....
- [HELOC Rates Expected to Continue Falling in 2025](https://www.thetruthaboutmortgage.com/heloc-rates/): Let’s talk about HELOC rates. If you’ve had a home equity line of credit (HELOC) for a while, you likely...
- [WaFd Bank Exits Single-Family Mortgage Lending Business](https://www.thetruthaboutmortgage.com/wafd-bank-exits-single-family-mortgage-lending-business/): Welp, another day in 2025, another mortgage lender calling it quits. This time it’s depository Washington Federal Bank, or WaFd...
- [Mortgage Rates Get Boost from Bessent and Soft Economic Data](https://www.thetruthaboutmortgage.com/mortgage-rates-get-boost-from-bessent-and-soft-economic-data/): As I’ve said before when talking about mortgage, what a difference a week makes. Or even a couple days. If...
- [What Is a Letter of Explanation? Your Chance to Talk to an Underwriter](https://www.thetruthaboutmortgage.com/what-is-a-letter-of-explanation/): Mortgage Q&A series: “What is a letter of explanation for a mortgage? ” If you’re currently going through the joyful...
- [What Is a 3/1 ARM? A 30-Year Loan That's Only Fixed for the First Three Years](https://www.thetruthaboutmortgage.com/what-is-a-3-1-arm/): If you haven’t been feeling 30-year mortgage rates recently, maybe an ARM could suit you better. This is especially true...
- [10 Simple Ways You Can Save Money on Your Next Mortgage](https://www.thetruthaboutmortgage.com/10-ways-to-save-money-on-your-next-mortgage/): You’ve heard the news – mortgage rates jumped from close to 6% back in September to over 7% in less...
- [Can You Refinance a Home Equity Loan or a HELOC?](https://www.thetruthaboutmortgage.com/can-you-refinance-a-home-equity-loan-or-a-heloc/): With second mortgages like home equity loans and home equity lines of credit (HELOCs) growing in popularity lately, I figured...
- [Fannie, Freddie, FHA, and Chase Announce Mortgage Relief for LA Wildfire Victims](https://www.thetruthaboutmortgage.com/fannie-freddie-fha-and-chase-announce-mortgage-relief-for-la-wildfire-victims/): While the Los Angeles wildfires are still ongoing, some mortgage relief options are beginning to roll out. This morning, both...
- [What Is the Downside of Getting a Mortgage?](https://www.thetruthaboutmortgage.com/what-is-the-downside-of-getting-a-mortgage/): I saw his seemingly straightforward question posed and was surprised I’d never really addressed it. I’ve been writing about mortgages...
- [Ally Financial Calls It Quits on Mortgage Lending, Will Lay Off Staff](https://www.thetruthaboutmortgage.com/ally-financial-calls-it-quits-on-mortgage-lending-will-lay-off-staff/): Well, 2025 is off to a rough start with one fairly large mortgage lender calling it quits already. Ally Financial...
- [Should You Drive Until You Qualify for a Mortgage?](https://www.thetruthaboutmortgage.com/should-you-drive-until-you-qualify-for-a-mortgage/): In the mortgage/real estate world there’s a saying: “Drive until you qualify. ” It’s a cute way of saying if...
- [New Rule Removes Medical Bills from Credit Reports, Could Lead to 20K More Mortgage Approvals Annually](https://www.thetruthaboutmortgage.com/new-rule-removes-medical-bills-from-credit-reports-could-lead-to-20k-more-mortgage-approvals-annually/): The Consumer Financial Protection Bureau (CFPB) has finalized a rule that will remove medical debts from consumer credit reports. In...
- [Mortgage Rates Are Back at 2001 Levels](https://www.thetruthaboutmortgage.com/mortgage-rates-are-back-at-2001-levels/): The popular 30-year fixed averaged 6. 91% to begin 2025, per the latest Freddie Mac data. This means mortgage rates...
- [Is the 30-Year Fixed Even a Good Deal Anymore?](https://www.thetruthaboutmortgage.com/is-the-30-year-fixed-even-a-good-deal-anymore/): It’s no secret that the 30-year fixed was the best deal ever a few short years ago. Back in 2021...
- [What Is a Mortgagee? Hint: It's Not a Typo Nor Is It Misspelled](https://www.thetruthaboutmortgage.com/what-is-a-mortgagee/): Are You a Mortgagee or Mortgagor? It’s 2025 and it’s time for some fresh mortgage Q&A! Today’s question: “What is...
- [Lender Credits: The Opposite of Paying Points on Your Mortgage](https://www.thetruthaboutmortgage.com/what-is-a-lender-credit/): A lender credit can eliminate the closing costs on your mortgage. But it will increase your mortgage rate as a result.
- [We Are Entering 2025 with Mortgage Rates on the Rise](https://www.thetruthaboutmortgage.com/we-are-entering-2025-with-mortgage-rates-on-the-rise/): What a difference a year makes. Toward the end of 2023, mortgage rates fell nearly 150 basis points to ring...
- [2025 Mortgage and Real Estate Predictions: Where Is the Market Headed Next?](https://www.thetruthaboutmortgage.com/2025-mortgage-and-real-estate-predictions/): 1. Mortgage rates will move lower and hit the 5s at some point I always start my New Year predictions...
- [One Major Reason Why the Housing Market Is Much Better Off Than It Used to Be](https://www.thetruthaboutmortgage.com/one-major-reason-why-the-housing-market-is-much-better-off-than-it-used-to-be/): With home prices out of reach for many and affordability the worst it’s been in decades, a lot of folks...
- [Mortgage Rates Increased About a Quarter Percent This Week.  What Does That Actually Mean?](https://www.thetruthaboutmortgage.com/mortgage-rates-increased-about-a-quarter-percent-this-week-what-does-that-actually-mean/): If you’ve scanned the headlines lately, you probably saw that mortgage rates went up yet again. And they did so...
- [The Reason Mortgage Rates Jumped After the Fed Rate Cut](https://www.thetruthaboutmortgage.com/the-reason-mortgage-rates-jumped-after-the-fed-rate-cut/): Well, it happened again. The Federal Reserve announced another rate cut and mortgage rates surged higher. In fact, the 30-year...
- [2025 Mortgage Rate Predictions: Where Do They Go From Here?](https://www.thetruthaboutmortgage.com/2025-mortgage-rate-predictions/): It’s that time of the year when I look at what the next year might have in store for mortgage...
- [Larger Loan Amounts Require Smaller Mortgage Rate Decreases for a Refinance to Pencil](https://www.thetruthaboutmortgage.com/larger-loan-amounts-require-smaller-mortgage-rate-decreases-for-a-refinance-to-pencil/): While 2025 offers some hope mortgage rates will move lower, that’s still very much up in the air. There are...
- [If You’re Serious About Selling Your Home, List Below the Zestimate](https://www.thetruthaboutmortgage.com/if-youre-serious-about-selling-your-home-list-below-the-zestimate/): Recently, I’ve encountered two very different types of for-sale listings in the market. There are the properties that go pending...
- [Homeowners Who Refinanced Recently Saw the Biggest Mortgage Rate Improvement in Decades](https://www.thetruthaboutmortgage.com/homeowners-who-refinanced-recently-saw-the-biggest-mortgage-rate-improvement-in-decades/): When mortgage rates fell to around 6% in August, homeowners jumped at the opportunity to refinance. In the months of...
- [Are We Still in a Falling Mortgage Rate Environment?](https://www.thetruthaboutmortgage.com/are-we-still-in-a-falling-mortgage-rate-environment/): It’s been a wild ride for mortgage rates this year. The 30-year fixed began 2024 at around 6. 625% and...
- [Opt-Out Before You Begin Mortgage Shopping](https://www.thetruthaboutmortgage.com/opt-out-before-you-begin-mortgage-shopping/): Often times when you apply for a mortgage, you’ll be bombarded by offers from competing banks and lenders. The reason...
- [Winter Is Coming for Mortgage Rates. Why That Might Be a Good Thing](https://www.thetruthaboutmortgage.com/winter-is-coming-for-mortgage-rates-why-that-might-a-good-thing/): Mortgage rates have been on a wild ride the past few years. In fact, it was still possible to obtain...
- [The U.S. President Doesn’t Set Mortgage Rates](https://www.thetruthaboutmortgage.com/the-u-s-president-doesnt-set-mortgage-rates/): Mortgage rates are a pretty complex subject. They’re also commonly misunderstood and oversimplified, with many myths perpetuated by those who...
- [Bilt Card to Offer Point Earning on Mortgage Payments](https://www.thetruthaboutmortgage.com/bilt-card-to-offer-point-earning-on-mortgage-payments/): Well, it sounds like the new Mesa Homeowners Card got the attention of one of its competitors. Bilt is best...
- [Why You Might Want to Steer Clear of a Cash Out Refinance Right Now](https://www.thetruthaboutmortgage.com/why-you-might-want-to-steer-clear-of-a-cash-out-refinance-right-now/): It’s no secret that mortgage rates aren’t cheap anymore. In the first quarter of 2022, you could still get a...
- [Mortgage Rates Tend to Fall Within 12 Weeks of a First Fed Rate Cut](https://www.thetruthaboutmortgage.com/mortgage-rates-tend-to-fall-within-12-weeks-of-a-first-fed-rate-cut/): Lately, there’s been a ton of speculation surrounding the direction of mortgage rates. I too have taken part in this...
- [Mortgage Rates Improve After New Treasury Secretary Bessent Announced](https://www.thetruthaboutmortgage.com/mortgage-rates-improve-after-new-treasury-secretary-bessent-announced/): As I’ve been saying for a while now, all of the potential bad news (for mortgage rates) has been largely...
- [Watch Out for Mortgage Mailers That Look Super Official But Aren’t](https://www.thetruthaboutmortgage.com/watch-out-for-mortgage-mailers-that-look-super-official-but-arent/): Lately we’ve been hearing a lot about trigger leads due to legislation trying to ban them. If you’re unaware, when...
- [Three Key Differences Between HELOCs and Home Equity Loans](https://www.thetruthaboutmortgage.com/three-key-differences-between-helocs-and-home-equity-loans/): Lately, homeowners have been turning to their equity for their cash needs. After all, most already have a super low...
- [It’s Okay to Negotiate with Your Real Estate Agent](https://www.thetruthaboutmortgage.com/its-okay-to-negotiate-with-your-real-estate-agent/): The big NAR settlement is expected to be finalized next week, but the changes already took effect back in August....
- [Normal Mortgage Rates? The Average Mortgage Rate Since 1972 Is Roughly 7.75%](https://www.thetruthaboutmortgage.com/normal-mortgage-rates-the-average-mortgage-rate-since-1972-is-roughly-7-75/): Lately, I’ve been a hearing a lot of people say that mortgage rates are “average” or “normal. ” As in,...
- [What Does It Actually Mean to Return to Lower Mortgage Rates?](https://www.thetruthaboutmortgage.com/what-does-it-actually-mean-to-return-to-lower-mortgage-rates/): Recently, a lot of people have argued that we won’t return to lower mortgage rates. That there’s no possible way...
- [Do the Home Builders Need to Offer Mortgage Rate Buydowns to Make the Math Work?](https://www.thetruthaboutmortgage.com/do-the-home-builders-need-to-offer-mortgage-rate-buydowns-to-make-the-math-work/): If you’ve been home shopping since early 2022 when mortgage rates surged higher, you’ve likely come across the buydown. The...
- [Can Mortgage Rates Improve Much Before Trump’s Inauguration?](https://www.thetruthaboutmortgage.com/can-mortgage-rates-improve-much-before-trumps-inauguration/): While mortgage rates have already seen some improvement since the election dust settled, they remain quite elevated. At last glance,...
- [Don’t Attempt to Time the Housing Market](https://www.thetruthaboutmortgage.com/dont-attempt-to-time-the-housing-market/): It’s a tale as old as time. Someone attempts to time the market, only to fail miserably. Then they either...
- [Is This Housing Market Cycle Just Getting Started?](https://www.thetruthaboutmortgage.com/is-this-housing-market-cycle-just-getting-started/): I sometimes wonder with so little equity extracted this cycle if it’s still early innings for the housing market. At...
- [What Will Happen to Mortgage Rates During Trump's Second Term?](https://www.thetruthaboutmortgage.com/what-will-happen-to-mortgage-rates-during-trumps-second-term/): It’s been no secret that most everyone thinks mortgage rates will be higher under President Trump. But because it’s been...
- [First-Time Home Buyer Share Hits Record Low: Why That Might Be a Good Thing](https://www.thetruthaboutmortgage.com/first-time-home-buyer-share-hits-record-low-why-that-might-be-a-good-thing/): The National Association of Realtors (NAR) reported that the first-time home buyer share fell to a historic low of just...
- [Chase Relationship Pricing Offers Discounted Mortgage Rates for Up to 1% Off](https://www.thetruthaboutmortgage.com/chase-relationship-pricing-offers-discounted-mortgage-rates-for-up-to-1-off/): If you recall, Chase took over troubled First Republic Bank back in May 2023. Prior to First Republic going under,...
- [How Did Almost Half of Recent Home Buyers Snag a Mortgage Rate Under 5%?](https://www.thetruthaboutmortgage.com/how-did-almost-half-of-recent-home-buyers-snag-a-mortgage-rate-under-5/): Everyone knows high mortgage rates have been a total drag lately, especially for prospective home buyers facing extremely high asking...
- [Mortgage Rates Are in a Holding Pattern Until After the Election](https://www.thetruthaboutmortgage.com/mortgage-rates-are-in-a-holding-pattern-until-after-the-election/): Seems pretty clear now that it doesn’t matter what economic data shows up between now and next week. Mortgage rates...
- [Figure Launches a Piggyback Second Mortgage](https://www.thetruthaboutmortgage.com/figure-launches-a-piggyback-second-mortgage/): Figure Lending has unveiled a new piggyback loan at a time when housing affordability has rarely been worse. Call it...
- [Would-Be Sellers vs. Must-Sell Sellers](https://www.thetruthaboutmortgage.com/would-be-sellers-vs-must-sell-sellers/): I wanted to take a moment to talk about the types of sellers that exist in the housing market. There...
- [Home Buyers: Use High Mortgage Rates as an Excuse to Get a Lower Price](https://www.thetruthaboutmortgage.com/home-buyers-use-high-mortgage-rates-as-an-excuse-to-get-a-lower-price/): I often try to find silver linings in bad situations. The latest issue facing prospective home buyers is a return...
- [Fannie and Freddie Expand Appraisal Waivers to Even More Home Buyers](https://www.thetruthaboutmortgage.com/fannie-and-freddie-expand-appraisal-waivers-to-even-more-home-buyers/): Both Fannie Mae and Freddie Mac announced newly expanded appraisal waivers to reduce costs and help more first-time home buyers...
- [The Second Mortgage Sales Pitch Is Coming, Be Ready](https://www.thetruthaboutmortgage.com/the-second-mortgage-sales-pitch-is-coming-be-ready/): We’re currently in a strange sort of housing crisis where existing homeowners are in a fantastic spot, but prospective buyers...
- [Calque Looks to Solve the Buy Before You Sell Problem](https://www.thetruthaboutmortgage.com/calque-mortgage-looks-to-solve-the-buy-before-you-sell-problem/): Another fintech has been quietly growing in the mortgage space, looking to solve the age-old “buy before you sell” conundrum....
- [Use a Higher Mortgage Rate When Shopping for a Home to Stay Within Budget](https://www.thetruthaboutmortgage.com/use-a-higher-mortgage-rate-when-shopping-for-a-home-to-stay-within-budget/): With mortgage rates surging higher again, somewhat unexpectedly, a thought came to my mind if you’re currently home shopping. A...
- [Is It Time to Bring Back the Mortgage Prepayment Penalty?](https://www.thetruthaboutmortgage.com/is-it-time-to-bring-back-the-mortgage-prepayment-penalty/): When the housing market crashed in the early 2000s, new mortgage rules emerged to prevent a similar crisis in the...
- [Do Mortgage Payments Increase? Here Are 4 Ways They Can Get More Expensive](https://www.thetruthaboutmortgage.com/do-mortgage-payments-increase/): This might sound like a no-brainer question, but there are several scenarios where mortgage payments can rise, even if your rate is fixed.
- [Mortgage Rates Take Time to Fall, So Be Patient](https://www.thetruthaboutmortgage.com/mortgage-rates-take-time-to-fall-so-be-patient/): If you’ve been paying attention, you may have noticed that mortgage rates have quietly crept back up to nearly 7%....
- [Is Home Equity Lending Really That Crazy Today?](https://www.thetruthaboutmortgage.com/is-home-equity-lending-really-that-crazy-today/): I came across a report from CoreLogic the other day that said home equity loan lending increased to its highest...
- [UWM Is Now Offering 90% LTV Cash Out Refis.  Should We Worry?](https://www.thetruthaboutmortgage.com/uwm-is-now-offering-90-ltv-cash-out-refis-should-we-worry/): The nation’s largest mortgage lender, UWM, has launched a new 90% LTV cash-out refi to drum up more business. While...
- [Assumable Mortgages Have a Down Payment Problem](https://www.thetruthaboutmortgage.com/assumable-mortgages-have-a-down-payment-problem/): At first glance, assumable mortgages sound like an awesome solution to a problem home buyers have been facing lately. With...
- [A Temporary Buydown Could Make Sense While Mortgage Rates Continue to Fall](https://www.thetruthaboutmortgage.com/a-temporary-buydown-could-make-sense-while-mortgage-rates-continue-to-fall/): Last week, I argued that mortgage rates remain in a downward trend, despite some pullback lately. The 30-year fixed had...
- [Is This Mortgage Rate Scare Going to Get Home Buyers Off the Fence?](https://www.thetruthaboutmortgage.com/is-this-mortgage-rate-scare-going-to-get-home-buyers-off-the-fence/): It’s not quite Halloween just yet, but home buyers may have already gotten a good scare. The 30-year fixed mortgage,...
- [Are Mortgage Rates Just a Distraction for High Home Prices?](https://www.thetruthaboutmortgage.com/are-mortgage-rates-just-a-distraction-for-high-home-prices/): Over the past several years, we’ve been entirely focused on high mortgage rates. The 30-year fixed surged from sub-3% levels...
- [Five Million Refinances Hinge on Mortgage Rates Falling Back to 5.5%](https://www.thetruthaboutmortgage.com/five-million-refinances-hinge-on-mortgage-rates-falling-back-to-5-5/): In the mortgage rate world, it’s sometimes a game of inches. This can be true for both prospective home buyers...
- [If You Can’t Refinance, You Can Make Larger Mortgage Payments Each Month Instead](https://www.thetruthaboutmortgage.com/if-you-cant-refinance-you-can-make-larger-mortgage-payments-each-month-instead/): Did those higher mortgage rates ruin your plans to refinance your mortgage? Well, there might be a temporary solution to...
- [Mortgage Rates Don’t Move in a Straight Line Up or Down](https://www.thetruthaboutmortgage.com/mortgage-rates-dont-move-in-a-straight-line-up-or-down/): Ever since the Fed announced their 50-basis point cut, mortgage rates have been climbing higher. In fact, they’re basically 50...
- [Don’t Buy a Home with Friends](https://www.thetruthaboutmortgage.com/dont-buy-a-home-with-friends/): Recently, Zillow began airing a commercial called “Homeowner Mates. ” It depicts three women moving into a home together. It...
- [Maybe Homeowners Are Struggling with Mortgage Loan Amount Lock-In](https://www.thetruthaboutmortgage.com/maybe-homeowners-are-struggling-with-mortgage-loan-amount-lock-in/): When mortgage rates surged off their record lows in early 2022, the housing market ground to a halt. In the...
- [Did Mortgage Lenders Raise Their Early Bird 2025 Conforming Loan Limits Too High?](https://www.thetruthaboutmortgage.com/did-mortgage-lenders-raise-their-early-bird-2025-conforming-loan-limits-too-high/): Over the past several years, mortgage lenders have been offering “early bird” conforming loan limits for the upcoming year. This...
- [Those Double-Digit Mortgage Rates from the 80s Required You to Pay Points Too!](https://www.thetruthaboutmortgage.com/those-double-digit-mortgage-rates-from-the-80s-required-you-to-pay-points-too/): Even though mortgage rates have fallen quite a bit from their highs seen a year ago, they remain quite elevated...
- [Is This as Good as Mortgage Rates Get For Now?](https://www.thetruthaboutmortgage.com/is-this-as-good-as-mortgage-rates-get-for-now/): Well, it’s been over a week since the Fed cut rates and mortgage rates went up. While this may have...
- [The Other Reason You Should Shop Around for Your Mortgage](https://www.thetruthaboutmortgage.com/the-other-reason-you-should-shop-around-for-your-mortgage/): I know, I know, mortgage shopping is the worst. It’s not a fun thing to do. It’s not like shopping...
- [Home Purchase Lending Expected to Be Lackluster in 2025 Despite Lower Rates](https://www.thetruthaboutmortgage.com/home-purchase-lending-expected-to-be-lackluster-in-2025-despite-lower-rates/): While lower mortgage rates have reinvigorated hope for the stalling housing market, 2025 might not wind up much better than...
- [Mesa Wants to Reward You for Every Dollar You Spend on Your Home](https://www.thetruthaboutmortgage.com/mesa-wants-to-reward-you-for-every-dollar-you-spend-on-your-home/): There is apparently a “home cost crisis,” and a new fintech company called Mesa is looking to solve that. It’s...
- [You Could Try a Mortgage Rate Modification Instead of a Refinance](https://www.thetruthaboutmortgage.com/what-is-a-mortgage-rate-modification/): Want to lower your mortgage rate without a traditional refinance? Look into a “mortgage rate modification,” which does just that....
- [Fed Rate Cut, But Mortgage Rates Up: What Gives?](https://www.thetruthaboutmortgage.com/fed-rate-cut-but-mortgage-rates-up-what-gives/): Anyone who works in the industry probably saw this coming. But those who don’t might be left scratching their head....
- [Why You Probably Don’t Want to Lock Your HELOC](https://www.thetruthaboutmortgage.com/why-you-probably-dont-want-to-lock-your-heloc/): If you’ve got a home equity line of credit (HELOC), payment relief may finally be here. The Fed is expected...
- [Rate and Term Refinances Are Up a Whopping 300% from a Year Ago](https://www.thetruthaboutmortgage.com/rate-and-term-refinances-are-up-a-whopping-300-from-a-year-ago/): What a difference a year makes. While the mortgage industry has been purchase loan-heavy for several years now, it could...
- [Mortgage Rates Could Fall Another Half Point Just from Market Normalization](https://www.thetruthaboutmortgage.com/mortgage-rates-could-fall-another-half-point-just-from-market-normalization/): It’s been a pretty good year so far for mortgage rates, which topped out at around 8% last year. The...
- [UWM Launches KEEP to Recapture Prior Mortgage Clients for Its Broker Partners](https://www.thetruthaboutmortgage.com/uwm-launches-keep-to-recapture-prior-mortgage-clients-for-its-broker-partners/): I’ve said for a while that the mortgage recapture game was going to ramp up and get more aggressive. Customer...
- [I Pay My Mortgage Around the 15th of Every Month](https://www.thetruthaboutmortgage.com/i-pay-my-mortgage-around-the-15th-of-every-month/): Lately, savings accounts have been paying a pretty solid return. Companies like Capital One and Discover have been offering over...
- [Surge in FHA Loans with Piggyback Second Mortgages Could Spell Future Problems](https://www.thetruthaboutmortgage.com/surge-in-fha-loans-with-piggyback-second-mortgages-could-spell-future-problems/): A recent report from CoreLogic revealed that “piggybacked purchase loans” for FHA borrowers reach a new high in June of...
- [More Consumers Think Mortgage Rates Will Go Down and That Home Prices Are Going to Fall](https://www.thetruthaboutmortgage.com/more-consumers-think-mortgage-rates-will-go-down-and-that-home-prices-are-going-to-fall/): The latest monthly national housing survey from Fannie Mae revealed an interesting contradiction. Last month, a new survey-high 39% of...
- [It’s Not a Mortgage Rate Story Anymore](https://www.thetruthaboutmortgage.com/its-not-a-mortgage-rate-story-anymore/): The other day I noticed that mortgage rates were being advertised at some really low levels. Many quotes in the...
- [The Hidden Problem with FHA Loans](https://www.thetruthaboutmortgage.com/the-hidden-problem-with-fha-loans/): If you’re thinking about purchasing a property, you’ve likely sifted through available home loan options to determine what’s best. There...
- [Researchers Says Don’t Wait on the Fed Rate Cut to Refinance Your Mortgage](https://www.thetruthaboutmortgage.com/researchers-says-dont-wait-on-the-fed-rate-cut-to-refinance-your-mortgage/): A new paper from Yale professor Kelly Shue argues that consumers mistakenly wait to take out mortgages and other long-term...
- [Home Buyers Were Urged to Beat the Rush, But Are Now Being Told They Might Want to Wait](https://www.thetruthaboutmortgage.com/home-buyers-were-urged-to-beat-the-rush-but-now-told-that-they-might-want-to-wait/): They say not to time the market. It’s a chump’s game. If anyone had any real success at it, they’d...
- [New Flat-Fee AI-Powered Real Estate Buyer Agent Service Called Landian Launches](https://www.thetruthaboutmortgage.com/new-flat-fee-ai-powered-real-estate-buyer-agent-service-called-landian-launches/): What’s better than taking on the National Association of Realtors (NAR) and winning? Well, launching your own flat-fee, AI-powered real...
- [I am Debt-Averse, But Don’t Mind Having a Mortgage](https://www.thetruthaboutmortgage.com/i-am-debt-averse-but-dont-mind-having-a-mortgage/): I went for a walk today and starting thinking about mortgage debt. I know, pretty lame. But that’s what apparently...
- [New Study Says Mortgage Brokers Save Consumers More Than $10K](https://www.thetruthaboutmortgage.com/new-study-says-mortgage-brokers-save-consumers-more-than-10k/): If you’re looking to save money on your next mortgage, a mortgage broker might be able to help. A firm...
- [Rocket Mortgage Unveils New 2-1 Rate Buydown for Lower Income Home Buyers](https://www.thetruthaboutmortgage.com/rocket-mortgage-unveils-new-2-1-rate-buydown-for-lower-income-home-buyers/): In an effort to boost affordability for those most in need, Rocket Mortgage has launched a new program called “Welcome...
- [How Does Real Estate Commission Work Now?](https://www.thetruthaboutmortgage.com/how-does-real-estate-commission-work-now/): In the not-so-distant past, aka before August 17th, 2024, real estate commissions worked a lot differently. Or at least the...
- [Can Real Estate Commissions Be Financed via the Mortgage?](https://www.thetruthaboutmortgage.com/can-real-estate-commissions-be-financed-via-the-mortgage/): You’ve probably heard about the big NAR settlement that could completely change how real estate works going forward. But if...
- [I Refinanced My Mortgage Without Making a Single Phone Call](https://www.thetruthaboutmortgage.com/i-refinanced-my-mortgage-without-making-a-single-phone-call/): In recent years, new technologies have been rolled out to increase efficiency, lower costs, and improve the borrower experience during...
- [Is It Better to Buy a Home When Mortgage Rates Are High?](https://www.thetruthaboutmortgage.com/is-it-better-to-buy-a-home-when-mortgage-rates-are-high/): Over the years, there’s been a popular argument that it’s better to buy a home when mortgage rates are high....
- [Will Home Prices Go Up When Interest Rates Go Down?](https://www.thetruthaboutmortgage.com/will-home-prices-go-up-when-interest-rates-go-down/): Well, here we are. It took longer than expected, but mortgage rates have finally strung together a decent rally after...
- [Will the Housing Market Crash in 2025?](https://www.thetruthaboutmortgage.com/will-the-housing-market-crash-in-2025/): I got active on Twitter over the past year and change and to my surprise (not sure why it’s surprising...
- [Presidential Candidate Kamala Harris Has a 7-Year Adjustable-Rate Mortgage](https://www.thetruthaboutmortgage.com/presidential-candidate-kamala-harris-has-a-7-year-adjustable-rate-mortgage/): By now you’ve heard the news. President Biden dropped out of the 2024 presidential race and paved the way for...
- [Beware of Inferior Mortgage Refinance Offers from Your Original Lender](https://www.thetruthaboutmortgage.com/beware-of-inferior-mortgage-refinance-offers-from-your-original-lender/): In case you haven’t heard, there’s talk of a “refinance boom” as soon as 2025. Yes, you read that right....
- [More Than 4 Million Mortgages Originated Since 2022 Have Rates Above 6.5%](https://www.thetruthaboutmortgage.com/more-than-4-million-mortgages-originated-since-2022-have-rates-above-6-5/): Want to hear some good news about mortgage rates that involves them being a lot higher than they previously were?...
- [Will Mortgage Rates Ever Go Back Down to 3% Again?](https://www.thetruthaboutmortgage.com/will-mortgage-rates-ever-go-back-down-to-3-again/): They say to never say never. But why? Because if you say it, whatever you said would never happen typically...
- [Can I Mortgage a House That Is Paid Off?](https://www.thetruthaboutmortgage.com/can-i-mortgage-a-house-that-is-paid-off/): Mortgage Q&A: “Can I mortgage a house that is paid off? ” When you own a home without any associated...
- [If I Have a Mortgage, Do I Actually Own My House?](https://www.thetruthaboutmortgage.com/if-i-have-a-mortgage-do-i-actually-own-my-house/): I’ve heard this argument many times, whether in real life or on social media. That if you hold a mortgage...
- [Freddie Mac’s Pilot Program to Buy Second Mortgages Probably Isn’t a Big Deal](https://www.thetruthaboutmortgage.com/freddie-macs-pilot-program-to-buy-second-mortgages-probably-isnt-a-big-deal/): In case you missed it, the Federal Housing Finance Agency (FHFA) granted conditional approval to Freddie Mac to purchase single-family...
- [The Other Major Downside to a Higher Mortgage Rate (Aside From the Payment)](https://www.thetruthaboutmortgage.com/the-other-major-downside-to-a-higher-mortgage-rate/): If you’re currently thinking about buying a home, or somehow in a position to refinance an existing loan, current mortgage...
- [Is a 0% Down Home Purchase Much Different Than a 3% Down Purchase?](https://www.thetruthaboutmortgage.com/is-a-0-down-home-purchase-much-different-than-a-3-down-purchase/): You may have heard that the nation’s largest mortgage lender just rolled out a zero down mortgage. If you were...
- [What Is a Conditional Loan Approval?](https://www.thetruthaboutmortgage.com/what-is-a-conditional-loan-approval/): When you apply for a home loan, an underwriter will review your file in order to make a lending decision....
- [What Is a Mortgage Account Executive?](https://www.thetruthaboutmortgage.com/what-is-a-mortgage-account-executive/): There are many different people involved in the home loan process. I wrote about this in detail already, but probably...
- [HELOC vs. Credit Card: Why the Plastic May Work Out Better](https://www.thetruthaboutmortgage.com/heloc-vs-credit-card-why-the-plastic-may-work-out-better/): You may have heard recently that “tappable” home equity has reached an all-time high, thanks to rapidly appreciating home prices...
- [Want to Move But Have a Super Low Mortgage Rate? Here’s What My Friend Is Doing](https://www.thetruthaboutmortgage.com/want-to-move-but-have-a-super-low-mortgage-rate/): I spoke to a friend the other day who is selling their home and moving up to a bigger one....
- [Which Mortgage Should I Pay Off First?](https://www.thetruthaboutmortgage.com/which-mortgage-should-i-pay-off-first/): Mortgage Q&A : “Which mortgage should I pay off first? ” Today we’re going to talk about strategy if you...
- [Assumable Mortgages: Do They Finally Make Sense with 7%+ Mortgage Rates?](https://www.thetruthaboutmortgage.com/assumable-mortgages-set-to-get-popular-once-rates-rise/): How an assumable mortgage works and why they might get super popular with mortgage interest rates above 7%.
- [What Do Mortgage Loan Processors Do? In Short, Everything to Close Your Loan!](https://www.thetruthaboutmortgage.com/what-do-loan-processors-do/): I’ve already covered the mortgage underwriter’s role, so let’s take a look at what mortgage loan processors do too. After...
- [What Do Mortgage Underwriters Do? Decide If You're Approved!](https://www.thetruthaboutmortgage.com/what-do-underwriters-do/): Here’s some Q&A with regard to the home loan approval process: “What do underwriters do? ” Once you actually apply...
- [Portfolio Lenders: A Solution for Hard to Close Mortgages](https://www.thetruthaboutmortgage.com/use-portfolio-lenders-for-hard-to-close-mortgage-deals/): If you’re having trouble obtaining a home loan, perhaps after speaking to multiple banks, lenders and even a mortgage broker,...
- [How Does Mortgage Refinancing Work?](https://www.thetruthaboutmortgage.com/how-does-refinancing-work/): A detailed overview of how mortgage refinancing works, including examples and a breakdown of different types of refinances.
- [What Mortgage Rate Can I Get With My Credit Score?](https://www.thetruthaboutmortgage.com/what-mortgage-rate-can-i-get-with-my-credit-score/): A reader recently asked, “What mortgage rate can I get with my credit score? ”  So I figured I’d try...
- [Top Mortgage Lenders of 2023: UWM Finally #1 After Rocket's Reign Comes to an End](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-2023/): We’ve finally got data for 2023 and United Wholesale Mortgage (UWM) left no doubt that it was the top mortgage...
- [Why Are Refinance Rates Higher? It All Has to Do With Risk](https://www.thetruthaboutmortgage.com/why-are-refinance-rates-higher/): Mortgage Q&A: “Why are refinance rates higher? ” If you’ve been comparing mortgage rates lately in an effort to save...
- [Does the Fed Control Mortgage Rates?](https://www.thetruthaboutmortgage.com/does-the-fed-control-mortgage-rates/): Mortgage Q&A: “Does the Fed control mortgage rates? ” With all the recent hubbub concerning mortgage rates, and the Fed,...
- [Fannie Mae and Freddie Mac Expect Mortgage Rates to Be Higher for Longer](https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-expect-mortgage-rates-to-be-higher-for-longer/): Well, so much for mortgage rates falling just in time for the spring home buying season. While many expected interest...
- [President Biden Proposes New $10,000 Mortgage Relief Credits](https://www.thetruthaboutmortgage.com/president-biden-proposes-new-10000-mortgage-relief-credits/): The Biden Administration has just unveiled a number of proposals to make homeownership more affordable. Aside from legislation to build...
- [Why Won’t Home Builders Lower Prices If Mortgage Rates Are Way Higher?](https://www.thetruthaboutmortgage.com/why-dont-home-builders-lower-prices-if-mortgage-rates-are-way-higher/): Lately, mortgage rates have surged higher, climbing from as low as 2% to over 8% in some cases. Despite this,...
- [The Power of Extra Mortgage Payments](https://www.thetruthaboutmortgage.com/the-power-of-extra-mortgage-payments/): Mortgages can be viewed very differently. Some see them as a positive financial instrument, a way to free up their...
- [UWM Is Officially the Nation’s Largest Mortgage Lender](https://www.thetruthaboutmortgage.com/uwm-is-officially-the-nations-largest-mortgage-lender/): It’s official. United Wholesale Mortgage (UWM) is the nation’s largest mortgage lender. The Pontiac, Michigan-based wholesale lender took the top...
- [What Is a Mortgage Loan Servicer? The Company That Collects Your Payments](https://www.thetruthaboutmortgage.com/what-is-a-mortgage-loan-servicer/): Perhaps one of the most confusing aspects of getting a mortgage is knowing who you actually pay once the thing...
- [The Refinance Rule of Thumb: Only Refinance Your Mortgage If...](https://www.thetruthaboutmortgage.com/the-refinance-rule-of-thumb/): How Much Lower Should Mortgage Rates Be to Refinance? Unfortunately there is no one-size-fits-all answer to this question Because no...
- [What’s the Best Mortgage for First Time Buyers?](https://www.thetruthaboutmortgage.com/whats-the-best-mortgage-for-first-time-buyers/): If you’re new to real estate and preparing to make an offer on a property, you might be wondering what...
- [Cash Out vs. HELOC vs. Home Equity Loan: Which Is the Best Option Right Now and Why?](https://www.thetruthaboutmortgage.com/cash-out-vs-heloc-vs-home-equity-loan/): It’s time for another mortgage match-up: “Cash out vs. HELOC vs. home equity loan. ” Yes, this is a three-way...
- [15-Year Fixed vs. 30-Year Fixed: The Pros and Cons](https://www.thetruthaboutmortgage.com/30-year-fixed-vs-15-year-fixed/): An in-depth look at the 15-year fixed vs. 30-year fixed mortgage, and the reasons one may be better suited for you.
- [Mortgage Impounds vs. Paying Taxes and Insurance Yourself: The Pros and Cons](https://www.thetruthaboutmortgage.com/mortgage-impounds-vs-paying-taxes-and-insurance-yourself/): If you’ve been researching mortgages, or are in the process of taking out a home loan, you may have come...
- [Is Rent Out and Rent the New Way to Move to a Different House?](https://www.thetruthaboutmortgage.com/is-rent-out-and-rent-the-new-way-to-move-to-a-different-house/): I had a conversation with a friend the other day about his current housing situation. In a nutshell, the home...
- [18 Important Mortgage Refinance Questions Answered](https://www.thetruthaboutmortgage.com/refinance-questions/): With mortgage rates no longer at or near record lows, the refinance question has become a lot more complex. It...
- [Should You Only Buy a House If You Can Afford a 15-Year Fixed Mortgage Payment?](https://www.thetruthaboutmortgage.com/should-you-only-buy-a-house-if-you-can-afford-a-15-year-fixed-mortgage-payment/): I’ve already written at length about the pros and cons of a 15-year fixed mortgage, but some financial experts claim...
- [10 Big Mortgage Myths Proved Wrong, Once and For All](https://www.thetruthaboutmortgage.com/mortgage-myths/): These days, the world is full of misinformation. You can thank the Internet for that, which has led to an...
- [When Should You Start Looking for a House?](https://www.thetruthaboutmortgage.com/when-should-you-start-looking-for-a-house/): Real estate Q&A: “When should you start looking for a house? ” The short answer: Immediately. That is, if you...
- [Does Refinancing Hurt Your Credit Score?](https://www.thetruthaboutmortgage.com/does-refinancing-hurt-your-credit-score/): Mortgage Q&A: “Does refinancing hurt your credit score? ” Everyone seems to be obsessed with their credit scores and what...
- [Do Mortgage Rates Change Daily?](https://www.thetruthaboutmortgage.com/do-mortgage-rates-change-daily/): Similar to stocks and bonds, mortgage rates can move higher or lower daily based on economic reports and market conditions.
- [Are Mortgage Points Worth the Cost?](https://www.thetruthaboutmortgage.com/are-mortgage-points-worth-the-cost/): Mortgage Q&A: “Are mortgage points worth it? ” When taking out a mortgage, whether for a new home purchase or...
- [Mortgage Lingo: 26 Terms You Should Know Before You Apply](https://www.thetruthaboutmortgage.com/mortgage-lingo/): Applying for a mortgage can be stressful, what with all the money that’s on the line. Oh, and the possibility...
- [25 Mortgage Questions You Should Know the Answer To](https://www.thetruthaboutmortgage.com/21-mortgage-questions-that-are-commonly-asked-answered/): The most popular mortgage questions from aspiring home buyers and existing homeowners, all answered in one convenient place.
- [What Is a Trigger Lead?](https://www.thetruthaboutmortgage.com/what-is-a-trigger-lead/): If you’ve recently applied for a home loan and been bombarded by competing offers, a “trigger lead” might be to...
- [How Much Does a Real Estate Agent Make?](https://www.thetruthaboutmortgage.com/how-much-does-a-real-estate-agent-make/): Ever wonder how much that real estate agent you constantly see on bus benches or your grocery store receipts makes?...
- [A Record High Share of Consumers Believe Mortgage Rates Will Go Down Over the Next 12 Months](https://www.thetruthaboutmortgage.com/a-record-high-share-of-consumers-believe-mortgage-rates-will-go-down-over-the-next-12-months/): With the winter break now finally behind us, it’s time to talk mortgage rates again. Lately, they’ve been on the...
- [2024 Mortgage and Real Estate Predictions: Lower Rates and Falling Home Prices?](https://www.thetruthaboutmortgage.com/2024-mortgage-and-real-estate-predictions/): Well, another year is nearly in the books, which means it’s time to look ahead to what the next 365...
- [How to Track Mortgage Rates: It's Easier Than You Might Think](https://www.thetruthaboutmortgage.com/how-to-track-mortgage-rates/): If you’re thinking about buying a home, or refinancing an existing home loan, mortgage rates are likely top of mind....
- [Do We Need a Mortgage MSRP?](https://www.thetruthaboutmortgage.com/do-we-need-a-mortgage-msrp/): Mortgage rate pricing can be a bit of a mystery. And also super complex. I’ve written about it in detail...
- [Mortgage Rates Fall to Lowest Levels Since Spring As Fed Indicates Cuts on the Way in 2024](https://www.thetruthaboutmortgage.com/mortgage-rates-fall-to-lowest-levels-since-spring/): Just when it appeared that the recent rally was running out of steam, mortgage rates sunk even lower. Despite a...
- [It’s Easier to Save More Money When Refinancing a High-Rate Mortgage](https://www.thetruthaboutmortgage.com/its-easier-to-save-more-money-when-refinancing-a-high-rate-mortgage/): Over the past year and change, mortgage refinance applications have fallen off a cliff. We had some of the biggest...
- [K. Hovnanian American Mortgage Review: Big Mortgage Rate Deals for Home Builder Customers](https://www.thetruthaboutmortgage.com/k-hovnanian-american-mortgage-review/): Today we’ll take a look at another home builder’s lender, K. Hovnanian American Mortgage. They are the affiliated lender of...
- [Buy Now, Refinance for Free Deals Aren’t All They're Cracked Up to Be](https://www.thetruthaboutmortgage.com/buy-now-refinance-for-free-deals-arent-all-their-cracked-up-to-be/): Lately, some mortgage lenders have pitched “buy now, refinance for free” offers to get more home buyers to take the...
- [Should I Use the Home Builder’s Mortgage Lender or a Different One?](https://www.thetruthaboutmortgage.com/should-i-use-the-home-builders-mortgage-lender-or-a-different-one/): Lately, new home sales have surged as existing housing supply continues to be hard to come by. This is partially...
- [Will Mortgage Rates Go Down in 2024? Here Are All the Latest Predictions From the Biggest Names](https://www.thetruthaboutmortgage.com/will-mortgage-rates-go-down-in-2024/): Well, another year is nearly in the books, which means it’s time to look ahead at what 2024 might have...
- [Newrez Enters the 1% Down Mortgage Fray with RezSource](https://www.thetruthaboutmortgage.com/newrez-rezsource-1-down-mortgage/): A new week, a new 1% down mortgage product, the latest coming from Fort Washington, Pennsylvania based lender Newrez. Call...
- [HomeAmerican Mortgage Review: Interest Rate Specials for Those Buying a Richmond American Home](https://www.thetruthaboutmortgage.com/homeamerican-mortgage-review/): Today we’ll take a hard look at “HomeAmerican Mortgage,” yet another home builder affiliated mortgage lender. They offer home purchase...
- [Silverton Mortgage Launches 100% Financing Across All Loan Types](https://www.thetruthaboutmortgage.com/silverton-mortgage-launches-100-financing-across-all-loan-types/): Silverton Mortgage has rolled out a series of mortgages that feature 100% financing in light of ongoing affordability woes. Some...
- [2024 FHA Loan Limits Rise to $498,257](https://www.thetruthaboutmortgage.com/2024-fha-loan-limits-rise-to-498257/): The Federal Housing Administration (FHA) announced new loan limits for 2024 this week, bumping up the “floor” on FHA loans...
- [2024 Conforming Loan Limit Climbs to $766,550](https://www.thetruthaboutmortgage.com/2024-conforming-loan-limit-climbs-to-766550/): Another year, another increase in the conforming loan limit, thanks to continued home price gains. The FHFA announced today that...
- [Foreclosures Halted for VA Loan Holders Until June 2024 (Extended to December 31st)](https://www.thetruthaboutmortgage.com/foreclosure-halted-for-va-loan-holders-until-june-2024/): In an effort to keep more veterans and servicemembers in their homes, the VA has paused foreclosures for the next...
- [Guaranteed Rate Launches Lock It, List It: Real Estate Agents Can Secure a Discounted Mortgage Rate for the Buyer Before They List](https://www.thetruthaboutmortgage.com/guaranteed-rate-launches-lock-it-list-it/): A new program called “Lock It, List It” allows real estate agents to secure a mortgage rate for a buyer...
- [Is Now a Good Time to Refinance My Home?](https://www.thetruthaboutmortgage.com/is-now-a-good-time-to-refinance-my-home/): Mortgage Q&A: “Is now a good time to refinance my home? ” If you’re one of the few people asking...
- [Zillow Home Loans Review: Best-in-Class Service Offered By a Household Name, But How Are the Rates?](https://www.thetruthaboutmortgage.com/zillow-home-loans-review/): In the spring of 2019, “Zillow Home Loans” was launched by its parent company Zillow. You probably know them best...
- [Down Payments on Houses Rise to Highest Levels in Over 20 Years](https://www.thetruthaboutmortgage.com/down-payments-on-houses-rise-to-highest-levels-in-over-20-years/): Gone are the days of the zero-down mortgage. At least for the typical home buyer. Instead, the 2023 Profile of...
- [It Now Takes More Than a Decade to Break Even on a Home Purchase](https://www.thetruthaboutmortgage.com/it-now-takes-more-than-a-decade-to-break-even-on-a-home-purchase/): I’ve already written about it not being the best time to buy a home right now, at least from a...
- [What Mortgage Has the Best Interest Rate and Why?](https://www.thetruthaboutmortgage.com/what-mortgage-has-the-best-interest-rate/): The longer the loan term and/or fixed-rate period, the higher the mortgage rate. If you want the cheapest mortgage rate, think shorter.
- [Inspire Home Loans Review: You Might Be Able to Snag Major Savings When Buying a New Home](https://www.thetruthaboutmortgage.com/inspire-home-loans-review/): It’s time to check out “Inspire Home Loans,” which is the lending partner of home builder Century Communities. They pride...
- [Redfin Says It’s the Best Time to Buy a Home Since Mid-September: Should You Buy Now or Hold On?](https://www.thetruthaboutmortgage.com/redfin-says-its-the-best-time-to-buy-a-home-since-mid-september-should-you-buy-now-or-hold-on/): Thanks to a record number of price cuts and a big improvement in mortgage rates, home buying conditions have improved...
- [Toll Brothers Mortgage Review: The Builder's Lender Is Hard to Beat](https://www.thetruthaboutmortgage.com/toll-brothers-mortgage-review/): It’s time to check out “Toll Brothers Mortgage,” which is a subsidiary of home builder Toll Brothers. Toll Brothers is...
- [CEO of Nation’s #1 Mortgage Lender Expects Mortgage Rates to Be Lower Before the Election](https://www.thetruthaboutmortgage.com/ceo-of-nations-1-mortgage-lender-expects-mortgage-rates-to-be-lower-before-the-election/): Mortgage rates finally caught a break last week after steadily rising throughout much of 2023. The 30-year fixed fell about...
- [Taylor Morrison Home Funding Review: Huge Mortgage Rate Buydowns Make Them Hard to Beat](https://www.thetruthaboutmortgage.com/taylor-morrison-home-funding-review/): If you’ve got your eye on a Taylor Morrison home, you may have come across their affiliated lender “Taylor Morrison...
- [Low Mortgage Rates Are the #1 Reason Homeowners Aren't Moving](https://www.thetruthaboutmortgage.com/low-mortgage-rates-are-1-reason-homeowners-arent-moving/): While there has been some debate about the so-called mortgage rate lock-in effect, it appears to be a pretty legit...
- [loanDepot accessZERO: You Can Buy a Home with Zero Down Again](https://www.thetruthaboutmortgage.com/loandepot-accesszero/): In order to make homeownership more accessible, loanDepot has launched a new program called “accessZERO. ” As the name suggests,...
- [Lender Will Split the Difference If You Give Up Your 3% Mortgage Rate](https://www.thetruthaboutmortgage.com/lender-will-split-the-difference-if-you-give-up-your-3-mortgage-rate/): You’ve probably heard of the mortgage rate lock-in effect, where homeowners are unwilling (or unable) to give up their ultra-low...
- [NVR Mortgage Review: A One-Stop Shop for a New Home and a Loan](https://www.thetruthaboutmortgage.com/nvr-mortgage-review/): The fourth largest home builder in the country, NVR, also operates its own financing division called “NVR Mortgage. ” This...
- [Use of VantageScore May Boost Annual Mortgage Volume by $1 Trillion](https://www.thetruthaboutmortgage.com/use-of-vantagescore-may-boost-annual-mortgage-volume-by-1-trillion/): How does an additional $1 trillion in annual home loan origination volume sound? At the moment, it sounds incredible if...
- [KBHS Home Loans Review: Mortgage Rate Specials for Those Who Buy a KB Home](https://www.thetruthaboutmortgage.com/kbhs-home-loans-review/): Today we’ll check out another home builder’s in-house mortgage lender, this time KB Home’s “KBHS Home Loans. ” As the...
- [Are Adjustable-Rate Mortgages Going to Replace Mortgage Rate Buydowns?](https://www.thetruthaboutmortgage.com/are-adjustable-rate-mortgages-going-to-replace-mortgage-rate-buydowns/): Lately, mortgage rate buydowns have been all the rage as a means to reduce home buying costs. This could come...
- [Pulte Mortgage Review: Gain Access to Unique Financing Specials If You Use the Builder's Lender](https://www.thetruthaboutmortgage.com/pulte-mortgage-review/): One of the nation’s largest home builders, PulteGroup, also operates its own financing division called “Pulte Mortgage. ” This is...
- [Higher Mortgage Rates Hurt Sales Volume, Not Home Prices](https://www.thetruthaboutmortgage.com/higher-mortgage-rates-hurt-sales-volume-not-home-prices/): For those of you still wondering why home prices haven’t plummeted, despite significantly higher mortgage rates, it’s because there isn’t...
- [It’s Not a Good Time to Buy a Home and Everyone Knows It](https://www.thetruthaboutmortgage.com/its-not-a-good-time-to-buy-a-home-and-everyone-knows-it/): As if you needed more evidence that it’s not a good time to buy a home. The latest piece comes...
- [An Alternative to Paying the Mortgage with a Credit Card](https://www.thetruthaboutmortgage.com/an-alternative-to-paying-the-mortgage-with-a-credit-card/): This week, I read an article in the WSJ about paying the mortgage with a credit card. Either things are...
- [Is It Time to Start Talking About 9% Mortgage Rates?](https://www.thetruthaboutmortgage.com/9-mortgage-rates/): If you thought 8% mortgage rates were bad, what about 9% mortgage rates? What was once unthinkable is now not...
- [DHI Mortgage Review: The Nation's Largest Home Builder Has Its Own Mortgage Lender](https://www.thetruthaboutmortgage.com/dhi-mortgage-review/): The nation’s largest home builder, D. R. Horton, also has its own affiliated mortgage lender known as “DHI Mortgage. ”...
- [An 8% Mortgage Rate?! Use These Mortgage Charts to Easily Compare Monthly Payments Fast](https://www.thetruthaboutmortgage.com/use-this-mortgage-payment-chart-to-easily-compare-rates/): One of the things prospective home buyers and existing homeowners seem to care most about is mortgage rates. And for...
- [What Is Escrow?](https://www.thetruthaboutmortgage.com/what-is-escrow/): If you have ever purchased a home and applied for a mortgage, you’ve likely come across the term “escrow. ”...
- [8% Mortgage Rates Look Imminent, But Could That Be Their Peak?](https://www.thetruthaboutmortgage.com/8-mortgage-rates-look-imminent-but-could-that-be-their-peak/): On a day when mortgage rates are officially close to hitting 8%, I decided to write a post about why...
- [Now You Can Use ADU Income to Qualify for an FHA Loan](https://www.thetruthaboutmortgage.com/adu-income-to-qualify-for-an-fha-loan/): The U. S. Department of Housing and Urban Development (HUD) announced today that lenders will now be able to count...
- [Lennar Mortgage Review: Known for Offering Big Mortgage Rate Buydowns](https://www.thetruthaboutmortgage.com/lennar-mortgage-review/): Today we’ll check out “Lennar Mortgage,” which is the financing division of parent company Lennar Corp. If you weren’t aware,...
- [You Can Now Search for Homes for Sale by School District on Zillow](https://www.thetruthaboutmortgage.com/you-can-now-search-for-homes-for-sale-by-school-district-on-zillow/): It’s common for home buyers to purchase a property in a certain school district. This ensures their children can attend...
- [Why Did Mortgage Rates Plunge This Week?](https://www.thetruthaboutmortgage.com/why-did-mortgage-rates-plunge-this-week/): If you’ve been keeping track lately, you might be wondering why mortgage rates plunged this week. Last week was a...
- [How to Supercharge the Savings of a Mortgage Rate Buydown](https://www.thetruthaboutmortgage.com/how-to-supercharge-the-savings-of-a-mortgage-rate-buydown/): These days, a lot of home buyers are using mortgage rate buydowns to make the deal work. They are particularly...
- [What Are Caps on Adjustable-Rate Mortgages?](https://www.thetruthaboutmortgage.com/adjustable-rate-mortgage-caps/): The other day I wrote about how adjustable-rate mortgages might soon make a comeback, given how high fixed mortgage rates...
- [Are Adjustable-Rate Mortgages Finally a Good Deal?](https://www.thetruthaboutmortgage.com/are-adjustable-rate-mortgages-finally-a-good-deal/): If you visit most bank/lender websites and navigate to their home loans section, you’ll likely only see fixed-rate mortgages advertised....
- [Mortgage Rates and Home Prices Can Fall Together](https://www.thetruthaboutmortgage.com/mortgage-rates-and-home-prices-can-fall-together/): If you don’t believe mortgage rates and home prices can fall together, just look at what home prices have done...
- [What Happens to Mortgage Rates During a Government Shutdown?](https://www.thetruthaboutmortgage.com/what-happens-to-mortgage-rates-during-a-government-shutdown/): It’s looking more likely that there will be a government shutdown beginning October 1st, which begs the question, what happens...
- [What to Do If Your Adjustable-Rate Mortgage Is About to Adjust Higher](https://www.thetruthaboutmortgage.com/what-to-do-if-your-adjustable-rate-mortgage-is-about-to-adjust/): Recently, a friend of mine with an adjustable-rate mortgage told me his rate was set to adjust significantly higher. His...
- [How to Compare HELOCs From One Lender to the Next](https://www.thetruthaboutmortgage.com/how-to-compare-helocs/): Over the past year or so, home equity lines of credit (HELOCs) have become a lot more popular. As a...
- [Frost Bank Re-Enters Mortgage Biz with a Zero Down Home Loan](https://www.thetruthaboutmortgage.com/frost-bank-re-enters-mortgage-biz-with-a-zero-down-home-loan/): Frost Bank, long absent from the mortgage industry, is back in the biz and rolling out a zero down home...
- [Home Prices Least Affordable in Over Three Decades](https://www.thetruthaboutmortgage.com/home-prices-least-affordable-in-over-three-decades/): If you think home prices are too expensive, you wouldn’t be the only one. A new analysis from First American...
- [Are High Mortgage Rates Here to Stay?](https://www.thetruthaboutmortgage.com/are-high-mortgage-rates-here-to-stay/): Today was a rough day for mortgage rates as the market digested the Fed’s latest outlook, which confirmed its inflation...
- [What Is Cash to Close?](https://www.thetruthaboutmortgage.com/what-is-cash-to-close/): When you take out a mortgage, whether it’s a refinance or a home purchase, you may come across the phrase...
- [Former Ginnie Mae Boss Makes the Case for a Zero Down FHA Loan](https://www.thetruthaboutmortgage.com/former-ginnie-mae-boss-makes-the-case-for-a-zero-down-fha-loan/): Past Ginnie Mae president Ted Tozer has argued that the FHA should lower or completely eliminate its current 3. 5%...
- [Why Are There No Homes for Sale?](https://www.thetruthaboutmortgage.com/why-are-there-no-homes-for-sale/): At last glance, 30-year fixed mortgage rates were sitting above 7%. Despite this, there are virtually no homes for sale....
- [Who Are All the People Involved in the Home Loan Process?](https://www.thetruthaboutmortgage.com/who-are-all-the-people-involved-in-the-home-loan-process/): One interesting aspect of the home loan process is the sheer number of individuals you’ll work with along the way....
- [Guaranteed Rate Launches a 5 Minute Approval for Mortgages](https://www.thetruthaboutmortgage.com/guaranteed-rate-5-minute-approval/): How fast is fast enough? Ask Guaranteed Rate, which just launched “5 Minute Approval” for mortgage applications. This new “innovation”...
- [Roam Assumable Mortgage Platform Allows Home Buyers to Snag Mortgage Rates as Low as 2%](https://www.thetruthaboutmortgage.com/roam-home-review-new-assumable-mortgage-platform/): A new startup called “Roam” has launched a service to make assuming a mortgage painless. The company is backed by...
- [The Silver Lining of High Mortgage Rates](https://www.thetruthaboutmortgage.com/the-silver-lining-of-high-mortgage-rates/): I don’t think it would be much of a stretch to assume nobody likes high mortgage rates. They make it...
- [Homeowners Can Now See How Much They’ll Make Renting a Room on Airbnb](https://www.thetruthaboutmortgage.com/homeowners-can-now-see-how-much-theyll-make-renting-a-room-on-airbnb/): If you peruse real estate listings on Realtor. com, you might come across a new Airbnb integration. This week, the...
- [Fannie Mae Chief Economist Calls Current Housing Market Unusual, Doesn’t Expect It to Change Anytime Soon](https://www.thetruthaboutmortgage.com/fannie-mae-chief-economist-calls-current-housing-market-unusual/): It’s time to check in on the state of the housing market. At last glance, mortgage rates were still above...
- [The Typical Home Sold in the Past Three Months Went for $200,000 More Than the Seller Paid](https://www.thetruthaboutmortgage.com/typical-home-sold-for-200000-more-than-seller-paid/): Lately, there’s been a lot of talk about a lack of affordability, even a potential housing bubble. And it comes...
- [One Really Simple Way to Offset a Higher Mortgage Rate](https://www.thetruthaboutmortgage.com/one-really-simple-way-to-offset-a-higher-mortgage-rate/): We all know mortgage interest rates have increased tremendously. While there were periods of relief here and there, the trajectory...
- [Shark Tank’s Kevin O’Leary Predicts 8% Mortgage Rates](https://www.thetruthaboutmortgage.com/shark-tanks-kevin-oleary-predicts-8-mortgage-rates/): A week ago, it seemed like we were on the fast track to 8% mortgage rates. But then something spectacular...
- [Why Are Lower Job Openings Good for Mortgage Rates?](https://www.thetruthaboutmortgage.com/why-are-lower-job-openings-good-for-mortgage-rates/): This morning, the Job Openings and Labor Turnover Survey (JOLTS report) was released by the Labor Department. It revealed that...
- [Zillow Home Loans Launches a 1% Down Mortgage](https://www.thetruthaboutmortgage.com/zillow-home-loans-1-down-mortgage/): Today, Zillow Home Loans announced its “1% Down Payment” loan program, making them the latest lender to join the near-zero...
- [What Will It Take for Mortgage Rates to Fall Again?](https://www.thetruthaboutmortgage.com/what-will-it-take-for-mortgage-rates-to-fall-again/): It’s been a rough month or so for mortgage rates. If we zoom out even further, it’s been a horrendous...
- [It’s Mortgage Principal, Not Principle](https://www.thetruthaboutmortgage.com/its-mortgage-principal-not-principle/): Principal vs. Principle Attention loan officers, mortgage brokers, real estate agents, and so on The words “principal” and “principle” are...
- [Why Are Mortgage Rates Still Going Up If the Fed Is Done Hiking?](https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-still-going-up-if-the-fed-is-done-hiking/): While Fed rate hike forecasts indicate the worst is behind us, mortgage rates are still going up. In fact, they...
- [Options Other Than Refinancing Your Mortgage](https://www.thetruthaboutmortgage.com/options-other-than-refinancing-your-mortgage/): With 30-year mortgage rates now above 7%, a refinance likely isn’t in the cards for most homeowners. In fact, the...
- [Why Are Mortgage Rates So High?](https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-so-high/): At last glance, the 30-year fixed mortgage was back above 7%, depending on the data source. Prior to late July...
- [3 Reasons Why You Need to Compare Mortgage Brokers Too](https://www.thetruthaboutmortgage.com/compare-mortgage-brokers/): While the most advantageous reason to use a mortgage broker might be their ability to shop your rate with multiple...
- [Today’s Housing Market Risk Factors: Is Real Estate in Trouble?](https://www.thetruthaboutmortgage.com/todays-housing-market-risk-factors/): With mortgage rates exceeding 7% again and home prices reaching new heights, some critics are sounding the alarm. The argument...
- [Zillow and Redfin Join Forces to Push More New Construction Home Sales](https://www.thetruthaboutmortgage.com/zillow-and-redfin-join-forces-to-push-more-new-construction-home-sales/): In a clear sign of the times, Zillow has announced a partnership to syndicate new-construction listings on Redfin. This means...
- [The Hidden Danger of a Higher Mortgage Rate](https://www.thetruthaboutmortgage.com/the-hidden-danger-of-a-higher-mortgage-rate/): Everyone knows mortgage rates aren’t as low as they used to be. Understatement of the decade there. But this doesn’t...
- [Big Jump in Homeowners Saying They’ll Sell in the Next Three Years](https://www.thetruthaboutmortgage.com/big-jump-in-homeowners-saying-theyll-sell-in-the-next-three-years/): Has residential housing supply finally bottomed? Are we finally going to see more single-family homes hit the market, after years...
- [Zillow Says Homeowners Twice as Likely to Sell If Their Mortgage Rate Is Above 5%](https://www.thetruthaboutmortgage.com/zillow-says-homeowners-twice-as-likely-to-sell-if-their-mortgage-rate-is-above-5/): More news on the mortgage rate lock-in effect, this time from Zestimate creator Zillow. The company conducted a survey and...
- [Nearly Half of Homeowners with a Mortgage Are Equity Rich](https://www.thetruthaboutmortgage.com/nearly-half-of-homeowners-with-a-mortgage-are-equity-rich/): While bulls and bears continue to argue the health of the housing market, a new report revealed that most existing...
- [Guaranteed Rate OneDown: The Latest 1% Down Mortgage + $1,000 Toward Lender Fees](https://www.thetruthaboutmortgage.com/guaranteed-rate-onedown/): Another day, another affordable home loan program launches, this time “OneDown” from Guaranteed Rate. As the name implies, you only...
- [Homebuyer Assistance Programs: What's Available These Days and Who Qualifies?](https://www.thetruthaboutmortgage.com/homebuyer-assistance-programs/): It’s no secret that homes just aren’t as affordable as they used to be. An unwelcome combination of significantly higher...
- [The National Average Mortgage Rate Lock-In Effect Is Worth $55,000](https://www.thetruthaboutmortgage.com/the-national-average-mortgage-rate-lock-in-effect-is-worth-55000/): You may have heard the phrase mortgage rate lock-in effect lately. As a quick refresher, it’s a homeowner’s unwillingness to...
- [Carrington Mortgage Launches a 40-Year Mortgage to Tackle Affordability Concerns](https://www.thetruthaboutmortgage.com/carrington-mortgage-launches-a-40-year-mortgage/): It’s been a tough year for the mortgage industry, with origination volume down substantially from the boom years of 2020...
- [Wondering Where Home Prices Go Next? Look at Inventory, Not Mortgage Rates](https://www.thetruthaboutmortgage.com/wondering-where-home-prices-go-next-look-at-inventory-not-mortgage-rates/): There’s been a lot of speculation that home prices would crash as mortgage rates surged. The argument was especially convincing...
- [U.S. Bank Access Home Loan Offers Up to $12,500 in Down Payment Assistance and a $5K Lender Credit](https://www.thetruthaboutmortgage.com/u-s-bank-access-home-loan/): The mortgage deals keep coming, the latest being the new “U. S. Bank Access Home Loan,” which comes with up...
- [Why Are Home Prices Not Dropping?](https://www.thetruthaboutmortgage.com/why-are-home-prices-not-dropping/): Late last year, Zillow said home prices needed to come down about 25% to become affordable again. Around that same...
- [Top Mortgage Lenders in Nevada](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-nevada/): It’s time to check out the top mortgage lenders in Nevada based on their total loan volume. Last year, more...
- [Will Mortgage Rates Go Down in 2023?](https://www.thetruthaboutmortgage.com/will-mortgage-rates-go-down-in-2023/): Well, were about halfway through the year and mortgage rates seem to have settled in around the high 6% range....
- [Top Mortgage Lenders in Florida](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-florida/): Now it’s time to take a look at the top mortgage lenders in Florida based on 2022 volume. The Sunshine...
- [Guild Mortgage Launches 1% Down Home Loan Combined with a Temporary Rate Buydown](https://www.thetruthaboutmortgage.com/guild-mortgage-launches-1-down-combined-with-a-temporary-buydown/): In the past few months, 1% down payment mortgages have returned with a vengeance. We’ve already seen Rocket Mortgage ONE+...
- [Chase Offering $200 If It Can’t Meet or Beat Your Mortgage Offer](https://www.thetruthaboutmortgage.com/chase-offering-200-if-it-cant-meet-or-beat-your-mortgage-offer/): The mortgage space is unique from a lot of other businesses in that the customer isn’t always right. And special...
- [Navy Federal No-Refi Rate Drop: Lower Your Mortgage Rate for Just $250](https://www.thetruthaboutmortgage.com/navy-federal-no-refi-rate-drop/): Lately, there’s been a lot of talk about buying now and refinancing later, once mortgage rates drop. Of course, that’s...
- [Top Illinois Mortgage Lenders](https://www.thetruthaboutmortgage.com/top-illinois-mortgage-lenders/): There was a new top mortgage lender in Illinois in 2022, per the latest HMDA data. And it was Chicago’s...
- [Why Are Mortgage Rates Different?](https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-different/): Mortgage rate Q&A: “Why are mortgage rates different? ” Why is the sky blue? Why are clouds white? Why won’t...
- [CFPB: Choosing a Cheaper Mortgage Lender Could Save You $100 a Month](https://www.thetruthaboutmortgage.com/cfpb-mortgage-rates-range-by-a-half-percent-among-lenders/): You’ve heard it a million times, but I’ll say it again. It pays to shop around for your mortgage. Freddie...
- [Why Are Mortgage Rate Spreads So High Right Now?](https://www.thetruthaboutmortgage.com/why-are-mortgage-rate-spreads-so-high-right-now/): If you haven’t heard, the 30-year fixed has once again surpassed 7%, at least by some accounts. After settling in...
- [Movement Mortgage Launches Zero Down FHA Loan](https://www.thetruthaboutmortgage.com/movement-mortgage-launches-zero-down-fha-loan/): As housing affordability wanes, mortgage lenders have gotten increasingly creative to help borrowers qualify. The latest innovative product is “Movement...
- [Rocket Mortgage ONE+: The Latest 1% Down Home Loan Program](https://www.thetruthaboutmortgage.com/rocket-mortgage-one/): Rocket Mortgage is the latest company to offer a 1% down payment mortgage to address ongoing affordability concerns. The new...
- [What Is the Mortgage Rate Lock-In Effect?](https://www.thetruthaboutmortgage.com/what-is-the-mortgage-rate-lock-in-effect/): Those looking to buy a home, along with existing owners, may have come across the term “mortgage rate lock-in effect”...
- [Top Mortgage Lenders in California](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-california/): Thanks to new data, it’s time to take a fresh look at the top mortgage lenders in California in 2022....
- [Temporary vs. Permanent Mortgage Buydowns: Which to Choose and Why](https://www.thetruthaboutmortgage.com/temporary-vs-permanent-mortgage-buydowns/): Mortgage rates aren’t so low these days. In fact, they’ve basically doubled since early 2022. While this clearly isn’t great...
- [Top Mortgage Lenders in 2022: Rocket Squeaks Past UWM for #1 Spot](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-2022/): Last year, Rocket Mortgage was the top mortgage lender in the nation, per the latest HMDA data. While that wasn’t...
- [27 States Oppose New Fannie/Freddie Mortgage Fees That Appear to Punish High FICO Score Borrowers](https://www.thetruthaboutmortgage.com/27-states-oppose-new-fannie-freddie-mortgage-fees/): Those new mortgage fees you’ve probably heard about are causing quite a stir. So much so that Pennsylvania State Treasurer...
- [Nearly Half of Home Loan Applicants Paid Mortgage Points in 2022](https://www.thetruthaboutmortgage.com/nearly-half-of-home-loan-applicants-paid-mortgage-points-in-2022/): A new analysis from Zillow revealed that nearly half of mortgage applicants opted to pay points when taking out a...
- [Fannie Mae Is Predicting Much Lower Mortgage Rates by Year End](https://www.thetruthaboutmortgage.com/fannie-mae-is-predicting-much-lower-mortgage-rates-by-year-end/): In its latest housing forecast, Fannie Mae has become much more optimistic with regard to mortgage rates. We’re talking 30-year...
- [Mortgage Rate Shopping: 10 Quick Tips to Score a Better Deal on Your Home Loan](https://www.thetruthaboutmortgage.com/mortgage-rate-shopping-10-tips-to-get-a-better-deal/): It’s time to talk mortgage rate shopping, which has become an absolute must in 2023. Simply put, you’ve got to...
- [Home Prices Just Experienced the Biggest Annual Decline Since 2012](https://www.thetruthaboutmortgage.com/home-prices-just-experienced-the-biggest-annual-decline-since-2012/): March was a rough month for home prices. The median U. S. home price fell a sizable 3. 3% in...
- [We Need 5.5% Mortgage Rates (or Lower) to Attract Home Buyers](https://www.thetruthaboutmortgage.com/we-need-5-5-mortgage-rates-to-attract-home-buyers/): A new survey from John Burns Research & Consulting found that 5. 5% is the “magic mortgage rate. ” By...
- [Nation's Top Mortgage Lender Launches a 1% Down Payment Home Loan](https://www.thetruthaboutmortgage.com/nations-top-mortgage-lender-launches-a-1-down-payment-home-loan/): The nation’s leading mortgage lender, United Wholesale Mortgage, has re-launched the 1% down payment home loan. It comes at a...
- [Zillow Now Lets Users Filter Homes by Monthly Payment](https://www.thetruthaboutmortgage.com/zillow-now-lets-users-filter-homes-by-monthly-payment/): Due to ongoing mortgage rate volatility, Zillow has launched a new feature that lets users search by monthly payment. Traditionally,...
- [Homepoint Exits Mortgage Origination, Sells Wholesale Division to The Loan Store](https://www.thetruthaboutmortgage.com/homepoint-exits-mortgage-origination-sells-wholesale-division-to-the-loan-store/): More mortgage M&A activity today. Homepoint announced this morning that it has entered into a definitive agreement to sell the...
- [Home Prices Are Still Too High, But Will They Actually Come Down?](https://www.thetruthaboutmortgage.com/home-prices-are-still-too-high-but-will-they-actually-come-down/): The housing market has been stubbornly frustrating for prospective home buyers. Not only have mortgage rates doubled over the past...
- [Moon Mortgage Launches a Crypto Mortgage to Materialize Digital Wealth](https://www.thetruthaboutmortgage.com/moon-mortgage-crypto-mortgage/): Crypto lending platform Moon Mortgage has launched its own “crypto mortgage. ” The move is designed to “help crypto investors...
- [Rocket Mortgage Launches BUY+: Get a 1.5% Credit When Using a Rocket Homes Partner Agent](https://www.thetruthaboutmortgage.com/rocket-mortgage-buy-plus/): Rocket Mortgage has rolled out a new program called “BUY+” that offers a credit of up to $10,000 when you...
- [SoFi Mortgage Review: Pricing Perks and an Online Application But No FHA or VA Loans](https://www.thetruthaboutmortgage.com/sofi-mortgage-review/): Today we’ll do a deep dive into SoFi, short for Social Finance, which offers mortgages, personal loans, student loan refinancing,...
- [Top Adjustable-Rate Mortgage Lenders](https://www.thetruthaboutmortgage.com/top-adjustable-rate-mortgage-lenders/): With fixed-rate mortgages no longer on sale, I thought it’d be useful to take a look at the top adjustable-rate...
- [Rocket Visa Signature Card: Rewards Can Be Used Toward Down Payment on a Home or an Existing Mortgage Balance](https://www.thetruthaboutmortgage.com/rocket-visa-signature-card/): The nation’s largest mortgage lender has launched a credit card, known as the “Rocket Visa Signature Card. ” It allows...
- ['California Dream For All' Home Loan Requires Zero Down Payment for Future Appreciation](https://www.thetruthaboutmortgage.com/california-dream-for-all-shared-appreciation-loan/): The California Housing Finance Agency has launched a new shared appreciation loan for home buyers. The program, known as the...
- [Why Do Mortgage Rates Go Down When the Fed Raises Rates?](https://www.thetruthaboutmortgage.com/why-do-mortgage-rates-go-down-when-the-fed-raises-rates/): Yesterday, the Federal Reserve raised its benchmark federal funds rate a quarter point (. 25%). As a result, some may...
- [Median Down Payment on a House Falls to 10%, Compared to 14% a Year Ago](https://www.thetruthaboutmortgage.com/median-down-payment-on-a-house-falls-to-10-down-from-14-a-year-ago/): Down payments are falling as the housing market slows and competition wanes. A new report from Redfin revealed that the...
- [Top Mortgage Lenders in Oklahoma](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-oklahoma/): It’s time to check out the top mortgage lenders in Oklahoma based on closed loan volume. These are the companies...
- [Top Mortgage Lenders in Louisiana](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-louisiana/): Today we’ll check out who the top mortgage lenders in Louisiana were based on the most recent year’s loan volume....
- [Mortgage Rates Are Very Volatile Right Now. Here’s What to Watch For](https://www.thetruthaboutmortgage.com/mortgage-rates-are-very-volatile-right-now-heres-what-to-watch-for/): Mortgage rates fell. Then mortgage rates rose. Then mortgage rates fell again. What the heck is going on out there?...
- [What Happens to My Mortgage If My Bank Fails?](https://www.thetruthaboutmortgage.com/what-happens-to-my-mortgage-if-my-bank-fails/): Mortgage Q&A: “What happens to my mortgage if my bank fails? ” It’s happening again – banks are failing. The...
- [Here's an Argument for the Wait to Buy a Home Crowd](https://www.thetruthaboutmortgage.com/heres-an-argument-for-the-wait-to-buy-a-home-crowd/): A lot of folks have pondered the buy now or buy later question when it comes to a home purchase....
- [Mortgage Rates vs. Bank Failures](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-bank-failures/): You’ve heard about, you know about it. Last week, Silicon Valley Bank was the target of a bank run, prompting...
- [Veterans United Home Loans Review: Is the Nation's Largest VA Lender a Good Choice?](https://www.thetruthaboutmortgage.com/veterans-united-home-loans-review/): If you’re an active duty or veteran homeowner (or aspiring home buyer), chances are you’ve heard of Veterans United Home...
- [Guaranteed Rate Same Day Mortgage: Get a Home Loan Approval in 1 Business Day](https://www.thetruthaboutmortgage.com/guaranteed-rate-brings-back-same-day-mortgage-underwriting/): Back in the good old days, pre-mortgage crisis, you could get a fully-underwritten mortgage approval the same day. In fact,...
- [94% of Homeowners Who Refinanced Recently Raised Their Mortgage Rate a Lot in the Process](https://www.thetruthaboutmortgage.com/94-of-homeowners-who-refinanced-recently-raised-their-mortgage-rate-a-lot-in-the-process/): Typically, borrowers refinance their home loans to take advantage of lower mortgage rates. But recently, the average refinance has resulted...
- [Today’s Homeowners Can’t Afford to Sell](https://www.thetruthaboutmortgage.com/todays-homeowners-cant-afford-to-sell/): The housing bears have ratcheted up their rhetoric lately, calling for an impeding crash. It’s not a crazy notion with...
- [Why You Might Still See 5% Mortgage Rates](https://www.thetruthaboutmortgage.com/why-you-might-still-be-seeing-5-mortgage-rates/): It’s been tough sledding for mortgage rates over the past month. They were actually on a roll to start off...
- [Mortgage Rates vs. Home Prices: Is There Really an Inverse Relationship?](https://www.thetruthaboutmortgage.com/home-prices-vs-mortgage-rates/): Mortgage Q&A: “Mortgage rates vs. home prices. ” Today, we’ll look at the impact of home prices and mortgage rates...
- [FHA vs. Conventional Loan: These Charts Can Help You Determine Which Is Cheaper](https://www.thetruthaboutmortgage.com/fha-loan-vs-conventional-loan/): An in-depth look at two of the most popular mortgage options available today, the FHA loan and the conventional loan.
- [Better's 'Equity Unlocker' Allows Amazon Employees to Buy Homes with Company Stock](https://www.thetruthaboutmortgage.com/better-equity-unlocker/): Better Mortgage has launched a new product called “Equity Unlocker” to help Amazon employees purchase homes. The innovative loan program...
- [Top VA Loan Lenders in 2022: Veterans United #1 Thanks to Large Home Purchase Share](https://www.thetruthaboutmortgage.com/top-va-loan-lenders/): If you’re curious who the top VA loan lenders were last year, wonder no longer. The biggest was Veterans United...
- [VA Funding Fee Being Reduced for Home Purchases and Cash Out Refis](https://www.thetruthaboutmortgage.com/va-funding-fee-being-reduced-for-home-purchases-and-cash-out-refis/): In an effort to make mortgage costs a little more bearable, the U. S. Department of Veterans Affairs (VA) is...
- [Is It Worth Using a Mortgage Lender Now for the Promise of Waived Fees in the Future?](https://www.thetruthaboutmortgage.com/is-it-worth-using-a-mortgage-lender-now-for-the-promise-of-waived-fees-in-the-future/): These days, mortgage rates aren’t as cheap as they used to be. And that is the understatement of the century....
- [Can Free and Clear Homeowners Save the Housing Market?](https://www.thetruthaboutmortgage.com/can-free-and-clear-homeowners-save-the-housing-market/): The housing market is in trouble. The latest blow being mortgage rates returning to 7%. But the ongoing issue has...
- [Annual Mortgage Insurance Premium on FHA Loans Reduced 30 Basis Points](https://www.thetruthaboutmortgage.com/annual-mortgage-insurance-premium-on-fha-loans-reduced-30-basis-points/): In an effort to make homeownership more affordable, the U. S. Department of Housing and Urban Development (HUD) is reducing...
- [Why Are Mortgage Rates Going Up Again?](https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-going-up-again/): It feels like déjà vu. Mortgage rates are going up again. What gives? I thought they peaked. Not so fast....
- [10 Things You Should Do Before Applying for a Mortgage](https://www.thetruthaboutmortgage.com/10-things-you-should-do-before-applying-for-a-mortgage/): I recently wrote that you should look for a mortgage before searching for a property to buy because unless you...
- [What Time of Year Are Mortgage Rates Lowest? Here's What The Data Says](https://www.thetruthaboutmortgage.com/when-are-mortgage-rates-lowest/): Mortgage Q&A: “What time of year are mortgage rates lowest? ” We’re all looking for an angle, especially if it’ll...
- [Why the “It’s the 2008 Housing Crisis All Over Again” Argument Falls Short](https://www.thetruthaboutmortgage.com/why-the-its-the-2008-housing-crisis-all-over-again-argument-falls-short/): There’s been a lot of buzz lately regarding another 2008 housing crisis unfolding in 2023. I’m hearing the phrases underwater...
- [There Is No Free Mortgage](https://www.thetruthaboutmortgage.com/there-is-no-free-mortgage/): You’ve heard the term “no free lunch. ” Well, the same is true of home loans. There is no “free...
- [Better Mortgage Review: They Promise Speed But at What Price?](https://www.thetruthaboutmortgage.com/better-mortgage-review/): One of the first “fintech” mortgage lenders that came into existence in recent years was Better Mortgage. Launched in 2014,...
- [How the Fed Could Benefit from Lower Mortgage Rates](https://www.thetruthaboutmortgage.com/how-the-fed-could-benefit-from-lower-mortgage-rates/): The Fed has played a major role in consumer mortgage rates over the past decade and change. Back in 2008,...
- [What Is the Easiest Type of Mortgage to Get?](https://www.thetruthaboutmortgage.com/what-is-the-easiest-type-of-mortgage-to-get/): Mortgage Q&A: “What is the easiest type of mortgage to get? ” Relative to other types of loans, it can...
- [Top Mortgage Lenders in DC](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-dc/): Now it’s time to check out the top mortgage lenders in DC, the capital of the United States. In 2021,...
- [Why You May Want a 780+ FICO Score When Applying for a Mortgage](https://www.thetruthaboutmortgage.com/780-fico-score-mortgage/): It used to be that a 720 FICO score was all you needed to ensure you qualified for the lowest...
- [Mortgage Co-Borrower vs. Co-Signer](https://www.thetruthaboutmortgage.com/mortgage-co-borrower-vs-co-signer/): Today we’ll discuss the key differences between a mortgage co-borrower and a mortgage co-signer. While the two phrases sound pretty...
- [Top Mortgage Lenders in Georgia](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-georgia/): It’s time to check out the top mortgage lenders in Georgia based on their 2021 loan volume. These mortgage companies...
- [A 1% Decrease in Mortgage Rates Is Worth an 11% Drop in Home Prices](https://www.thetruthaboutmortgage.com/a-1-decrease-in-mortgage-rates-is-worth-an-11-drop-in-home-prices/): A recent podcast from First American economists discussed the current state of the housing market. The subject was the rebalancing...
- [What Are Seller Concessions?](https://www.thetruthaboutmortgage.com/what-are-seller-concessions/): Now that the housing market is turning in favor of home buyers, the phrase “seller concessions” might become a lot...
- [Nearly Half of Homeowners Regret Their Adjustable-Rate Mortgage](https://www.thetruthaboutmortgage.com/nearly-half-of-homeowners-regret-their-adjustable-rate-mortgage/): A new survey from U. S. News & World Report found that nearly half of homeowners with adjustable-rate mortgages regret...
- [Wells Fargo to Exit Correspondent, Shrink Mortgage Business, Focus on Bank Clients and Minority Borrowers](https://www.thetruthaboutmortgage.com/wells-fargo-to-exit-correspondent-lending-shrink-mortgage-business/): Despite long being the #1 mortgage lender in the country, Wells Fargo has announced plans to shrink its mortgage business....
- [Why Mortgage Lenders Are Requiring Upfront Points](https://www.thetruthaboutmortgage.com/why-do-mortgage-lenders-charge-points/): There’s been a recent phenomenon where mortgage lenders are requiring borrowers to pay upfront points when obtaining a home loan....
- [2023 Mortgage Rate Predictions: All Eyes on Inflation](https://www.thetruthaboutmortgage.com/2023-mortgage-rate-predictions/): Another year has nearly passed, which means it’s time for the 2023 mortgage rate predictions. I think we can all...
- [Top Mortgage Lenders in Kentucky](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-kentucky/): It’s time to find out who the top mortgage lenders in Kentucky are, based on total loan volume. More than...
- [Mortgage Broker Magnate Ishbia to Buy the Phoenix Suns and Mercury](https://www.thetruthaboutmortgage.com/uwm-ishbia-to-buy-the-phoenix-suns-and-mercury/): In a rather surprising move, United Wholesale Mortgage president and CEO Mat Ishbia is set to acquire the Phoenix Suns...
- [Top Mortgage Lenders in Connecticut](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-connecticut/): Let’s talk about the top mortgage lenders in Connecticut, based on their total loan volume. Nearly 700 companies originated home...
- [Cash Out Refinance Fees Are Going Up in Early 2023](https://www.thetruthaboutmortgage.com/cash-out-refinance-fees-are-going-up-in-early-2023/): While most homeowners probably don’t have a refinance on their radar (due to the big jump in interest rates), take...
- [Top Mortgage Lenders in Hawaii](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-hawaii/): Today we’ll check out the top mortgage lenders in Hawaii based on total loan volume. These companies closed the most...
- [Top Mortgage Lenders in Idaho](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-idaho/): Let’s take a look at the top mortgage lenders in Idaho, based on annual loan origination volume. The Gem State...
- [2023 Mortgage and Real Estate Predictions](https://www.thetruthaboutmortgage.com/2023-mortgage-and-real-estate-predictions/): It’s nearly 2023, which means it’s time for a fresh batch of mortgage and real estate predictions for the new...
- [Top Mortgage Lenders in Alabama](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-alabama/): Today we’ll take a look at the top mortgage lenders in Alabama, based on their most recent year’s loan volume....
- [The Beauty of High Mortgage Rates](https://www.thetruthaboutmortgage.com/the-beauty-of-high-mortgage-rates/): High mortgage rates are bad. They reduce affordability, lead to fewer home sales, and can cause lots of industry-related job...
- [How to Shop for a Mortgage](https://www.thetruthaboutmortgage.com/how-to-shop-for-a-mortgage/): Mortgage basics: “How to shop for a mortgage. ” Every now and then I focus on mortgage 101 because it...
- [2023 Conforming Loan Limits Rise to $726,200](https://www.thetruthaboutmortgage.com/2023-conforming-loan-limits/): A dollar ain’t worth what it used to be; just take a look at the newly released 2023 conforming loan...
- [Mortgage Rates vs. CPI: Less Inflation = Lower Rates](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-cpi/): While it seemed mortgage rates just couldn’t catch a break, a positive CPI report has led to a huge rally....
- [UWM Becomes Top Mortgage Lender in the Nation](https://www.thetruthaboutmortgage.com/uwm-becomes-top-mortgage-lender-in-the-nation/): Similar to how Rocket Mortgage overtook Wells Fargo, United Wholesale Mortgage (UWM) has now risen above Rocket to become the...
- [loanDepot Digital HELOC Launched: Paperless Process and Funding in as Little as 7 Days](https://www.thetruthaboutmortgage.com/loandepot-digital-heloc/): Direct lender loanDepot has launched a so-called “Digital HELOC” to help homeowners tap into their massive amounts of home equity....
- [Top Mortgage Lenders in Wisconsin](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-wisconsin/): Now we’ll rank the top mortgage lenders in Wisconsin, based on the most recent year’s completed loan volume. These are...
- [Rocket Rewards Loyalty Program Launched by Rocket Mortgage](https://www.thetruthaboutmortgage.com/rocket-rewards-loyalty-program/): The nation’s number one lender, Rocket Mortgage, has launched a new loyalty program called “Rocket Rewards. ” Similar to other...
- [How Mortgage Interest Works](https://www.thetruthaboutmortgage.com/how-mortgage-interest-works/): A friend of mine asked me over the weekend how mortgage interest works? His coworker had posed a similar question...
- [Who Cares What Mortgage Rates Were in the 1980s?](https://www.thetruthaboutmortgage.com/mortgage-rates-in-the-1980s/): Month after month, and week after week, articles continue to focus on mortgage rates in the 1980s, to seemingly paint...
- [FICO 10 T and VantageScore 4.0 Approved for Fannie Mae and Freddie Mac Mortgages](https://www.thetruthaboutmortgage.com/fico-10-t-and-vantagescore-4-0-approved-for-fannie-mae-and-freddie-mac-mortgages/): Two new credit scores will be used if and when you apply for a mortgage backed by Fannie Mae or...
- [Home Prices Need to Fall 25%, But They Probably Won’t](https://www.thetruthaboutmortgage.com/home-prices-need-to-fall-25-but-they-probably-wont/): A new report from Zillow revealed that home prices need to come down by about 25% to become affordable again....
- [Top Mortgage Lenders in Missouri](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-missouri/): Today we’ll take a look at the top mortgage lenders in Missouri, based on loan volume. This means the biggest...
- [The Case for Sub-5% Mortgage Rates by 2023](https://www.thetruthaboutmortgage.com/the-case-for-sub-5-mortgage-rates-by-2023/): While mortgage rates have a good chance of getting worse before they get better, hope might be on the horizon....
- [Buy a House Before Mortgage Rates Come Back Down?](https://www.thetruthaboutmortgage.com/buy-a-house-before-mortgage-rates-come-back-down/): There is a plausible scenario where mortgage rates continue higher for a short period and then eventually correct. Possibly as...
- [Top Mortgage Lenders in Indiana](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-indiana/): Now let’s talk about the top mortgage lenders in Indiana, based on their most recent year’s loan volume. In 2021,...
- [Are Mortgage Rates Going to 8.5% Next?](https://www.thetruthaboutmortgage.com/are-mortgage-rates-going-to-8-5-next/): The year 2022 has been absolutely dreadful with respect to mortgage rates. We’ve seen the popular 30-year fixed rise from...
- [Top Mortgage Lenders in South Carolina](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-south-carolina/): It’s time to check out the top mortgage lenders in South Carolina, based on who did the most business. Last...
- [Now You Can Get a Mortgage at Walmart](https://www.thetruthaboutmortgage.com/walmart-mortgage/): It’s official, you can get a mortgage at Walmart now. So next time you’re grocery shopping, or picking up other...
- [Top Mortgage Lenders in Minnesota](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-minnesota/): Let’s check out the top mortgage lenders in Minnesota based on the most recent year’s loan volume. Around 750 mortgage...
- [What Is Inflation Buster from Rocket Mortgage?](https://www.thetruthaboutmortgage.com/what-is-inflation-buster-from-rocket-mortgage/): I was watching some football this weekend and happened upon an ad for “Inflation Buster” from Rocket Mortgage. I’m always...
- [The Truth About Falling Home Prices](https://www.thetruthaboutmortgage.com/the-truth-about-falling-home-prices/): Real estate doom and gloom articles are going to ramp up big time in coming months, if they haven’t already....
- [Top Reverse Mortgage Lenders](https://www.thetruthaboutmortgage.com/top-reverse-mortgage-lenders/): If you’re a senior, you might be wondering who the top reverse mortgage lenders in the nation are. Unlike the...
- [Marry the House, Date the Rate. What?](https://www.thetruthaboutmortgage.com/marry-the-house-date-the-rate/): Lately, I’ve been seeing the old “marry the house, date the rate” adage thrown around a lot. The idea is...
- [Crowdfunded Zero Down Mortgage Launched as Housing Market Peaks](https://www.thetruthaboutmortgage.com/crowdfunded-zero-down-mortgage-launched/): A credit union out of Cheyenne, Wyoming has launched a crowdfunded, zero down mortgage loan for its customers. It comes...
- [Top Mortgage Lenders in Tennessee](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-tennessee/): Today we’ll take a hard look at the top mortgage lenders in Tennessee by loan volume. Last year, nearly 1,200...
- [Your Credit Score Alone Can Make or Break Your HELOC Rate](https://www.thetruthaboutmortgage.com/heloc-credit-score/): You’ve probably heard that maintaining an excellent credit score is very important when it comes to getting a mortgage. Not...
- [Why Homeowners Aren’t Selling](https://www.thetruthaboutmortgage.com/why-homeowners-arent-selling/): With all the talk of a housing market crash, there’s not a lot of data to support it. Sure, home...
- [Top Mortgage Lenders in Ohio](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-ohio/): Today we’ll take a look at the top mortgage lenders in Ohio. Last year, nearly 1,000 mortgage companies originated about...
- [Watch Out for 8% Mortgage Rates](https://www.thetruthaboutmortgage.com/8-percent-mortgage-rates/): Now that interest rates have resumed their upward climb, do we have to worry about 8% mortgage rates next? Back...
- [Top Mortgage Lenders in Oregon](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-oregon/): Today we’ll take a look at the top mortgage lenders in Oregon, based on total loan volume. Nearly 700 different...
- [Top Mortgage Lenders in Utah](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-utah/): If you’re curious who the top mortgage lenders in Utah are, I’ve got some answers. Last year, more than 500...
- [Housing Crash Imminent?  The National LTV Is Below 30%](https://www.thetruthaboutmortgage.com/housing-crash-imminent-the-national-ltv-is-below-30/): The topic du jour lately has been a housing market on the edge of disaster. But no one can quite...
- [Top Mortgage Lenders in Michigan](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-michigan/): Let’s check out the top mortgage lenders in Michigan based on the most recent year’s loan volume. The state of...
- [Top Mortgage Lenders in Maryland](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-maryland/): Today we’ll have a look at the top mortgage lenders in Maryland based on their annual loan volume. Like other...
- [Bank of America Launches a Zero Down Mortgage](https://www.thetruthaboutmortgage.com/bank-of-america-zero-down-mortgage/): This week, Bank of America unveiled a zero down mortgage option as part of their Community Homeownership Commitment. In short,...
- [Home Equity Loans 101: Everything You Need to Know](https://www.thetruthaboutmortgage.com/home-equity-loan/): Today we’re going to talk about the “home equity loan,” which is quickly becoming all the rage with mortgage rates...
- [Top Mortgage Lenders in Pennsylvania](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-pennsylvania/): Today we’ll take a look at the top mortgage lenders in Pennsylvania based on their annual loan volume. The state...
- [The Temporary Buydown: How to Get a Lower Rate the First Couple Years on Your Mortgage](https://www.thetruthaboutmortgage.com/buydown-mortgage/): Today we’re going to talk about a “temporary buydown,” the latest effort by the mortgage industry to provide much-needed payment...
- [Top Mortgage Lenders in the State of Massachusetts](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-massachusetts/): Now let’s check out the top mortgage lenders in Massachusetts, based on loan volume. In 2021, roughly $164 billion in...
- [4.5% Mortgage Rates in 2023?  That’s the Latest Estimate from Fannie Mae](https://www.thetruthaboutmortgage.com/4-5-mortgage-rates-in-2023/): Might 2023 be good to mortgage rates? If you believe the latest Housing Forecast from Fannie Mae, then yes. Most...
- [Orchard Mortgage Review: A Tech-Enabled Mortgage Broker That Wants to Transform the Stale Home Buying Process](https://www.thetruthaboutmortgage.com/orchard-mortgage-review/): Today we’ll check out “Orchard Mortgage,” formerly known as Orchard Home Loans. The direct lender is backed by its parent...
- [Could a 50-Year Fixed Mortgage Finally Solve the Affordability Crisis?](https://www.thetruthaboutmortgage.com/50-year-mortgage/): With mortgage rates nearly double what they used to be, you might wonder if an alternative product like a “50-year...
- [Top Mortgage Lenders in North Carolina](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-north-carolina/): Despite being a big banking hub, the top mortgage lenders in North Carolina are mostly nonbanks. In fact, just three...
- [A Severe Housing Downturn Is Now Possible](https://www.thetruthaboutmortgage.com/a-severe-housing-downturn-is-now-possible/): Sound the alarm. A severe housing downturn may now be in the cards in the United States. That is, if...
- [The Top Refinance Companies By Loan Volume Last Year](https://www.thetruthaboutmortgage.com/top-refinance-companies/): Now it’s time to take a look at the top refinance companies in the country, based on who closed the...
- [Top Mortgage Lenders in New Jersey](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-new-jersey/): Today we’ll do a deep dive into the top mortgage lenders in New Jersey. Using HMDA data, we can see...
- [Half of Americans Don’t Even Know What a Mortgage Is?](https://www.thetruthaboutmortgage.com/half-of-americans-dont-even-know-what-a-mortgage-is/): A new shock poll (I just wanted to utter that phrase) found that half of Americans don’t even know what...
- [Top Mortgage Lenders in Virginia](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-virginia/): Now we’ll check out the top mortgage lenders in Virginia, which like many other states, was led by Rocket Mortgage....
- [Why Is the Housing Market Cooling? And Should We Worry About a Bubble Bursting?](https://www.thetruthaboutmortgage.com/why-is-the-housing-market-cooling/): The housing market is cooling. There’s really no debate. Things are slowing down. You can mostly thank a doubling in...
- [Top Mortgage Lenders in Colorado](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-colorado/): Today we’ll take a look at the top mortgage lenders in Colorado. Interestingly, the top lender in the state isn’t...
- [Top Mortgage Lenders in New York](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-new-york/): Now let’s take a look at the top mortgage lenders in New York, based on overall loan volume produced last...
- [Mortgage Rate Predictions for the Rest of the Year (2022)](https://www.thetruthaboutmortgage.com/mortgage-rate-predictions-for-the-rest-of-the-year-2022/): With all the seesaw movement in the first eight months of 2022, I wanted to throw out some mortgage rate...
- [Arvest Central Mortgage Review: the Top Mortgage Lender in the State of Arkansas](https://www.thetruthaboutmortgage.com/arvest-central-mortgage-review/): If you reside in Arkansas or a nearby state, chances are you’ve heard of Arvest Central Mortgage. Or perhaps you...
- [Top Mortgage Lenders in Washington State](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-washington-state/): If you reside in the Pacific Northwest, you might wonder who the top mortgage lenders in Washington State are. Yes,...
- [40-Year Mortgages: Do They Make Any Sense?](https://www.thetruthaboutmortgage.com/do-40-year-mortgages-make-any-sense/): Interested in a 40-Year Fixed Mortgage? If you need even more time to pay off your mortgage Or need to...
- [Top Mortgage Lenders in Arizona](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-arizona/): If you’re curious who the top mortgage lenders in Arizona are, you’ve come to the right place. I’ve compiled several...
- [Does Having A Mortgage Help Your Credit Score? Your Mileage May Vary, Here's Why](https://www.thetruthaboutmortgage.com/does-having-a-mortgage-help-your-credit-score/): Mortgage Q&A: “Does Having A Mortgage Help Your Credit Score? ” If you’ve ever pulled your credit report and/or viewed...
- [Top Mortgage Lenders in Texas](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-texas/): Today we’ll take a look at the top mortgage lenders in Texas based on their annual production last year. They...
- [Will Mortgage Rates Hit 7% Next?](https://www.thetruthaboutmortgage.com/seven-percent-mortgage-rates/): It seems mortgage rates can’t catch a break in 2022, despite a few pullbacks here and there. However, those moments...
- [What Is a Housing Correction?  And Are We In One Now?](https://www.thetruthaboutmortgage.com/what-is-a-housing-correction/): Lately, I’ve been hearing a lot about a “housing correction,” which at first glance looks and sounds kind of bad....
- [An Easy Way to Save Even More Money with an Adjustable Rate Mortgage](https://www.thetruthaboutmortgage.com/how-to-save-money-with-an-adjustable-rate-mortgage/): Because mortgage rates have more than doubled lately, interest in adjustable-rate mortgages has taken off. The popular 30-year fixed, which...
- [Mortgage Rates vs. Recessions: Do They Go Up or Down During Hard Times?](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-recessions/): It’s time for another mortgage match-up, the latest installment “mortgage rates vs. recessions. ” This is a timely post seeing...
- [AnnieMac Mortgage Review: A New Jersey Mortgage Lender Big on Human Touch](https://www.thetruthaboutmortgage.com/anniemac-mortgage-review/): If you want a more personal home loan experience, take a look at AnnieMac Home Mortgage. The New Jersey-based lender...
- [Paying Extra Today Won’t Lower Your Future Monthly Mortgage Payments](https://www.thetruthaboutmortgage.com/paying-more-today-wont-lower-future-monthly-mortgage-payments/): Just about everyone with a home loan ponders the idea of paying a little extra, whether it’s via biweekly mortgage...
- [The Average Homeowner Now Has $207,000 in Tappable Equity: The Question Is How Do You Tap It?](https://www.thetruthaboutmortgage.com/tappable-equity/): While prospective home buyers continue to grapple with high mortgage rates and limited supply, existing owners are getting richer. A...
- [Can You Still Get an Adjustable Rate Mortgage?](https://www.thetruthaboutmortgage.com/can-you-still-get-an-adjustable-rate-mortgage/): Yes, adjustable-rate mortgages are still available, even though your lender may have hidden them from you for the past few...
- [Flat Branch Home Loans Review: Over 1,000 Years of Mortgage Experience](https://www.thetruthaboutmortgage.com/flat-branch-home-loans-review/): If you’re looking for a home purchase lending expert in the Midwest, you may want to check out “Flat Branch...
- [NJ Lenders Corp. Review: The 5th Largest Mortgage Lender in the State of New Jersey](https://www.thetruthaboutmortgage.com/nj-lenders-corp-review/): With a name like “NJ Lenders Corp. ,” there’s no question who they’re focused on; folks in the Garden State!...
- [Summit Mortgage Review: If You Want More Than a Call Center Home Loan](https://www.thetruthaboutmortgage.com/summit-mortgage-review/): If you’re looking for personalized service, instead of a call-center home loan, you might want to check out Summit Mortgage....
- [What Does It Mean to Be House Poor?](https://www.thetruthaboutmortgage.com/what-does-it-mean-to-be-house-poor/): If you’re an existing homeowner or an aspiring one, you may have heard the phrase “house poor,” typically uttered by...
- [Top Mortgage Lenders by Volume in 2021: Rocket Zooms Highest Once Again with $100 Billion Gap](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-2021/): Now that the Home Mortgage Disclosure Act (HMDA) data is out, we can check out the top mortgage lenders of...
- [Top USDA Lenders in 2021: Pennymac Blew Away the Competition](https://www.thetruthaboutmortgage.com/top-usda-lenders/): Today we’ll take a look at the top USDA lenders by loan volume in 2021. In case you need a...
- [Top FHA Lenders: Pennymac Is #1 Overall, But Is Biggest the Best?](https://www.thetruthaboutmortgage.com/top-fha-lenders/): If you’re in need of an FHA loan, you might be curious who the top FHA lenders are. By top,...
- [Why You Might Not Want to Get Too Excited (or Nervous) About a Housing Crash](https://www.thetruthaboutmortgage.com/why-you-might-not-want-to-get-too-excited-or-nervous-about-a-housing-crash/): As mortgage rates continue their ascent toward 6%, more and more folks are talking housing market crash. But high interest...
- [Sometimes It’s Actually Better to Choose the Higher Mortgage Rate](https://www.thetruthaboutmortgage.com/sometimes-its-better-to-choose-the-higher-mortgage-rate/): It might not make sense (or save you money) to choose a promotional mortgage rate, such as 2.99%. Learn why.
- [Are Home Prices Falling? The Devil Is in the Details](https://www.thetruthaboutmortgage.com/are-home-prices-falling/): How’s this for a dramatic headline: “Home prices are falling! ” But before you get too excited, assuming you’re a...
- [10-Year Mortgages vs. the 30-Year Fixed: Are They Worth the Small Discount?](https://www.thetruthaboutmortgage.com/30-year-vs-10-year-mortgages/): It’s time for another mortgage match-up folks. Today, we’ll look at 10-year mortgages versus the 30-year fixed mortgage to see...
- [Now That We’ve Got 5% Mortgage Rates, Is the Seller’s Market Finally Over?](https://www.thetruthaboutmortgage.com/now-that-weve-got-5-mortgage-rates-is-the-sellers-market-finally-over/): We’ve got 5% mortgage rates and record high home prices. Does this mean the seller’s market is finally over? You...
- [7/1 ARM vs. 30-Year Fixed Mortgage: Pros, Cons, and How Much Cheaper Are They?](https://www.thetruthaboutmortgage.com/30-year-fixed-vs-7-year-arm/): When shopping for a mortgage, it’s very important to pick a suitable loan product for your unique situation. Lately, I’ve...
- [Is an Adjustable-Rate Mortgage a Good Short-Term Strategy Until Interest Rates Cool Off?](https://www.thetruthaboutmortgage.com/is-an-adjustable-rate-mortgage-a-good-short-term-strategy-until-interest-rates-cool-off/): We know mortgage rates are projected to keep rising, so what’s a cost-effective solution if you need a home loan...
- [Allow Me to Introduce You to the 5% Mortgage Rate](https://www.thetruthaboutmortgage.com/allow-me-to-introduce-you-to-the-5-mortgage-rate/): For those new to mortgages, the number five might feel a bit foreign. Over the past decade and even longer,...
- [Have Mortgage Rates Peaked?](https://www.thetruthaboutmortgage.com/have-mortgage-rates-peaked/): Two weeks ago, I wrote about how mortgage rates jumped, something just about everyone is aware of. But I also...
- [Are We Near the Peak of the Current Housing Cycle?](https://www.thetruthaboutmortgage.com/are-we-near-the-peak-of-the-current-housing-cycle/): They say real estate is cyclical, much like the stock market and the wider economy. It ebbs and flows, goes...
- [Are the Housing Bears Being Too Rational?](https://www.thetruthaboutmortgage.com/are-the-housing-bears-being-too-rational/): Now that 30-year fixed mortgage rates are flirting with 5%, there’s been quite the uptick in housing bubble chatter. The...
- [Figure's Crypto Mortgage: Purchase a Home with Nothing Down While You Continue to HODL](https://www.thetruthaboutmortgage.com/figure-crypto-mortgage-review/): For the individual who eschews fiat currency, but still needs a mortgage, look no further than Figure. The company originally...
- [Diamond Residential Mortgage Review: No Borrower Is Left Behind Thanks to Their Endless Menu of Loan Programs](https://www.thetruthaboutmortgage.com/diamond-residential-mortgage-review/): Today we’ll check out “Diamond Residential Mortgage Corp. ,” a Midwest mortgage lender that’s named after its founder, not the...
- [5/1 ARM vs. 30-Year Fixed: What's the Better Choice and Why?](https://www.thetruthaboutmortgage.com/30-year-fixed-vs-51-arm/): A 5/1 ARM can save you a lot of money versus the more expensive 30-year fixed. Learn how and if it could be a good fit for your situation.
- [Mortgage Rates Have Jumped. Just How Bad Is It?](https://www.thetruthaboutmortgage.com/mortgage-rates-have-jumped-just-how-bad-is-it/): In a word, bad. At least in terms of historic interest rate moves, which have rarely rivaled the massive increases...
- [Nation’s Largest Wholesale Lender Now Offering Bank Statement Loans](https://www.thetruthaboutmortgage.com/uwm-bank-statement-loans/): What year is it? 2006? The nation’s largest wholesale mortgage lender, United Wholesale Mortgage, has just announced the availability of...
- [Is the Best Cure for High Mortgage Rates, High Mortgage Rates?](https://www.thetruthaboutmortgage.com/is-the-best-cure-for-high-mortgage-rates-high-mortgage-rates/): There’s an old adage in the commodities market that says, “the best cure for high prices is, high prices. ”...
- [Sun West Mortgage Review: Near Instantaneous Underwriting to Get Your Home Loan Closed Fast](https://www.thetruthaboutmortgage.com/sun-west-mortgage-review/): Not many mortgage companies have been around since the 1980s, but “Sun West Mortgage” has. However, that doesn’t mean they...
- [What Is a Conventional Mortgage Loan?](https://www.thetruthaboutmortgage.com/what-is-a-conventional-mortgage-loan/): Mortgage Q&A: “What is a conventional mortgage loan? ” A “conventional loan” simply refers to any residential mortgage loan that...
- [Mortgage Investors Group Review: A Leading Southeast Mortgage Lender with Great First-Time Buyer Loan Programs](https://www.thetruthaboutmortgage.com/mortgage-investors-group-review/): Mortgage Investors Group, or MIG for short, has a familiar story in that they were founded by a small group...
- [If You Want to Buy a Home, Adjust Your Max Purchase Price Filter a Lot Lower](https://www.thetruthaboutmortgage.com/if-you-want-to-buy-a-home-adjust-your-max-purchase-price-filter-a-lot-lower/): If you’re a prospective home buyer, you need to prepare for the worst. And by worst, I mean a much...
- [Mortgage Rates vs. War: The Silver Lining](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-war-the-silver-lining/): Sadly, there’s another war taking place, this time Russia’s invasion of neighboring Ukraine. While it doesn’t involve the United States...
- [UpEquity Review: They Can Make You an All-Cash Power Buyer in a Hot Housing Market](https://www.thetruthaboutmortgage.com/upequity-review/): The latest company looking to tackle the buy before you sell quandary goes by the name “UpEquity. ” They’re also...
- [Waterstone Mortgage Review: Home Purchase Loan Experts Who Strive to Close On Time](https://www.thetruthaboutmortgage.com/waterstone-mortgage-review/): Today we’ll take a thorough look at “Waterstone Mortgage,” a residential mortgage lender backed by a billion-dollar depository bank. Despite...
- [Number Who Say It’s a Good Time to Buy a Home Hits an All-Time Low, However…](https://www.thetruthaboutmortgage.com/number-who-say-its-a-good-time-to-buy-a-home-hits-an-all-time-low-however/): You may have heard that home buying sentiment is horrible at the moment, what with home prices and mortgage rates...
- [10 Ways to Get a Bigger Mortgage: With Home Prices On the Rise You May Need One](https://www.thetruthaboutmortgage.com/get-a-bigger-mortgage/): With home prices on the rise, and only expected to go higher this year, you might be wondering how to...
- [Is This Mortgage Company Legit? How to Quickly Vet Your Lender](https://www.thetruthaboutmortgage.com/is-this-mortgage-company-legit/): It’s a question I see consumers ask whenever they size up a lender: “Is X mortgage company legit? ” Ultimately,...
- [Loan Factory Review: They Dare You to Compare Rates Elsewhere](https://www.thetruthaboutmortgage.com/loan-factory-review/): Do you want a low mortgage rate and a good experience to boot while obtaining a home loan? While that...
- [InstaMortgage Review: A Minority-Owned Lender That Aims to Provide Legendary Customer Service](https://www.thetruthaboutmortgage.com/instamortgage-review/): Today we’ll deep dive into “InstaMortgage,” formerly known as Arcus Lending, a lender that promises low rates, legendary service, and...
- [UWM Offering No-Cost Appraisals on Home Purchase Loans](https://www.thetruthaboutmortgage.com/uwm-offering-no-cost-appraisals-on-home-purchase-loans/): In an effort to make loan closings even faster, United Wholesale Mortgage (UWM) is offering an appraisal credit on home...
- [Cake Mortgage Review: A Piece of Cake From Start to Finish?](https://www.thetruthaboutmortgage.com/cake-mortgage-review/): Today we’ll check out “Cake Mortgage Corp. ,” which as the name implies wants to make the home loan process...
- [The Mortgage Refinance Process: Complete Step-by-Step Guide and Timeline](https://www.thetruthaboutmortgage.com/mortgage-refinance-process-steps/): Most homeowners know what a mortgage refinance is, but aren’t necessarily familiar with the process and many steps that take...
- [How Many Homes Should I Look at Before I Buy? One Could Be Enough But More Is Definitely Better](https://www.thetruthaboutmortgage.com/how-many-homes-should-i-look-at-before-i-buy/): These days, prospective home buyers are spending a lot more time looking at homes virtually rather than in person. This...
- [What Is Prepaid Interest? Here's Why You Need to Pay the Mortgage Lender Ahead of Time](https://www.thetruthaboutmortgage.com/what-is-prepaid-interest/): As the name implies, “prepaid interest” is money you owe to a bank or mortgage lender that is paid in...
- [What Mortgage Term Is Best? Why It Could Pay to Look Beyond the 30-Year Fixed](https://www.thetruthaboutmortgage.com/what-mortgage-term-is-best/): Before you set out to snag the lowest rate on your purchase mortgage or refinance, you’ll need to decide on (or at least narrow down) a mortgage term.
- [Do You Need 20% Down to Buy a House? Why This Old Rule No Longer Applies](https://www.thetruthaboutmortgage.com/do-you-need-20-down-to-buy-a-house/): It’s been some time since I’ve done mortgage Q&A, so without further delay, let’s explore the following question: “Do you...
- [Why You May Want to Act Fast If Taking Out a Mortgage on a Second Home or Expensive Property](https://www.thetruthaboutmortgage.com/new-fees-for-high-balance-loans-and-second-home-loans/): If you own a second home or hold a high balance loan amount, you may want to refinance sooner rather...
- [2022 Real Estate and Mortgage Predictions](https://www.thetruthaboutmortgage.com/2022-real-estate-predictions/): It’s almost mid-December, which means it is time for another round of mortgage and real estate predictions for the upcoming...
- [Strong Home Mortgage Review: A Veteran-Owned Mortgage Lender That's Part of the Costco Program](https://www.thetruthaboutmortgage.com/strong-home-mortgage-review/): Today we’ll take a good look at a newer veteran-owned mortgage lender by the name of Strong Home Mortgage. As...
- [2022 Mortgage Rate Predictions: Is This the Year They Finally Hit 4%?](https://www.thetruthaboutmortgage.com/2022-mortgage-rate-predictions/): Well, just like that it’s December again, which means it’s time for the 2022 mortgage rate predictions. This past year...
- [NASB Home Loans Review: NerdWallet Ranked Them Best Mortgage Lender Overall](https://www.thetruthaboutmortgage.com/nasb-home-loans-review/): Today we’ll review a Missouri-based community bank that’s big on home loans, North American Savings Bank, or NASB Home Loans...
- [Mortgage Network Review: One of the Largest Independent Mortgage Lenders in New England](https://www.thetruthaboutmortgage.com/mortgage-network-review/): If you live in New England, or more specifically Massachusetts, there’s a very good chance you’ve heard of Mortgage Network,...
- [2022 FHA Loan Limits: Floor Rises to $420,680, Ceiling to $970,800](https://www.thetruthaboutmortgage.com/2022-fha-loan-limits/): Similar to the FHFA, the U. S. Department of Housing and Urban Development (HUD) announces maximum loan limits each year...
- [2022 Conforming Loan Limit Jumps to $647,200](https://www.thetruthaboutmortgage.com/2022-conforming-loan-limits/): This morning, the 2022 conforming loan limits were officially announced by the FHFA, with the baseline limit hitting a whopping...
- [Mortgage Rates vs. Omicron](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-omicron/): Last week, the World Health Organization (WHO) designated Omicron, formally known as B. 1. 1. 529, a variant of concern....
- [Lendevity Review: A SoCal Mortgage Broker That Charges $0 Broker Fees and Offers a Loyalty Program](https://www.thetruthaboutmortgage.com/lendevity-review/): Today we’ll check out a Southern California-based mortgage broker named “Lendevity,” which has been earning rave reviews lately. Their name...
- [What Will Cause the Next Housing Crash?](https://www.thetruthaboutmortgage.com/what-will-cause-the-next-housing-crash/): I think I finally know what’s going to cause the next major financial collapse. Crypto. Ignore the fact that the...
- [Another Reason You Can’t Find a Home to Buy: Investors](https://www.thetruthaboutmortgage.com/cant-find-home-to-buy/): Don’t be fooled by Zillow’s recent iBuying exit. The housing market is alive and well, despite some expected seasonal slowing....
- [FHA-to-Conventional Refinance: How to Drop Mortgage Insurance Once and For All](https://www.thetruthaboutmortgage.com/an-fha-to-conventional-refinance-may-allow-you-to-ditch-mip/): While refinance applications seem to be slowing, there are still some good reasons to refinance your mortgage, even if interest...
- [Lakeview Loan Servicing Review: A Top Mortgage Lender and Loan Servicer Rolled Into One](https://www.thetruthaboutmortgage.com/lakeview-mortgage-review/): Lakeview Loan Servicing is the nation's fourth largest loan servicer and also a home loan lender that provides purchase and refinance loans.
- [Zillow Offers Shuts Down Because It Can't Forecast Future Home Prices, 25% of Workforce to Be Let Go](https://www.thetruthaboutmortgage.com/zillow-offers-shuts-down/): In a somewhat strange turn of events, the iBuying unit of Zillow, known as Zillow Offers, is shutting down after...
- [Zillow Hits Pause on iBuying for the Rest of 2021:  Should We Worry?](https://www.thetruthaboutmortgage.com/zillow-hits-pause-on-ibuying-for-the-rest-of-2021-should-we-worry/): In a rather surprising turn, Zillow has suspended new home purchases via its Zillow Offers unit through the end of...
- [2022 Home Prices: Goldman Sachs Sees Values Rising Another 16%](https://www.thetruthaboutmortgage.com/2022-home-prices/): Think home prices are expensive today? Well, get ready for an even bigger shock. A new report claims 2022 home...
- [Why Are Mortgages Cheaper Than Rent?](https://www.thetruthaboutmortgage.com/why-are-mortgages-cheaper-than-rent/): Mortgage Q&A: “Why are mortgages cheaper than rent? ” Today we’ll discuss why mortgages often appear to be less expensive...
- [Mortgages for Doctors:  Expanded LTVs and Large Loan Amounts](https://www.thetruthaboutmortgage.com/mortgages-for-doctors-expanded-ltvs-and-large-loan-amounts/): If you’re a doctor, resident, or even a veterinarian, getting a mortgage can be a little bit easier thanks to...
- [Dude, Where’s My Low Mortgage Rate?](https://www.thetruthaboutmortgage.com/dude-wheres-my-low-mortgage-rate/): A Common Mortgage Rate Tale You’ve been shopping mortgage rates and finally found a lender you like. The loan officer...
- [It’s Okay to Rent Until You Find a House You Really Like](https://www.thetruthaboutmortgage.com/its-okay-to-rent-until-you-find-a-house-you-really-like/): When deciding between renting and buying, individuals often fret about missing out on home equity if they do the former....
- [What the Names Zillow, Redfin, and Trulia Mean](https://www.thetruthaboutmortgage.com/what-the-names-zillow-redfin-and-trulia-mean/): Nowadays, just about everyone looking to buy or sell real estate begins their search online. And a small handful of...
- [What Is Lender-Paid Mortgage Insurance? First Of All, You Still Pay For It](https://www.thetruthaboutmortgage.com/what-is-lender-paid-mortgage-insurance/): While it sounds like you're getting something for free with lender-paid mortgage insurance, it's more about how you pay for this coverage.
- [Two Simple Ways to Boost Your Credit Score Before Applying for a Mortgage](https://www.thetruthaboutmortgage.com/two-simple-ways-to-boost-your-credit-score-before-applying-for-a-mortgage/): A while back, I cautioned readers to avoid swiping the credit card before applying for a mortgage. In short, the...
- [Michigan State Athletes Will Soon Be Paid $500 Per Month to Promote Mortgage Brokers](https://www.thetruthaboutmortgage.com/michigan-state-athletes-will-soon-be-paid-500-per-month-to-promote-mortgage-brokers/): Back in July, the NCAA granted college athletes the opportunity to make money by using their “name, image and likeness”...
- [6 Ways to Snag a Low Mortgage Rate Even If They Suddenly Jump Higher](https://www.thetruthaboutmortgage.com/six-ways-to-secure-a-low-mortgage-rate-despite-the-recent-jump/): Over the past year, mortgage rates have been relatively steady near their all-time lows. This has continued to benefit existing...
- [Mortgage Insurance vs. Homeowners Insurance: Only One of Them Protects You](https://www.thetruthaboutmortgage.com/mortgage-insurance-vs-homeowners-insurance/): These days, it seems as if you can insure just about anything. Your car, your house, your dog, your phone,...
- [Change Home Mortgage Review: If Homeownership Feels Like a Long Shot, Give Them a Call](https://www.thetruthaboutmortgage.com/change-home-mortgage-review/): If you’ve driven the 405 freeway lately, you may have seen a billboard from “ChangeFi,” a bank that’s looking to...
- [ClearPath Lending Review: They're a Big Time VA Loan Lender](https://www.thetruthaboutmortgage.com/clearpath-lending-review/): If you’re in need of a VA loan, one mortgage company that deals almost exclusively in them goes by the...
- [Neat Loans Will Give You a $500 Discount on Your Mortgage If You Got the COVID-19 Vaccine](https://www.thetruthaboutmortgage.com/neat-loans-covid-19-discount/): This appears to be a first – digital mortgage lender Neat Loans will provide applicants with a $500 discount if...
- [Borrowers Don’t Choose Mortgage Lenders for the Best Interest Rate](https://www.thetruthaboutmortgage.com/borrowers-dont-choose-mortgage-lenders-for-the-best-interest-rate/): Conventional wisdom would lead us to believe that consumers go with the mortgage lender that offers the lowest interest rate....
- [Is the Housing Market Finally Slowing Down? Not So Fast…](https://www.thetruthaboutmortgage.com/is-the-housing-market-finally-slowing-down/): It’s a question a lot of prospective home buyers are asking right now. When will the housing market slow down?...
- [Nation’s Second Largest Mortgage Lender to Accept Bitcoin Because They Want to Be First](https://www.thetruthaboutmortgage.com/nations-second-largest-mortgage-lender-to-accept-bitcoin-because-they-want-to-be-first/): The nation’s second largest mortgage lender, United Wholesale Mortgage, has plans to accept bitcoin for mortgage payments. The Pontiac, Michigan-based...
- [Your Positive Rental History Will Now Help You Qualify for a Mortgage](https://www.thetruthaboutmortgage.com/your-positive-rental-history-will-now-help-you-qualify-for-a-mortgage/): In a bid to help more renters become homeowners, Fannie Mae has introduced a new “innovation” that will incorporate rental...
- [Are Mortgage Calculators Accurate? Why Some Totally Miss the Mark](https://www.thetruthaboutmortgage.com/are-mortgage-calculators-actually-accurate/): Time for more mortgage Q&A: “Are mortgage calculators accurate? ” Just about anyone looking to buy real estate or apply...
- [Mortgage Rates vs. Unemployment: Keep a Close Eye on the Jobs Report!](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-unemployment/): It’s time for another mortgage match-up: “Mortgage rates vs. unemployment. ” When it comes to making (or for our purposes...
- [Rocket Mortgage Launches Detroit Home Loan+: Is It a Good Deal?](https://www.thetruthaboutmortgage.com/detroit-home-loan-plus-rocket-mortgage/): The nation’s largest mortgage lender, Rocket Mortgage, has just rolled out a home loan program exclusively for customers buying homes...
- [Why It's Best to Apply for a Mortgage When Things Are Slow](https://www.thetruthaboutmortgage.com/why-you-may-want-to-apply-for-a-mortgage-when-things-are-slow/): If you apply for a mortgage when it's super busy, you might not get the lowest interest rate, or the best customer service!
- [Why a Really Cheap Mortgage Might Actually Be Trouble](https://www.thetruthaboutmortgage.com/why-a-really-cheap-mortgage-might-actually-be-trouble/): An ultra-cheap mortgage might give you a false sense of living below your means, pushing you to spend when you otherwise wouldn't.
- [Resetting the Clock When You Refinance: Why It Could Cost You](https://www.thetruthaboutmortgage.com/resetting-the-clock-when-refinancing-your-mortgage/): If you decide to refinance your mortgage, be sure to factor in your new loan term, which could add thousands of dollars in interest.
- [How to Lower Your Mortgage Rate Without Refinancing](https://www.thetruthaboutmortgage.com/can-i-lower-my-mortgage-interest-rate-without-refinancing/): There are several ways it might be possible to lower your mortgage rate without a refinance. Find out if one of these methods works for you!
- [Why Are Mortgage Payments Mostly Interest?](https://www.thetruthaboutmortgage.com/why-are-mortgage-payments-mostly-interest/): Homeowners often complain that mortgages are mostly interest, despite the low rates offered. But is it true, and if so why? Let's find out!
- [New Mortgage Startup Tomo Exists Because Buying a Home Can Be Terrible](https://www.thetruthaboutmortgage.com/tomo-mortgage-review/): The mortgage and real estate industry is no stranger to disruptors, especially over the past few years as scores of...
- [Fixed-Rate Mortgages vs. ARMs: Which to Choose and Why?](https://www.thetruthaboutmortgage.com/30-year-fixed-vs-arm/): Mongoose vs. Cobra. Coyote vs. Roadrunner. Pirate vs. Ninja? And finally, “fixed-rate mortgage vs. adjustable-rate mortgage. ”  Yes, we’re talking...
- [Better Will Now Guarantee Your Mortgage Even If the Appraisal Comes in Low](https://www.thetruthaboutmortgage.com/better-appraisal-guarantee/): With the housing market so competitive, and properties often going above asking, getting a mortgage can be a little more...
- [American Express Cardholders Can Get Up to $6,000 Statement Credits If They Use Rocket or Better Mortgage](https://www.thetruthaboutmortgage.com/american-express-mortgage-promotion/): If you happen to be an American Express cardholder, or were thinking about becoming one, they’ve got new a limited-time...
- [If You Want to Be a Homeowner, Go to College and Get a Degree](https://www.thetruthaboutmortgage.com/if-you-want-a-mortgage-go-to-college-and-get-a-degree/): Assuming you want to become a homeowner, it’s probably best to go to college, even if you have to take...
- [3 Reasons Why Putting Less Down Can Raise Your Mortgage Payment](https://www.thetruthaboutmortgage.com/3-ways-a-low-down-payment-can-raise-your-mortgage-payment/): While a low down payment can make it easier to buy your dream home, it may increase your mortgage payment in three different ways.
- [The Mortgage Firm Review: Twice a SocialSurvey Winner for Customer Satisfaction](https://www.thetruthaboutmortgage.com/the-mortgage-firm-review/): Today we’ll check out Florida-based lender “The Mortgage Firm,” which has been originating home loans since the mid-1990s. That’s a...
- [Top Mortgage Lenders by State in 2020: Rocket Claims 19 States and D.C.](https://www.thetruthaboutmortgage.com/top-mortgage-lenders-by-state-2020/): Check out which mortgage lender dominated each state across the nation in 2020. Rocket Mortgage won a whopping 19 states and D.C.!
- [Directors Mortgage Review: Oregon's Local Mortgage Lender](https://www.thetruthaboutmortgage.com/directors-mortgage-review/): Today we’ll check out “Directors Mortgage,” a Portland, Oregon-based mortgage lender that says it “takes a community-first, people-focused approach” to...
- [Thursday Is the Best Day to List Your House](https://www.thetruthaboutmortgage.com/thursday-is-the-best-day-to-list-your-house/): The best day to list your home is Thursday because they go pending faster and are more likely to sell above asking!
- [Supreme Lending Review: A Local Lender That Aims to Close Loans in 20 Days or Less](https://www.thetruthaboutmortgage.com/supreme-lending-review/): Today we’ll check out “Supreme Lending,” a mortgage banker out of Dallas, Texas that is all about speed. In fact,...
- [Do Mortgage Payments Go Down Over Time?](https://www.thetruthaboutmortgage.com/do-mortgage-payments-decrease/): While everyone always seems to focus on mortgage payments adjusting higher, there are a number of reasons why a mortgage payment may decrease.
- [Mortgage vs. Cash: Which Is the Better Option When Buying a Home?](https://www.thetruthaboutmortgage.com/mortgage-vs-cash-which-is-the-better-option-when-buying-a-home/): The pros and cons of using a mortgage to finance your home purchase, or paying all-cash instead to save on interest.
- [How Many Mortgage Quotes Should I Get? A Key Study Says the More the Better](https://www.thetruthaboutmortgage.com/how-many-mortgage-quotes-should-i-get/): Mortgage Q&A: “How many mortgage quotes should I get? ” When it comes to getting the best deal on your...
- [Garden State Home Loans Review: One of the Highest-Rated Lenders I’ve Come Across](https://www.thetruthaboutmortgage.com/garden-state-home-loans-review/): Today we’ll check out East Coast mortgage lender “Garden State Home Loans,” which says it has some of the lowest...
- [Nation’s Top Wholesale Mortgage Lender Launches New Line of Adjustable-Rate Mortgages](https://www.thetruthaboutmortgage.com/united-wholesale-mortgage-arms/): Declaring that ARMs are back, United Wholesale Mortgage (UWM) has just rolled out a new line of adjustable-rate mortgages for...
- [Quicken Loans Changes Name to Rocket Mortgage](https://www.thetruthaboutmortgage.com/quicken-loans-changes-name-to-rocket-mortgage/): In an effort to perhaps streamline its brand and create a little less consumer confusion, Quicken Loans announced today that...
- [Central Bank Mortgage Review: A Modern Home Loan from a 100-Year Old Bank](https://www.thetruthaboutmortgage.com/central-bank-mortgage-review/): Today we’ll review a Midwest-based depository bank that is big on home loans, “Central Bank,” which also operates an online...
- [Why You Shouldn't Swipe Your Credit Card Before You Apply for a Mortgage](https://www.thetruthaboutmortgage.com/dont-swipe-your-credit-card-before-you-apply-for-a-mortgage/): Large Credit Card Purchases Really Can Tank Your Credit Score While missed payments are arguably the worst offense Even racking...
- [New Fannie/Freddie Refinance Option Drops Adverse Market Fee, Offers $500 Appraisal Credit](https://www.thetruthaboutmortgage.com/new-fannie-freddie-refinance-option-drops-adverse-market-fee-offers-500-appraisal-credit/): In an effort to undo some of the damage the Federal Housing Finance Agency (FHFA) basically caused itself, it’s throwing...
- [Don't Be a Desperate Home Buyer: Be Prepared and Willing to Move On](https://www.thetruthaboutmortgage.com/dont-be-a-desperate-home-buyer/): It’s no secret the housing market is hot at the moment, so much so that just about everyone is wondering...
- [Why Is the Housing Market So Hot?](https://www.thetruthaboutmortgage.com/why-is-the-housing-market-so-hot/): Real estate Q&A: “Why Is the Housing Market So Expensive Right Now? ” If you asked me this same question...
- [Do Mortgage Brokers Offer Better Rates Than the Competition?](https://www.thetruthaboutmortgage.com/do-mortgage-brokers-offer-better-rates-than-the-competition/): In your endless search to find the lowest mortgage rates on the planet, you may be wondering which route will...
- [When Will the Next Housing Market Crash Take Place? All Eyes on 2024](https://www.thetruthaboutmortgage.com/when-will-the-next-housing-market-crash-take-place/): I’ve noticed a trend lately. Everyone’s a real estate expert. It seems the most recent crisis and recovery has turned...
- [Jim Cramer Just Paid Off His Mortgage with Bitcoin Gains](https://www.thetruthaboutmortgage.com/jim-cramer-just-paid-off-his-mortgage-with-bitcoin-gains/): File this one under bizarre, for several different reasons. Mad Money host Jim Cramer disclosed yesterday that “he recently paid...
- [How to Pay for Home Renovations: Pros and Cons to Different Methods](https://www.thetruthaboutmortgage.com/how-to-pay-for-home-renovations-pros-and-cons-to-different-methods/): Most properties require some amount work to get into their desired shape, even newer ones. And just about everyone knows...
- [10 Reasons to Buy a House Other Than for the Investment](https://www.thetruthaboutmortgage.com/10-reasons-to-buy-a-house-other-than-for-the-investment/): There are a lot of good reasons to buy a house, and probably a lot of bad ones too. But...
- [11 Ways to Build Home Equity](https://www.thetruthaboutmortgage.com/10-ways-to-build-home-equity/): These days, home equity is booming thanks to rapidly appreciating property values. At last glance, total equity on mortgaged properties...
- [Spring EQ Review: Need a Second Mortgage?](https://www.thetruthaboutmortgage.com/spring-eq-review/): With the weather warming up, I thought it’d be prudent to check out “Spring EQ,” a lender that specializes in...
- [10 Reasons Why You Can't Refinance Your Mortgage](https://www.thetruthaboutmortgage.com/7-reasons-why-you-cant-refinance-your-mortgage/): A look at some of the most common refinance roadblocks and what you can do to overcome them now.
- [21 Things That Can Drive Your Mortgage Rate Higher](https://www.thetruthaboutmortgage.com/21-things-that-can-drive-your-mortgage-rate-higher/): Wondering why you didn’t receive the low mortgage rate you saw advertised on TV or the Internet? Well, there are...
- [Marriage and Mortgage May Not Mix](https://www.thetruthaboutmortgage.com/marriage-and-mortgage/): Marriage or Mortgage? The premise of the new Netflix show “Marriage or Mortgage” is simple. It pits a wedding planner...
- [Demystifying How Mortgages Are Calculated](https://www.thetruthaboutmortgage.com/demystifying-how-mortgages-are-calculated/): The Importance of Knowing How to Calculate a Mortgage While there are plenty of mortgage calculators out there that do...
- [Condo vs. Townhouse: Why It Matters](https://www.thetruthaboutmortgage.com/condo-vs-townhouse-why-it-matters/): It’s been a while since I’ve done a matchup, so let’s talk about an important one if you’re in the...
- [Why You May Want to Switch Mortgage Companies](https://www.thetruthaboutmortgage.com/more-than-half-of-consumers-switch-mortgage-companies/): Loyalty? Not in the mortgage business. That is, if you actually want to save money on your home loan. A...
- [What Is the Loan-to-Value Ratio? (LTV) How to Easily Calculate It Fast](https://www.thetruthaboutmortgage.com/what-is-loan-to-value/): The loan-to-value ratio (LTV) is your mortgage loan amount divided by the current appraised value or sales price.
- [Why Every Mortgage Lender Will Disappoint You](https://www.thetruthaboutmortgage.com/why-every-mortgage-lender-will-disappoint-you/): People constantly ask me if a particular lender is good, bad, or should be avoided at all costs. They also...
- [18 Reasons to Refinance Your Mortgage](https://www.thetruthaboutmortgage.com/18-reasons-to-refinance-your-mortgage/): There are many reasons to refinance your mortgage, some obvious and some a bit more obscure and/or different. I figured...
- [Own Up Review: The Mortgage You Deserve?](https://www.thetruthaboutmortgage.com/own-up-review/): Today we’ll check out “Own Up,” a new technology company that wants to be your mortgage co-pilot. By that, they...
- [Why Does Everyone Want Us to Pay Down Our Mortgages?](https://www.thetruthaboutmortgage.com/why-does-everyone-want-us-to-pay-down-our-mortgages/): You may have come across one of those articles lately that talks about how a couple paid off their mortgage...
- [Why Do Mortgage Companies Want You to Refinance So Badly?](https://www.thetruthaboutmortgage.com/why-do-mortgage-companies-want-you-to-refinance-so-badly/): If you already have a mortgage, there’s a good chance you receive junk mail on a regular basis urging you...
- [Do I Qualify for a Mortgage?](https://www.thetruthaboutmortgage.com/do-i-qualify-for-a-mortgage/): Sometimes I tend to skip past the seemingly basic mortgage questions, assuming everyone already knows the simple stuff. Unfortunately, that’s...
- [Should You Buy a New Home or an Old Home? There Are Pros and Cons to Both](https://www.thetruthaboutmortgage.com/should-you-buy-a-new-home-or-an-old-home/): New Home vs. Old Home It’s time for another match-up, this time we’ll compare buying a new home versus purchasing...
- [You Can Now Request COVID-Related Mortgage Forbearance for Up to 18 Months](https://www.thetruthaboutmortgage.com/covid-mortgage-forbearance-15-months/): Some good news for homeowners struggling to make ends meet thanks to COVID-19, which as the name implies has been...
- [The CEO of a Tech-Enabled Loan Servicer Believes We Might Be on the Cusp of Another Foreclosure Crisis](https://www.thetruthaboutmortgage.com/valon-loan-servicer-cusp-of-another-foreclosure-crisis/): The co-founder and CEO of a so-called “tech-enabled residential mortgage servicer” named Valon (formerly Peach Street) has warned we could...
- [Sage Mortgage Review: A Fully-Digital Refinance Lender](https://www.thetruthaboutmortgage.com/sage-mortgage-review/): Today we’ll check out “Sage Mortgage,” a digital mortgage lender startup backed by Red Ventures, which refers to itself as...
- [Does a Refinance Require an Appraisal?](https://www.thetruthaboutmortgage.com/does-a-refinance-require-an-appraisal/): Mortgage Q&A: “Does a refinance require an appraisal? ” A reader recently asked if they needed an appraisal to refinance...
- [Optimum First Mortgage Review: #1 in Price and Customer Service?](https://www.thetruthaboutmortgage.com/optimum-first-mortgage-review/): You’ve got to pretty confident to say you’re #1 in both price and customer service, but that’s exactly how “Optimum...
- [What Is a Streamline Refinance?](https://www.thetruthaboutmortgage.com/what-is-a-streamline-refinance/): If you simply want a lower interest rate on your existing home loan, look into a “streamline refinance” that requires limited paperwork.
- [Nations Lending Review: A Human Home Loan?](https://www.thetruthaboutmortgage.com/nations-lending-review/): While tech has taken center stage in the mortgage world, Nations Lending still strives to make home loans human. That’s...
- [How to Move Out of Your Parents House](https://www.thetruthaboutmortgage.com/how-to-move-out-of-your-parents-house/): There’s nothing inherently wrong with living with your parents, other than EVERYTHING! So let’s talk about how to GET OUT!...
- [Ruoff Mortgage Review: Enjoy a Stress-Free Mortgage Process?](https://www.thetruthaboutmortgage.com/ruoff-mortgage-review/): If you live in Indiana, there’s a very good chance you either got your home loan from Ruoff Mortgage, or...
- [PenFed Mortgage Review: Competitive Rates with No Lender Fees](https://www.thetruthaboutmortgage.com/penfed-mortgage-review/): Today we’ll take a deep dive into a major credit union that’s also a sizable mortgage lender, Pentagon Federal Credit...
- [2021 Mortgage and Housing Market Predictions](https://www.thetruthaboutmortgage.com/2021-mortgage-and-housing-market-predictions/): Welp, it’ll be nice to close out 2020 and look ahead to a brand-new year that hopefully features a lot...
- [Paramount Residential Mortgage Group Review: A Top-50 Lender Chock Full of Loan Programs](https://www.thetruthaboutmortgage.com/paramount-residential-mortgage-group-review/): While searching for a home loan, you may have come across “Paramount Residential Mortgage Group,” or PRMG for short, along...
- [2021 Mortgage Rate Predictions: Mostly Flat But New Record Lows Possible](https://www.thetruthaboutmortgage.com/2021-mortgage-rate-predictions/): Yet another year is about to come to an end, and that means it’s time to look ahead to what...
- [Partial Claim May Be Option for VA Borrowers Exiting COVID-19 Forbearance](https://www.thetruthaboutmortgage.com/partial-claim-va-loan-covid-19-forbearance/): The Department of Veterans Affairs (VA) has proposed a new loss mitigation method to help homeowners with VA loans in...
- [Lower Mortgage Review: A Techy Mortgage Lender in Love with Everything Low](https://www.thetruthaboutmortgage.com/lower-mortgage-review/): Today we’ll check out another one of the newcomers in the mortgage industry that is all about technology and low...
- [USA Mortgage Review: Nearly a Top-5 Mortgage Lender in Missouri](https://www.thetruthaboutmortgage.com/usa-mortgage-review/): If you live in the USA and need a mortgage, perhaps you’ve thought about applying at “USA Mortgage. ” Makes...
- [Why Joe Biden and Kamala Harris Haven't Paid Off Their Mortgages](https://www.thetruthaboutmortgage.com/why-joe-biden-and-kamala-harris-havent-paid-off-their-mortgages/): You’d think presumably wealthy politicians like Joe Biden and Kamala Harris would own their homes free and clear. But that’s...
- [FBC Mortgage Review: A Florida Lender with a Simple Loan Process](https://www.thetruthaboutmortgage.com/fbc-mortgage-review/): Today we’ll take a look at FBC Mortgage, which is a Florida-based mortgage lender that does a ton of business...
- [If a Mortgage Lender Reaches Out to You, Reach Out to Other Lenders](https://www.thetruthaboutmortgage.com/if-a-mortgage-lender-reaches-out-to-you-reach-out-to-other-lenders/): A lot of homeowners are looking to refinance their mortgages at the moment. That’s abundantly clear based on the record...
- [An Alternative to Paying Mortgage Points: Just Be a Little 'Extra'](https://www.thetruthaboutmortgage.com/alternative-to-paying-mortgage-points/): If and when you take out a mortgage, you’ll be faced with an important choice. To pay or not pay...
- [Watch Out for Low Mortgage Rates You Have to Pay For](https://www.thetruthaboutmortgage.com/watch-out-for-low-mortgage-rates-you-have-to-pay-for/): Mortgage rates keep on marching lower and lower, with new records broken seemingly every week. But with all the fervor...
- [When to Refinance a Home Mortgage: Now, Later, or Never?](https://www.thetruthaboutmortgage.com/when-to-refinance-a-mortgage/): A mortgage refinance can result in big savings, but it's not always the right move. Learn when to refinance your mortgage to maximize your benefit and when you may want to pump the brakes.
- [Royal United Mortgage Review: A Faster, Friendlier Mortgage Lender?](https://www.thetruthaboutmortgage.com/royal-united-mortgage-review/): If customer satisfaction is your thing, and you happen to need a home loan, you might want to check out...
- [Synergy One Lending Review: They've Got an App But How Is the Pricing?](https://www.thetruthaboutmortgage.com/synergy-one-lending-review/): Today, we’ll take a look at Synergy One Lending, a company whose mission is to create a modern mortgage experience...
- [Record Home Purchase Activity Expected in 2021 Despite Higher Mortgage Rates](https://www.thetruthaboutmortgage.com/record-home-purchase-activity-expected-in-2021-despite-higher-mortgage-rates/): While mortgage rates are projected to be slightly higher next year, home purchase activity should hit a new record high,...
- [Loan Simple Mortgage Review: A Boutique Mortgage Lender](https://www.thetruthaboutmortgage.com/loan-simple-mortgage-review/): One mortgage lender that’s been around a while, but is beginning to shake things up is Loan Simple. As the...
- [Should You Prepay the Mortgage or Invest Instead? How to Earn a Better Return](https://www.thetruthaboutmortgage.com/prepay-the-mortgage-or-invest-instead/): It’s been a while since I last posted a mortgage match-up, so without further ado, here’s the latest installment: “Prepay...
- [Will Mortgage Rates Go Up or Down If Trump/Biden Wins the Election?](https://www.thetruthaboutmortgage.com/will-mortgage-rates-go-up-or-down-if-trump-biden-wins-the-election/): As everyone knows, we have a very important U. S. presidential election just around the corner. In fact, it’s now...
- [Is Refinancing Worth It? Consider the Costs and How Long You'll Keep the Loan](https://www.thetruthaboutmortgage.com/is-refinancing-worth-it/): With mortgage rates at or near record lows, a lot of existing homeowners are probably asking themselves, “Is refinancing worth...
- [What Mortgage Rate Can I Expect? Answer These Questions First](https://www.thetruthaboutmortgage.com/what-mortgage-rate-can-i-expect/): Mortgage Q&A: “What mortgage rate can I expect? ” The thing with mortgage rates is that they can vary greatly...
- [Costco Mortgage Review: Yes, They Do Home Loans Too, Kind Of](https://www.thetruthaboutmortgage.com/costco-mortgage-review-what-dont-they-do/): Costco, the well-known mega wholesaler that runs a chain of membership warehouses internationally, rolled out it’s so-called “Mortgage Services” program...
- [Redfin: 2020 Home Sales Will Be Highest Since 2006](https://www.thetruthaboutmortgage.com/redfin-2020-home-sales-will-be-highest-since-2006/): While 2020 continues to surprise us, somehow, someway, home sales are expected to hit their highest point since 2006 this...
- [What Will Happen When the CARES Act Forbearance Option Ends?](https://www.thetruthaboutmortgage.com/cares-act-forbearance-option-end-date/): While it’s still possible to request mortgage forbearance via the CARES Act if you’re having trouble making monthly payments, this...
- [You Can Buy More House If You Put More Money Down](https://www.thetruthaboutmortgage.com/you-can-buy-more-house-if-you-put-more-money-down/): I was reading through the latest quarterly home price report from the National Association of Realtors yesterday and stumbled upon...
- [The Mortgage Broker Comeback](https://www.thetruthaboutmortgage.com/the-mortgage-broker-comeback/): Once left for dead, the mortgage broker is alive and well. And in fact, thriving. There are now more than...
- [Union Home Mortgage Review: Ohio's Mortgage Lender](https://www.thetruthaboutmortgage.com/union-home-mortgage-review/): If you’ve watched a Cleveland Guardians baseball game lately, you may have noticed a big sign for “Union Home Mortgage”...
- [Should You Use Experian Boost Before Applying for a Mortgage? How It Can Help](https://www.thetruthaboutmortgage.com/should-you-use-experian-boost-before-applying-for-a-mortgage/): You may have seen commercials lately for “Experian Boost,” a program that says it can increase your credit scores instantly....
- [Regions Mortgage Review: A Mortgage Leader in the Southeast](https://www.thetruthaboutmortgage.com/regions-mortgage-review/): If you live in Texas or the Southeast, you’ve likely heard of Regions Mortgage. In fact, you might already be...
- [UWM Offering 50 Basis Point Discount on VA Streamline Loans Through Veterans Day](https://www.thetruthaboutmortgage.com/uwm-offering-50-basis-point-discount-on-va-streamline-loans-through-veterans-day/): United Wholesale Mortgage continues to bring the heat, this time shaving 50 basis points off streamline VA loans from now...
- [Primary Residential Mortgage Inc. (PRMI) Review: Faster, Simpler, Smarter?](https://www.thetruthaboutmortgage.com/primary-residential-mortgage-review-prmi/): Primary Residential Mortgage, Inc. , or PRMI for short, is a direct mortgage lender based out of Salt Lake City,...
- [Beeline Loans Mortgage Review: Using Tech to Make Mortgages Painless](https://www.thetruthaboutmortgage.com/beeline-loans-mortgage-review/): In early 2019, a new mortgage lender called Beeline Loans, or Beeline for short, was launched. Their mission: to completely...
- [United Wholesale Mortgage Going Public](https://www.thetruthaboutmortgage.com/united-wholesale-mortgage-going-public/): Despite the ongoing pandemic, it’s turning out to be a very good time for companies to go public, especially mortgage...
- [Zillow Homes: Zillow Launches a Real Estate Brokerage](https://www.thetruthaboutmortgage.com/zillow-homes-zillow-launches-a-real-estate-brokerage/): Zillow has officially launched a real estate brokerage, known as “Zillow Homes. ” The move is intended to “simplify and...
- [Cardinal Financial Mortgage Review: A High-Octane Mortgage Lender](https://www.thetruthaboutmortgage.com/cardinal-financial-mortgage-review/): One of the “most senior lenders in the industry,” in their own words, is Charlotte, North Carolina-based Cardinal Financial. The...
- [Is It a Bad Idea to Buy a Home During a Pandemic?](https://www.thetruthaboutmortgage.com/is-it-a-bad-idea-to-buy-a-home-during-a-pandemic/): A recent op-ed said buying a home during a pandemic was a terrible idea. The author, Teresa Ghilarducci, noted that...
- [NOVA Home Loans Review: Arizona's Mortgage Lender](https://www.thetruthaboutmortgage.com/nova-home-loans-review/): If you reside in Arizona, there’s a really good chance you’ve driven by a billboard advertising NOVA Home Loans. I...
- [Mortgage Lending Volume Hits Highest Level on Record Despite COVID-19](https://www.thetruthaboutmortgage.com/mortgage-lending-volume-hits-highest-level-on-record-despite-covid-19/): It makes sense that the mortgage industry would see its best quarter in history during a global pandemic. Okay, it...
- [Rounding Up Your Mortgage Payment: Can It Really Save You Money?](https://www.thetruthaboutmortgage.com/rounding-up-your-mortgage-payment-does-it-actually-work/): There are all sorts of gimmicks, tips, and tricks out there to pay down the mortgage a little (or a...
- [Beware the New Mortgage Fee Fearmongering](https://www.thetruthaboutmortgage.com/new-mortgage-fee-refinance/): You may have heard there’s a “new mortgage fee. ” And you might have been told to hurry up and...
- [CMG Financial Mortgage Review: Is Their All In One Loan for You?](https://www.thetruthaboutmortgage.com/cmg-financial-mortgage-review/): CMG Financial isn’t new to the mortgage industry, having been around since 1993. That makes them a veritable veteran in...
- [When Do Mortgage Payments Start? It Depends When You Close](https://www.thetruthaboutmortgage.com/when-do-mortgage-payments-start/): A little bit of mortgage Q&A: “When do mortgage payments start? ” New homeowners (and those refinancing a mortgage) often...
- [U.S. Bank Mortgage Review: Is Their Smart Refinance a Wise Choice for You?](https://www.thetruthaboutmortgage.com/us-bank-mortgage-review/): While there are thousands of mortgage companies nationwide, only a select few land in the top 10. Today, we’ll examine...
- [Fannie Mae and Freddie Mac Mortgage Refinances Just Got More Expensive](https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-mortgage-refinances-just-got-more-expensive/): Way to rain on our parade, Fannie Mae and Freddie Mac. Just when mortgage rates were hitting record lows, the...
- [How Low Will Mortgage Rates Go?](https://www.thetruthaboutmortgage.com/how-low-will-mortgage-rates-go/): It seems that lately we reach a new all-time low for mortgage rates just about every week, which begs the...
- [Do Mortgage Inquiries Affect Your Credit Score? Yes, But You Can Still Shop](https://www.thetruthaboutmortgage.com/do-mortgage-inquiries-affect-credit-score/): Mortgage Q&A: “Do mortgage inquiries affect credit score? ” When preparing to take out a mortgage, you may have concerns...
- [Prosperity Home Mortgage Review: A Berkshire Hathaway Backed Mortgage Lender](https://www.thetruthaboutmortgage.com/prosperity-home-mortgage-review/): Prosperity Home Mortgage based out of Chantilly, Virginia originally got started in the Carolinas back in 2006. While that was...
- [COVID-19 Is Pushing Home Buyers to Move Sooner](https://www.thetruthaboutmortgage.com/covid-19-is-pushing-home-buyers-to-move-sooner/): Sometimes you need a little push to get things going, especially when it’s a big something like purchasing a home....
- [UWM’s Exact Rate Lets Borrowers Choose Exact Mortgage Rates](https://www.thetruthaboutmortgage.com/uwms-exact-rate-lets-borrowers-choose-exact-mortgage-rates/): The mortgage industry can be a little bit old school. Similar to how the stock market used to operate in...
- [Homespire Mortgage Review: Now Waiving Lender Fees for Healthcare Workers](https://www.thetruthaboutmortgage.com/homespire-mortgage-review/): Today we’ll learn more about “Homespire Mortgage,” which has made the Inc. 5000’s List of America’s Fastest-Growing Private Companies for...
- [Is a 2.25% 30-Year Fixed Mortgage Rate in the Cards?](https://www.thetruthaboutmortgage.com/is-a-2-25-30-year-fixed-mortgage-rate-in-the-cards/): One of the problems with refinancing a home loan right now is that mortgage rates keep falling. As such, you...
- [Homeowners in Forbearance Plans Have Lower Credit Scores, Higher DTI Ratios](https://www.thetruthaboutmortgage.com/homeowners-in-forbearance-plans-have-lower-credit-scores-higher-dti-ratios/): The latest weekly Forbearance and Call Volume Survey from the Mortgage Bankers Association (MBA) revealed that 7. 80% of outstanding...
- [What Is a Gift of Equity? One Way to Buy Your Parents House](https://www.thetruthaboutmortgage.com/what-is-a-gift-of-equity/): One of the biggest hurdles to homeownership is down payment. Most people can afford a monthly mortgage payment, especially with...
- [Is Mortgage a Good Debt or a Bad Debt? It Can Be the Absolute Best Debt](https://www.thetruthaboutmortgage.com/is-mortgage-a-good-debt-or-a-bad-debt/): You may have heard that mortgage is a “good debt,” in that it’s okay to carry a multi-hundred-thousand-dollar loan for...
- [Knock Home Swap: Buy, Sell, a Get a Mortgage with Just One Company](https://www.thetruthaboutmortgage.com/knock-home-swap-buy-sell-a-get-a-mortgage-with-just-one-company/): One of the trickiest aspects of homeownership is unloading an existing property while acquiring a replacement. Aside from being stressful,...
- [A Look Inside the Books of Rocket Companies, Inc.](https://www.thetruthaboutmortgage.com/a-look-inside-the-books-of-rocket-companies-inc/): Thanks to a newly released SEC Form S-1 associated with their upcoming initial public offering (IPO), we now know a...
- [Now Home Prices Are Expected to Fall By 2021 Thanks to COVID-19](https://www.thetruthaboutmortgage.com/now-home-prices-are-expected-to-fall-by-2021-thanks-to-covid-19/): While the housing market has been coming up roses lately, even in the face of COVID-19, it might turn out...
- [The Top 25 Mortgage Lenders of 2019](https://www.thetruthaboutmortgage.com/the-top-25-mortgage-lenders-of-2019/): If you’re curious which mortgage lender closed the most home loans in 2019, I’ve got your answer. You probably already...
- [Veterans Can Now Get Rates as Low as 2.25% on a 30-Year Fixed Mortgage](https://www.thetruthaboutmortgage.com/veterans-can-now-get-rates-as-low-as-2-25-on-a-30-year-fixed-mortgage/): It seems mortgage rates keep moving lower and lower, and now some veterans and active duty military might be able...
- [COVID-19 May Have Just Been a Speed Bump for Surging Housing Market](https://www.thetruthaboutmortgage.com/covid-19-may-have-just-been-a-speed-bump-for-surging-housing-market/): We’re starting to get a better picture of how COVID-19 affected the housing market, with the National Association of Realtors’...
- [NewRez Mortgage Review: Are They the Home of Your Perfect Loan?](https://www.thetruthaboutmortgage.com/newrez-mortgage-review/): Newrez is one of the fastest growing mortgage lenders in the nation, currently offering a $1,000 closing cost credit to home buyers.
- [Quicken Loans IPO: Top Mortgage Lender Reportedly Going Public](https://www.thetruthaboutmortgage.com/quicken-loans-ipo-going-public/): Some very big news in the mortgage world – Quicken Loans is reportedly going public, with an IPO currently being...
- [Planet Home Lending Review: 3 Trees Planted for Every Closed Loan](https://www.thetruthaboutmortgage.com/planet-home-lending-review/): Planet Home Lending is a mortgage lender and loan servicer that was recently named one of the fairest lenders based on HMDA data.
- [5 Things to Know If Considering Mortgage Forbearance](https://www.thetruthaboutmortgage.com/5-things-to-know-if-considering-mortgage-forbearance/): If you’re a homeowner, or just became one during the pandemic, you’ve likely heard of mortgage forbearance. Not to be...
- [Home Equity Could Prevent Flood of Forbearance-Related Foreclosures](https://www.thetruthaboutmortgage.com/home-equity-could-prevent-flood-of-forbearance-related-foreclosures/): The latest Mortgage Monitor report from Black Knight reveals that many homeowners in forbearance plans are sitting on a healthy...
- [FHA Will Insure Mortgages in Forbearance, With a Catch](https://www.thetruthaboutmortgage.com/fha-will-buy-mortgages-in-forbearance-with-a-catch/): The Federal Housing Administration (FHA) finally announced a new policy, which is temporary, to endorse mortgages where the borrower has...
- [On Q Financial Mortgage Review: The Simple Way to Get a Mortgage?](https://www.thetruthaboutmortgage.com/on-q-financial-mortgage-review/): Today we’ll take a good look at On Q Financial, a direct mortgage lender based in Tempe, Arizona that wants...
- [PennyMac Mortgage Review: A Top-3 Mortgage Lender Nationally](https://www.thetruthaboutmortgage.com/pennymac-mortgage-review/): One of the fastest growing and largest mortgage lenders in the country goes by the name PennyMac, not to be...
- [Eagle Home Mortgage Review: Should You Get a Mortgage from the Nation’s Largest Homebuilder?](https://www.thetruthaboutmortgage.com/eagle-home-mortgage-review/): Update: Eagle Home Mortgage is now known as Lennar Mortgage. If you’re thinking about buying a home or refinancing an...
- [46% of Homeowners in Forbearance Plans Still Made Their Mortgage Payments](https://www.thetruthaboutmortgage.com/46-of-homeowners-in-forbearance-plans-still-made-their-mortgage-payments/): Another interesting trend has emerged from the latest mortgage forbearance data, this time courtesy of a new report from data...
- [Fairway Independent Mortgage Review: A Top-20 Lender Big on Home Purchase Financing](https://www.thetruthaboutmortgage.com/fairway-independent-mortgage-review/): One of the largest mortgage lenders in the country you may not have heard of is Fairway Independent Mortgage Corp....
- [Only 5% of Homeowners Who Got Approved for Mortgage Forbearance Needed It](https://www.thetruthaboutmortgage.com/only-five-percent-who-requested-mortgage-forbearance-needed-it/): Just five percent of homeowners who recently got approved for mortgage forbearance actually needed it, according to a shocking survey...
- [Despite COVID-19, You Can Still Get a Jumbo Home Loan](https://www.thetruthaboutmortgage.com/despite-covid-19-you-can-still-get-a-jumbo-home-loan/): While lots of lenders have recently cut back on offerings that aren’t backed explicitly by the government, some are rolling...
- [There Will Be a 3-Month Waiting Period to Get a Mortgage After Forbearance](https://www.thetruthaboutmortgage.com/mortgage-forbearance-waiting-period/): We’ve finally got some clarity regarding what happens after mortgage forbearance in terms of obtaining a subsequent home loan. The...
- [Mortgage Forbearance Rate Only Rises 3% From a Week Ago, But Second Wave Could Be Coming](https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-only-rises-3-from-a-week-ago-but-second-wave-could-be-coming/): Maybe there’s some good news out there, or maybe it’s just the calm before another storm. The mortgage forbearance rate...
- [Home Buyer Demand Bounces Back, Small Towns Become Hot](https://www.thetruthaboutmortgage.com/home-buyer-demand-bounces-back-small-towns-become-hot/): Well that didn’t take long – demand to buy a home is now back above its so-called 
“pre-coronavirus levels,” per...
- [Payment Deferral Will Be an Option to Repay Mortgage Forbearance](https://www.thetruthaboutmortgage.com/covid-19-payment-deferral/): The Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac have launched a new payment deferral...
- [Will Forbearance Prevent You from Getting a Mortgage in the Future?](https://www.thetruthaboutmortgage.com/will-forbearance-prevent-you-from-getting-a-mortgage-in-the-future/): Since the CARES Act rolled out in early April, more than four million Americans have reportedly put their mortgage payments...
- [It’s Now Possible to Get a 1.99% Mortgage Rate on a 30-Year Fixed](https://www.thetruthaboutmortgage.com/its-now-possible-to-get-a-2-5-mortgage-rate-on-a-30-year-fixed/): Here’s a good sign mortgage rates might be moving even lower than they already are. Pontiac, Michigan-based United Wholesale Mortgage...
- [Mortgage Forbearance Rate Up Near 8%, Housing Assistance Fund Proposed](https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-up-near-8-housing-assistance-fund-proposed/): The mortgage forbearance rate increased again last week, rising to 7. 91% from 7. 54% a week earlier, per the...
- [Home Prices vs. COVID-19: Will They Go Up or Down?](https://www.thetruthaboutmortgage.com/home-prices-vs-covid-19-will-they-go-up-or-down/): It’s time to take a look at how COVID-19 could impact home prices given the massive disruption to the local,...
- [Nearly 4 Million Homeowners Now in Mortgage Forbearance Plans, Servicers May Get $500 Payments](https://www.thetruthaboutmortgage.com/nearly-4-million-homeowners-now-in-mortgage-forbearance-plans-servicers-may-get-500-payments/): The mortgage forbearance rate worsened yet again compared to last week, though as expected the increase has slowed as the...
- [Loan Servicers Accused of Providing Unclear and Dated Mortgage Forbearance Information](https://www.thetruthaboutmortgage.com/loan-servicers-accused-of-providing-unclear-and-dated-mortgage-forbearance-information/): While some have complained that the mortgage forbearance program under the CARES Act is far too liberal, a new report...
- [NewDay USA Mortgage Review: A Mortgage Company Designed for Veterans](https://www.thetruthaboutmortgage.com/newday-usa-mortgage-review-a-mortgage-company-designed-for-veterans/): Today we’ll review NewDay USA, a mortgage lender that is geared specifically toward veterans and active duty military. Like other...
- [Mortgage Forbearance Rate Hits 7%, Fannie/Freddie May Offer Partial Claim to Repay](https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-hits-7-fannie-freddie-may-offer-partial-claim-to-repay/): Here we go again – the latest Forbearance and Call Volume Survey from the Mortgage Bankers Association’s (MBA) revealed that...
- [12 Reasons Today’s Housing Market Is Not the Great Recession All Over Again](https://www.thetruthaboutmortgage.com/12-reasons-todays-housing-market-is-not-the-great-recession-all-over-again/): While it’s becoming easier to compare the housing bust that sparked the Great Recession with today’s uncertain climate, the two...
- [FHFA Says No Lump Sum Due Once Mortgage Forbearance Ends](https://www.thetruthaboutmortgage.com/fhfa-says-no-lump-sum-due-once-mortgage-forbearance-ends/): It’s Monday and I’ve got some good news for homeowners regarding mortgage forbearance. This morning, the Federal Housing Finance Agency...
- [Quicken Loans Officially the Biggest Mortgage Lender in the Country](https://www.thetruthaboutmortgage.com/quicken-loans-officially-the-biggest-mortgage-lender-in-the-country/): Back in early 2018, Quicken Loans proclaimed it was the largest mortgage lender in the country, thanks to a solid...
- [It’s Going to Be Harder to Get a Mortgage Thanks to COVID-19](https://www.thetruthaboutmortgage.com/its-going-to-be-harder-to-get-a-mortgage-thanks-to-covid-19/): While the first quarter was booming for many mortgage lenders (see Quicken’s record month), the second quarter and beyond might...
- [Fannie Mae and Freddie Mac Agree to Buy Mortgages in Forbearance](https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-agree-to-buy-mortgages-in-forbearance/): While the CARES Act has allowed millions of homeowners nationwide to put their mortgage payments on hold, doing so has...
- [Nearly 6% of Mortgages in Forbearance as FHFA Provides Relief to Loan Servicers](https://www.thetruthaboutmortgage.com/nearly-6-of-mortgages-in-forbearance-as-fhfa-provides-relief-to-loan-servicers/): With each week that goes by, the mortgage forbearance rate climbs to new highs thanks to the coronavirus (COVID-19). The...
- [Introducing the Livestream Open House](https://www.thetruthaboutmortgage.com/introducing-the-livestream-open-house/): Necessity is the mother of innovation, and with that comes the so-called “Livestream Open House,” which has just been launched...
- [Nearly 3 Million Homeowners Already Receiving Mortgage Forbearance](https://www.thetruthaboutmortgage.com/nearly-3-million-homeowners-already-receiving-mortgage-forbearance/): We’re now getting more information on just how many Americans might be receiving mortgage relief due to the crippling effects...
- [Could a Cash Out Refinance Be a Better Solution Than Mortgage Forbearance?](https://www.thetruthaboutmortgage.com/could-a-cash-out-refinance-be-a-better-solution-than-mortgage-forbearance/): The current solution for those struggling to make mortgage payments due to COVID-19 is mortgage forbearance. It allows homeowners to...
- [Quicken Loans Just Had Its Biggest Month in History](https://www.thetruthaboutmortgage.com/quicken-loans-just-had-its-biggest-month-in-history/): The nation’s top retail mortgage lender just knocked it out of the park, despite the ongoing coronavirus pandemic. Quicken Loans...
- [Stimulus Checks Barely Make Dent in Mortgage](https://www.thetruthaboutmortgage.com/stimulus-checks-barely-make-dent-in-mortgage/): The so-called “coronavirus checks” have begun to hit Americans’ bank accounts this week, providing relief to those whose income has...
- [Mortgage Forbearance Rate Worsens, But Most Probably Won’t Lose Their Homes](https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-worsens-but-most-probably-wont-lose-their-homes/): Well, another week has gone by, and with that a new wave of mortgage forbearance requests. The total number of...
- [Chase Now Requires a 700 FICO and 20% Down to Get a New Mortgage](https://www.thetruthaboutmortgage.com/chase-now-requires-a-700-fico-and-20-down-to-get-a-new-mortgage/): Following in the footsteps of many other mortgage lenders of late, JP Morgan Chase has upped its minimum requirements to...
- [Citizens Bank Mortgage Review: Digital Process and a Smartphone App](https://www.thetruthaboutmortgage.com/citizens-bank-mortgage-review/): Today we’ll take a hard look at Citizens Bank Mortgage, which is operated by one of the oldest and largest...
- [Which Housing Markets Are Most at Risk From COVID-19?](https://www.thetruthaboutmortgage.com/which-housing-markets-are-most-at-risk-from-covid-19/): While it’s hard to compare the current possible housing crisis to the very real one experienced about a decade ago,...
- [Number of Mortgages in Forbearance Jumps Nearly 1000%](https://www.thetruthaboutmortgage.com/number-of-mortgages-in-forbearance-jumps-by-nearly-1000/): While estimates have ranged from two million to 12. 5 million, we’re now getting our first clues as to just...
- [How Is Mortgage Forbearance Paid Back? Lump Sum Now or Never?](https://www.thetruthaboutmortgage.com/how-is-mortgage-forbearance-paid-back/): At this point, most homeowners have probably heard of the CARES Act and its massive 12-month forbearance option for those...
- [Wells Fargo Will Only Give You a Jumbo Loan If You Have $250k in Their Bank](https://www.thetruthaboutmortgage.com/wells-fargo-will-only-give-you-a-jumbo-loan-if-you-have-250k-in-their-bank/): In yet another sign that the mortgage market is completely volatile and far from liquid, top mortgage lender Wells Fargo...
- [How Do I Know If Fannie Mae or Freddie Mac Owns My Mortgage?](https://www.thetruthaboutmortgage.com/how-do-i-know-if-fannie-mae-or-freddie-mac-owns-my-mortgage/): Quick mortgage tip: “How do I know if Fannie Mae or Freddie Mac owns my mortgage? ” One of the...
- [Real Estate Delistings Increase 148% From a Year Ago as COVID-19 Impact Grows](https://www.thetruthaboutmortgage.com/home-delistings-increase-148-from-a-year-ago-as-covid-19-impact-grows/): Housing supply was bad before the coronavirus epidemic reared its ugly head, and now it has gotten even worse, per...
- [Generate a Mortgage Forbearance Request Letter with This Free Tool](https://www.thetruthaboutmortgage.com/generate-a-mortgage-forbearance-request-letter-with-this-free-tool/): You may (or may not) have heard that the CARES Act is allowing a huge chunk of homeowners to request...
- [How Many Homeowners Are Expected to Miss Mortgage Payments Due to Coronavirus?](https://www.thetruthaboutmortgage.com/how-many-homeowners-are-expected-to-miss-mortgage-payments-due-to-coronavirus/): It’s the first of the month, and with that comes fear and uncertainty that both homeowners and renters won’t be...
- [I’ve Been Offered the Opportunity to Skip Two Mortgage Payments](https://www.thetruthaboutmortgage.com/ive-been-offered-the-opportunity-to-skip-two-mortgage-payments/): So I received an unmarked piece of mail the other day, and whenever that happens, I know it’s going to...
- [Clear Capital’s New OwnerInsight Tool Lets Homeowners Fill in Appraisal Gaps](https://www.thetruthaboutmortgage.com/clear-capitals-new-ownerinsight-tool-lets-homeowners-fill-in-appraisal-gaps/): As reported earlier this week, some important pieces of the home loan process have been disrupted by the ongoing and...
- [Fannie Mae and Freddie Mac Roll Out New Payment Deferral Option](https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-roll-out-new-payment-deferral-option/): To further complicate the complicated mortgage relief picture surrounding the coronavirus outbreak, Fannie Mae and Freddie Mac have released their...
- [California Homeowners Now Eligible for 90-Day Mortgage Payment Relief Due to Coronavirus](https://www.thetruthaboutmortgage.com/california-homeowners-now-eligible-for-90-day-mortgage-payment-relief/): California Governor Gavin Newsom has announced a “major financial relief package” that gives homeowners in the Golden State a three-month...
- [Streamlined Mortgage Relief Program Could Mean No Payments for 12 Months](https://www.thetruthaboutmortgage.com/streamlined-mortgage-relief-program-could-suspend-payments-for-12-months/): A group of mortgage industry heavyweights have sent a letter to the Federal Reserve, HUD, FHFA, CFPB, Treasury Department, and...
- [Quicken Loans Warns Some Parts of Loan Process May Not Proceed Due to Shelter-in-Place](https://www.thetruthaboutmortgage.com/quicken-loans-warns-some-parts-of-loan-process-may-not-proceed-due-to-shelter-in-place/): Quicken Loans told customers certain parts of the loan process “can’t proceed” in areas of the country affected by shelter-in-place...
- [Top iBuyers Stop Buying Homes: Zillow, Redfin, Opendoor Purchases All on Hold](https://www.thetruthaboutmortgage.com/top-ibuyers-stop-buying-homes-zillow-redfin-opendoor-all-on-hold/): The real estate market carnage continues with all the major iBuyers pausing home purchases thanks to the coronavirus. Zillow Offers...
- [Bank of America, Ally Home, Quicken Loans, Wells Fargo Offer to Defer Mortgage Payments Due to Coronavirus](https://www.thetruthaboutmortgage.com/bank-of-america-ally-home-offer-to-defer-mortgage-payments-due-to-coronavirus/): Here comes the mortgage assistance! I honestly thought I wouldn’t be writing about this sort of stuff anytime soon, but...
- [Mortgage Lenders Now Providing Payment Relief Due to Coronavirus](https://www.thetruthaboutmortgage.com/mortgage-lenders-may-provide-payment-relief-due-to-coronavirus/): CARES Act permits 6-12 month forbearance for mortgage payments on federally-backed home loans HUD has announced a foreclosure and eviction...
- [RedfinNow Temporarily Halts Offers as Housing Market Takes Turn for the Worse](https://www.thetruthaboutmortgage.com/redfinnow-temporarily-halts-offers-as-housing-market-takes-turn-for-the-worse/): We’re now getting our first indication of how the coronavirus may affect the once booming housing market, thanks to a...
- [Is Now the Time to Pull Cash Out of Your Home and Buy Stocks?](https://www.thetruthaboutmortgage.com/is-now-the-time-to-pull-cash-out-of-your-home-and-buy-stocks/): There’s been lots of chatter around Wall Street that this could be an unprecedented time to buy stocks on the...
- [Landed: Helping Educators Buy Homes in the Expensive Areas They Serve](https://www.thetruthaboutmortgage.com/landed-review/): There are tons of mortgage lenders out there, certainly too many to count, but Landed Home Loans is a little...
- [No, You Aren’t Getting a 0% Mortgage Rate](https://www.thetruthaboutmortgage.com/no-you-arent-getting-a-0-mortgage-rate/): At least not yet... As you probably know, the Fed slashed the federal funds rate to near-zero yesterday afternoon to...
- [The Federal Reserve Has Swooped In to Save Mortgage Rates](https://www.thetruthaboutmortgage.com/the-federal-reserve-has-swooped-in-to-save-mortgage-rates/): In light of the ongoing coronavirus outbreak, which were the Federal Reserve’s very own words, the Committee took bold action...
- [CrossCountry Mortgage Review: The Nation's Third Largest Retail Lender](https://www.thetruthaboutmortgage.com/crosscountry-mortgage-review/): Today we’ll do an in-depth review of CrossCountry Mortgage, which as the name implies, is a nationally-licensed mortgage lender that...
- [Lenox Financial / WesLend Mortgage Review: The Biggest No-Brainer?](https://www.thetruthaboutmortgage.com/lenox-financial-weslend-mortgage-review/): Today we’ll take a look at Southern California-based Lenox Financial Mortgage Corp. , which also does business as WesLend Financial....
- [Quicken Loans CEO Doesn’t See the 30-Year Fixed Falling Below 3%](https://www.thetruthaboutmortgage.com/quicken-loans-ceo-doesnt-see-the-30-year-fixed-falling-below-3/): Call him a party pooper, but the CEO of top retail mortgage lender Quicken Loans doesn’t expect mortgage rates to...
- [Churchill Mortgage Review: Dave Ramsey's Favorite Mortgage Lender](https://www.thetruthaboutmortgage.com/churchill-mortgage-review/): If you’ve heard of Dave Ramsey, you might have come across Churchill Mortgage, which happens to be his mortgage lender...
- [AmeriHome Mortgage Review: A Lender with a Countrywide Mortgage Pedigree](https://www.thetruthaboutmortgage.com/amerihome-mortgage-review/): Today we’ll take a hard look at AmeriHome Mortgage Company, LLC, which is a direct mortgage lender based out of...
- [Just How Popular Has iBuying Become?](https://www.thetruthaboutmortgage.com/just-how-popular-has-ibuying-become/): In 2019, one out of every 100 homes were purchased by an iBuyer, short for instant buyer, per a new...
- [Mortgage APR: Why It's More Important Than Just Looking at the Mortgage Rate](https://www.thetruthaboutmortgage.com/mortgage-rate-vs-apr/): An in-depth look at the difference between the mortgage interest rate and APR, including the limitations of each.
- [LemonBrew Launches Real Estate Agent Match and Rebate](https://www.thetruthaboutmortgage.com/lemonbrew-launches-real-estate-agent-match-and-rebate/): A new tech company called LemonBrew has launched its so-called “custom matching platform” to link up home buyers (and sellers)...
- [The Next Big Thing in Mortgage Is Keeping in Touch](https://www.thetruthaboutmortgage.com/the-next-big-thing-in-mortgage-is-keeping-in-touch/): I wrote a while back that more than half of consumers switched mortgage companies when obtaining a subsequent home loan....
- [Mortgage Rates vs. the Coronavirus: We Might Test New All-Time Lows](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-the-coronavirus/): Mortgage rates can be pretty volatile. Just like stocks, they can change daily depending on what’s happening in the economy....
- [Mortgage Delinquencies Have Fallen to the Lowest Level on Record](https://www.thetruthaboutmortgage.com/mortgage-delinquencies-have-fallen-to-the-lowest-level-on-record/): What a difference a decade makes, at least when it comes to paying the mortgage on time. A new report...
- [Quontic Bank Launches No Doc Streamline Mortgage Refinance](https://www.thetruthaboutmortgage.com/quontic-bank-launches-no-doc-streamline-mortgage-refinance/): Quontic Bank, which bills itself as an “adaptive digital bank,” has launched what they refer to as a “first of...
- [Quicken Loans’ One Reverse Mortgage to Pause Operations](https://www.thetruthaboutmortgage.com/quicken-loans-one-reverse-mortgage-to-pause-operations/): One Reverse Mortgage, a Quicken Loans company, is reportedly pausing operations, according to a statement delivered to Reverse Mortgage Daily....
- [Mortgage Due Dates 101: Is There Really a Grace Period?](https://www.thetruthaboutmortgage.com/mortgage-due-dates-101/): If you recently took out a mortgage, or have been thinking about purchasing real estate, you may be wondering when...
- [loanDepot Mortgage Review: Their Digital Process Helps You Close 17 Days Faster](https://www.thetruthaboutmortgage.com/loandepot-mortgage-review/): One of the largest nonbank mortgage lenders in the country is loanDepot, typically landing on the top-10 list overall year...
- [More Than a Quarter of Millennial Homeowners Want to Go Back to Renting](https://www.thetruthaboutmortgage.com/more-than-a-quarter-of-millennial-homeowners-want-to-go-back-to-renting/): I guess homeownership isn’t for everyone, at least if you consider a new study from LendingTree. When respondents were asked...
- [AmeriSave Mortgage Review: Pioneer of the Digital Mortgage?](https://www.thetruthaboutmortgage.com/amerisave-mortgage-review/): An in-depth look at Atlanta, GA-based direct lender AmeriSave Mortgage Corp., which claims to have launched digital origination.
- [A Fast Mortgage Isn’t Necessarily the Best Mortgage](https://www.thetruthaboutmortgage.com/a-fast-mortgage-isnt-necessarily-the-best-mortgage/): These days, all the mortgage advertisements I see promote speed. Get your loan fast. Get it with the push of...
- [HomeLight Cash Close:  Make All-Cash Offers and Trade-In Your Old Home for a New One](https://www.thetruthaboutmortgage.com/homelight-cash-close-review/): Real estate agent matchmaker HomeLight has launched two new programs for homeowners in California (and now Texas) that make it...
- [New American Funding Review: A Direct Lender That Isn't Shy About Sharing Its Mortgage Rates](https://www.thetruthaboutmortgage.com/new-american-funding-review/): New American Funding is a direct mortgage lender based in Tustin, CA that refers to itself as the #1 Hispanic mortgage lender in the United States.
- [Point Home Equity Review: Get Payment-Free Cash In Exchange for Future Home Price Appreciation](https://www.thetruthaboutmortgage.com/point-home-equity-review/): A company called Point wants to give you “early access to your home equity” without ever having to make monthly...
- [You Can Refinance a Mortgage with Bad Credit, However…](https://www.thetruthaboutmortgage.com/refinance-a-mortgage-with-bad-credit/): For some reason, folks always want to know if you can do X, Y, and Z with bad credit. Which...
- [Figure Review: The Fastest Way to Tap Home Equity?](https://www.thetruthaboutmortgage.com/figure-review-home-equity/): I received a letter in the mail the other day from a fintech company called “Figure” that claims it can...
- [Credible Mortgage Review: An Online Mortgage Broker Owned by Fox](https://www.thetruthaboutmortgage.com/credible-mortgage-review/): There are lots of different ways to get a mortgage these days – you can walk into a physical bank...
- [Don’t Take Out a Mortgage to Buy Super Bowl Tickets](https://www.thetruthaboutmortgage.com/dont-take-out-a-mortgage-to-buy-super-bowl-tickets/): I came across a new partnership between ticket marketplace Stubhub and fintech company Affirm that lets you pay for purchases...
- [Third Federal Mortgage Review: Is Their Smart Rate Right for You?](https://www.thetruthaboutmortgage.com/third-federal-mortgage-review/): Take a closer look at their Smart Rate ARMs and Low Cost mortgages that require just $295 out-of-pocket at closing.
- [Are Home Prices Going to Surge in 2020?](https://www.thetruthaboutmortgage.com/are-home-prices-going-to-surge-in-2020/): It’s a new year, and with that comes old questions, like will mortgage rates go up or down in 2020?...
- [Quicken Loans Review: Should You Get Your Home Loan from the Top Mortgage Lender in the Country?](https://www.thetruthaboutmortgage.com/quicken-loans-review/): If you’re looking to buy a home, or refinance an existing home loan you already have, you will undoubtedly come...
- [There Is No Mortgage Trick](https://www.thetruthaboutmortgage.com/there-is-no-mortgage-trick/): Over the years, I’ve seen tons of ads and articles about a so-called “mortgage trick,” only to click on the...
- [LendingTree Review: Compare Multiple Mortgage Offers Without Leaving Your House](https://www.thetruthaboutmortgage.com/lendingtree-review/): If you’ve been even remotely interested in taking out a home loan, you’ve undoubtedly heard of LendingTree, which bills itself...
- [Rocket Mortgage Becomes Official NFL Sponsor, Launches Super Bowl Squares Game](https://www.thetruthaboutmortgage.com/rocket-mortgage-becomes-official-nfl-sponsor-launches-super-bowl-squares-game/): If you’re into football squares, there’s a new game available via Rocket Mortgage by Quicken Loans related to them becoming...
- [Mortgage Rates vs. a Potential War with Iran](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-a-potential-war-with-iran/): Well, it’s a new year and it certainly didn’t begin quietly. Might as well address the elephant in the room...
- [2020 Real Estate and Mortgage Predictions](https://www.thetruthaboutmortgage.com/2020-real-estate-and-mortgage-predictions/): Well, 2019 is set to come to a close. It’s certainly been an interesting year (and decade), surely one to...
- [2020 Mortgage Rate Predictions: Expect Flat to Better](https://www.thetruthaboutmortgage.com/2020-mortgage-rate-predictions/): As 2019 wraps up, it’s time once again to consider what the future holds for mortgage rates. Looking back over...
- [2020 FHA Loan Limits Rise Five Percent from a Year Earlier](https://www.thetruthaboutmortgage.com/2020-fha-loan-limits-rise-five-percent-from-a-year-earlier/): Another year, another increase in FHA loan limits, thanks to yet another rise in home prices. This is good news...
- [2020 Loan Limits Rise Above $500,000 for Conforming Mortgages](https://www.thetruthaboutmortgage.com/2020-loan-limits-rise-above-500000-for-conforming-mortgages/): It’s that special time of the year again when the Federal Housing Finance Agency (FHFA) adjusts the conforming loan limit...
- [Offerpad: Sell Your Home in 10 Days Without Even Listing It](https://www.thetruthaboutmortgage.com/offerpad-review/): If you’re thinking about selling your home, you may have come across a company by the name of Offerpad. They...
- [Apple Pledges $1 Billion in Mortgage Assistance to First-Time Home Buyers in California](https://www.thetruthaboutmortgage.com/apple-pledges-1-billion-in-mortgage-assistance-to-first-time-home-buyers-in-california/): You know them for your computer, your phone, your TV streaming device, your TV programs (soon), maybe your credit card,...
- [Divvy Homes Review: Rent Now, Buy Later](https://www.thetruthaboutmortgage.com/divvy-homes-review/): Yet another disruptor, known as Divvy Homes, is out to change the rent-to-own space so more renters can become homeowners....
- [Are Closing Costs Included In a Mortgage?](https://www.thetruthaboutmortgage.com/are-closing-costs-included-in-mortgage/): Mortgage Q&A: “Are closing costs included in a mortgage? ” There seems to be a great deal of confusion when...
- [RealSure Review: Guaranteed Cash Offer While Your Home Is Listed](https://www.thetruthaboutmortgage.com/realsure-review-guaranteed-cash-offer/): There’s no question real estate is in full disruption mode, with endless companies vying to turn the age-old model of...
- [Compass Launches Bridge Loan Services to Close Gap Between Selling and Buying a Home](https://www.thetruthaboutmortgage.com/compass-bridge-loan-services-review/): Real estate brokerage Compass has launched a unique new offering known as “Compass Bridge Loan Services” that solves the buy...
- [Should I Use an iBuyer to Sell My Home?](https://www.thetruthaboutmortgage.com/what-is-an-ibuyer/): If you’re thinking about selling your home, you’ve got a lot of options. It’s not 2012 anymore, when you simply...
- [If You Took Out a VA Loan in the Past 20 Years, Look Out for a Possible Refund](https://www.thetruthaboutmortgage.com/va-loan-funding-fee-refund/): Over the past few years, VA loans have been at the center of controversies related to loan churning and high...
- [Curbio Review: Renovate Today, Pay When You Sell](https://www.thetruthaboutmortgage.com/curbio-review/): A startup named Curbio wants to help homeowners sell for more by improving their properties before they go to market....
- [2012 Was a Really Good Year to Buy a Home](https://www.thetruthaboutmortgage.com/2012-was-a-really-good-year-to-buy-a-home/): A new report from Redfin revealed 2012 was an absolutely fantastic time to purchase a home. Collectively, that crop of...
- [The Number One Reason Mortgages Were Denied in 2018](https://www.thetruthaboutmortgage.com/the-number-one-reason-mortgages-were-denied-in-2018/): Hint: It wasn’t because of a low credit score. Some say a mortgage (homeownership) is a privilege, not a right....
- [Blend Launches One Tap Pre-Approvals for Mortgages](https://www.thetruthaboutmortgage.com/blend-launches-one-tap-pre-approvals-for-mortgages/): The thing about mortgages is they continue to be difficult to obtain relative to just about everything else out there....
- [20-Year vs. 30-Year Mortgages: Is It Possible to Get an Even Lower Rate?](https://www.thetruthaboutmortgage.com/20-year-vs-30-year-mortgages/): It’s time for a new mortgage match-up. Since paying down the mortgage early seems to be so en vogue these...
- [Borrowers with Low Credit Scores Should Shop Their Mortgage More](https://www.thetruthaboutmortgage.com/borrowers-with-low-credit-scores-should-shop-their-mortgage-more/): Most people don’t bother shopping around for their mortgage, despite the tremendous potential savings involved. In fact, nearly half of...
- [Mortgages for Self-Employed Borrowers: Tips to Qualify](https://www.thetruthaboutmortgage.com/mortgages-for-self-employed-borrowers-tips-to-qualify/): It can be more difficult to get a mortgage if you're self-employed. Learn about the special requirements and loan programs available to business owners.
- [Opendoor Home Loans Review: Quick Closings, No Fees](https://www.thetruthaboutmortgage.com/opendoor-home-loans-review/): On August 29th, 2019, major iBuyer Opendoor launched a mortgage lending division known as “Opendoor Home Loans” to create a...
- [What Is a Lender Overlay? And How to Avoid Them](https://www.thetruthaboutmortgage.com/what-is-a-lender-overlay/): Mortgage Q&A: “What is a lender overlay? ” If you’ve been studying underwriting guidelines recently to determine if you’re eligible...
- [FHA Approved Condos: Individual Units Now Eligible for Financing!](https://www.thetruthaboutmortgage.com/fha-approved-condos-individual-units-now-eligible-for-financing/): People looking to buy a condo with FHA financing rejoice. HUD has released a new condominium approval process that, among...
- [You Might Get a Better Deal If You Buy a House Where Kids Live](https://www.thetruthaboutmortgage.com/you-might-get-a-better-deal-if-you-buy-a-house-where-kids-live/): It’s common knowledge that home buyers are interested in purchasing properties in good school districts. After all, many individuals purchase...
- [Mortgage Rates vs. the Stock Market](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-stock-market/): Mortgage match-ups: “Mortgage rates vs. the stock market. ” With all the recent stock market volatility, you may be wondering...
- [Wait, Home Buying Is the Cheapest It’s Been in 20 Years?](https://www.thetruthaboutmortgage.com/wait-home-buying-is-the-cheapest-its-been-in-20-years/): If you happen to be in the market to buy a home, you’re probably not giddy with delight over today’s...
- [Why a Low Down Payment Mortgage Might Be the Safer Move](https://www.thetruthaboutmortgage.com/why-a-low-down-payment-mortgage-might-be-the-safer-move/): If you ask most people, they’ll probably say you should save up a good chunk of money before buying a...
- [One Quick Reason to Avoid the 30-Year Fixed](https://www.thetruthaboutmortgage.com/one-quick-reason-to-avoid-the-30-year-fixed/): Here’s a hint – a moving van. While the 30-year fixed is the most common home loan program utilized by...
- [Amazon TurnKey: Get Free Stuff If You Use a Realogy Agent](https://www.thetruthaboutmortgage.com/amazon-turnkey-review/): While they’re not yet directly involved in the mortgage industry, Amazon has now dipped its toes in the real estate...
- [37% of American Homeowners Are Now Free and Clear](https://www.thetruthaboutmortgage.com/37-of-american-homeowners-are-now-free-and-clear/): What a difference a decade makes. Back in 2009, it was a lot more common to hear about underwater mortgages...
- [Mortgage Down Payment Requirements: What's the Minimum You Need to Put Down on a House?](https://www.thetruthaboutmortgage.com/a-primer-on-mortgage-down-payment-requirements/): An overview of down payment requirements for a variety of different mortgages, including what's required for conventional and government-backed home loans.
- [How to Get a Mortgage with a Low Credit Score](https://www.thetruthaboutmortgage.com/how-to-get-a-mortgage-with-a-low-credit-score/): If you’ve got a low credit score, but are determined to buy a new home (or looking to refinance your existing mortgage), you may be wondering how to get a mortgage.
- [How Soon Can You Refinance a Mortgage? Know the Waiting Periods](https://www.thetruthaboutmortgage.com/how-soon-can-i-refinance-my-mortgage/): Mortgage Q&A: “How soon can I refinance my mortgage? ” With mortgage rates marching toward new all-time lows again, a...
- [Owning Review: Not Your Nana's Mortgage Company](https://www.thetruthaboutmortgage.com/owning-review/): An online lender called “Owning” is looking to shake up the mortgage industry with what it refers to as “ridiculously...
- [Freddie Mac CHOICERenovation Mortgage Review](https://www.thetruthaboutmortgage.com/freddie-mac-choicerenovation-mortgage-review/): Freddie Mac has just launched a new renovation loan product known as the “Freddie Mac CHOICERenovation Mortgage. ” While the...
- [A Startup Called ZeroDown Just Launched to Help Home Buyers Lease to Own](https://www.thetruthaboutmortgage.com/startup-zerodown-lease-to-own/): It’s starting to feel a little like 2006 again. Recently, we’ve seen mortgage lenders launching interest-only mortgages, 40-year mortgage terms,...
- [What Is Home Equity?](https://www.thetruthaboutmortgage.com/what-is-home-equity/): Mortgage Q&A: “What is home equity? ” You’ve probably heard the phrase “home equity” get thrown around, likely during a...
- [Young Homeowners Are Having More Mortgage Regrets](https://www.thetruthaboutmortgage.com/young-homeowners-are-having-more-mortgage-regrets/): While homeowners of all ages are mostly happy they purchased a property, younger borrowers seem to be regretting their mortgages...
- [Why You Should Live in Your Home Until It Sells](https://www.thetruthaboutmortgage.com/why-you-should-live-in-your-home-until-it-sells/): A new study from Redfin proved what we probably all assumed was the case; vacant homes sell for less than...
- [Redfin Direct: Buy a Redfin-Listed Home Without a Real Estate Agent](https://www.thetruthaboutmortgage.com/redfin-direct-buy-a-redfin-listed-home-without-a-real-estate-agent/): First Redfin brought us the 1% listing fee, which disrupted the traditional 2. 5% to 3% listing agents charge(d) to...
- [What Credit Score Do You Need to Get a Mortgage? Learn the Key FICO Thresholds](https://www.thetruthaboutmortgage.com/what-credit-score-do-i-need-to-get-a-mortgage/): Mortgage Q&A: “What credit score do I need to get a mortgage? ” If you’re thinking about purchasing a new...
- [Why You Might Want to Skip the Starter Home](https://www.thetruthaboutmortgage.com/why-you-might-want-to-skip-the-starter-home/): Some 45 million Americans are expected to reach the typical first-time home buyer age in the next decade, which is...
- [Study: Open Houses Result in Faster, More Expensive Home Sales](https://www.thetruthaboutmortgage.com/study-open-houses-result-in-faster-more-expensive-home-sales/): Aside from tracking mud through your beautiful home, it turns out open houses actually lead to higher sales prices and...
- [Zillow Home Loans Is Now Live](https://www.thetruthaboutmortgage.com/zillow-home-loans-review-live/): Following the announcement made last summer to acquire Mortgage Lenders of America, “Zillow Home Loans” is now officially open for...
- [PITI: Find Out All That Goes Into Your Mortgage Payment](https://www.thetruthaboutmortgage.com/what-does-a-mortgage-payment-consist-of/): More fun and exciting mortgage Q&A: “What does a monthly mortgage payment consist of? ” Have you ever been curious...
- [loanDepot’s Mello Smartloan Can Shorten Mortgage Closing to Just 8 Days](https://www.thetruthaboutmortgage.com/loandepot-mello-smartloan/): In yet another effort to push mortgage lending firmly into the 21st century, loanDepot has debuted its proprietary “mello smartloan”...
- [Is the 30-Year Fixed Mortgage Going Extinct?](https://www.thetruthaboutmortgage.com/is-the-30-year-fixed-mortgage-going-extinct/): It’s that time again when we fret about the viability of the 30-year fixed mortgage. This last occurred in 2014...
- [Is the Real Estate Market Going to Crash in 2019?](https://www.thetruthaboutmortgage.com/is-the-real-estate-market-going-to-crash-in-2019/): There have been a lot of unpleasant headlines regarding the state of the real estate market lately. Earlier this week,...
- [What Is a Good Price for a First-Time Home Buyer?](https://www.thetruthaboutmortgage.com/what-is-a-good-price-for-a-first-time-home-buyer/): How to figure out a good price to pay for a home as a first-time home buyer, and ensuring you qualify for that loan amount.
- [The Cost of Property Taxes and Hazard Insurance](https://www.thetruthaboutmortgage.com/the-cost-of-property-taxes-and-hazard-insurance/): As home prices continue to flirt with record highs nationwide, the cost of property taxes and hazard insurance can be...
- [15 Things to Do After Your Mortgage Funds Besides Buy New Furniture](https://www.thetruthaboutmortgage.com/15-things-to-do-after-your-mortgage-funds/): Getting a mortgage can be pretty exciting, especially if it’s your first time. It can also be a very daunting...
- [Chase Launches Free Biweekly Mortgage Payment Option](https://www.thetruthaboutmortgage.com/chase-launches-free-biweekly-mortgage-payment-option/): In an effort to make life a little easier for its mortgage customers, Chase has launched a new suite of...
- [What Is a Non-Conforming Mortgage Loan? And How Does It Affect You?](https://www.thetruthaboutmortgage.com/what-is-a-non-conforming-mortgage-loan/): If you’ve been doing some mortgage shopping/research lately and happened to come across the phrase “non-conforming loan,” you might have...
- [2019 Mortgage Rate Forecast: We Could Be in for a Big Surprise](https://www.thetruthaboutmortgage.com/2019-mortgage-rate-forecast-we-could-be-in-for-a-big-surprise/): Just like that another year has passed, well almost, so it’s time once again to look forward to what the...
- [2019 FHA Loan Limits Rise: Floor Climbs Above $300k](https://www.thetruthaboutmortgage.com/2019-fha-loan-limits-rise-floor-climbs-above-300k/): Following the release of the 2019 conforming loan limit, HUD announced the 2019 FHA loan limits, which like the former...
- [Home Prices vs. Recessions](https://www.thetruthaboutmortgage.com/home-prices-vs-recessions/): There have been three recessions since the 1990s, including the Great Recession, which took place from 2007 and 2009 and...
- [2019 Mortgage and Real Estate Predictions](https://www.thetruthaboutmortgage.com/2019-mortgage-and-real-estate-predictions/): First off, here are my 2018 predictions in case you want to see how they panned out. Overall, I think...
- [2019 Conforming Loan Limit Will Be $484,350 for Mortgages Backed by Fannie and Freddie](https://www.thetruthaboutmortgage.com/2019-conforming-loan-limit-will-be-484350-for-mortgages-backed-by-fannie-and-freddie/): As expected, the conforming loan limit for 2019 has increased thanks to an ongoing rise in property values, according to...
- [Guaranteed Rate Mortgage Review: A Fast-Growing Top-10 Lender](https://www.thetruthaboutmortgage.com/guaranteed-rate-mortgage-review/): If you haven’t heard of “Guaranteed Rate,” there’s a good chance you’ve never applied for a home loan before. Or...
- [What Is Verification of Employment for a Mortgage? Proving Your Job History](https://www.thetruthaboutmortgage.com/what-is-verification-of-employment-for-a-mortgage/): When you apply for a mortgage, underwriters will comb through your finances to determine if you’re a good candidate for...
- [Wells Fargo the Top Mortgage Lender in 2017, Quicken Tops for Number of Loans](https://www.thetruthaboutmortgage.com/wells-fargo-the-top-mortgage-lender-in-2017-quicken-tops-for-number-of-loans/): Despite closing a higher number of mortgage loans last year, Quicken Loans was unable to wrestle the coveted top spot...
- [PrimeLending Mortgage Review: Committed to Customer Satisfaction](https://www.thetruthaboutmortgage.com/primelending-mortgage-review-committed-to-customer-satisfaction/): Today let’s talk about PrimeLending, a PlainsCapital Company, which is a top-10 mortgage lender that does business in all 50...
- [Sell Your House or Rent It Out? The Pros and Cons](https://www.thetruthaboutmortgage.com/sell-your-house-or-rent-it-out/): If you already own some real estate, perhaps a house or a condo, and are looking to move on, you...
- [How to Get Cash Out of Your Home in a Rising Rate Environment](https://www.thetruthaboutmortgage.com/how-to-get-cash-out-of-your-home-in-a-rising-rate-environment/): In a perfect world, you could tap into your home equity and lower your mortgage interest rate at the same...
- [Redfin Launches the Owner Estimate to Give Homeowners Control](https://www.thetruthaboutmortgage.com/redfin-launches-the-owner-estimate-to-give-homeowners-control/): Are you sick and tired of your Redfin Estimate or Zillow Zestimate being too low? Do you feel your property...
- [The Largest Nonbank Home Purchase Lender in the Nation Is a Wholesaler](https://www.thetruthaboutmortgage.com/the-largest-nonbank-home-purchase-lender-in-the-nation-is-a-wholesaler/): Everyone wants to be #1 these days. I guess that’s no different than any other days, but the battle to...
- [Quicken Launches Rocket Homes to Compete with Zillow and Redfin](https://www.thetruthaboutmortgage.com/quicken-launches-rocket-homes-to-compete-with-zillow-and-redfin/): Following the recent trend of real estate and mortgage link-ups, Quicken Loans has launched “Rocket Homes” to fill in the...
- [5 Things Home Buyers Are Doing If They Haven’t Found a Property After 3 Months](https://www.thetruthaboutmortgage.com/5-things-home-buyers-are-doing-if-they-havent-found-a-property-after-3-months/): If you’re a prospective home buyer, life isn’t fun right now. The real estate market remains red hot (despite those...
- [Zillow Enters the Mortgage Originating Business](https://www.thetruthaboutmortgage.com/zillow-enters-the-mortgage-originating-business/): In what seemed like a pretty inevitable move, Zillow has gotten into the mortgage originating business via its acquisition of...
- [Don’t Make the Mistake of Calling the Housing Top Too Early](https://www.thetruthaboutmortgage.com/dont-make-the-mistake-of-calling-the-housing-top-too-early/): It’s that time of year again, when we enter the housing doldrums and everyone in the industry begins to panic....
- [Freedom Mortgage Review: Specialize in VA Loans But Offer Everything Else Too](https://www.thetruthaboutmortgage.com/freedom-mortgage-review-specialize-in-va-loans-but-offer-everything-else-too/): While “Freedom Mortgage” might not be a household name like Quicken Loans or Wells Fargo, the company often finds itself...
- [Getting a Mortgage with a Gig Economy Job](https://www.thetruthaboutmortgage.com/getting-a-mortgage-with-a-gig-economy-job/): If you’re one of many people out there who happens to bring in money from a so-called “gig economy” job,...
- [Redfin Compete Score: How Hard Is It to Win That Home?](https://www.thetruthaboutmortgage.com/redfin-compete-score-how-hard-is-it-to-win-that-home/): Redfin just launched its so-called “Compete Score,” a tool designed to help prospective home buyers determine how hard it’ll be...
- [Flagstar Mortgage Review: Tons of Loan Programs to Choose From](https://www.thetruthaboutmortgage.com/flagstar-mortgage-review-tons-of-loan-programs-to-choose-from/): One of the larger, but perhaps lesser-known mortgage lenders out there is Flagstar Bank, which was just acquired by New...
- [Average Home Seller in 2017 Made Only $39,000](https://www.thetruthaboutmortgage.com/average-home-seller-in-2017-made-only-39000/): While all the headlines paint a really rosy picture for the real estate market where sellers are cashing in mega...
- [Should You Pay Off Your Mortgage Before Retirement? There Are Pros and Cons](https://www.thetruthaboutmortgage.com/should-you-pay-off-your-mortgage-before-retirement/): If you speak to any financial planners or so-called experts on the matter, they’ll probably say, “Yes, pay off your...
- [Laurel Road: Truly Digital Mortgages Built Entirely Online](https://www.thetruthaboutmortgage.com/laurel-road-truly-digital-mortgages-built-entirely-online/): Another Millennial or even Gen-Z focused mortgage lender has come online, literally, to offer you a mortgage. I’m talking about...
- [PNC Mortgage Review: Low Rates Maybe, and Now a Digital Application Process Too](https://www.thetruthaboutmortgage.com/pnc-mortgage-review-low-rates-maybe-but-not-much-else/): If you haven’t heard of PNC Mortgage before, you probably will soon. They’re a rapidly growing mortgage lender just outside the top-10 list.
- [Citi Is Offering .50% Off Your Mortgage Rate If You Deposit a Million Bucks](https://www.thetruthaboutmortgage.com/citi-is-offering-50-off-your-mortgage-rate-if-you-deposit-a-million-bucks/): Okay, it sounds a little silly, but it’s not a bad deal if you happen to have a million dollars...
- [Freddie Mac HomeOne Mortgage: New 3% Down Mortgage with No Income Restrictions](https://www.thetruthaboutmortgage.com/freddie-mac-homeone-mortgage-new-3-down-mortgage-with-no-income-restrictions/): A new home loan program is being rolled out this July by Freddie Mac, known as “HomeOne Mortgage,” which features...
- [Mortgage Rates Vary by Lender, So Take the Time to Shop Around](https://www.thetruthaboutmortgage.com/mortgage-rates-vary-by-lender-so-shop-around/): While mortgages are largely a commoditized product, unlike perhaps a TV or a smartphone with unique technology, their cost can...
- [Carrington Mortgage Launches Line of Subprime Mortgages](https://www.thetruthaboutmortgage.com/carrington-mortgage-launches-line-of-subprime-mortgages/): Here we go again? Maybe, maybe not. Regardless, Carrington Mortgage has launched a new line of subprime mortgages available to...
- [Getting a Mortgage on a Duplex, Triplex, or Fourplex](https://www.thetruthaboutmortgage.com/getting-a-mortgage-on-a-duplex-triplex-or-fourplex/): One trend I’ve been seeing lately is buying a multi-unit property, such as a duplex, and renting out one unit...
- [What Will Happen to Home Sales If Mortgage Rates Rise to 9%?](https://www.thetruthaboutmortgage.com/what-will-happen-to-home-sales-if-mortgage-rates-rise-to-9/): There’s been a lot of hubbub about mortgage rates since the start of the year. It’s not unwarranted, given the...
- [Guild Mortgage Review - A Mortgage Lender Big on Customer Satisfaction](https://www.thetruthaboutmortgage.com/guild-mortgage-review/): Guild Mortgage is one name you may have come across lately while searching for a mortgage. They’re a rapidly growing...
- [MassHousing Launches Zero Down Mortgage](https://www.thetruthaboutmortgage.com/masshousing-launches-zero-down-mortgage/): There is yet another zero down mortgage option available to prospective home buyers, the latest being offered by The Massachusetts...
- [USAA Mortgage Review: VA Loans, Jumbo, and More](https://www.thetruthaboutmortgage.com/usaa-mortgage-review-va-loans-jumbo-and-more/): USAA Mortgage, technically known as USAA Bank Home Loans, is one of the larger mortgage lenders out there, though not...
- [Amazon Mortgage Might Be a Thing Soon](https://www.thetruthaboutmortgage.com/amazon-mortgage-might-be-a-thing-soon/): There have been a lot of so-called mortgage disruptors entering the space of late, but this might be the biggest...
- [Ideal Credit Union Is Offering a Zero Down Mortgage with a Catch](https://www.thetruthaboutmortgage.com/ideal-credit-union-is-offering-a-zero-down-mortgage-with-a-catch/): Ideal Credit Union, which has six locations scattered across Minnesota, is the latest mortgage company to offer a no down...
- [What Is a Gift Letter for a Mortgage? Know the Key Requirements](https://www.thetruthaboutmortgage.com/what-is-a-gift-letter-for-a-mortgage/): Mortgage Q&A: “What is a gift letter? ” A reader recently inquired about mortgage gift letters, so instead of simply...
- [2017 Was the Best Year for Home Purchase Mortgages Since the Market Peak](https://www.thetruthaboutmortgage.com/2017-was-the-best-year-for-home-purchase-mortgages-since-the-market-peak/): It turns out 2017 was a banner year for mortgages, just not all of them. A total of $1. 148...
- [HUD Homes: Buy a Foreclosed Home for a Potential Discount](https://www.thetruthaboutmortgage.com/hud-homes-buy-a-foreclosed-home-for-a-potential-discount/): With the red hot real estate market showing no signs of letting up, prospective home buyers need to get increasingly...
- [There Are Still Nearly 90,000 Borrowers Who Could Benefit from a HARP Refinance](https://www.thetruthaboutmortgage.com/there-are-still-nearly-90000-borrowers-who-could-benefit-from-a-harp-refinance/): Before mortgage rates began their recent upward trajectory to start off 2018, quite a few mortgage refinances squeaked through the...
- [loanDepot Has a 150-Day Rate Lock for Those Who Want Today’s Rates This Summer](https://www.thetruthaboutmortgage.com/loandepot-has-a-150-day-rate-lock-for-those-who-want-todays-rates-this-summer/): I came across a flyer today from loanDepot advertising a 150-day rate lock for borrowers interested in today’s mortgage rates,...
- [Higher Mortgage Rates Likely to Have Little Effect on Housing Market](https://www.thetruthaboutmortgage.com/higher-mortgage-rates-likely-to-have-little-effect-on-housing-market/): Well, it’s been a stressful couple of weeks, and the way the stock market is swinging at the moment, it...
- [Airbnb Income Can Officially Be Used to Qualify for a Mortgage Refinance](https://www.thetruthaboutmortgage.com/airbnb-income-can-officially-be-used-to-qualify-for-a-mortgage-refinance/): Call it a sign of the times, or perhaps the power of the sharing, or “gig” economy. You can now...
- [Top Reverse Mortgage Lender AAG Now Offering Forward Mortgages](https://www.thetruthaboutmortgage.com/top-reverse-mortgage-lender-aag-now-offering-forward-mortgages/): File this one under: why didn’t we (they) think of this sooner. While it might seem like a no-brainer in...
- [Quicken Loans Is the Largest Home Loan Lender for the First Time Ever](https://www.thetruthaboutmortgage.com/quicken-loans-is-the-largest-home-loan-lender-for-the-first-time-ever/): Anyone watching this space knew it was going to happen, but perhaps not this fast. Quicken Loans officially became the...
- [Better Mortgage Is Giving Home Buyers Pre-Offer Appraisals to Help Them Compete](https://www.thetruthaboutmortgage.com/better-mortgage-is-offering-pre-offer-home-appraisals-to-its-customers/): In a bid to get a leg up on the competition, Better Mortgage is allowing prospective home buyers to get...
- [PHH Mortgage to Provide Borrowers with $30.4 Million for Improper Loan Servicing](https://www.thetruthaboutmortgage.com/phh-mortgage-to-provide-borrowers-with-30-4-million-for-improper-loan-servicing/): It’s 2018 and the mortgage settlements continue. As part of an agreement reached today with 49 states and Washington D....
- [Guaranteed Rate Launches New Jumbo Loan with Interest-Only Option](https://www.thetruthaboutmortgage.com/guaranteed-rate-launches-new-jumbo-loan-with-interest-only-option/): Well, it’s a new year, and with that comes new and exciting home loan programs to help borrowers purchase homes...
- [2018 Real Estate and Mortgage Predictions](https://www.thetruthaboutmortgage.com/2018-real-estate-and-mortgage-predictions/): Just like that, another year has gone by, well, almost. There are still a few days left and anything can...
- [See How Exuberant Your Housing Market Is](https://www.thetruthaboutmortgage.com/see-how-exuberant-your-housing-market-is/): Back in the mid-1990s, former Federal Reserve Board chairman Alan Greenspan used the phrase “irrational exuberance,” which served as a...
- [2018 Mortgage Rate Forecast: Overall It’s Looking Pretty Good](https://www.thetruthaboutmortgage.com/2018-mortgage-rate-forecast-overall-its-looking-pretty-good/): It’s that time of the year again, when we take a look at what’s in store for mortgage rates the...
- [Will 2018 Be the Last Great Year for This Real Estate Boom?](https://www.thetruthaboutmortgage.com/will-2018-be-the-last-great-year-for-this-real-estate-boom/): A new survey of housing experts and economists led by Zillow sees home prices rising 4. 1% in 2018 before...
- [2018 FHA Loan Limit Floor Increased to $294,515](https://www.thetruthaboutmortgage.com/2018-fha-floor-loan-limit-increased-to-294515/): Just like the 2018 conforming loan limits, the FHA will see its 2018 loan limits increase as well, which is...
- [Can You Pay the Mortgage with Bitcoin?](https://www.thetruthaboutmortgage.com/can-you-pay-the-mortgage-with-bitcoin/): Mortgage Q&A: “Can you pay the mortgage with bitcoin? ” First off, I apologize for writing an article about bitcoin....
- [New Program Allows Renters to Get a Mortgage with as Little as a Security Deposit](https://www.thetruthaboutmortgage.com/new-program-allows-renters-to-get-a-mortgage-with-as-little-as-a-security-deposit/): Home Partners of America and New Penn Financial have joined forces to offer renters the ability to get a mortgage...
- [2018 Conforming Loan Limit Jumps to $453,100](https://www.thetruthaboutmortgage.com/2018-conforming-loan-limit-jumps-to-453100/): It’s that time of year again, when the FHFA announces the conforming loan limit for the upcoming year. And like...
- [Are Mortgages Simple Interest and Compounded Monthly?](https://www.thetruthaboutmortgage.com/are-mortgages-simple-interest-and-compounded-monthly/): People seem to be fascinated with how mortgages are calculated and paid off, but when it comes down to it,...
- [Flagstar Offering Zero Down Mortgages to Michigan Home Buyers](https://www.thetruthaboutmortgage.com/flagstar-offering-zero-down-mortgages-to-michigan-home-buyers/): Flagstar Bank is the latest mortgage lender to offer a home loan with zero down payment requirement. They even go...
- [Capital One to Stop Offering Mortgages](https://www.thetruthaboutmortgage.com/capital-one-to-stop-offering-mortgages/): It’s feeling a little like 2007 today. Back then, I was writing posts like this on a daily basis. Capital...
- [OfferPad Home Loans: iBuyer Links Up with loanDepot to Provide Bridge Financing](https://www.thetruthaboutmortgage.com/offerpad-home-loans-ibuyer-links-up-with-loandepot-to-provide-bridge-financing/): A so-called direct home buyer by the name of OfferPad that agrees to purchase homes in as little as 24...
- [The Five Most Common Uses of Home Equity Lines of Credit](https://www.thetruthaboutmortgage.com/the-five-most-common-uses-of-home-equity-lines-of-credit/): In case you hadn’t heard, home equity lines of credit are expected to get a lot more popular in coming...
- [10 Takeaways from the Annual Realtor Survey](https://www.thetruthaboutmortgage.com/10-takeaways-from-the-annual-realtor-survey/): The National Association of Realtors just released its 2017 Profile of Home Buyers and Sellers, and there are lots of...
- [New Bill Aims to End FHA Mortgage Insurance Premiums for Life Policy](https://www.thetruthaboutmortgage.com/new-bill-aims-to-end-fha-mortgage-premiums-for-life-policy/): Back in 2013, FHA home loans became a lot less attractive because most newly originated mortgages required mortgage insurance to...
- [Imagine Getting a Mortgage with Just a Couple Clicks](https://www.thetruthaboutmortgage.com/imagine-getting-a-mortgage-with-just-a-couple-clicks/): Wouldn’t it be nice if your mortgage lender could gather your income, asset, and employment information from a single digital...
- [FHA 203k Loan Program: The All-in-One Renovation Mortgage](https://www.thetruthaboutmortgage.com/fha-203k-loan-program-the-all-in-one-renovation-mortgage/): In a nutshell, the FHA 203k loan program allows prospective home buyers to finance the cost of a property and...
- [While Mortgages Go Digital, People Still Matter, a Lot](https://www.thetruthaboutmortgage.com/while-mortgages-go-digital-people-still-matter-a-lot/): The latest buzz in the mortgage world is e-mortgages, or digital mortgages, or paperless mortgages. Or mortgages that don’t require...
- [Freddie Mac Revises Student Loan Guidelines](https://www.thetruthaboutmortgage.com/freddie-mac-revises-student-loan-guidelines/): It’s one of the more common dilemmas these days – you graduated college and you’re ready to start a family...
- [Millennials Are Buying Homes to Give Their Dogs Room to Roam](https://www.thetruthaboutmortgage.com/millennials-are-buying-homes-to-give-their-dogs-room-to-roam/): Curious what’s driving Millennial homeownership? Is it marriage or the prospect of a little one crawling around? Nope. Aside from...
- [Mortgage Originations by Product Type: What’s Most Popular?](https://www.thetruthaboutmortgage.com/mortgage-originations-by-product-type-whats-most-popular/): Ever wonder what share of borrowers are taking out a 15-year mortgage as opposed to a standard 30-year fixed? Or...
- [Synovus Mortgage Offering 100% Financing via Affordable Mortgage Program](https://www.thetruthaboutmortgage.com/synovus-mortgage-offering-100-financing-via-affordable-mortgage-program/): You’ve probably heard of HAMP, otherwise known as the Home Affordable Modification Program, which was very popular post-housing crisis. But...
- [HomeFundMe: Now You Can Crowdfund a Mortgage Down Payment](https://www.thetruthaboutmortgage.com/homefundme-now-you-can-crowdfund-a-mortgage-down-payment/): Don’t have the required down payment to purchase your dream home? No problem. There’s now a service that lets you...
- [Lennar Offers to Pay Your Student Loans If You Buy a New Home](https://www.thetruthaboutmortgage.com/lennar-offers-to-pay-your-student-loans-if-you-buy-a-new-home/): One of the more common problems young home buyers face these days is student loan debt, which can complicate a...
- [A 30-Year Fixed Mortgage That Is Adjustable, Self-Refinancing, and Ideally Paid Off Early](https://www.thetruthaboutmortgage.com/a-30-year-fixed-mortgage-that-is-adjustable-self-refinancing-and-ideally-paid-off-early/): Confused yet? Yeah, me too. Let’s dive in. For a while now, the 30-year fixed-rate mortgage has been under attack....
- [ZHome Lets You Sell Your Current Home in 24 Hours So You Can Buy a Brand New One](https://www.thetruthaboutmortgage.com/zhome-lets-you-sell-your-current-home-in-24-hours-so-you-can-buy-a-brand-new-one/): A company called ZHome, which can apparently generate an offer to buy your home within 24 hours, is also making...
- [Wells Fargo Hit with Lawsuit Related to Improper Mortgage Lock Fees](https://www.thetruthaboutmortgage.com/wells-fargo-hit-with-lawsuit-related-to-improper-mortgage-lock-fees/): It’s been a tough year or so for Wells Fargo, the undisputed king of mortgages. While they continue to lead...
- [360 Mortgage Group Touting 15-Minute Mortgage Approval Sans Loan Officer](https://www.thetruthaboutmortgage.com/360-mortgage-group-touting-15-minute-mortgage-approval-sans-loan-officer/): A mortgage bank by the name of “360 Mortgage Group” is making some lofty claims, one being a 15-minute full...
- [Jay-Z and Beyoncé Take Out $52.8 Million Mortgage on Bel Air Home](https://www.thetruthaboutmortgage.com/jay-z-and-beyonce-take-out-52-8-million-mortgage-on-bel-air-home/): Think you can’t get a jumbo home loan these days? Think again. Power couple Jay-Z and Beyoncé somehow managed to...
- [Mr. Cooper Mortgage Review: The Lender Formerly Known as Nationstar](https://www.thetruthaboutmortgage.com/mortgage-lender-nationstar-becomes-mr-cooper-will-offer-home-rewards-credit-card/): Nationstar Mortgage, which was once on the brink of failure, officially announced its name change to “Mr. Cooper” in August...
- [Primary Residence vs. Second Home vs. Investment: Know the Key Differences](https://www.thetruthaboutmortgage.com/primary-residence-vs-second-home-vs-investment/): Sometimes I’m surprised I miss the most basic of mortgage definitions, seeing that this blog has been around for more...
- [Soon You May Be Able to Buy a House Without an Appraisal](https://www.thetruthaboutmortgage.com/soon-you-may-be-able-to-buy-a-house-without-an-appraisal/): Here’s something that may finally speed up the typically slow home loan process: an appraisal-less home purchase. Yep, it’ll be...
- [These Six Things Will Happen If Mortgage Rates Go Up](https://www.thetruthaboutmortgage.com/these-six-things-will-happen-if-mortgage-rates-go-up/): We’ve been worrying that mortgage rates would go up for years now, but it just hasn’t happened yet. Sure, they’re...
- [Millennials Favor Conventional Mortgages Over FHA](https://www.thetruthaboutmortgage.com/millennials-favor-conventional-mortgages-over-fha/): I’ve got more Millennial mortgage data for you, courtesy of the monthly Ellie Mae Millennial Tracker. This is a heavily...
- [What Will Happen to Your Mortgage When the LIBOR Goes Away? Hello SOFR!](https://www.thetruthaboutmortgage.com/what-will-happen-to-your-mortgage-when-the-libor-goes-away/): If you have an adjustable-rate mortgage, I’ve got some important news for you. The London Interbank Offered Rate, or LIBOR...
- [1% Down Payment Mortgages Come Under Fire](https://www.thetruthaboutmortgage.com/1-down-payment-mortgages-come-under-fire/): While we’ve come a long way since housing bottomed, the memories of how we got there still don’t feel very...
- [Ally Home Launches Price Match Guarantee for Mortgages](https://www.thetruthaboutmortgage.com/ally-home-launches-price-match-guarantee-for-mortgages/): Mortgage industry newcomer Ally Home is getting into the price match game with its just launched promotion called, you guessed...
- [How Long Does It Take to Get a Mortgage? Think a Month, Not Minutes](https://www.thetruthaboutmortgage.com/how-long-does-it-take-to-get-a-mortgage/): Mortgage Q&A: “How long does it take to get a mortgage? ” This is a fairly common mortgage question because...
- [For Some Reason, Homeowner Regrets Are on the Rise](https://www.thetruthaboutmortgage.com/for-some-reason-homeowner-regrets-are-on-the-rise/): Despite the red-hot real estate market, more Americans are regretting their home purchases, per a new Trulia survey. It’s a...
- [Millennials Seem to Like Adjustable Rate Mortgages](https://www.thetruthaboutmortgage.com/millennials-seem-to-like-adjustable-rate-mortgages/): It’s not just avocado toast. A new anecdotal report from the WSJ reveals that Millennials who are buying homes are...
- [RedfinNow: Get an Offer on Your Home Within 24 Hours (Shut Down Nov. 22)](https://www.thetruthaboutmortgage.com/redfin-now-get-an-offer-on-your-home-within-24-hours/): Are you the impatient type? Well, have I’ve got news for you. A new service dubbed “RedfinNow” will get you...
- [One Third of Home Buyers Made Offers Without Actually Visiting the Property](https://www.thetruthaboutmortgage.com/one-third-of-home-buyers-made-offers-without-actually-visiting-the-property/): Is the housing market getting stupid again, or is technology changing the way we buy homes? That’s still up for...
- [Fannie Mae Increasing Max DTI to 50%, Upping LTVs for ARMs](https://www.thetruthaboutmortgage.com/fannie-mae-increasing-max-dti-to-50-dti-upping-ltvs-for-arms/): There’s been a lot of talk lately about mortgage lenders easing credit standards as refinance volume wanes and purchase activity...
- [Homie: A Startup Is Eliminating Real Estate Agent and Loan Officer Commissions](https://www.thetruthaboutmortgage.com/homie-a-startup-is-eliminating-real-estate-agent-and-loan-officer-commissions/): There’s a new startup out there called “Homie” that transforms the old way people buy and sell homes by harnessing...
- [Guild Mortgage Latest to Offer a 1% Down Payment Mortgage](https://www.thetruthaboutmortgage.com/guild-mortgage-latest-to-offer-a-1-down-payment-mortgage/): It seems 1% down is the new zero down in the mortgage world, with San Diego-based Guild Mortgage the latest...
- [Movement Mortgage Launches Zero Down Mortgage Called MAP](https://www.thetruthaboutmortgage.com/movement-mortgage-launches-zero-down-mortgage-called-map/): Movement Mortgage is the latest of many mortgage lenders to offer a zero down option for prospective home buyers, referred...
- [Magilla Lets You Shop Mortgage Lenders Anonymously](https://www.thetruthaboutmortgage.com/magilla-lets-you-shop-mortgage-lenders-anonymously/): There’s a new disruptor in the mortgage space called Magilla that lets you shop for a mortgage anonymously, assuming you...
- [Zillow Offers: For Those Who Want to Sell Their Home Fast](https://www.thetruthaboutmortgage.com/zillow-instant-offers-for-those-who-want-to-sell-their-home-fast/): The online real estate marketplace Zillow has just launched a new feature called “Zillow Offers,” formerly known as Zillow Instant...
- [Traditional 20% Mortgage Down Payment Could Be Cut in Half](https://www.thetruthaboutmortgage.com/traditional-20-mortgage-down-payment-could-be-cut-in-half/): I recently wrote about the need to put down 20% when buying a home, which although often recommended, isn’t a...
- [Can Credit Card Churning Hurt Your Chances of Getting a Mortgage?](https://www.thetruthaboutmortgage.com/can-credit-card-churning-hurt-your-chances-of-getting-a-mortgage/): These days, it’s not uncommon for individuals to open a bunch of credit cards in a short span of time...
- [The Best Time to Buy a Home Is in August and September](https://www.thetruthaboutmortgage.com/the-best-time-to-buy-a-home-is-in-august-and-september/): Wondering when the best time to buy a home is? And the worst time? Well, thanks to data science, we...
- [Chase Is Offering 75,000 Ultimate Rewards Points When You Take Out a Mortgage](https://www.thetruthaboutmortgage.com/chase-is-offering-100000-ultimate-rewards-points-when-you-take-out-a-mortgage/): It’s not very common for mortgage lenders to offer cash back or some other sort of reward for taking out...
- [What Is Mortgage Protection Insurance? And Do You Actually Need to Buy It?](https://www.thetruthaboutmortgage.com/what-is-mortgage-protection-insurance-and-do-you-need-it/): You just closed your home loan and now a company is trying to sell you "mortgage protection insurance." What is it and should you buy it?
- [Today’s Mortgages Are Not Your Older Sibling’s Mortgages](https://www.thetruthaboutmortgage.com/todays-mortgages-are-not-your-older-siblings-mortgages/): While pundits and fusspots continue to question whether we’re headed for another housing bubble, consider this: The most recent mortgages...
- [Credit Bureau Experian Launches Real-Time Asset and Income Verification for Mortgages](https://www.thetruthaboutmortgage.com/credit-bureau-experian-launches-real-time-asset-and-income-verification-for-mortgages/): Mortgage lenders have come a long way in the past decade. They used to approve loans without the need for...
- [The 5/5 ARM Is an Adjustable-Rate Mortgage for the Faint of Heart](https://www.thetruthaboutmortgage.com/the-55-arm-is-an-adjustable-rate-mortgage-for-the-faint-of-heart/): There’s a popular new loan in town that a lot of credit unions seem to be offering known as the...
- [Warren Buffett Just Listed a Home for $11 Million That He Paid $150,000 For](https://www.thetruthaboutmortgage.com/warren-buffett-just-listed-a-home-for-11-million-that-he-paid-150000-for/): At first glance, I’m wondering why he didn’t list it for $10,999,999, but shoot, he probably has a reason. Legendary...
- [Pay Down Your Debts Before You Apply for a Mortgage to Increase Purchasing Power](https://www.thetruthaboutmortgage.com/pay-down-your-debts-before-you-apply-for-a-mortgage-to-increase-purchasing-power/): With home prices (and interest rates) on the rise, it’s getting more and more difficult to qualify for a mortgage....
- [BurkeyLoan: A 120% LTV Mortgage That’s Portable and Can Pay Off Student Loans](https://www.thetruthaboutmortgage.com/burkeyloan-a-120-ltv-mortgage-thats-portable-and-can-pay-off-student-loans/): It sounds like magic, doesn’t it? A mortgage that allows for a loan-to-value ratio as high as 120%, portability, and...
- [Chase Wants You to Have a Digital Mortgage Experience](https://www.thetruthaboutmortgage.com/chase-wants-you-to-have-a-digital-mortgage-experience/): While they might be better known for credit cards at this point, Chase also offers mortgages. And now they want...
- [Guaranteed Rate Affinity: Another Mortgage Lender and Real Estate Company Link Up](https://www.thetruthaboutmortgage.com/guaranteed-rate-affinity-another-mortgage-lender-and-real-estate-company-link-up/): The mortgage and real estate marriage trend continues, this time with Realogy and Guaranteed Rate joining forces to create a...
- [Loftium Offers Mortgage Assistance If You Airbnb Your Extra Bedroom](https://www.thetruthaboutmortgage.com/loftium-offers-mortgage-assistance-if-you-airbnb-your-extra-bedroom/): Here’s a strange one – a new company by the name of Loftium is offering down payment money and “monthly...
- [2017 Mortgage Rates Are Expected to Stay in the 4% Range](https://www.thetruthaboutmortgage.com/2017-mortgage-rates-are-expected-to-stay-in-the-4-range/): Before you panic, take comfort in the fact that mortgage rates probably won’t do too much in 2017, just as...
- [Redfin Mortgage Now Available in 20 States and DC](https://www.thetruthaboutmortgage.com/redfin-mortgage-just-launched/): Whoa. In an unexpected turn of events, online real estate brokerage Redfin has launched a new mortgage service called, you...
- [Black Knight Is Working on Its Own Mortgage Credit Score](https://www.thetruthaboutmortgage.com/black-knight-is-working-on-its-own-mortgage-credit-score/): Black Knight Financial Services is apparently working on its own “mortgage-specific FICO score” to better determine individual mortgage borrower risk,...
- [The Pros and Cons of Trump’s FHA Premium Cut Freeze](https://www.thetruthaboutmortgage.com/the-pros-and-cons-of-trumps-fha-premium-cut-freeze/): You’ve heard the news. President Trump announced a freeze on the expected 25-basis point FHA premium cut just a week...
- [Would You Rather Have a Low Mortgage Rate or Pay a Lower Price for a Home?](https://www.thetruthaboutmortgage.com/would-you-rather-have-a-low-mortgage-rate-or-pay-a-lower-price-for-a-home/): My friend asked me the other day if I’d rather have a low mortgage rate or pay a lower price...
- [Mortgage Rates vs. Presidential Inaugurations: Is There a Correlation?](https://www.thetruthaboutmortgage.com/mortgage-rates-vs-presidential-inaugurations-is-there-a-correlation/): Let’s get political – just kidding. Let’s talk about data that involves presidential elections and mortgage rates, more specifically, what...
- [2017 Mortgage and Real Estate Predictions](https://www.thetruthaboutmortgage.com/2017-mortgage-and-real-estate-predictions/): Well, another year has passed, and not just any year. Some have referred to 2016 as the worst year ever,...
- [Home Prices Rise at Fastest Pace Since 2006](https://www.thetruthaboutmortgage.com/home-prices-rise-at-fastest-pace-since-2006/): Just when you thought things were cooling off, home prices surprised us with yet another killer year. Tomorrow, Zillow will...
- [Fannie and Freddie Launch Flex Modification Program: No Paperwork Required in Some Cases](https://www.thetruthaboutmortgage.com/fannie-and-freddie-launch-flex-modification-program-no-paperwork-required-in-some-cases/): Fannie Mae and Freddie Mac have launched a new loan modification program for troubled mortgages known as “Flex Modification. ”...
- [Fairway Mortgage App: Close Your Mortgage with Your Phone](https://www.thetruthaboutmortgage.com/fairway-mortgage-app-close-your-mortgage-with-your-phone/): Fairway Independent Mortgage Corp. plans to launch a new smartphone app designed to make the home loan process a lot...
- [Ally Home Loans: Bank Now Offers Retail Mortgages to Its Customers](https://www.thetruthaboutmortgage.com/ally-home-bank-now-offers-retail-mortgages-to-its-customers/): You may remember GMAC Bank, which was taken down by its fateful mortgage arm Residential Capital (ResCap) before eventually requiring...
- [Caliber Home Loans Unveils Ultimate Homebuying Experience: Close Your Mortgage in 10 Days](https://www.thetruthaboutmortgage.com/caliber-home-loans-unveils-ultimate-homebuying-experience-close-your-mortgage-in-10-days/): Caliber Home Loans out of Irving, Texas wants to close your mortgage faster than anyone else, and thinks it can...
- [Is the 30-Year Fixed Mortgage Actually a Lot of Work?](https://www.thetruthaboutmortgage.com/is-the-30-year-fixed-mortgage-actually-a-lot-of-work/): I typically refer to the 30-year fixed mortgage as a set-it-and-forget-it type of mortgage because it’s fixed for the entire...
- [Post-Election Mortgage Rate Surge Crushes Refi Candidates, Puts Home Prices on Watch](https://www.thetruthaboutmortgage.com/post-election-mortgage-rate-surge-crushes-refi-candidates-puts-home-prices-on-watch/): It’s been an eventful three weeks or so since the U. S. presidential election took place, that is, if you...
- [Is Now the Time to Slow Down Mortgage Repayment?](https://www.thetruthaboutmortgage.com/is-now-the-time-to-slow-down-mortgage-repayment/): Now that mortgage rates have jumped, it might be time to take a look at how you’re repaying your mortgage....
- [President-Elect Trump vs. Mortgage Rates](https://www.thetruthaboutmortgage.com/president-elect-trump-vs-mortgage-rates/): You may have already read the headlines. Things like Trump-fueled Treasury surge and the so-called Trump Effect, all driving mortgage...
- [SoFi Wants You to Pay Off Your Student Loans with a Mortgage](https://www.thetruthaboutmortgage.com/sofi-wants-you-to-pay-off-your-student-loans-with-a-mortgage/): Often times student loans get in the way of a mortgage because of the tremendous monthly debt, but fintech lender...
- [HomeBridge Financial to Acquire Prospect Mortgage Loan Platform](https://www.thetruthaboutmortgage.com/homebridge-financial-to-acquire-prospect-mortgage-loan-platform/): HomeBridge Financial Services announced this morning that it plans to acquire the operating assets of Prospect Mortgage, LLC headquartered in...
- [FHA Lowers Owner-Occupancy Requirement to 35% for Certain Condos](https://www.thetruthaboutmortgage.com/fha-agrees-to-lower-owner-occupancy-requirement-to-35-for-certain-condos/): Effective immediately, the FHA will lower its owner-occupancy requirement for certain approved condominium complexes to just 35%. That means a...
- [Home Purchase Mortgage Volume to Exceed $1 Trillion in 2017](https://www.thetruthaboutmortgage.com/home-purchase-mortgage-volume-to-exceed-1-trillion-in-2017/): Good News for Real Estate Agents The Mortgage Bankers Association (MBA) expects home purchase lending to hit $1. 1 trillion...
- [Motto Mortgage Looks to Save the Mortgage Broker](https://www.thetruthaboutmortgage.com/motto-mortgage-looks-to-save-the-mortgage-broker/): Today, RE/MAX Holdings announced the launch of a new one-of-a-kind franchised mortgage brokerage known as Motto Mortgage. In a nutshell,...
- [Your Mortgage Is About to Get More Paperless, Finally](https://www.thetruthaboutmortgage.com/your-mortgage-is-about-to-get-more-paperless-finally/): They say the average mortgage application contains some 500 pages, which explains part of the frustration mortgage borrowers feel when...
- [Plastiq Lets You Charge the Mortgage for a Fee](https://www.thetruthaboutmortgage.com/plastiq-lets-you-charge-the-mortgage-for-a-fee/): A company called Plastiq enables consumers to make payments with their credit cards that might not otherwise be accepted by...
- [Check Out the Top 40 Mortgage Lenders in 2015](https://www.thetruthaboutmortgage.com/check-out-the-top-40-mortgage-lenders-in-2015/): If you’re wondering which mortgage company originated the most home loans last year, stop wondering and take a look. Most...
- [Why Your USDA Loan Just Got Cheaper](https://www.thetruthaboutmortgage.com/why-your-usda-loan-just-got-cheaper/): After increasing the price of a USDA-insured mortgage last year, the Rural Housing Service has now slashed the associated fees...
- [Why Don’t More People with High-Rate Mortgages Refinance?](https://www.thetruthaboutmortgage.com/why-dont-more-people-with-high-rate-mortgages-refinance/): If you have a mortgage, you’ve undoubtedly had some company urge you to refinance, especially right now with mortgage rates...
- [Mortgage Lender Offers to Share Servicing Income with Its LOs](https://www.thetruthaboutmortgage.com/mortgage-lender-to-share-servicing-income-with-loan-officers/): A Virginia-based mortgage lender has launched a loan officer compensation plan that provides originators with a piece of the loan...
- [It's Now Easier to Get a Mortgage Without a Credit Score](https://www.thetruthaboutmortgage.com/its-now-easier-to-get-a-mortgage-without-a-credit-score/): Fannie Mae has rolled out a new version of its automated writing system, known as Desktop Underwriter® (DU®) Version 10....
- [See Which Phase of the Housing Cycle Your City Is In](https://www.thetruthaboutmortgage.com/see-which-phase-of-the-housing-cycle-your-city-is-in/): Recently, I wrote about when the next housing crash might take place. For opportunists, it’s something to look forward to....
- [Morty: The Mortgage Broker 2.0](https://www.thetruthaboutmortgage.com/morty-the-mortgage-broker-2-0/): There’s yet another mortgage disruptor in town, the latest goes by the name of “Morty. ” Sounds like a play...
- [Women Are Better at Paying the Mortgage Despite Worse Terms](https://www.thetruthaboutmortgage.com/women-are-better-at-paying-the-mortgage-despite-worse-terms/): A new study from the Urban Institute reveals that women are better at paying the mortgage despite receiving less favorable...
- [Permanent HARP Refinance Replacements Have Been Unveiled](https://www.thetruthaboutmortgage.com/permanent-harp-refinance-replacements-have-been-unveiled/): A little over a year ago, I wrote that HARP had received its final extension. I affixed the word “probably”...
- [Mortgage Recasting 101: How It Works and What It Does](https://www.thetruthaboutmortgage.com/mortgage-recasting-101-how-it-works-and-what-it-does/): You may have heard that you can lower your monthly mortgage payment without refinancing via a “mortgage recast. ” These...
- [Airbnb Is Reportedly Messing Up Mortgage Applications](https://www.thetruthaboutmortgage.com/airbnb-is-reportedly-messing-up-mortgage-applications/): If you’ve been renting out your own house or condo via Airbnb, or a similar service like HomeAway or FlipKey,...
- [Zillow: Homes Would Be Worth More Without the Housing Bubble](https://www.thetruthaboutmortgage.com/zillow-homes-would-be-worth-more-without-the-housing-bubble/): A new analysis from Zillow reveals that many homes would actually be worth a lot more today had there been...
- [Quicken Loan’s 1% Down Mortgage Program](https://www.thetruthaboutmortgage.com/quicken-loans-1-down-mortgage-program/): It seems just about everyone is lowering mortgage down payment requirements to deal with rising home prices, this despite the...
- [Mortgage Origination Volume Expected to Hit $2 Trillion This Year](https://www.thetruthaboutmortgage.com/mortgage-origination-volume-expected-to-hit-2-trillion-this-year/): While many expected the mortgage market to cool off this year thanks to both rising home prices and higher mortgage...
- [Buy a Home in a Good School District Even If You Don’t Have or Want Kids](https://www.thetruthaboutmortgage.com/buy-a-home-in-a-good-school-district-even-if-you-dont-have-or-want-kids/): Over the years, we’ve learned that buying homes near certain types of businesses can boost the value quite substantially. For...
- [This Blog Is 10 Years Old Today: What’s Different Today in the Mortgage Industry?](https://www.thetruthaboutmortgage.com/this-blog-is-10-years-old-today-whats-different-today-in-the-mortgage-industry/): A week or so ago, I was scanning through my archived posts and it occurred to me that my blog’s...
- [New Guaranteed Rate Double Match Mortgage Gives You 2% of the Down Payment for Free](https://www.thetruthaboutmortgage.com/new-guaranteed-rate-double-match-mortgage-gives-you-2-of-the-down-payment-for-free/): No it’s not déjà vu, or Groundhog Day. Guaranteed Rate has launched yet another 1% down payment mortgage in the...
- [Unison Will Provide Half Your Down Payment in Exchange for Future Appreciation](https://www.thetruthaboutmortgage.com/firstrex-will-provide-half-your-down-payment-in-exchange-for-future-appreciation/): If you’re a little light on down payment funds, a company called FirstREX (now known as “Unison Home Ownership Investors”)...
- [Time Heals All Real Estate Wounds If You Let It](https://www.thetruthaboutmortgage.com/time-heals-all-real-estate-wounds-if-you-let-it/): Let’s talk about real estate investment for a moment. A recent commentary from mortgage financier Freddie Mac revealed that those...
- [You Probably Shouldn’t Go with the Mortgage Lender That Sends You Junk Mail](https://www.thetruthaboutmortgage.com/you-probably-shouldnt-go-with-the-mortgage-lender-that-sends-you-junk-mail/): Look Familiar? This probably goes without saying, but I’ll say it anyway because I recently received a very pressing letter...
- [Create a Phone Number Just for Mortgage Shopping](https://www.thetruthaboutmortgage.com/create-a-phone-number-just-for-mortgage-shopping/): I think just about everyone can agree that shopping for a mortgage isn’t fun. This would explain why few people...
- [United Wholesale Mortgage Launches 1% Down Home Loan for Brokers](https://www.thetruthaboutmortgage.com/united-wholesale-mortgage-launches-1-down-home-loan-for-brokers/): Yep, it’s another post about a 1% down home loan, which seems to be the next big thing in the...
- [BancorpSouth Has a No Fee 100% LTV Mortgage That Doesn’t Require Mortgage Insurance](https://www.thetruthaboutmortgage.com/bancorpsouth-has-a-no-fee-100-ltv-mortgage-that-doesnt-require-mortgage-insurance/): While it might sound too good to be true, BancorpSouth out of Tupelo, Mississippi has a mortgage with virtually no...
- [Fifth Third Bank Offering No Down Payment Mortgage](https://www.thetruthaboutmortgage.com/fifth-third-bank-offering-no-down-payment-mortgage/): It appears the pesky down payment hurdle to homeownership is finally being swept aside. This week, Fifth Third Bank out...
- [Is It Actually a Good Thing That a Home Is an Illiquid Asset?](https://www.thetruthaboutmortgage.com/is-it-actually-a-good-thing-that-a-home-is-an-illiquid-asset/): Here’s yet another post on the rent vs. buy argument, one that never seems to go away. I’ve written extensively...
- [25 Trade Groups Call for Elimination of Loan-Level Pricing Adjustments](https://www.thetruthaboutmortgage.com/25-trade-groups-call-for-elimination-of-loan-level-pricing-adjustments/): More than two dozen trade groups have called for the reduction or elimination of loan-level pricing adjustments (LLPAs) on Fannie...
- [UK Mortgage Lenders Offering 0.99% Mortgage Rates](https://www.thetruthaboutmortgage.com/uk-mortgage-lenders-offering-0-99-mortgage-rates/): While U. S. -based mortgage lenders (and borrowers) are expected to benefit from Brexit via lower mortgage rates, the opposite...
- [Brexit vs. Mortgage Rates: How Low Might They Actually Go?](https://www.thetruthaboutmortgage.com/brexit-vs-mortgage-rates-how-low-might-they-actually-go/): Bye Bye Britain Well, the unthinkable happened early this morning (or late last evening depending on where you live). The...
- [A Bank Is Offering Discounted Mortgage Rates Because Cleveland Won an NBA Championship](https://www.thetruthaboutmortgage.com/a-bank-is-offering-discounted-mortgage-rates-because-cleveland-won-an-nba-championship/): If you didn’t hear the news, LeBron James and his Cleveland Cavaliers won the NBA championship. It’s pretty amazing because...
- [Guaranteed Rate Launches 1% Down Payment Mortgage Program](https://www.thetruthaboutmortgage.com/guaranteed-rate-launches-1-down-payment-mortgage-program/): This seems to be a theme lately – super low or no down payment mortgages. The latest of these not-so-novel...
- [There’s a New ‘Lite Doc’ Loan in the Mortgage World](https://www.thetruthaboutmortgage.com/theres-a-new-lite-doc-loan-in-the-mortgage-world/): It feels a little like 2006, but it’s entirely different, or so they say. A lender by the name of...
- [Borrowers with Mortgage Rates of 4.25% and Below Less Likely to Sell Their Homes](https://www.thetruthaboutmortgage.com/borrowers-with-mortgage-rates-of-4-25-and-below-less-likely-to-sell-their-homes/): I had a nice little Sunday yesterday, strolling around a beach city south of Los Angeles with some friends of...
- [3 Signs Another Housing Crisis Is Just Around the Corner](https://www.thetruthaboutmortgage.com/3-signs-another-housing-crisis-is-just-around-the-corner/): Here’s yet another post in my growing series of wondering if home prices are too high. Earlier this week, Black...
- [Looking for 100% Mortgage Financing? Check Your Local Credit Union](https://www.thetruthaboutmortgage.com/looking-for-100-mortgage-financing-check-your-local-credit-union/): We all know home prices are getting more expensive every day, and as a result, you may be looking for...
- [Chase Also Launched a 3% Down Payment Mortgage](https://www.thetruthaboutmortgage.com/chase-also-launched-a-3-down-payment-mortgage/): It’s been a busy month for the launch of low-down payment mortgages... It turns out Chase also has a 3%...
- [The Surprising Mistake a Lot of People Make Before Refinancing](https://www.thetruthaboutmortgage.com/the-surprising-mistake-a-lot-of-people-make-before-refinancing/): A new study from credit bureau TransUnion revealed that consumers still don’t get it when it comes to smart credit...
- [Wells Fargo yourFirst Mortgage: You Only Need a 3% Down Payment](https://www.thetruthaboutmortgage.com/wells-fargo-yourfirst-mortgage-you-only-need-a-3-down-payment/): The nation’s largest mortgage lender, Wells Fargo, is now offering mortgages to home buyers with just 3% down via their...
- [If You Put Down Less Than 20%, You’re Paying Mortgage Insurance](https://www.thetruthaboutmortgage.com/if-you-put-down-less-than-20-youre-paying-mortgage-insurance/): Here’s yet another anecdote involving some buddies who were arguing about their mortgages. This seems to be a trend lately....
- [Know Which Type of Mortgage You Want Before Speaking to Any Lenders](https://www.thetruthaboutmortgage.com/know-which-type-of-mortgage-you-want-before-speaking-to-any-lenders/): So I was chatting with a couple buddies the other night about their mortgages, as I do sometimes, and the...
- [A Return to Bubble-Era Home Prices Doesn’t Signal a Crisis](https://www.thetruthaboutmortgage.com/a-return-to-bubble-era-home-prices-doesnt-signal-a-crisis/): There’s renewed fear that another housing crisis is on the horizon because home values are inching closer and closer to...
- [Paying Your Mortgage Faster So You Can Actually Sell Your Home](https://www.thetruthaboutmortgage.com/paying-your-mortgage-faster-so-you-can-actually-sell-your-home/): Most people seem to be obsessed with paying off their mortgage early, whether it’s good for them or not. Clearly...
- [Can We Use These Charts to Predict the Next Housing Crisis?](https://www.thetruthaboutmortgage.com/can-we-use-these-charts-to-predict-the-next-housing-crisis/): The Urban Institute released its monthly chartbook today, which provides tons of data about the mortgage market. As I scanned...
- [Should You Buy a Home Where the FHA Loan Share Is High?](https://www.thetruthaboutmortgage.com/should-you-buy-a-home-where-the-fha-loan-share-is-high/): Another one of those wonky Federal Reserve papers was released last week, which made the claim that government-backed mortgage insurance...
- [Bernie Sanders Wants Every Homeowner to Get the Mortgage Interest Deduction](https://www.thetruthaboutmortgage.com/bernie-sanders-wants-every-homeowner-to-get-the-mortgage-interest-deduction/): It’s that time of the year again, when presidential hopefuls lay out their plans to save America and get the...
- [Get a Fixed Mortgage If You’re Worried You Won’t Be Able to Get Another One](https://www.thetruthaboutmortgage.com/get-a-fixed-mortgage-if-youre-worried-you-wont-be-able-to-get-another-one/): Recently, I wrote about how an adjustable-rate mortgage can make a lot of sense if you’re not planning on staying...
- [You Can Sell Your Home for More If It Looks Like a Barn](https://www.thetruthaboutmortgage.com/you-can-sell-your-home-for-more-if-it-looks-like-a-barn/): How to Boost Your Home’s Value If you’re thinking about listing your home in the coming months (or this month),...
- [LendingHome Declares Itself the Largest Mortgage Marketplace Lender](https://www.thetruthaboutmortgage.com/lendinghome-review-declares-itself-the-largest-mortgage-marketplace-lender/): LendingHome, a marketplace lender that claims it’s “the best way for borrowers to get a mortgage,” announced this week that...
- [Why You May Want to Apply for That Mortgage Alone](https://www.thetruthaboutmortgage.com/why-you-may-want-to-apply-for-that-mortgage-alone/): Conventional wisdom tells us that two salaries are better than one, especially when it comes to qualifying for a mortgage....
- [Get Up to One Million Credit Card Miles When You Apply for a Mortgage with Capital One](https://www.thetruthaboutmortgage.com/get-up-to-one-million-credit-card-miles-when-you-apply-for-a-mortgage-with-capital-one/): Are you looking to snag a boatload of credit card miles in a hurry? Well, you can score up to...
- [Use Your Tax Refund to Pay Down the Mortgage](https://www.thetruthaboutmortgage.com/use-your-tax-refund-to-pay-down-the-mortgage/): It’s that time of year again, unfortunately. We’re just a few weeks away from April 15th, a day no one...
- [Now You Can Trade Your House In for a New One Like a Car Lease](https://www.thetruthaboutmortgage.com/now-you-can-trade-your-house-in-for-a-new-one-like-a-car-lease/): How Real Estate Once Was Buying and selling real estate used to be really hard And very time consuming I...
- [Buy a House Close to Target, Not Walmart](https://www.thetruthaboutmortgage.com/buy-a-house-close-to-target-not-walmart/): Finding That Perfect Location In my quest to find the perfect home location, as opposed to one poorly located, I...
- [Zillow Says Early May Is Now the Best Time to Sell a Home](https://www.thetruthaboutmortgage.com/zillow-says-early-may-is-now-the-best-time-to-sell-a-home/): A previous study from Redfin found that winter was the best time to sell a home, which seemed a bit...
- [Home Flippers in 2015 Were the Most Active Since 2007](https://www.thetruthaboutmortgage.com/home-flippers-in-2015-were-the-most-active-since-2007/): 179,778 Properties Flipped in 2015 Is it time to worry? Home prices are surging, affordability is becoming a concern, and...
- [Skupit Lets You Make an Offer on a Home in Five Minutes](https://www.thetruthaboutmortgage.com/skupit-lets-you-make-an-offer-on-a-home-in-five-minutes/): Looking to purchase a home and not waste any time doing so? Well, a new company called “Skupit” might be...
- [Refinancing to an ARM If You Plan on Moving Soon](https://www.thetruthaboutmortgage.com/refinancing-to-an-arm-if-you-plan-on-moving-soon/): I was looking at rates on hybrid adjustable-rate mortgages the other day and thought it could make sense for some...
- [Bank of America 3% Down Payment Mortgage Being Rolled Out](https://www.thetruthaboutmortgage.com/bank-of-america-3-down-payment-mortgage-being-rolled-out/): Bank of America’s Affordable Loan Solution The widely available 3% down home loan program Is being branded by individual banks...
- [Lender Launches 7/1 ARM with 20-Year Amortization to Help Borrowers Own Their Homes Faster](https://www.thetruthaboutmortgage.com/lender-launches-71-arm-with-20-year-amortization-to-help-borrowers-own-their-homes-faster/): A national mortgage lender based out of Wisconsin just unveiled a new home loan product with some rather unique features....
- [Your Mortgage Has a Better Chance of Approval on a Sunny Day](https://www.thetruthaboutmortgage.com/your-mortgage-has-a-better-chance-of-approval-on-a-sunny-day/): Let’s forget about whether it’s okay for a mortgage to be easily obtained. Yes, I’m looking at you Rocket Mortgage....
- [Mission Accomplished: Quicken Loans Super Bowl Ad Stirs Controversy](https://www.thetruthaboutmortgage.com/mission-accomplished-quicken-loans-super-bowl-ad-stirs-controversy/): A couple of weeks ago I wrote about Quicken Loan’s first Super Bowl ad, which was pre-released before the big...
- [HSBC to Provide $400+ Million in Consumer Relief to Homeowners](https://www.thetruthaboutmortgage.com/hsbc-to-provide-400-million-in-consumer-relief-to-homeowners/): As part of an agreement between HSBC and the Justice Department, HUD, the CFPB, and 49 state attorneys general (and...
- [Quicken Loans Just Paid a Lot of Money for a One Minute Super Bowl Commercial](https://www.thetruthaboutmortgage.com/quicken-loans-just-paid-a-lot-of-money-for-a-one-minute-super-bowl-commercial/): The nation’s largest nonbank mortgage lender is going to the Super Bowl. Well, they’re not playing in the game, but...
- [Why You Should Buy a Home Next to Trader Joe’s or Whole Foods](https://www.thetruthaboutmortgage.com/why-you-should-buy-a-home-next-to-trader-joes-or-whole-foods/): We all know the old adage: Location, location, location. It’s a real estate mantra that actually makes sense and one...
- [Now You Can Get a Mortgage Without a FICO Score](https://www.thetruthaboutmortgage.com/now-you-can-get-a-mortgage-without-a-fico-score/): These days, pretty much all banks and mortgage lenders use FICO scores to determine your creditworthiness before approving you for...
- [2016 Mortgage Rates Forecast: They Could Climb to 5%](https://www.thetruthaboutmortgage.com/2016-mortgage-rates-forecast-they-could-climb-to-5/): 2016 Mortgage Rate Predictions Well, another year is behind us and it’s time to look into the crystal ball to...
- [10 Predictions for Real Estate and Mortgage in 2016](https://www.thetruthaboutmortgage.com/10-predictions-for-real-estate-and-mortgage-in-2016/): It’s time for another round of real estate and mortgage predictions for the coming year. Here are my 2015 and...
- [California Credit Union Launches 80/20 Piggyback Mortgage](https://www.thetruthaboutmortgage.com/california-credit-union-launches-8020-piggyback-mortgage/): Could 2016 be the year that the piggyback mortgage returns? Well, one California credit union is taking things back to...
- [Zillow Now Lets You Be Your Own Appraiser](https://www.thetruthaboutmortgage.com/zillow-now-lets-you-be-your-own-appraiser/): Everyone knows about the Zestimate, Zillow’s rel="bookmark">Read More »A Good Reminder That Lenders Are Always Quick to Raise Mortgage Rates
- [The POPPYLOAN Is Here to Help San Franciscans Buy Really Expensive Homes with Nothing Down](https://www.thetruthaboutmortgage.com/the-poppyloan-is-here-to-help-san-franciscans-buy-really-expensive-homes-with-nothing-down/): Home prices are getting expensive out there, especially in the Bay Area (Northern California) where inventory is low and demand...
- [Introducing the Redfin Estimate](https://www.thetruthaboutmortgage.com/introducing-the-redfin-estimate/): Watch about Zillow... your Zestimate now has company. Today, Redfin announced the availability of the so-called “Redfin Estimate,” which is...
- [Redeem Citi Points for a Mortgage Payment Reward to Reduce Your Mortgage Balance](https://www.thetruthaboutmortgage.com/redeem-citi-points-for-a-mortgage-payment-reward-to-reduce-your-mortgage-balance/): There are plenty of ways to pay off the mortgage early, which I’ve already highlighted here, but I wanted to...
- [Rocket Mortgage Review: Full Approval in Just 8 Minutes](https://www.thetruthaboutmortgage.com/quicken-loans-launches-rocket-mortgage-full-mortgage-approval-in-8-minutes/): Do you know how long it takes for the space shuttle to reach orbit? Apparently it takes just eight minutes,...
- [It Just Got Easier to Get an FHA Loan on a Condo](https://www.thetruthaboutmortgage.com/it-just-got-easier-to-get-an-fha-loan-on-a-condo/): Looking to buy a condo but need an FHA loan to get the job done? In the past this may...
- [Trulia: Not a Bad Idea to Buy an Unaffordable Home](https://www.thetruthaboutmortgage.com/trulia-not-a-bad-idea-to-buy-an-unaffordable-home/): This headline may have caught your attention seeing that it sounds like terrible advice. But wait, let them explain. Well,...
- [Why Most People Don’t Get Mortgages from Their Bank](https://www.thetruthaboutmortgage.com/why-most-people-dont-get-mortgages-from-their-bank/): If you were to get a mortgage today, where would you go? Would you turn to your local bank or...
- [Fannie Mae to Use Trended Data When Evaluating Your Credit](https://www.thetruthaboutmortgage.com/fannie-mae-to-use-trended-data-when-evaluating-your-credit/): Beginning in mid-2016, Fannie Mae will incorporate “trended credit data” into its automated underwriting system Desktop Underwriter (DU). You’re probably...
- [Faira Looks to Ditch the Real Estate Agent](https://www.thetruthaboutmortgage.com/faira-looks-to-ditch-the-real-estate-agent/): A new company called Faira, founded by a guy who designed business models for eBay and Microsoft, wants to sell...
- [Down Payment Protection for Your Home Purchase Is a Thing Now](https://www.thetruthaboutmortgage.com/down-payment-protection-for-your-home-is-a-thing-now/): There seems to be a new trend regarding insurance and homes losing value. Perhaps the unfortunate part is that all...
- [The BRED Mortgage: Combining a 30-Year Fixed, 15-Year FRM, and 5/1 ARM](https://www.thetruthaboutmortgage.com/the-bred-mortgage-combining-a-30-year-fixed-15-year-frm-and-51-arm/): Most homeowners these days rely on 30-year fixed-rate mortgages to finance their homes. But there are obvious drawbacks to the...
- [A Mortgage Credit Certificate Can Save You Money on Mortgage Interest](https://www.thetruthaboutmortgage.com/a-mortgage-credit-certificate-can-save-you-money-on-mortgage-interest/): Whether you realize it or not, when you take out a mortgage you wind up paying a lot of money...
- [FHA Comes Under Attack, Again, This Time by the Big Banks](https://www.thetruthaboutmortgage.com/fha-comes-under-attack-again-this-time-by-the-big-banks/): Just over a month ago, it seemed as if the FHA was loosening up. They launched the Supplemental Performance Metric,...
- [I Wish I Could Buy a Home While Interest Rates Are So Low](https://www.thetruthaboutmortgage.com/i-wish-i-could-buy-a-home-while-interest-rates-are-so-low/): Continuing my series of “Things My Friends Say,” I had yet another thought-provoking conversation with a buddy about the current...
- [Portland Residents Don’t Want Californians Buying Their Homes](https://www.thetruthaboutmortgage.com/portland-residents-dont-want-californians-buying-their-homes/): Anti-Californian sentiment has reared its ugly head in Portland, Oregon where home prices are apparently spiraling out of control. An...
- [Sweden Will Force Homeowners to Pay Down Their Mortgages](https://www.thetruthaboutmortgage.com/sweden-will-force-homeowners-to-pay-down-their-mortgages/): In an effort to cool off the white-hot real estate market in Sweden, the country’s Financial Supervisory Authority (FSA) has...
- [Fannie Mae HomeReady Will Help Lower Income Borrowers Get Mortgages](https://www.thetruthaboutmortgage.com/fannie-mae-homeready-will-help-lower-income-borrowers-get-mortgages/): In an effort to boost home loan lending to lower- and moderate-income borrowers, Fannie Mae has created a new program...
- [Jumbo Loans Now Available with Just 5% Down](https://www.thetruthaboutmortgage.com/jumbo-loans-now-available-with-just-5-down/): It sounds like the credit box is beginning to open up a bit more, maybe too much if the latest...
- [Is the Stock Market Correction Good or Bad for Homeowners?](https://www.thetruthaboutmortgage.com/is-the-stock-market-correction-good-or-bad-for-homeowners/): So the inevitable happened – the U. S. stock market corrected after questions about the questionable Chinese economy sparked a...
- [New Real Estate Trend: Sell Existing Home Before Buying Another](https://www.thetruthaboutmortgage.com/new-real-estate-trend-sell-existing-home-before-buying-another/): A new survey from online real estate brokerage Redfin regarding home buyer sentiment found that existing owners are a lot...
- [Why It Might Get Easier to Obtain a FHA Loan with a Poor Credit Score](https://www.thetruthaboutmortgage.com/why-it-might-get-easier-to-obtain-a-fha-loan-with-a-poor-credit-score/): The Federal Housing Administration (FHA) already has some of most relaxed mortgage underwriting guidelines around, but many lenders don’t originate...
- [How to Pay the Mortgage with a Credit Card (or a Debit Card)](https://www.thetruthaboutmortgage.com/how-to-pay-the-mortgage-with-a-credit-card-for-free-and-make-money-doing-it/): Mortgage Q&A: “How to pay the mortgage with a credit card. ” First things first; banks, mortgage lenders, and loan...
- [100+ Not So Great Places to Buy a Home](https://www.thetruthaboutmortgage.com/100-not-so-great-places-to-buy-a-home/): Below is an extensive and exhaustive (and silly but somewhat serious) list of places where it might not make the...
- [Four Million Homeowners Denied HAMP Loan Modifications, More Changes Coming?](https://www.thetruthaboutmortgage.com/four-million-homeowners-denied-hamp-loan-modifications-more-changes-coming/): Think it’s hard to get a mortgage? How about a loan modification via the Treasury’s Home Affordable Modification Program (HAMP)....
- [Why Your Mortgage Lender Asks for More Than Is Required](https://www.thetruthaboutmortgage.com/why-your-mortgage-lender-asks-for-more-than-is-required/): It’s no secret that there is a lot of confusion surrounding mortgages. One of the main gripes is that requirements...
- [You Can Get Interest-Only Mortgages from Mortgage Brokers Again](https://www.thetruthaboutmortgage.com/you-can-get-interest-only-mortgages-from-mortgage-brokers-again/): Party like it’s 2006! Mortgage brokers are now able to peddle interest-only mortgages to qualified borrowers nationwide. Oh wait, that...
- [Home Prices vs. Gas Prices](https://www.thetruthaboutmortgage.com/home-prices-vs-gas-prices/): With mortgage rates hitting 2015 highs last week, one might worry that the housing recovery will lose steam. The 30-year...
- [USDA Home Loans Are About to Get More Expensive](https://www.thetruthaboutmortgage.com/usda-home-loans-are-about-to-get-more-expensive/): While the government has been busy lowering costs for FHA loans, it seems the opposite will happen for USDA home...
- [The Greeks Aren’t Making Their Mortgage Payments](https://www.thetruthaboutmortgage.com/the-greeks-arent-making-their-mortgage-payments/): And who could blame them... what with their entire financial system in complete disarray. The Greek situation is a mess,...
- [Harvard: Renting Is the New Buying, But It’s Unaffordable](https://www.thetruthaboutmortgage.com/harvard-renting-is-the-new-buying-but-its-unaffordable/): The Joint Center for Housing Studies of Harvard University released the 2015 edition of The State of the Nation’s Housing...
- [Realtor and Airbnb Team Up to Let People Try Before They Buy](https://www.thetruthaboutmortgage.com/realtor-and-airbnb-team-up-to-let-people-try-before-they-buy/): Consider this common scenario. You really like a house and decide to make an offer. After winning a bidding war...
- [Owning a Home Costs Nearly $10,000 a Year Not Including the Mortgage](https://www.thetruthaboutmortgage.com/owning-a-home-costs-nearly-10000-a-year-not-including-the-mortgage/): A lot of folks I know who rent are still hot on the idea of homeownership, but it’s important not...
- [Discover to Halt Mortgage Lending](https://www.thetruthaboutmortgage.com/discover-to-cease-mortgage-lending/): If you’re wondering how difficult it is to enter the business of originating mortgages, just take a look at Discover....
- [The Mortgage Crisis Needed More Adjustable Rate Mortgages](https://www.thetruthaboutmortgage.com/the-mortgage-crisis-needed-more-adjustable-rate-mortgages/): You know what the mortgage crisis needed more of? Adjustable-rate mortgages. Yep, we needed more loans with variable interest rates...
- [You Can Buy a Nice House in Houston for $1](https://www.thetruthaboutmortgage.com/if-you-live-in-houston-you-can-buy-a-nice-house-for-1/): A family living in Sunset Heights, close to the center of Houston, Texas, is parting with their home for just...
- [HARP and HAMP Receive Final Annual Extension, Probably](https://www.thetruthaboutmortgage.com/harp-and-hamp-receive-final-annual-extension-probably/): Since being introduced back in 2009, both and the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program...
- [Department of Justice Sues Quicken Loans for Faulty FHA Underwriting](https://www.thetruthaboutmortgage.com/department-of-justice-sues-quicken-loans-for-faulty-fha-underwriting/): The United States Department of Justice has filed a lawsuit against Quicken Loans for improperly originating and underwriting mortgages insured...
- [Mortgage Lenders In Europe Now Owe Their Borrowers Interest](https://www.thetruthaboutmortgage.com/mortgage-lenders-in-europe-now-owe-their-borrowers-interest/): A very odd thing is happening over in Europe. Thanks to rock bottom interest rates, some homeowners are actually due...
- [Green Tree to Pay Borrowers $48 Million for Loan Servicing Abuses](https://www.thetruthaboutmortgage.com/green-tree-to-pay-borrowers-48-million-for-loan-servicing-abuses/): If Green Tree serviced your mortgage from 2010 to 2014, you might be due some compensation for alleged wrongdoings. Today,...
- [Detroit Home Buyers Offered Zero Down Mortgages Up to 150% LTV](https://www.thetruthaboutmortgage.com/detroit-home-buyers-offered-zero-down-mortgages-up-to-150-ltv/): While this might sound like another exotic mortgage gone wrong, it’s actually a new program geared toward making the city...
- [Soon Your Mortgage Lender May Pull Your VantageScore](https://www.thetruthaboutmortgage.com/soon-your-mortgage-lender-may-pull-your-vantagescore/): Last week, HUD Secretary Julián Castro and NAR President Chris Polychron told a room full of realtors that it was...
- [Consumer Reports Bashes Mortgage Brokers, Receives Backlash](https://www.thetruthaboutmortgage.com/consumer-reports-bashes-mortgage-brokers-receives-backlash/): The latest issue of Consumer Reports magazine recommends that consumers avoid mortgage brokers when seeking home loan financing. As a...
- [An Open House Got Shut Down by the Cops](https://www.thetruthaboutmortgage.com/an-open-house-got-shut-down-by-the-cops/): The real estate market is starting to get really, really weird. Recently, an open house was actually shut down by...
- [Mortgage Lender Launches Six-Year ARM](https://www.thetruthaboutmortgage.com/mortgage-lender-launches-six-year-arm/): File this one under PR department. Or perhaps publicity stunt. Last week, First Savings Mortgage Corporation based out of McLean,...
- [BBVA Compass Launches No Down Payment Mortgage](https://www.thetruthaboutmortgage.com/bbva-compass-launches-no-down-payment-mortgage/): Sure, Fannie and Freddie now allow LTVs as high as 97%, and the FHA only requires 3. 5% down, but...
- [Discover May Exit the Mortgage Biz](https://www.thetruthaboutmortgage.com/discover-may-exit-the-mortgage-biz/): After only about three years, Discover might be looking to get out of the mortgage business, per a new interview...
- [Google Launches Mortgage Calculator Within Search Results](https://www.thetruthaboutmortgage.com/google-launches-mortgage-calculator-within-search-results/): Looking to calculate a mortgage payment on the fly? Instead of searching for a mortgage calculator using Google, you can...
- [Homes Next to Starbucks Are Worth More](https://www.thetruthaboutmortgage.com/homes-next-to-starbucks-are-worth-more/): Here’s an interesting, though not surprising data point from Zillow.  It turns out properties located next to Starbucks locations are...
- [The Mortgage Crisis Created Nearly 7.3 Million Potential Boomerang Buyers](https://www.thetruthaboutmortgage.com/the-mortgage-crisis-created-nearly-7-3-million-potential-boomerang-buyers/): It has now been roughly seven years since the devastating housing crisis rocked our great nation. Between 2007 and 2014,...
- [Why Aren’t You Shopping Around for Your Mortgage?](https://www.thetruthaboutmortgage.com/why-arent-you-shopping-around-for-your-mortgage/): I’ve got a bone to pick... it seems you aren’t bothering to shop around for your mortgage? Instead, you’re just...
- [10 Predictions for Mortgage and Real Estate in 2015](https://www.thetruthaboutmortgage.com/10-predictions-for-mortgage-and-real-estate-in-2015/): Here we go again. It’s that time of the year when I make 10 predictions for the mortgage industry and...
- [Fannie and Freddie Now Allow Purchases and Refis up to 97% LTV](https://www.thetruthaboutmortgage.com/fannie-and-freddie-now-allow-purchases-and-refis-up-to-97-ltv/): In an effort to make homeownership more accessible, seeing that down payment is often the biggest hurdle, Fannie Mae and...
- [HAMP Participants Are Now Eligible for an Additional $5,000 in Principal Balance Reduction](https://www.thetruthaboutmortgage.com/hamp-participants-are-now-eligible-for-an-additional-5000-in-principal-balance-reduction/): It sounds like Christmas came early this year... borrowers who already received loan modifications via the Home Affordable Modification Program...
- [Boost Your Tax Deduction by Making Your January Mortgage Payment This Year](https://www.thetruthaboutmortgage.com/boost-your-tax-deduction-by-making-your-january-mortgage-payment-this-year/): It’s that time of the year again... namely the end of the year, when year-end tax tips flood the web...
- [Watch Out for the Old ‘No Mortgage Payments for a Year’ Gimmick](https://www.thetruthaboutmortgage.com/watch-out-for-the-old-no-mortgage-payments-for-a-year-gimmick/): I came across a promotion today from a home builder out in Arizona. The press release mentions that the company...
- [Fannie Mae Reduces Max LTV on Cash-Out Refinances to 80%](https://www.thetruthaboutmortgage.com/fannie-mae-reduces-max-ltv-on-cash-out-refinances-to-80/): Though it may soon become easier to purchase a home with less money down, assuming 3% mortgages return as Mel...
- [Are Low Credit Scores More Dangerous Than Low Down Payments?](https://www.thetruthaboutmortgage.com/are-low-credit-scores-more-dangerous-than-low-down-payments/): Ever since Mel Watt hinted at the return of 3% down mortgages, there’s been a lot of worry that we...
- [There’s Now a .Mortgage Top Level Domain](https://www.thetruthaboutmortgage.com/theres-now-a-mortgage-top-level-domain/): If you’re a webmaster, a blogger, or just happen to own a domain name or two, you might be confused...
- [Your Personality Determines If You’ll Buy or Rent and What Mortgage You’ll Get](https://www.thetruthaboutmortgage.com/your-personality-determines-if-youll-buy-or-rent-and-what-mortgage-youll-get/): I came across an interesting study that explores real estate and mortgage preferences based on personality type (thanks WSJ). Whether...
- [HUD Has $412 Million in Uncollected FHA Mortgage Insurance Refunds](https://www.thetruthaboutmortgage.com/hud-has-412-million-in-uncollected-fha-mortgage-insurance-refunds/): If you’ve ever taken out an FHA loan, you may be eligible for a refund on that costly upfront mortgage...
- [Fannie and Freddie Will Offer 3% Down Mortgages Again](https://www.thetruthaboutmortgage.com/fannie-and-freddie-will-offer-3-down-mortgages-again/): Some good news finally came out of Las Vegas today, and I’m not talking about someone winning a mega jackpot...
- [The Rent vs. Buy Argument Depends on Mortgage Type Too](https://www.thetruthaboutmortgage.com/the-rent-vs-buy-argument-depends-on-mortgage-type-too/): Trulia releases a quarterly Rent Versus Buy report to determine if it makes more sense to buy a home or...
- [Man Offers to Sell Home In Exchange for an iPhone 6 or the 32 GB iPad](https://www.thetruthaboutmortgage.com/man-offers-to-sell-home-in-exchange-for-an-iphone-6-or-the-32-gb-ipad/): So a guy, an Austrian fellow named Andreas Gindelhuber, with apparent dreams of making money in real estate here in...
- [Trulia Is Giving Away a House in Vegas via the Game of War](https://www.thetruthaboutmortgage.com/trulia-is-giving-away-a-house-in-vegas-via-the-game-of-war/): I like to highlight contests that involve free houses and mortgage payoffs, and this one is a little stranger than...
- [Ben Bernanke Claims He Was Unable to Refinance His Mortgage](https://www.thetruthaboutmortgage.com/ben-bernanke-claims-he-was-unable-to-refinance-his-mortgage/): While this might sound a little hard to believe, it has been reported that former Federal Reserve chairman Ben Bernanke...
- [Using a Home Equity Loan to Pay Off Your First Mortgage](https://www.thetruthaboutmortgage.com/using-a-home-equity-loan-to-pay-off-your-first-mortgage/): Learn how a home equity loan can be used to pay off your mortgage, along with the pros and cons involved.
- [Here Are the Many Reasons Why Renters Rent](https://www.thetruthaboutmortgage.com/here-are-the-many-reasons-why-renters-rent/): The whole rent vs. own argument can be pretty polarizing. There are those that liken renting to throwing money down...
- [97% of Teens Believe They Will Own a Home One Day  ](https://www.thetruthaboutmortgage.com/97-of-teens-believe-they-will-own-a-home-one-day/): Several months ago, I thanked Millennials for their faith in real estate, seeing that Gen X isn’t a huge fan...
- [The Wealth Building Home Loan Makes the 15-Year Fixed Mortgage Affordable](https://www.thetruthaboutmortgage.com/the-wealth-building-home-loan-makes-the-15-year-fixed-mortgage-affordable/): Most homeowners opt for fixed-rate mortgages because there aren’t any surprises. Many of them go with a 30-year term because...
- [Should You Take Out a 30-Year Fixed Mortgage Before It’s Gone Forever?](https://www.thetruthaboutmortgage.com/should-you-take-out-a-30-year-fixed-mortgage-before-its-gone-forever/): Well-known banking analyst Dick Bove sounded alarm bells earlier this week after he warned of a mortgage crisis by winter....
- [White House Asks Lenders to Offer Lower Mortgage Rates to the Military](https://www.thetruthaboutmortgage.com/white-house-asks-lenders-to-offer-lower-mortgage-rates-to-the-military/): There’s been a lot of news coverage lately concerning veterans not receiving proper medical care. Sadly, that’s just one area...
- [What You Can Afford Isn’t Necessarily What You Should Spend on a Home](https://www.thetruthaboutmortgage.com/what-you-can-afford-isnt-necessarily-what-you-should-spend-on-a-home/): Most individuals shopping for a home will determine how much they can afford before beginning a property search. It’s the...
- [Some Homeowners Will Receive Permanent 2% Interest Rates Thanks to Bank of America Mortgage Settlement](https://www.thetruthaboutmortgage.com/some-homeowners-will-receive-permanent-2-interest-rates-as-a-result-of-bank-of-america-mortgage-settlement/): Today, Bank of America reached a historic agreement with the U. S. Department of Justice to pay the largest settlement...
- [Apparently It’s Not a Housing Bubble, But an Affordability Crisis](https://www.thetruthaboutmortgage.com/apparently-its-not-a-housing-bubble-but-an-affordability-crisis/): Here’s some good news, if you can call it that. Real estate experts at a recent housing forum in San...
- [Have Massive Home Price Gains Eclipsed the Benefit of Low Mortgage Rates?](https://www.thetruthaboutmortgage.com/have-massive-home-price-gains-eclipsed-the-benefit-of-low-mortgage-rates/): The new threat to those resisting the urge to buy real estate (how dare you) is the risk of rising...
- [Realtors’ Chief Economist Says FHA Loans Are a Rip-Off for Consumers](https://www.thetruthaboutmortgage.com/realtors-chief-economist-says-fha-loans-are-a-rip-off-for-consumers/): Last week, Zillow hosted its fifth housing forum in the nation’s capital to discuss current real estate matters. The panel...
- [Zillow to Buy Trulia for $3.5 Billion in Stock](https://www.thetruthaboutmortgage.com/is-zillow-about-to-buy-trulia-for-billions-of-dollars/): There were several reports floating around today that Zillow is in talks to buy its smaller rival Trulia for a...
- [Home Prices Are Expected to Peak in 2016, Then Do Pretty Much Nothing Through 2022](https://www.thetruthaboutmortgage.com/home-prices-are-expected-to-peak-in-2016-then-do-pretty-much-nothing-until-2022/): Are you still looking to buy a place before time runs out? Don’t want to miss out on the next...
- [Opendoor Review: Get an Offer for Your Home in Just 24 Hours](https://www.thetruthaboutmortgage.com/soon-youll-be-able-to-sell-your-home-online-in-just-three-days/): Life has gotten a lot more convenient over the past decade thanks to our friend the Internet. Today, we can...
- [The Daughter of Mortgage Bankers Association President David Stevens Doesn’t Want a Mortgage](https://www.thetruthaboutmortgage.com/the-daughter-of-mortgage-bankers-association-president-david-stevens-doesnt-want-a-mortgage/): You’d think that someone so heavily involved in the mortgage world would have a family full of homeowners, but that’s...
- [Hooray, Home Price Gains Are Slowing and Should Be Just Right by Year End](https://www.thetruthaboutmortgage.com/hooray-home-prices-are-slowing-and-should-be-just-right-by-year-end/): If we’ve learned anything from Goldilocks and the Three Bears, it’s that we should strive for “just right,” no matter...
- [Don’t Buy a House Because You Don’t Want to Miss Out](https://www.thetruthaboutmortgage.com/dont-buy-a-house-because-you-dont-want-to-miss-out/): I’m sure regular readers of this blog see me as a bit of a pessimist, perhaps a little cynical. After...
- [Mortgage Rates vs. the World Cup](https://www.thetruthaboutmortgage.com/mortgages-rates-vs-the-world-cup/): Happy World Cup opening day everyone. I like soccer (and mortgages) so I tried desperately to come up with a...
- [Mortgage Lending Standards Aren’t Too Tight, Really](https://www.thetruthaboutmortgage.com/mortgage-lending-standards-arent-too-tight-really/): I’m getting sick and tired of hearing about how restrictive and constrained mortgage lending standards are these days. It’s really...
- [You Can Have an Adjustable-Rate Mortgage, But Only If You Educate Yourself First](https://www.thetruthaboutmortgage.com/you-can-have-an-adjustable-rate-mortgage-but-only-if-you-educate-yourself-first/): Homeowners opt for ARMs instead of fixed mortgages for a number of reasons, but it’s mostly to save money. After...
- [Mr. Wonderful of Shark Tank Fame Thinks Real Estate Is a Crappy Investment](https://www.thetruthaboutmortgage.com/mr-wonderful-of-shark-tank-fame-thinks-real-estate-is-a-crappy-investment/): If you watch Shark Tank, you’re quite familiar with Kevin O’Leary, the cynical money loving, yet somehow likable venture capitalist....
- [Netflix, iPhones, and Lattes Are More Important than Saving to Buy a Home](https://www.thetruthaboutmortgage.com/netflix-iphones-and-lattes-are-more-important-than-saving-to-buy-a-home/): A few months back, I noted that Millennials, those born between 1980 and 1995, purchased the most real estate between...
- [If You Can’t Pay the Mortgage, Live in Your Awesome Garage](https://www.thetruthaboutmortgage.com/if-you-cant-pay-the-mortgage-live-in-your-awesome-garage/): Here’s a novel idea. If you’re having trouble paying the mortgage, and you can’t get any assistance from your lender/servicer,...
- [Wells Fargo Vows to Fix the Flawed HELOC Product](https://www.thetruthaboutmortgage.com/wells-fargo-vows-to-fix-the-flawed-heloc-product/): It’s not uncommon for homeowners to take out a home equity line of credit (HELOC) behind their first mortgage to...
- [Almost Half of Recent Home Purchases Required Mortgage Insurance](https://www.thetruthaboutmortgage.com/almost-half-of-recent-home-purchases-required-mortgage-insurance/): A new survey from TD Bank revealed that a large percentage of recent home buyers needed mortgage insurance to get...
- [Refinance Applications Remain 65% Below Last Year’s Pace Despite Lowest Rates of 2014](https://www.thetruthaboutmortgage.com/refinance-applications-remain-65-below-last-years-pace-despite-lowest-rates-of-2014/): You’d think mortgage applications would be humming given the recent sizable declines in mortgage rates. After all, rates haven’t been...
- [Joe Biden Is a Refinancing Machine](https://www.thetruthaboutmortgage.com/joe-biden-is-a-refinancing-machine/): Though HARP is often referred to as “Obama’s refinance program,” perhaps Vice President Joe Biden’s name should be in there...
- [It Turns Out the Qualified Mortgage Rule Is Pretty Flexible](https://www.thetruthaboutmortgage.com/it-turns-out-the-qualified-mortgage-rule-is-pretty-flexible/): Rules are inherently restrictive, but if there’s one thing the mortgage industry does well, it’s circumvention. For example, taking what...
- [All-Cash Home Sales Hit New High as Mortgage Rates Fall to 2014 Low](https://www.thetruthaboutmortgage.com/all-cash-home-sales-hit-new-high-as-mortgage-rates-fall-to-2014-low/): At first glance, the headline doesn’t make a lot of sense. Why would all-cash home sales increase if mortgage rates...
- [Real Estate Agent Leaves Nasty Note for Homeowner Who Parks Car on the Front Lawn](https://www.thetruthaboutmortgage.com/real-estate-agent-leaves-nasty-note-for-homeowner-who-parks-car-on-the-front-lawn/): An interesting thing happened to a pair of Ocean City, New Jersey homeowners recently. Residents Bill and Barbara Doughten received...
- [Even Flippers Are Having a Hard Time Finding Homes to Buy](https://www.thetruthaboutmortgage.com/even-flippers-are-having-a-hard-time-finding-homes-to-buy/): If you’re currently in the market to purchase a home, you’re probably pretty frustrated. After all, it has become increasingly...
- [Mortgage Rates Will Only Be Marginally Higher If Fannie and Freddie Disappear](https://www.thetruthaboutmortgage.com/mortgage-rates-will-only-be-marginally-higher-if-fannie-and-freddie-disappear/): Everyone seems to agree that Fannie Mae and Freddie Mac need to go away. Well, maybe not the hedge funds...
- [One in Four Homeowners Wouldn’t Buy Their Current Home Again If Given the Chance](https://www.thetruthaboutmortgage.com/one-in-four-homeowners-wouldnt-buy-their-current-home-again-if-given-the-chance/): Two words: Buyer’s remorse. Not a big deal when buying lunch, but a pretty huge deal when purchasing a home...
- [The 3% Down Payment Mortgage Has Returned](https://www.thetruthaboutmortgage.com/the-3-down-payment-mortgage-has-returned/): Well that didn’t take long. Only about six months after we bid adieu to 3% down mortgages, they have resurfaced....
- [The Nation’s Most Expensive Short Sale Finally Sold This Week](https://www.thetruthaboutmortgage.com/the-nations-most-expensive-short-sale-finally-sold-this-week/): Sure, short sales have come to a relative crawl after carving out a decent slice of the real estate market...
- [Higher FHA Premiums May Have Priced Out 375,000 Potential Home Buyers](https://www.thetruthaboutmortgage.com/higher-fha-premiums-may-have-priced-out-375000-potential-home-buyers/): Earlier this week, the National Association of Realtors sent a letter to FHA Commissioner Carol Galante urging her to rethink...
- [Wholesale Mortgage Lender Drops Minimum FICO Score for FHA and VA Loans to 550](https://www.thetruthaboutmortgage.com/wholesale-mortgage-lender-drops-minimum-fico-score-for-fha-and-va-loans-to-550/): Update: Carrington Mortgage Services now allows FICO scores as low as 500 for both FHA loans and VA loans, which...
- [Forget Location, Location, Location, It's Water, Water, Water!](https://www.thetruthaboutmortgage.com/why-water-is-so-important-to-real-estate-values/): What a difference a city makes... in the uber-hot Bay Area, a staggering 43. 5% of homes for sale are...
- [The Wind Down of Fannie Mae and Freddie Mac Gets Real](https://www.thetruthaboutmortgage.com/the-wind-down-of-fannie-mae-and-freddie-mac-gets-real/): Today, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) said they reached an agreement on...
- [Thank You Millennials for Your Faith in Real Estate](https://www.thetruthaboutmortgage.com/thank-you-millennials-for-your-faith-in-real-estate/): It wasn’t long ago that real estate was deemed toxic, untouchable, whatever bad thing you want to call it. But...
- [Why Low Mortgage Rates Might Force You to Stay in Your Current Home Forever](https://www.thetruthaboutmortgage.com/why-low-mortgage-rates-might-force-you-to-stay-in-your-current-home-forever/): After the Fed steered mortgage rates lower via quantitative easing, the housing market got the boost it needed to get...
- [It Looks Like the Seller’s Market Is Coming to an End](https://www.thetruthaboutmortgage.com/it-looks-like-the-sellers-market-is-coming-to-an-end/): Many people will look back at 2013 with regret, perhaps realizing that there was a golden opportunity to purchase a...
- [PenFed Just Invented a New Mortgage Program: The 15-Year ARM](https://www.thetruthaboutmortgage.com/penfed-just-invented-a-new-mortgage-program-the-15-year-arm/): If you’re not satisfied with the selection of mortgage programs offered by your bank or local lender, you might want...
- [Did You Receive a HAMP Modification? If So, Your Mortgage Payments May Increase This Year](https://www.thetruthaboutmortgage.com/did-you-receive-a-hamp-modification-if-so-your-mortgage-payments-may-increase-this-year/): Back in 2009, the government launched the Home Affordable Modification Program (HAMP) to help struggling homeowners keep up with their...
- [The Following Words Were Not Found in Obama’s State of the Union Address Last Night](https://www.thetruthaboutmortgage.com/the-following-words-were-not-found-in-obamas-state-of-the-union-address-last-night/): President Barack Obama said a lot of things during his annual State of the Union Address before Congress last night,...
- [The HarmonyLoan: An Adjustable-Rate Mortgage You Control](https://www.thetruthaboutmortgage.com/the-harmonyloan-an-adjustable-rate-mortgage-you-control/): As home prices and mortgage rates continue to rise, lenders are becoming a lot more creative with their product offerings...
- [If You Don’t Want to Work Forever, Pay Off Your Mortgage](https://www.thetruthaboutmortgage.com/if-you-dont-want-to-work-forever-pay-off-your-mortgage/): Conventional wisdom says to pay off the mortgage in its entirety before you retire. That way you won’t have to...
- [Real Estate in the United States Is Actually Cheaper Than Most Other Parts of the World](https://www.thetruthaboutmortgage.com/real-estate-in-the-united-states-is-actually-cheaper-than-most-other-parts-of-the-world/): Believe it or not, real estate in the United States is actually really cheap, assuming you compare it to what...
- [Quicken Loans Offering $1 Billion for Perfect March Madness Bracket](https://www.thetruthaboutmortgage.com/quicken-loans-offering-1-billion-for-perfect-march-madness-bracket/): Well, somehow it’s already late January, which means NCAA March Madness is less than two months away! It’s personally one...
- [No, It’s Not Always a Good Time to Buy a Home](https://www.thetruthaboutmortgage.com/no-its-not-always-a-good-time-to-buy-a-home/): If you talk to most interested parties, whether it’s a real estate agent, a home builder, or someone else who...
- [Quicken CEO: Mortgage Rates on Non-QM Loans 4-5% Higher Than QM Loans](https://www.thetruthaboutmortgage.com/quicken-ceo-mortgage-rates-on-non-qm-loans-4-5-higher-than-qm-loans/): This morning, the House Financial Services Committee heard testimony from five housing industry leaders regarding the new QM rule. The...
- [Nearly 85% of Real Estate Agents Are Actually Homeowners](https://www.thetruthaboutmortgage.com/nearly-85-of-real-estate-agents-are-actually-homeowners/): A new analysis from real estate information portal Trulia revealed that the overwhelming majority of real estate agents actually own...
- [Mortgages Originated in 2013 the Best Performing on Record](https://www.thetruthaboutmortgage.com/mortgages-originated-in-2013-the-best-performing-on-record/): We all know underwriting standards have improved immensely since the latest housing crisis. When it comes down to it, they...
- [10 Predictions for Mortgage and Housing in 2014](https://www.thetruthaboutmortgage.com/10-predictions-for-mortgage-and-housing-in-2014/): Well, 2013 has officially come to a close, and 2014 is well underway. For a moment there, it seemed as...
- [The Average Mortgage Application File Is Now 500 Pages Long](https://www.thetruthaboutmortgage.com/the-average-mortgage-application-file-is-now-500-pages-long/): During the early 2000s, you didn’t need to prove much to qualify for a mortgage. In fact, it got to...
- [It Turns Out the Best Time to Sell a Home Is During Winter](https://www.thetruthaboutmortgage.com/it-turns-out-the-best-time-to-sell-a-home-is-during-winter/): Conventional wisdom says its best to list your home in spring if you want to get the most bang for...
- [How the Fed Ruined Mortgage Rates Forever](https://www.thetruthaboutmortgage.com/how-the-fed-ruined-mortgage-rates-forever/): A few years back, the Fed began purchasing mortgage-backed securities in an effort to lower interest rates on mortgages. Over...
- [Underwater Mortgage Insurance: Yes, It Exists Now](https://www.thetruthaboutmortgage.com/underwater-mortgage-insurance-yes-it-exists-now/): Plenty of strange things happened after the latest housing boom and subsequent bust, but this is perhaps one of the...
- [2014 Conforming Loan Limits Unchanged (Except for These 18 Counties)](https://www.thetruthaboutmortgage.com/2014-conforming-loan-limits-unchanged-except-for-these-18-counties/): After much speculation and fear mongering, the FHFA finally announced this morning that the conforming loan limit for mortgages acquired...
- [Former Fannie Mae Executive Says the FHA Is a Predatory Lender](https://www.thetruthaboutmortgage.com/former-fannie-mae-executive-says-the-fha-is-a-predatory-lender/): Things are getting nasty in the mortgage world. Former Fannie Mae executive vice president and chief credit officer Edward Pinto...
- [Know Before You Owe Mortgage Forms Finalized](https://www.thetruthaboutmortgage.com/know-before-you-owe-mortgage-forms-finalized/): The Consumer Financial Protection Bureau (CFPB) has been hard at work over the past couple years changing the way Americans...
- [Housing Affordability Chalks Biggest Drop Since Second Quarter of 2004](https://www.thetruthaboutmortgage.com/housing-affordability-chalks-biggest-drop-since-second-quarter-of-2004/): I’ve brought up the issue of housing affordability several times over the past year, and things don’t appear to be...
- [Keep Your Home California Now Considers LTV of 140% or Higher a Financial Hardship](https://www.thetruthaboutmortgage.com/keep-your-home-california-now-considers-ltv-of-140-or-higher-a-financial-hardship/): Back in early 2010, the Hardest Hit Fund (HHF) was established by the Treasury to help certain hard-hit states deal...
- [Beware: Your Adjustable-Rate Mortgage May Reset Lower](https://www.thetruthaboutmortgage.com/beware-your-adjustable-rate-mortgage-may-reset-lower/): One of the greatest fears adjustable-rate mortgage (ARM) holders have is the risk their interest rate may increase. After all,...
- [The 1-Year ARM Is Hugely Popular with the Rich Right Now](https://www.thetruthaboutmortgage.com/the-1-year-arm-is-hugely-popular-with-the-rich-right-now/): If you were shopping for a mortgage and a bank offered you an extra low rate on a 1-year adjustable-rate...
- [MBA Forecasts $1.2 Trillion in Mortgage Volume in 2014, Down 32% from 2013](https://www.thetruthaboutmortgage.com/mba-forecasts-1-2-trillion-in-mortgage-volume-in-2014-down-32-from-2013/): If you think this year has been slow in mortgage land, don’t ask what next year has in store. A...
- [HARP 2.1 Is Here!  Fannie and Freddie to Use Note Date for Eligibility](https://www.thetruthaboutmortgage.com/harp-2-1-is-here-fannie-and-freddie-to-use-note-date-for-eligibility/): I’ve written about the Home Affordable Refinance Program (HARP) on this blog many, many times. Most of the posts have...
- [Say Goodbye to the 3% Down Payment Mortgage](https://www.thetruthaboutmortgage.com/say-goodbye-to-the-3-down-payment-mortgage/): In less than a month, Fannie Mae is implementing some tough new mortgage guidelines, including a larger minimum down payment...
- [Mark Zuckerberg Is Now an Investor in Single-Family Homes](https://www.thetruthaboutmortgage.com/mark-zuckerberg-is-now-an-investor-in-single-family-homes/): While it might sound like following in the footsteps of hedge funds, or taking advice from Warren Buffett, who recently...
- [How the Government Shutdown Affects Various Types of Mortgages](https://www.thetruthaboutmortgage.com/how-the-government-shutdown-affects-various-types-of-mortgages/): The latest buzzword on the street is “shutdown,” and apart from being buzzworthy, it’s actually very real. National parks are...
- [FHA Bailout Official: Agency Makes Request for $1.7 Billion from Treasury](https://www.thetruthaboutmortgage.com/fha-bailout-official-agency-makes-request-for-1-7-billion-from-treasury/): Well, it took 79 years, but the FHA’s squeaky-clean track record is over. FHA Commissioner Carol Galante wrote a letter...
- [Zillow: Credit Score Single Most Important Factor for Mortgage Rates](https://www.thetruthaboutmortgage.com/zillow-credit-score-single-most-important-factor-for-mortgage-rates/): This morning, Zillow, the company behind the love it or hate it Zestimate, released a new study that analyzed the...
- [Why Mortgages Are Declined: 50 Reasons You Might Be Denied a Home Loan](https://www.thetruthaboutmortgage.com/why-mortgages-are-declined/): Mortgages are declined frequently for tons of different reasons. Learn why and what steps you can take to boost your chances of approval.
- [Is the ‘No Taper’ Good or Bad for Mortgage Rates and the Housing Market?](https://www.thetruthaboutmortgage.com/is-the-no-taper-good-or-bad-for-mortgage-rates-and-the-housing-market/): Yesterday, many declared “victory” when the Fed decided not to taper its monthly purchases of mortgage-backed securities and longer-term Treasuries....
- [Old Subprime Players Back In Charge of New Mortgage Companies](https://www.thetruthaboutmortgage.com/old-subprime-players-back-in-charge-of-new-mortgage-companies/): It has been about five years since the so-called subprime mortgage crisis rattled Wall Street (and America), and led to...
- [Suze Orman Says It’s Now OK to Put Just 10% Down on a Home](https://www.thetruthaboutmortgage.com/suze-orman-says-its-now-ok-to-put-just-10-down-on-a-home/): I’m starting to get really worried about the housing market. Suze Orman, who doles out no-nonsense financial advice to millions...
- [Check Out the Five Biggest Sacrifices People Made In Order to Buy a Home](https://www.thetruthaboutmortgage.com/check-out-the-five-biggest-sacrifices-people-made-in-order-to-buy-a-home/): The National Association of Realtors released its 2013 National Housing Pulse Survey recently, and they’ve been sharing bits and pieces...
- [125% Second Mortgages Are Back Again...](https://www.thetruthaboutmortgage.com/125-second-mortgages-are-back-again/): It feels like we’re getting dangerously close to repeating history in the worst way possible. High-risk loan programs that seemed...
- [Redfin’s Price Whisperer Determines What Local Buyers Are Willing to Pay Before You List Your Home](https://www.thetruthaboutmortgage.com/redfins-price-whisperer-determines-what-local-buyers-are-willing-to-pay-before-you-list-your-home/): In a bid to increase its listing business, Redfin has launched a new tool called the “Price Whisperer,” which aims...
- [Purchase Applications Grab Majority Share of Mortgage Market in July as Refinances Fade Away](https://www.thetruthaboutmortgage.com/purchase-applications-grab-majority-share-of-mortgage-market-in-july-as-refinances-fade-away/): There’s been a lot of fuss about the refinance market drying up lately, and we now know it’s not just...
- [A Perfect Example of Why Throwing All Your Money at the Mortgage Can Come Back to Bite You](https://www.thetruthaboutmortgage.com/a-perfect-example-of-why-throwing-all-your-money-at-the-mortgage-can-come-back-to-bite-you/): There are countless programs out there aimed at paying down the mortgage as quickly as possible, but they often highlight...
- [The LendingTree Mortgage Negotiator Makes Home Loan Shopping Anonymous](https://www.thetruthaboutmortgage.com/the-lendingtree-mortgage-negotiator-makes-home-loan-shopping-anonymous/): Everyone’s heard of the Priceline Negotiator, but what about LendingTree Mortgage Negotiator? I hadn’t heard about it until last week,...
- [The FHA Is Now Offering Mortgages to Borrowers Just One Year After Foreclosure, Short Sale, or Bankruptcy](https://www.thetruthaboutmortgage.com/the-fha-is-now-offering-mortgages-to-borrowers-just-one-year-after-foreclosure-short-sale-or-bankruptcy/): In a bid to perhaps stay relevant, though in the FHA’s own words, to continue “its commitment to fully evaluate...
- [Obama Answered My Question About HARP 3](https://www.thetruthaboutmortgage.com/obama-answered-my-question-about-harp-3/): This week has been all about Obama, at least on this blog. The President has been making the rounds, visiting...
- [The 10 Best Quotes From Obama’s Housing Speech](https://www.thetruthaboutmortgage.com/the-10-best-quotes-from-obamas-housing-speech/): Yesterday, President Obama gave a speech on homeownership at Desert Vista High School in Phoenix, Arizona, one of the hardest...
- [Study: Minimum Credit Card Payments Increase Risk of Mortgage Default](https://www.thetruthaboutmortgage.com/study-minimum-credit-card-payments-increase-risk-of-mortgage-default/): A new study from credit reporting agency TransUnion revealed some interesting insights about credit card use and mortgage performance. The...
- [A Lack of Qualified Buyers Could Hit the Real Estate Market](https://www.thetruthaboutmortgage.com/a-lack-of-qualified-buyers-could-hit-the-real-estate-market/): Lately, I probably haven’t been winning many friends with my somewhat pessimistic view on the real estate market. A couple...
- [Fannie Economist: Rising Mortgage Rates Should Slow Purchases, Not Lower Prices](https://www.thetruthaboutmortgage.com/fannie-economist-rising-mortgage-rates-should-slow-purchases-not-lower-prices/): A new commentary written by Fannie Mae’s Vice President of Applied Economic and Housing Research, Mark Palim, aims to put...
- [Chart: Look How Many Homeowners Could Benefit From HARP 3.0](https://www.thetruthaboutmortgage.com/chart-look-how-many-homeowners-could-benefit-from-harp-3-0/): I’ve discussed the idea of an enhanced Home Affordable Refinance Program (HARP) on several occasions, though nothing has actually materialized....
- [Don’t Choose a Mortgage Lender for Their Sales Gimmick](https://www.thetruthaboutmortgage.com/dont-choose-a-mortgage-lender-for-their-sales-gimmick/): As competition heats up, banks and lenders will likely ramp up efforts to get their hands on your mortgage, using...
- [Hovnanian: Higher Mortgage Rates Will Just Lead to Smaller Homes](https://www.thetruthaboutmortgage.com/hovnanian-higher-mortgage-rates-will-just-lead-to-smaller-homes/): During an interview with CNBC this morning, Ara Hovnanian of K. Hovnanian Homes expressed that he’s not worried about higher...
- [Look: Mortgage Rates Are Still Historically Cheap](https://www.thetruthaboutmortgage.com/look-mortgage-rates-are-still-historically-cheap/): I feel like I’ve been going on and on about mortgage rates lately, but for good reason. After hovering at...
- [Why You Should Care About Your Neighbor’s Mortgage](https://www.thetruthaboutmortgage.com/why-you-should-care-about-your-neighbors-mortgage/): While your neighbor’s home loan may be none of your business, how they choose to finance their property can affect...
- [Watch Out for the Adjustable-Rate Mortgage Pitch](https://www.thetruthaboutmortgage.com/watch-out-for-the-adjustable-rate-mortgage-pitch/): Over the past couple weeks, mortgage rates have risen roughly 1% across the board. If you look at Wells Fargo’s...
- [Blogger Claims Bernanke Made His Mortgage $53,000 More Expensive](https://www.thetruthaboutmortgage.com/blogger-claims-bernanke-made-his-mortgage-53000-more-expensive/): A Yahoo! Finance blogger named Rick Newman claims Ben Bernanke cost him $53,000 on his recently acquired mortgage. The issue...
- [Bank of America Panned for Unattractive Refinance Offer](https://www.thetruthaboutmortgage.com/bank-of-america-panned-for-unattractive-refinance-offer/): Anytime someone is looking to save you money, you should probably be skeptical, really skeptical. After all, it’s one thing...
- [Zillow CEO Says Don’t Wait, Best to Sell Home Now](https://www.thetruthaboutmortgage.com/zillow-ceo-says-dont-wait-best-to-sell-home-now/): In a rather odd interview on CNBC Thursday, Zillow CEO Spencer Rascoff said it’s “definitely a great time to sell....
- [Mortgage Rates Experience Largest Single-Week Increase Since 2011](https://www.thetruthaboutmortgage.com/mortgage-rates-experience-largest-single-week-increase-since-2011/): To say the last couple weeks have been bad for mortgage rates (and consumers) would be an enormous understatement. In...
- [Many FHA Loans Now Require Mortgage Insurance for Life](https://www.thetruthaboutmortgage.com/many-fha-loans-now-require-mortgage-insurance-for-life/): In mid-2013, the FHA implemented a major change to its loan program that requires the annual mortgage insurance to be...
- [New Study Blames Cash Out Refis for Mortgage Crisis](https://www.thetruthaboutmortgage.com/new-study-blames-cash-out-refis-for-mortgage-crisis/): A new study from Fed researcher Steven Laufer puts a lot of the mortgage crisis blame on cash out refinancing,...
- [The Fed Minutes and Mortgage Rates](https://www.thetruthaboutmortgage.com/the-fed-minutes-and-mortgage-rates/): Just a few short hours ago, the Federal Reserve released the hotly anticipated FOMC “minutes” from its two-day meeting that...
- [How Long Do You Plan to Keep Your Mortgage?](https://www.thetruthaboutmortgage.com/how-long-do-you-plan-to-keep-your-mortgage/): The mortgage landscape has changed a ton over the past several years. Mortgage lending guidelines have firmed tremendously since the...
- [Will High Quality Mortgages Prevent Another Housing Bubble?](https://www.thetruthaboutmortgage.com/will-high-quality-mortgages-prevent-another-housing-bubble/): After the previous mortgage boom and subsequent crash, many questions were asked regarding what exactly went wrong. There was plenty...
- [Warren Buffett: Now Is the Time to Get a Mortgage](https://www.thetruthaboutmortgage.com/warren-buffett-now-is-the-time-to-get-a-mortgage/): There are plenty of so-called experts and gurus out there with all types of advice on what you should do...
- [The HELOC Resets Are Coming: Should We Worry?](https://www.thetruthaboutmortgage.com/the-heloc-resets-are-coming-should-we-worry/): Several years ago, when the mortgage crisis first materialized, an interest rate reset chart from Credit Suisse began circulating on...
- [How Does HARP 2.5 Sound?](https://www.thetruthaboutmortgage.com/how-does-harp-2-5-sound/): For the past couple years now, there has been a big push for a so-called HARP 3. 0, which would...
- [Still No Comeback for Subprime Mortgages](https://www.thetruthaboutmortgage.com/still-no-comeback-for-subprime-mortgages/): It has been some time since the word “subprime” was voted word of the year. Six years to be exact....
- [Mortgages vs. Inflation](https://www.thetruthaboutmortgage.com/mortgages-vs-inflation/): Mortgage match-ups: “Mortgages vs. inflation. ” While inflation has been kept mostly in check lately as the economy has limped...
- [Real Estate Agents Influence Lender Choice for Nearly Half of Home Buyers](https://www.thetruthaboutmortgage.com/real-estate-agents-influence-lender-choice-for-nearly-half-of-homebuyers/): A new survey from Campbell Communications and Inside Mortgage Finance Publications revealed that real estate agents hold sway when it...
- [New Website Helps Mortgage Brokers Shop Around](https://www.thetruthaboutmortgage.com/new-website-helps-mortgage-brokers-shop-around/): For those shopping for a mortgage, it can be pretty difficult to determine which company is the best to work...
- [PennyMac Cracks List of Top 10 Mortgage Lenders](https://www.thetruthaboutmortgage.com/pennymac-cracks-list-of-top-10-mortgage-lenders/): During the fourth quarter of 2012, newcomer PennyMac cracked the top 10 mortgage lender list, according to stats compiled by...
- [Mortgage Madness 2013](https://www.thetruthaboutmortgage.com/mortgage-madness-2013/): (Please click here for the large, legible version) As an ode to the NCAA tournament, or “March Madness” as it’s...
- [Nearly Half of All Underwater Private-Label Mortgages Modified](https://www.thetruthaboutmortgage.com/nearly-half-of-all-underwater-private-label-mortgages-modified/): For months, I’ve been banging on about the lack of a refinance program for private-label mortgages, those not backed by...
- [Study Claims Mortgage Default Risk Lower on Energy Efficient Homes ](https://www.thetruthaboutmortgage.com/study-claims-mortgage-default-risk-lower-on-energy-efficient-homes/): Do you live in a “green” house? If so, you might be a better mortgage borrower, whether you realize it...
- [Home Prices Expected to Rise 22% Through 2017](https://www.thetruthaboutmortgage.com/home-prices-expected-to-rise-22-through-2017/): A huge panel of economists from banks, universities, and investment and research firms weighed in on the direction of U....
- [Preparing Yourself for the Sellers Market](https://www.thetruthaboutmortgage.com/preparing-yourself-for-the-sellers-market/): Whether you like it or not, the buyer’s market of the past couple years or so has come to an...
- [Beginning of the End for Fannie and Freddie?](https://www.thetruthaboutmortgage.com/beginning-of-the-end-for-fannie-and-freddie/): There have long been stirrings of a potential Fannie Mae and Freddie Mac merger, or the outright dissolution of the...
- [HomeSteps Review: Freddie Mac Homes for Sale](https://www.thetruthaboutmortgage.com/freddie-mac-homesteps-review/): In case you weren’t aware, Freddie Mac, along with sister Fannie Mae, acquired a ton of real estate as a...
- [Detailing the FHA’s New Annual Mortgage Insurance Premium Structure](https://www.thetruthaboutmortgage.com/detailing-the-fhas-new-annual-mortgage-insurance-premium-structure/): Over the next few months, the FHA will make a number of substantial revisions to its annual mortgage insurance premium...
- [Nearly 20% of Vegas Borrowers Owe More Than Double Their Home’s Worth](https://www.thetruthaboutmortgage.com/nearly-20-of-vegas-borrowers-owe-more-than-double-their-homes-worth/): While the good news about housing keeps flooding in, one piece of negative data jumped out at me today. The...
- [New Mortgage Rules Eliminate 60% of Today’s Loans](https://www.thetruthaboutmortgage.com/new-mortgage-rules-eliminate-60-percent-of-todays-loans/): A pair of sweeping mortgage rules is expected to eliminate roughly 60% of today’s mortgages, according to a new analysis...
- [Getting a Mortgage After a Short Sale: Tips, Tricks, and Waiting Periods](https://www.thetruthaboutmortgage.com/getting-a-mortgage-after-a-short-sale/): Over the past several years, scores of homeowners have elected to ditch their unmanageable mortgages via short sales to avoid...
- [Deed in Lieu of Foreclosure vs. Short Sale: Here's Why They're Different](https://www.thetruthaboutmortgage.com/deed-in-lieu-of-foreclosure-vs-short-sale/): It’s time for another mortgage match-up, with the latest in the series pitting the lesser known “deed in lieu of...
- [HARP May Be Expanded and Extended to Promote Mortgage Refinancing](https://www.thetruthaboutmortgage.com/harp-may-be-expanded-and-extended-to-promote-mortgage-refinancing/): There’s been a lot of buzz about the Home Affordable Refinance Program lately. While it has picked up steam in...
- [Wells Fargo Shifts Loan Officer Pay to Highlight Mortgage Quality](https://www.thetruthaboutmortgage.com/wells-fargo-shifts-loan-officer-pay-to-highlight-mortgage-quality/): Here’s an interesting little piece of mortgage news. According to an internal presentation obtained by Bloomberg, top mortgage lender Wells...
- [Higher Home Prices Push 1.3 Million Mortgage Holders Back Above Water](https://www.thetruthaboutmortgage.com/higher-home-prices-push-1-3-million-mortgage-holders-back-above-water/): During the third quarter of 2012, another 100,000 or so homeowners “reached a state of positive equity,” per the latest...
- [Short Sales Increased 23 Percent in 2012 While REOs Plummeted](https://www.thetruthaboutmortgage.com/short-sales-increased-23-percent-in-2012-while-reos-plummeted/): It appears as if 2012 was a very good year for the housing market, according to the latest CoreLogic MarketPulse...
- [New Petition Urges Mortgage Re-HARPing](https://www.thetruthaboutmortgage.com/new-petition-urges-mortgage-re-harping/): Well, file this one under “was bound to happen,” or, “was only a matter of time. ” A clever guy...
- [Ability-to-Repay and Qualified Mortgage Rules Unveiled](https://www.thetruthaboutmortgage.com/ability-to-repay-and-qualified-mortgage-rules-unveiled/): Well, the Consumer Finance Protection Bureau finally released its “Ability to Repay” and “Qualified Mortgage” rules today. At first glance,...
- [Mortgage Debt Relief Extended Through 2013](https://www.thetruthaboutmortgage.com/mortgage-debt-relief-extended-through-2013/): Well, the fiscal cliff was averted at the 11th hour, though there are already rumblings of more cliffs to come....
- [Mortgage Rates Not as Low as They Could Be](https://www.thetruthaboutmortgage.com/mortgage-rates-not-as-low-as-they-could-be/): A new Fed study and associated workshop revealed that mortgage lenders continue to offer inflated mortgage rates to consumers, despite...
- [10 Predictions for Mortgage and Housing in 2013](https://www.thetruthaboutmortgage.com/10-predictions-for-mortgage-and-housing-in-2013/): Well, another year has passed, and unlike previous years, 2012 was a fairly decent year for the housing market. After...
- [FHA Goes Easy on Borrowers with Soft Changes](https://www.thetruthaboutmortgage.com/fha-goes-easy-on-borrowers-with-soft-changes/): There’s been a lot of hubbub lately regarding the FHA, its seemingly high-risk lending, and its dwindling insurance fund (that...
- [Fiscal Cliff Deal May Include Loan Modifications for Non-Agency Mortgages](https://www.thetruthaboutmortgage.com/fiscal-cliff-deal-may-include-loan-modifications-for-non-agency-mortgages/): Here’s a little nugget of potentially good news that may materialize out of the fiscal cliff. The Treasury Department is...
- [BofA Boss: Not Everyone Should Own a Home](https://www.thetruthaboutmortgage.com/bofa-boss-not-everyone-should-own-a-home/): Bank of America CEO Brian Moynihan got down to brass tacks today. Well, sort of. As much as the CEO...
- [Consumers Prefer PayPal Over Walmart for Mortgage Needs](https://www.thetruthaboutmortgage.com/consumers-prefer-paypal-over-walmart-for-mortgage-needs/): File this under confusing. A new “online study” from Carlisle & Gallagher Consulting Group released today revealed some interesting consumer...
- [To Mess or Not Mess With the Mortgage Interest Deduction](https://www.thetruthaboutmortgage.com/to-mess-or-not-mess-with-the-mortgage-interest-deduction/): That is the question... I’ve been trying to avoid writing about this subject for a week or two now, mainly...
- [Survey: Lower Income Borrowers Do Less Mortgage Research, Shopping](https://www.thetruthaboutmortgage.com/survey-lower-income-borrowers-do-less-mortgage-research-shopping/): There have been plenty of reports about lower-income borrowers getting the short end of the stick during the latest housing...
- [Is There Any Correlation Between Elections and Mortgage Rates?](https://www.thetruthaboutmortgage.com/is-there-any-correlation-between-elections-and-mortgage-rates/): Seeing that it’s Election Day, I figured I’d take a look at historic mortgage rates to see if there is...
- [The White House Is Better Off Than It Was Four Years Ago](https://www.thetruthaboutmortgage.com/the-white-house-is-better-off-than-it-was-four-years-ago/): By now, we’ve all heard the line, “Are you better off than you were four years ago? ” It was...
- [Zillow Now Offers Pre-Foreclosure and Foreclosure Listings for Free](https://www.thetruthaboutmortgage.com/zillow-now-offers-pre-foreclosure-and-foreclosure-listings-for-free/): If you want to snag a foreclosure property on the cheap, take a look at the new improved Zillow. The...
- [Mortgage Mentioned Just Once During Final Presidential Debate](https://www.thetruthaboutmortgage.com/mortgage-mentioned-just-once-during-final-presidential-debate/): What a difference four years make. Back in 2007, the only subject the presidential hopefuls talked about was mortgages. In...
- [HARP Refinancing Takes Off Thanks to New Guidelines](https://www.thetruthaboutmortgage.com/harp-refinancing-takes-off-thanks-to-new-guidelines/): As a result of recent enhancements, and perhaps ultra-low mortgage rates, the Home Affordable Refinance Program has actually made a...
- [Did Bank of America Offer to Pay Off Your Second Mortgage?](https://www.thetruthaboutmortgage.com/did-bank-of-america-offer-to-pay-off-your-second-mortgage/): Are you one of the “lucky” ones? Bank of America announced late Friday that it is in the process of...
- [Consumers Don’t Care About Low Mortgage Rates Anymore](https://www.thetruthaboutmortgage.com/consumers-dont-care-about-low-mortgage-rates-anymore/): As you’re probably aware, the latest move to boost the economy was another round of quantitative easing, known as QE3....
- [Fico Explains Why Short Sales Hurt Your Credit Score](https://www.thetruthaboutmortgage.com/fico-explains-why-short-sales-hurt-your-credit-score/): There’s been a lot of confusion about short sales, especially with regard to how they affect one’s credit score. Plenty...
- [2011 Was the Worst Year in Mortgage Lending Since 1995](https://www.thetruthaboutmortgage.com/2011-was-the-worst-year-in-mortgage-lending-since-1995/): While we’ve certainly been in a good news cycle for the past many months, it wasn’t long ago that things...
- [Mitt Romney’s ‘Plan to End the Housing Crisis’](https://www.thetruthaboutmortgage.com/mitt-romneys-plan-to-end-the-housing-crisis/): Politics... ugh. Is there anything worse? It’s that time again, when presidential candidates boost rhetoric into overdrive, which sadly has...
- [The Problem With Mortgage Rate Surveys](https://www.thetruthaboutmortgage.com/the-problem-with-mortgage-rate-surveys/): Every week, mortgage financier Freddie Mac comes out with a mortgage rate survey, which reveals the average interest rate (and...
- [Why Your Mortgage May Get More Expensive](https://www.thetruthaboutmortgage.com/why-your-mortgage-may-get-more-expensive/): Last Friday, the Federal Housing Finance Agency (FHFA) announced plans to increase guarantee fees (g-fees) on loans sold to Fannie...
- [Are Younger Underwater Homeowners More Responsible Borrowers?](https://www.thetruthaboutmortgage.com/are-younger-underwater-homeowners-more-responsible-borrowers/): Zillow released the second edition of its new Zillow Negative Equity Report today, revealing some interesting statistics about age and...
- [Introducing HAFA II: A Quicker Short Sale Process](https://www.thetruthaboutmortgage.com/introducing-hafa-ii-a-quicker-short-sale-process/): The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, has released details of a new program to...
- [The Word ‘Underwater’ Gets New Dictionary Meaning](https://www.thetruthaboutmortgage.com/the-word-underwater-gets-new-dictionary-meaning/): In recent years, new words (or jargon really) tied to the ongoing credit and mortgage crisis have found their way...
- [FHFA: No Principal Forgiveness for You!](https://www.thetruthaboutmortgage.com/fhfa-no-principal-forgiveness-for-you/): The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, concluded today that principal forgiveness is not...
- [New Refinancing Program for Loans Not Owned by Fannie or Freddie](https://www.thetruthaboutmortgage.com/new-refinancing-program-for-loans-not-owned-by-fannie-or-freddie/): Yet another mass refinancing program has been proposed, this time by Oregon Senator Jeff Merkley. His program, “The 4% Mortgage:...
- [Facebook Founder Mark Zuckerberg Has a 1% Mortgage](https://www.thetruthaboutmortgage.com/facebook-founder-mark-zuckerberg-has-a-1-percent-mortgage/): It’s always interesting to see what the rich and famous are doing, right? Heck, celebrity magazine Us Weekly features a...
- [Don’t Use Pennies to Pay Your Mortgage](https://www.thetruthaboutmortgage.com/dont-use-pennies-to-pay-your-mortgage/): You may have read a certain ABC news report that a man made his final mortgage payment with pennies he...
- [Housing Bottom Now Expected in 2013, Recovery Looks Weaker](https://www.thetruthaboutmortgage.com/housing-bottom-now-expected-in-2013-recovery-looks-weaker/): There’s been a lot of interesting housing-related news over the past week, with some good and some bad. The first...
- [Housing Market Update: Floodgates Officially Open](https://www.thetruthaboutmortgage.com/housing-market-update-floodgates-officially-open/): Well, another week has gone by, and mortgage rates drifted to a new low, per the latest Freddie Mac data....
- [What Flavor Is Your Mortgage?](https://www.thetruthaboutmortgage.com/what-flavor-is-your-mortgage/): Knowing where you stand before applying for a mortgage is key to negotiating a better interest rate. Yes, you can...
- [Discover Home Loans Review: The Nation's #1 Home Equity Loan Lender](https://www.thetruthaboutmortgage.com/discover-home-loans-review/): Well, it’s official, there’s a new mortgage player in town, and they go by a familiar name, “Discover Home Loans....
- [Short Sale vs. Foreclosure: What’s the Credit Score Impact?](https://www.thetruthaboutmortgage.com/short-sale-vs-foreclosure-whats-the-credit-score-impact/): Mortgage match-up: “Foreclosure vs. short sale on your credit report. ” It’s been a while since I’ve come up with...
- [Obama Hasn’t Refinanced His Mortgage in Seven Years](https://www.thetruthaboutmortgage.com/obama-hasnt-refinanced-his-mortgage-in-seven-years/): Despite a push to allow more Americans to refinance their mortgages (Harp 2. 0), the Obamas haven’t taken the time...
- [You May Have Missed the Housing Bottom, But Not the Mortgage Rate Bottom](https://www.thetruthaboutmortgage.com/you-may-have-missed-the-housing-bottom-but-not-the-mortgage-rate-bottom/): Over the past several months, it has become somewhat clear (insert gigantic grain of salt here) that home prices may...
- [Bank of America Ramps Up Principal Reductions](https://www.thetruthaboutmortgage.com/bank-of-america-ramps-up-principal-reductions/): It took a while, but Bank of America announced today that it intends to mail out principal reduction offers to...
- [Wells Fargo Claims More Than a Third of Mortgage Market](https://www.thetruthaboutmortgage.com/wells-fargo-claims-more-than-a-third-of-mortgage-market/): Talk about dominating the market. A new report from Inside Mortgage Finance revealed that San Francisco-based bank and mortgage lender...
- [Bank of America’s Mortgage to Lease Program](https://www.thetruthaboutmortgage.com/bank-of-americas-mortgage-to-lease-program/): About a week ago, Bank of America released details of its so-called “Mortgage to Lease” program, which as the name...
- [CashCall Mortgage Review: Still Offering Really Low Mortgage Rates. But How?](https://www.thetruthaboutmortgage.com/cashcall-mortgage-same-apr-and-mortgage-rate/): So I listen to the radio here and there, and even though I only listen occasionally, I still tend to...
- [Do I Qualify for the National Mortgage Settlement?](https://www.thetruthaboutmortgage.com/do-i-qualify-for-the-national-mortgage-settlement/): In case you haven’t heard by now, the so-called “National Mortgage Settlement” was finalized today. It’s the largest multi-state settlement...
- [Bank of America Has a Waiting List to Refinance](https://www.thetruthaboutmortgage.com/bank-of-america-has-a-waiting-list-to-refinance/): If you’re interested in refinancing your mortgage with Bank of America, you may be in for a big surprise. Per...
- [Choose Your Own Term Mortgages: Look Beyond the 30-Year](https://www.thetruthaboutmortgage.com/choose-your-own-term-mortgages/): It’s time to talk about silly mortgage products! So I was driving out in Los Angeles today, listening to ESPN...
- [2011 Mortgage Lending Volume Lowest In Over a Decade](https://www.thetruthaboutmortgage.com/2011-mortgage-lending-volume-lowest-in-over-a-decade/): You may have thought that mortgage lenders were raking it in, what with the record low mortgage rates currently on...
- [Mortgage Crisis Foreshadowing](https://www.thetruthaboutmortgage.com/mortgage-crisis-foreshadowing/): I think a lot. Often, about mortgages. In fact, a day doesn’t go by when I don’t try to think...
- [Why Principal Reductions on Loan Mods Aren’t the Move](https://www.thetruthaboutmortgage.com/why-principal-reductions-on-loan-mods-arent-the-move/): Unless you live under a rock, you’ve likely heard stirrings of a mega super duper fantastic solve-all trillion-dollar refinance program...
- [Mass Mortgage Refinancing Plan: Obama’s Ace In the Hole](https://www.thetruthaboutmortgage.com/mass-mortgage-refinancing-plan-obamas-ace-in-the-hole/): We’ve heard talk of mass refinancing plans for years now, but nothing has quite delivered. Sure, the >Home Affordable Refinance...
- [Bernanke Has Refinanced His Mortgage Twice in the Past Two Years](https://www.thetruthaboutmortgage.com/bernanke-has-refinanced-his-mortgage-twice-in-the-past-two-years/): When deciding whether you should refinance your mortgage, you may look to your friends, family, and neighbors to see what...
- [Maximum FHA Loan Limit Restored to $729,750](https://www.thetruthaboutmortgage.com/maximum-fha-loan-limit-restored-to-729750/): Late last week, Congress agreed to reinstate the temporarily inflated FHA loan limits that fell on October 1. So for...
- [Soon Just About Any Underwater Borrower Will Be Able to Refinance](https://www.thetruthaboutmortgage.com/soon-just-about-any-underwater-borrower-will-be-able-to-refinance/): The Federal Housing Finance Agency (FHFA) released details of a newly revamped Home Affordable Refinance Program (HARP) today, with the...
- [Some 30-Year Mortgage Rates Aren’t Really Fixed](https://www.thetruthaboutmortgage.com/some-30-year-mortgage-rates-arent-really-fixed/): Let’s talk about mortgage marketing for a moment. I’d hate to call it deceptive, since that’s a term used by...
- [Short Sales Can Save You Money If You’re Extremely Patient](https://www.thetruthaboutmortgage.com/short-sales-can-save-you-money-if-youre-patient/): If you’re reading this, you’ve undoubtedly heard of a real estate short sale, which allows a distressed homeowner to unload...
- [What on Earth Is a Zestimate and Is It Accurate?](https://www.thetruthaboutmortgage.com/what-on-earth-is-a-zestimate/): I was on Zillow the other day looking at real estate when it occurred to me that I never really...
- [Shares of Zillow Skyrocket in Nasdaq Debut](https://www.thetruthaboutmortgage.com/shares-of-zillow-skyrocket-in-nasdaq-debut/): Real estate behemoth Zillow went public today to much fanfare. After an original IPO price target of $12-$14, which later...
- [What Is an Underwater Mortgage? When You Owe More Than Your Home Is Worth](https://www.thetruthaboutmortgage.com/what-is-an-underwater-mortgage/): A mortgage is considered "underwater" if the outstanding balance exceeds the current value of the associated property. Here's what you can do if you've got one.
- [Are Mortgage Rates Higher for Condos?](https://www.thetruthaboutmortgage.com/are-mortgage-rates-higher-for-condos/): Mortgage Q&A: “Are mortgage rates higher for condos? ” If you’re in the market for a new condo or a...
- [How Much Do Mortgage Brokers Make? No Salary Means The Sky Is the Limit](https://www.thetruthaboutmortgage.com/how-much-do-mortgage-brokers-make/): Mortgage Q&A: “How much do mortgage brokers make? ” If you use a mortgage broker, you may be curious what...
- [Are Mortgage Rates Negotiable? How to Haggle Your Way to Big Savings](https://www.thetruthaboutmortgage.com/are-mortgage-rates-negotiable/): Mortgage Q&A: “Are mortgage rates negotiable? ” Here’s a popular question everyone looking for a mortgage wants to know (or...
- [Fannie Mae HomePath Review](https://www.thetruthaboutmortgage.com/fannie-mae-homepath-review/): A closer look at the HomePath financing offered by mortgage financier Fannie Mae, which allows individuals to buy previously foreclosed homes with very little down.
- [Astronauts Eligible for Mortgages With No Money Down](https://www.thetruthaboutmortgage.com/astronauts-eligible-for-mortgages-with-no-money-down/): We all know it’s hard to find a mortgage with zero down these days. You can thank everyone who got...
- [Fico: Some Homeowners 110 Times More Likely to Strategically Default than Others](https://www.thetruthaboutmortgage.com/fico-some-homeowners-110-times-more-likely-to-strategically-default-than-others/): Fico, the creator of the almighty Fico score, says enhancements in its analytic modeling allow it to identify borrowers who...
- [Can't Pay Your Mortgage? Turn Your Home Into a Billboard](https://www.thetruthaboutmortgage.com/cant-pay-your-mortgage-turn-your-home-into-an-billboard-adzookie/): If you’re having trouble keeping up with mortgage payments, which we know many of you are, there’s a new solution....
- [Homebuilder Plans to Buy Its Own Homes](https://www.thetruthaboutmortgage.com/homebuilder-plans-to-buy-its-own-homes/): One of the nation’s top homebuilders plans to buy its own homes and rent them out. Beazer Homes introduced its...
- [Wells Fargo Offers Homeowner $2 Loan Modification Discount](https://www.thetruthaboutmortgage.com/wells-fargo-offers-homeowner-2-loan-modification-discount/): Here’s another PR nightmare... Wells Fargo reportedly offered a struggling homeowner a loan modification that resulted in just $2 off...
- [Homeowners Less Likely to Default on Mortgages from Local Lenders](https://www.thetruthaboutmortgage.com/homeowners-less-likely-to-default-on-mortgages-from-local-lenders/): New research from Ohio State University suggests that homeowners who obtain home loans from local mortgage lenders are less likely...
- [Most Consumers Only Obtain One Mortgage Quote](https://www.thetruthaboutmortgage.com/most-consumers-only-obtain-one-mortgage-quote/): Here’s a shocker. Only about 40 percent of borrowers obtain more than one mortgage quote, according to a survey conducted...
- [Mortgage Lenders Raise Credit Score Requirements on FHA Loans](https://www.thetruthaboutmortgage.com/mortgage-lenders-raise-credit-score-requirements-on-fha-loans/): Both Wells Fargo and Bank of America, the top two residential mortgage lenders in the nation, have raised minimum credit...
- [Strategic Default Driven by Future Home Prices, Default Costs](https://www.thetruthaboutmortgage.com/strategic-default-driven-by-future-home-prices-default-costs/): Borrowers thinking about walking away from their homes voluntarily don’t necessarily give up because the mortgage balance exceeds the value...
- [Former Countrywide Boss to Pay Largest SEC Fine Ever](https://www.thetruthaboutmortgage.com/former-countrywide-boss-to-pay-largest-sec-fine-ever/): Former Countrywide CEO Angelo Mozilo will pay a record $22. 5 million penalty to settle SEC charges that claim he...
- ['How to Be a Mortgage Broker' Most Popular Course in Prison](https://www.thetruthaboutmortgage.com/how-to-be-a-mortgage-broker-most-popular-course-in-prison/): Since the mortgage crisis has taken hold, I’ve tried to think of all the reasons why everything went so horribly...
- [Yield Spread Premiums Banned](https://www.thetruthaboutmortgage.com/yield-spread-premiums-banned/): The Federal Reserve issued a final rule today that effectively bans yield spread premiums paid to mortgage brokers, along with...
- [USDA Zero Down Loan Program to Return](https://www.thetruthaboutmortgage.com/usda-zero-down-loan-program-to-return/): The USDA’s zero down loan program is slated to make a comeback, thanks to legislation making its way to President...
- [HUD to Investigate Mortgage Lenders Who Discriminate Against Expectant Mothers](https://www.thetruthaboutmortgage.com/hud-to-investigate-mortgage-lenders-who-discriminate-against-expectant-mothers/): The U. S. Department of Housing and Urban Development plans to launch multiple investigations to determine if certain mortgage lenders...
- [Bill Aims to Eliminate Loan Mod Credit Score Hit](https://www.thetruthaboutmortgage.com/bill-aims-to-eliminate-loan-mod-credit-score-hit/): A bill introduced by California Congresswoman Jackie Speier earlier this month aims to protect the credit scores of homeowners who...
- [Most Borrowers Don’t Strategically Default Until Deeply Underwater](https://www.thetruthaboutmortgage.com/most-borrowers-dont-strategically-default-until-deeply-underwater/): New research conducted by the Federal Reserve revealed that the median borrower doesn’t strategically default until home equity falls to...
- [Delinquent Mortgage Borrowers Now Get Free Cell Phones](https://www.thetruthaboutmortgage.com/delinquent-mortgage-borrowers-now-get-free-cell-phones/): Imagine receiving a cell phone in your mailbox, that once powered on, dialed your mortgage lender – and once connected,...
- [Countrywide to Pay $108 Million for Overcharging Homeowners](https://www.thetruthaboutmortgage.com/countrywide-to-pay-108-million-for-overcharging-homeowners/): Former mortgage lending giant Countrywide has been ordered by the FTC to pay out $108 million in refunds to homeowners...
- [The Fonz is New Spokesperson for Reverse Mortgage Company](https://www.thetruthaboutmortgage.com/the-fonz-is-new-spokesperson-for-reverse-mortgage-company/): The “Fonz,” better known for being cool than pitching mortgage products to old people, is the new face of a...
- [Nearly 40 Percent of California Foreclosures Were Rentals](https://www.thetruthaboutmortgage.com/nearly-40-percent-of-california-foreclosures-were-rentals/): Of the estimated 211,154 residential units foreclosed on in California during 2009, roughly 77,145 were rental units, according to a...
- [Foreclosure More Likely if You're Bad at Simple Math](https://www.thetruthaboutmortgage.com/foreclosure-more-likely-if-youre-bad-at-simple-math/): There’s a better chance you’ll experience foreclosure if your math isn’t up to snuff, according to a new research paper...
- [Many Homeowners Won't See Positive Equity Until 2015](https://www.thetruthaboutmortgage.com/many-homeowners-wont-see-positive-equity-until-2015/): We already know negative equity is plaguing millions of Americans nationwide, but perhaps worse is the fact that many won’t...
- [Bank of America Wants You to Earn Principal Forgiveness](https://www.thetruthaboutmortgage.com/bank-of-america-wants-you-to-earn-principal-forgiveness/): Bank of America announced a new strategy today to tackle the pesky underwater mortgages on its books, many acquired via...
- [How Short Sale Fraud Works](https://www.thetruthaboutmortgage.com/how-short-sale-fraud-works/): There’s been a lot of talk about short sales lately, and considerable concern about related fraud. After all, there is...
- [Short Sale Program Slammed by Appraisers](https://www.thetruthaboutmortgage.com/short-sale-program-slammed-by-appraisers/): Just days after details of the Treasury’s streamlined short sale program were revealed, several leading appraiser groups have criticized the...
- [67 Percent of Californians Sold Homes Because They Couldn't Pay the Mortgage](https://www.thetruthaboutmortgage.com/67-percent-of-californians-sold-homes-because-they-couldnt-pay-the-mortgage/): A staggering 67 percent of Californians who sold their homes in 2009 did so because they couldn’t meet their mortgage...
- [HAMP Permanent Loan Modifications Double](https://www.thetruthaboutmortgage.com/hamp-permanent-loan-modifications-double/): The Home Affordable Modification Program (HAMP) has finally gotten some legs, with permanent loan modifications doubling last month compared to...
- [Former Countrywide Customers to Receive Relief Payments](https://www.thetruthaboutmortgage.com/former-countrywide-customers-to-receive-relief-payments/): Former mortgage lender Countrywide Financial is mailing out checks to 2,700 borrowers as part of a settlement with Florida homeowners,...
- [Why Is the APR Lower Than the Mortgage Rate?](https://www.thetruthaboutmortgage.com/why-is-the-apr-lower-than-the-mortgage-rate/): If you’ve been shopping mortgage rates lately, you may be wondering why the APR is sometimes lower than the advertised...
- [What to Pay First?  Mortgage or Credit Card?](https://www.thetruthaboutmortgage.com/what-to-pay-first-mortgage-or-credit-card/): Well, an increasing number of consumers are making sure the plastic is paid before the mortgage, bucking the historical trend...
- [FDIC Chief Bair Receives Curious Mortgage from Bank of America](https://www.thetruthaboutmortgage.com/fdic-chief-bair-receives-curious-mortgage-from-bank-of-america/): FDIC chief Sheila Bair, who spearheaded loan modification efforts early on at failed institutions such as Indymac, received a rather...
- [Bernanke: Exotic Mortgages Caused Housing Bubble](https://www.thetruthaboutmortgage.com/bernanke-exotic-mortgages-caused-housing-bubble/): Fed Chairman Ben Bernanke noted in a speech yesterday that an increase in exotic mortgages, not monetary policy, was the...
- [Bank of America Completes Just 98 Permanent Loan Modifications](https://www.thetruthaboutmortgage.com/bank-of-america-completes-just-98-permanent-loan-modifications/): Amid all the uproar surrounding the Home Affordable Modification Program (HAMP), it was revealed today that Bank of America completed...
- [Fannie Mae Deed for Lease Program](https://www.thetruthaboutmortgage.com/fannie-mae-deed-for-lease-program/): Mortgage financier Fannie Mae has unveiled a new foreclosure prevention tool called the “Deed for Lease Program,” which helps struggling...
- [Loan Modifications Will Not Hurt Credit Scores (At the Moment)](https://www.thetruthaboutmortgage.com/loan-modifications-will-not-hurt-credit-scores/): Going forward, government sponsored loan modifications will not adversely affect consumers’ credit scores, at least not immediately, according to a...
- [Bill Aims to Increase FHA Down Payment to Five Percent](https://www.thetruthaboutmortgage.com/bill-aims-to-increase-fha-down-payment-to-five-percent/): A new bill introduced by New Jersey Republican Scott Garrett would require FHA borrowers to make at least a five...
- [Can I Refinance a Mortgage With Negative Equity?](https://www.thetruthaboutmortgage.com/can-i-refinance-with-negative-equity/): There are now a number of programs available that allow borrowers short on equity to refinance their existing mortgages.
- [3,944,602 Home Loan Applications Denied in 2008](https://www.thetruthaboutmortgage.com/3944602-home-loan-applications-denied-in-2008/): Below are some select takeaways from the Federal Reserve’s new report titled, “The 2008 HMDA Data: The Mortgage Market during...
- [FHA Insurance Fund to Fall Below Minimum, Policy Changes Coming](https://www.thetruthaboutmortgage.com/fha-insurance-fund-to-fall-below-minimum-policy-changes-coming/): The Federal Housing Administration announced today that it will make a series of policy changes in reaction to its capital...
- [How Long After Foreclosure Can I Purchase a Home? Waiting Periods By Loan Type](https://www.thetruthaboutmortgage.com/how-long-after-foreclosure-can-i-purchase-a-home/): Timely mortgage Q&A: “How long after foreclosure can I purchase a home? ” If you’ve recently experienced foreclosure, you may...
- [How Long Does a Foreclosure Stay on Your Credit Report?](https://www.thetruthaboutmortgage.com/how-long-does-a-foreclosure-stay-on-your-credit/): More mortgage crisis Q&A: “How long does a foreclosure stay on your credit report? ” With all the foreclosures sprouting...
- [Do Mortgage Modifications Work?](https://www.thetruthaboutmortgage.com/do-mortgage-modifications-work/): Here’s some timely mortgage Q&A: “Do mortgage modifications work? ” Since the mortgage mess got in full swing, mortgage lenders...
- [Are Mortgage Points Tax Deductible?](https://www.thetruthaboutmortgage.com/are-mortgage-points-tax-deductible/): More mortgage Q&A: “Are mortgage points tax deductible? ” Mortgage points, sometimes known as loan origination fees or discount points,...
- [Chase Offering 1% Mortgage Cash Back](https://www.thetruthaboutmortgage.com/chase-offering-1-mortgage-cash-back/): Chase is offering to give customers 1% of their scheduled monthly principal and interest mortgage payments back if they meet...
- [Report: Originate to Distribute Mortgages Default More](https://www.thetruthaboutmortgage.com/originate-to-distribute-mortgages-carry-higher-foreclosure-rates/): Mortgages sold on the secondary market quickly after being originated were underwritten more poorly than loans kept on banks’ books,...
- [Home Price Depreciation Leading Cause of Mortgage Default](https://www.thetruthaboutmortgage.com/boston-fed-home-price-depreciation-strongest-indicator-of-mortgage-default/): A report released by the Boston Fed last week found that home price depreciation is a leading cause of mortgage...
- [The Worst Loan Modification Companies](https://www.thetruthaboutmortgage.com/the-worst-loan-modification-companies/): It’s a relatively new business, but like any other, it’s been infiltrated by fraud and scams in no time at...
- [California Realtors Offer to Make Mortgage Payments](https://www.thetruthaboutmortgage.com/california-realtors-offer-to-make-mortgage-payments/): The California Association of Realtors has become the latest group to offer to make mortgage payments if you lose your...
- [Indymac Federal Becomes OneWest Bank Group](https://www.thetruthaboutmortgage.com/indymac-federal-becomes-onewest-bank-group/): The FDIC completed its sale of Indymac Federal Bank yesterday to OneWest Bank Group LLC, a newly formed federal savings...
- [HSBC to Halt Lending, Shutter HFC and Beneficial](https://www.thetruthaboutmortgage.com/hsbc-to-halt-lending-shutter-hfc-and-beneficial/): HSBC announced today it will close both its HFC and Beneficial units, resulting in thousands of layoffs. The consumer lending...
- [Countrywide Name to be Retired in April](https://www.thetruthaboutmortgage.com/countrywide-name-to-be-retired-in-april/): Sad news folks.   On April 27, Bank of America will re-brand Countrywide Financial to “Bank of America Home Loans,”...
- [Equifirst to Halt Lending Operations](https://www.thetruthaboutmortgage.com/equifirst-to-halt-lending-operations/): Equifirst announced today that effective immediately, it will be ceasing lending operations. Going forward, the Charlotte, North Carolina-based mortgage lender...
- [Former Fannie Mae Employee Attempted to Destroy All Data](https://www.thetruthaboutmortgage.com/former-fannie-mae-employee-attempted-to-destroy-all-data/): A former Fannie Mae contracted employee was indicted for computer intrusion this week for allegedly planting a malicious script on...
- [The Hummers Are Back](https://www.thetruthaboutmortgage.com/the-hummers-are-back/): In recent weeks, I’ve seen an increasing number of tank-like Hummers cruising the streets of Los Angeles, a troubling trend...
- [Skaters Benefiting from Foreclosure Crisis](https://www.thetruthaboutmortgage.com/skaters-benefiting-from-foreclosure-crisis/): While record numbers of foreclosures continue to wreak havoc on home prices and the economy as a whole, one unlikely...
- [Bailout is 2008 Word of the Year](https://www.thetruthaboutmortgage.com/bailout-is-2008-word-of-the-year/): Another year, another word of the year tied to the ongoing mortgage crisis. Merriam-Webster unveiled its word of the year...
- [Downey Savings Shut Down by FDIC](https://www.thetruthaboutmortgage.com/downey-savings-shut-down-by-fdic/): Downey Savings was shut down late Friday by the FDIC on a busy day where two other banks were also...
- [Hovnanian Wants Mortgage Rates Cut to Three Percent](https://www.thetruthaboutmortgage.com/hovnanian-wants-mortgage-rates-cut-to-three-percent/): One the leading U. S. homebuilders has called for the government to temporarily cut mortgage rates to make homeownership more...
- [Subprime Wins Ninth Race at Aqueduct Park](https://www.thetruthaboutmortgage.com/subprime-wins-ninth-race-at-aqueduct-park/): The word “subprime” has undoubtedly been associated with massive losses over the past couple of years, but last Thursday, quite...
- [Bank of America Launches Modification Program to Satisfy Countrywide Lawsuits](https://www.thetruthaboutmortgage.com/bank-of-america-launches-modification-program-to-satisfy-countrywide-lawsuits/): So I guess there was a point to the many, many state Attorney General lawsuits filed against Countrywide Financial over...
- [Washington Mutual Shut Down by OTS](https://www.thetruthaboutmortgage.com/washington-mutual-shut-down-by-ots/): So much for the merger with Chase; instead the largest bank failure in U. S. history. Late Thursday evening, Washington...
- [Website Selling “I Hate Mortgage Brokers” T-Shirts](https://www.thetruthaboutmortgage.com/website-selling-i-hate-mortgage-brokers-t-shirts/): A website popped up today selling “I Hate Mortgage Brokers” t-shirts and other various products such as baseball hats and...
- [In Pictures: Indymac Bank Run](https://www.thetruthaboutmortgage.com/in-pictures-indymac-bank-run/): Our street team headed down to Encino, CA today to take a look at what we thought would be a...
- [Introducing Indymac Federal Bank](https://www.thetruthaboutmortgage.com/introducing-indymac-federal-bank/): Tomorrow morning, Indymac Federal Bank will open its doors, largely to panicked and upset customers inquiring about their mostly-insured deposits....
- [Introducing Wachovia’s New Three-Pronged Option Arm](https://www.thetruthaboutmortgage.com/introducing-wachovias-new-three-pronged-option-arm/): Wachovia announced today that it would no longer offer the negative amortization payment option on its popular and now infamous...
- [Service Launched to Help Pets Affected by Foreclosure](https://www.thetruthaboutmortgage.com/service-launched-to-help-pets-affected-by-foreclosure/): A new non-profit called “No Paws Left Behind” was launched today to help foreclosure victims find homes for their pets...
- [Down Payment Assistance Loans Drive $4.6 Billion Loss at FHA](https://www.thetruthaboutmortgage.com/fha-down-payment-assistance-loans-drive-46-billion-loss/): FHA Commissioner Brian D. Montgomery said today that his organization realized $4. 6 billion in “unanticipated long-term losses,” largely due...
- [Mortgage Bust Market Cap Impact](https://www.thetruthaboutmortgage.com/mortgage-bust-market-cap-impact/): What a difference a mortgage crisis can make. Take a look at select mortgage stocks and their market cap declines...
- [Study: Originate to Distribute Model to Blame for Mortgage Crisis](https://www.thetruthaboutmortgage.com/study-originate-to-distribute-model-to-blame-for-mortgage-crisis/): Research and consulting firm Celent released a study yesterday titled, “Pathology of the US Mortgage Crisis,” which examines the evolution...
- [Wachovia Pitching Pick-a-Pay Mortgage Amid Crisis](https://www.thetruthaboutmortgage.com/wachovia-pitching-pick-a-payment-mortgage-amid-crisis/): Yesterday I saw a television ad from Wachovia touting their “Fixed Rate Pick-a-Payment Mortgage” as a sensible choice for homeowners....
- [Company Launched to Buy Distressed Mortgage Assets](https://www.thetruthaboutmortgage.com/company-launched-to-buy-distressed-mortgage-assets/): As the mortgage crisis deepens, it’s clear that opportunities will present themselves, and some winners must emerge. And so PennyMac,...
- [Top 10 Most Admired Mortgage Companies](https://www.thetruthaboutmortgage.com/top-10-most-admired-mortgage-companies/): Fortune magazine released its top 10 list of the most admired mortgage companies in the March 17th edition, which begs...
- [Bank of America to Buy Countrywide](https://www.thetruthaboutmortgage.com/bank-of-america-buys-countrywide/): Rare Opportunity for BofA? As expected, Bank of America announced this morning that it would buy struggling mortgage lender Countrywide...
- [Subprime Voted Word of the Year for 2007](https://www.thetruthaboutmortgage.com/subprime-voted-word-of-the-year-for-2007/): Not surprisingly, the American Dialect Society voted “subprime” the word of the year for 2007. At a voting session in...
- [Interest Rate Reset Chart](https://www.thetruthaboutmortgage.com/interest-rate-reset-chart/): So you’ve probably heard all about the mortgage rate resets that will occur over the next decade, but now you...
- [Ex Pro Wrestler Enters Mortgage Business](https://www.thetruthaboutmortgage.com/ex-pro-wrestler-enters-mortgage-business/): If you’ve ever watched “pro” wrestling, you’ve undoubtedly heard of Ric Flair, the undisputed king of flair, and an all...
- [Lowermybills Dancing Alien Ads Are Back!](https://www.thetruthaboutmortgage.com/dancing-alien-ads-are-back/): Dancing aliens rejoice. The ads are back. Apparently dreams do come true sometimes. A few weeks ago, a blogger from...
- [Greenpoint Mortgage Closed](https://www.thetruthaboutmortgage.com/greenpoint-mortgage-closed/): Greenpoint Mortgage was shut down today by parent Capital One Financial Corp. , who said weak demand for residential home...
- [Pay Rate vs. Teaser Rate](https://www.thetruthaboutmortgage.com/pay-rate-vs-teaser-rate/): If you scan through mortgage programs and lender rate sheets you may have come across mortgage lingo such as “pay...
- [Predatory Lending Q & A](https://www.thetruthaboutmortgage.com/predatory-lending-q-a/): I did a recent interview regarding predatory lending. I thought I’d share it here to offer a better insight as...
- [A Long List of Mortgage Layoffs, Mergers, and Closures](https://www.thetruthaboutmortgage.com/a-list-of-recent-mortgage-closures-mergers-and-layoffs/): A never-ending list chronicling the latest mortgage layoffs, lender closures, and company mergers.
- [Rent Before Applying for a Mortgage](https://www.thetruthaboutmortgage.com/rent-before-applying-for-a-mortgage/): While it’s common for young, prospective homeowners to live with mom and dad to save money for their down payment...
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# Detailed Content


## Pages

### What Is a Conforming Mortgage? A Loan That Meets the Guidelines of Fannie Mae or Freddie Mac

- Published: 2025-03-19
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/conforming-mortgage-loans/

A "conforming mortgage" is a home loan with a loan amount up to $806,500 that also meets the underwriting guidelines set forth by Fannie Mae and Freddie Mac. This maximum loan amount is up from $766,550 in 2024 after increasing from $726,200 in 2023. It typically adjusts each year in January, as long as property values increase, based on home price movement during the year prior. Aside from adhering to maximum loan amounts, conforming loans generally require a minimum FICO score of 620 from all borrowers. They are the most common type of mortgage, accounting for around half of all home loans originated. Conforming Home Loan Requirements Must meet underwriting guidelines set by Fannie Mae or Freddie Mac Including a minimum credit score (generally 620 FICO or higher) And a maximum debt-to-income (DTI) ratio of 43% Home buyers can obtain a loan with as little as 3% down payment Income, assets, and employment will be evaluated for loan approval Loan amount must be at/below the conforming loan limit As noted, conforming home loans adhere to underwriting standards set by Fannie Mae and Freddie Mac. This includes credit and income requirements, such as a minimum 620 FICO score and full doc underwriting, which considers income, assets, and employment history. A maximum DTI ratio of 43% is permitted, though ratios up to 50% may be allowed with compensating factors. Both home buyers and those refinancing an existing mortgage can get a mortgage for up to 97% loan-to-value (LTV). Conforming loans are subject...

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### How Are Mortgage Rates Determined?

> See current mortgage rates and learn about the many factors that drive them higher and lower so you can get a better rate.

- Published: 2025-03-13
- Modified: 2025-04-11
- URL: https://www.thetruthaboutmortgage.com/what-causes-mortgage-interest-rates-to-move/

The Mortgage Rates Puzzle A lot of factors go into determining your mortgage rate Things like credit score are huge (if not the most important) As are down payment, property type, and transaction type (refi vs. purchase) Along with any points you're paying to obtain said rate The state of the economy will also come into play This means there are some things you can control, and others you cannot If you do a web search for “mortgage rates” you’ll likely see a list of interest rates from a variety of different banks and lenders. Unfortunately, this won’t tell you much without actually knowing why the rates are what they are and if they’re actually available toYOU. It’s really just a bunch of numbers on a page. Shouldn’t you know how lenders come up with them before you start shopping for a home loan and buying real estate? Simply put, the more you know, the better you'll be able to negotiate! Or call out the nonsense... Many homeowners tend to just go along with whatever their bank or mortgage broker puts in front of them, often without researching mortgage lender rates or inquiring about how it all works. Whether you’re interested in rates or not, it’s wise to get a better understanding of how mortgage rates move and why. One of the most important aspects to successfully obtaining a mortgage is securing a low interest rate. After all, the lower the rate, the lower the mortgage payment each month. And...

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### Which Mortgage Is Right For Me? Look Beyond the 30-Year Fixed If You Dare

- Published: 2025-03-11
- Modified: 2025-03-21
- URL: https://www.thetruthaboutmortgage.com/which-mortgage-is-right-for-me/

An age old question: "Which mortgage is right for me? " When shopping for a home loan, whether it’s a new purchase-money mortgage or a refinance, knowing which loan type to pick and why is absolutely paramount. After all, the choice you make today will affect your checkbook for years to come. Possibly even 30. So it’s important to put some thought behind your decision. Yes, it will involve a mortgage calculator, research, note taking, and not least of which, your precious time. We're not shopping for a microwave here folks. We're talking about one the bigger financial decisions of your life. Lots of Mortgage Options: There are countless mortgage types to choose from — conventional, conforming, FHA, VA, USDA, jumbo, fixed-rate (FRM), adjustable-rate (ARM), and more. The "right mortgage" depends on individual financial circumstances and goals. Or even what you qualify for. It's a Personal Choice: No one-size-fits-all mortgage exists. An FHA loan might be suitable for a low-credit score home buyer, while VA loans benefits military/veterans, USDA loans are great for rural areas, and ARMs appeal to wealthy home buyers (or those looking to refi/sell soon thereafter). Key Factors to Consider: Choosing the right mortgage involves assessing your credit scores, down payment, income, debt-to-income (DTI) ratio, property type, and how long you plan to stay in the home (and with the loan). The Decision Might Be Made for You: For example, if your FICO score is below 620, you might have no choice but to go with an...

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### The Cash-Out Refinance: A Simple Way to Tap Your Home Equity

> A cash-out refinance is a home loan where the borrower takes out additional cash beyond the amount of the existing loan balance. It can be used for things like home improvements, to pay for college tuition, or to pay off credit cards.

- Published: 2025-03-06
- Modified: 2025-03-06
- URL: https://www.thetruthaboutmortgage.com/cash-out-refinance/

Let's talk mortgage basics. There are two main types of mortgage refinances available to homeowners. There is the standard rate and term refinance, which allows a borrower to obtain a lower mortgage rate and/or shorten their loan term, while keeping their existing loan balance intact. And then there is the "cash-out refinance," which allows a borrower to tap into the equity (or cash) in their home. Cash Out Refinance 101: Key Takeaways Definition: A cash-out refinance is a mortgage transaction where you borrow more than your current loan balance and receive the proceeds in cash for purposes such as home improvements, debt consolidation, or other expenses. How it works: Replaces your existing mortgage with a larger loan, paying off the outstanding balance and leaving you with the difference in cash, minus closing costs. Larger mortgage balance: The new loan will be larger than the original one, often leading to higher monthly payments unless you can secure a lower interest rate and/or extend the loan term. Equity required: You need sufficient home equity (typically at least 20% after the refinance) to qualify for a cash-out refinance, as lenders cap the loan-to-value (LTV) ratio at 80% for conforming loans. Potential benefits: Provides a lump sum of cash at a low interest rate (relative to other options), and if rates drop in the process, you could lower your mortgage interest rate too, making it a "home run. " Flexibility of funds: Cash can be used for anything, including home renovations, college tuition, paying...

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### What Is a Mortgage Broker? Your Personal Rate Shopper and Loan Guide

- Published: 2025-02-27
- Modified: 2025-02-27
- URL: https://www.thetruthaboutmortgage.com/what-is-a-mortgage-broker/

Unless you live under a rock (like I do), you've probably heard the term "mortgage broker" get thrown around on more than one occasion. You may have heard good things, and you may have heard bad things... Opinions aside, a mortgage broker is an intermediary that works between the borrower and the bank to help the former obtain home loan financing. Instead of contacting a retail bank or mortgage lender directly, you have the option of enlisting a broker instead, who will act as your liaison and loan guide. Brokers can help you apply for a mortgage and do most of the heavy lifting along the way, whether it be a home purchase loan or a mortgage refinance. Key Points About Mortgage Brokers A mortgage broker acts as an intermediary connecting borrowers with lenders Differs from captive loan officers who work directly with one single bank Brokers shop third-party lenders on your behalf to find competitive rates (so you don't have to) Can also provide expert guidance for tricky loans and access to diverse loan options They handle the application, loan processing, and lender coordination to simplify the process Paid via lender compensation (e. g. 1-2% of loan amount) or directly via borrower (your choice) Studies suggest brokers can secure lower rates (or lower costs) but your experience may vary Possible bias toward lender partners that offer higher commissions so you need to shop brokers too! Jump to mortgage broker topics: - How does a mortgage broker work? - Comparison...

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### Par Mortgage Rate: An Interest Rate Without Points or Credits

> A par rate loan doesn't require the payment of discount points, nor does it come with lender credits.

- Published: 2025-02-26
- Modified: 2025-02-26
- URL: https://www.thetruthaboutmortgage.com/mortgage-dictionary/par-rate-loan/

In the mortgage world, the "par rate" is the mortgage rate a borrower qualifies for assuming there is no interest rate manipulation of any kind. This means no discount points should be paid by the borrower to get a below-market rate. And there should not be a lender credit OR lender-paid compensation, as either would push the interest rate above the true market price. This par mortgage rate, otherwise known as the base rate, is also determined by a borrower’s particular loan scenario. It may include mortgage pricing adjustments for things such as loan amount, credit score, property type, loan-to-value ratio, and so on. As such, a high-risk borrower will have a higher par rate than a low-risk borrower because of said adjustments. Let’s look at an example of a par mortgage rate: -6. 5% = -1. 00 -6. 25% = -0. 50 -6% = 0. 00 (par rate) -5. 75% = 0. 50 In the example above, we see a list of mortgage interest rates with corresponding fees or rebates. Let's pretend the loan amount is $500,000. On the surface, a rebate is a good thing because it means you get a credit toward your closing costs. For example, -1. 00 for a rate of 6. 5% means you get 1% of the loan amount in money back, or $5,000. That money could be used to pay the lender and/or other third-party costs. However, it also means the interest rate is higher than par as a result. No free...

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### Today's Mortgage Rates

> Compare today's mortgage rates from dozens of banks, lenders, and credit unions.

- Published: 2025-02-19
- Modified: 2025-03-11
- URL: https://www.thetruthaboutmortgage.com/todays-mortgage-rates/

As I often say around here, it’s important to compare mortgage rates to ensure you receive favorable pricing on your home loan. The table below contains today’s mortgage rates from a variety of local and national home loan lenders, along with select banks and credit unions. Your rate and payment can greatly affect your home buying decision, so it’s something that should be taken very seriously. Why It’s Important to Compare Mortgage Rates Actual studies have proven that those who obtain more than one mortgage quote can save money Getting just a second quote can produce savings between $966 and $2,086 And 5+ quotes may result in average expected savings of nearly $3,000 over the loan term Aside from saving money, it’s important to use a competent mortgage lender that can successfully close your loan with few hiccups If you only gather a single mortgage rate quote, which many individuals seem to do, especially first-time home buyers, you won’t know if it’s good or bad relative to what else is out there. This isn’t just casual advice – there are studies (Freddie Mac) that prove those who gather more than one mortgage quote actually save money on their home loan. And not just a little, potentially thousands via years of lower monthly payments! While mortgages are mostly a commodity (similar if not the same product from lender to lender), the mortgage rates they offer can vary for one reason or another, just like how milk and eggs may cost more...

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### Mission Statement

- Published: 2024-08-09
- Modified: 2024-08-09
- URL: https://www.thetruthaboutmortgage.com/mission-statement/

You might be wondering what the point of this website is. Many websites sell a product or offer a service. I don’t sell anything nor do I offer any sort of paid service. Instead, I just write about mortgages. And I’ve been doing it for the past 20 years (almost! ). The reason I created this website is simple: to help consumers better understand how mortgages work. That’s it. Plain and simple. That’s still the main goal and raison d'être. “Your guide to a smarter home loan. ” I want visitors to walk away (or click away) knowing more about mortgages than when they arrived. And ideally make more informed choices when dealing with real estate agents, loan officers, and brokers when buying a home or refinancing their loan. As noted on my about me page, I used to work in the mortgage industry as an Account Executive for a wholesale mortgage lender. While employed there, I learned a ton about the business, gained invaluable experience, and also discovered that many people were asking a lot of questions about how it all worked. That led to the creation of TheTruthAboutMortgage. com in 2006, just before the housing market happened to tank. Good timing I know. I began writing about types of mortgages, mortgage terminology, how-to articles, and general mortgage tips I thought would be useful. Today, that’s what I still do on this site. In fact, not a whole lot has changed in that regard. Just new topics and ideas...

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### Editorial Standards

- Published: 2024-07-02
- Modified: 2024-08-09
- URL: https://www.thetruthaboutmortgage.com/editorial-standards/

First a brief history. I created The Truth About Mortgage all the way back in 2006. My mission statement continues to be helping prospective home buyers and existing homeowners navigate the home loan process. One day at work in the early 2000s, the thought came to me. At the time, I was employed by a mortgage lender and often heard the same questions being asked over and over again. I realized there wasn't a good place to find basic information on mortgages. That was my lightbulb moment to take what I knew and share it with the world. And hopefully avoid hearing the same questions get asked more than once! Over the years, I have crafted thousands of pages of content focused solely on mortgages, home buying, and the housing market. And in the process, The Truth About Mortgage has become one of the top resources on the internet with millions of visits. I am fully dedicated to demystifying mortgages and that is what you will find when exploring my website. My Editorial Process and Quality Standards Knowing mortgages are a very important and complex subject, I have carefully and tirelessly created the content on this site to ensure it is of the utmost quality. That means being accurate, thorough, honest, remaining objective (despite having opinions that I openly share), and simply ensuring it’s helpful. And perhaps most importantly, getting information direct from the source, whether it’s Fannie Mae, Freddie Mac, the FHA, the VA, or private companies like First...

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### Rent vs. Buy Calculator

- Published: 2018-03-07
- Modified: 2019-11-19
- URL: https://www.thetruthaboutmortgage.com/rent-vs-buy-calculator/

If you’re still determining if it’s time to move on from renting to homeownership, you may want to do the math with the "rent vs. buy calculator" below to calculate the costs. I understand that the rent or buy question is not just a financial decision, but as we all know, money does have a lot to do with. As I once pointed out, there are many reasons to buy a home beyond the investment. So be sure to consider all factors, both financial and personal (and emotional) before you dive in. How to Use the Rent vs. Buy Calculator I’ll be the first one to admit that this mortgage calculator is a little complex, but then so is home buying. You aren’t buying a toaster, after all. And you’re not applying for a credit card. You’ll probably need a big old mortgage on your dream home. Most real estate will set you back at least six-digits, so you have to put a little bit of time into it if you want to yield the best results. And yes, math will be involved, as will mortgage calculators. And that’s plural because you’ll also need one to determine affordability, or even just a basic mortgage payment calculator. Anyway, to solve the pesky rent or buy query, start by entering in your monthly rent payment and any renter’s insurance you pay, with the premium divided by 12. If you don’t pay it, just enter “0. ” For the record, I’ve never paid...

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### Mortgage Affordability Calculator

- Published: 2018-02-21
- Modified: 2019-11-19
- URL: https://www.thetruthaboutmortgage.com/mortgage-affordability-calculator/

One of the most important things you can do when shopping for real estate is determine how much mortgage you can afford (assuming you aren’t paying all-cash). The best way to do this is with a mortgage calculator, not a bar napkin. After all, if you don’t know what you can actually afford to spend, you could be in a for a rude awakening when it comes time to apply for a mortgage. Or you might just waste a lot of your time. In reality, you probably won’t get that far without at least getting a mortgage pre-approval. Real estate agents won’t take you seriously, and home sellers likely won’t give you the time of day. Use a Mortgage Affordability Calculator as a Starting Point Before you start perusing real estate listings Use an affordability calculator to determine if homeownership Makes sense financially and is within reach Then you can look into a pre-qual or pre-approval to fine-tune the numbers and make sure all red flags are addressed The mortgage affordability calculator below can give you a head start in front of other prospective home buyers competing for the same property. How to Use the Mortgage Affordability Calculator First enter your gross income and monthly liabilities Then consider your down payment, loan type, and mortgage rate Don't forget the extras like homeowners insurance and property taxes You can generally use the 36/42 ratios to determine the maximum home purchase you can afford Just remember that it's good to live at...

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### Mortgage Payment Calculator

- Published: 2018-02-20
- Modified: 2025-03-06
- URL: https://www.thetruthaboutmortgage.com/mortgage-payment-calculator/

If you're looking for a basic mortgage payment calculator, you've come to the right place. The mortgage rate calculator below will give you the monthly principal and interest payment after inputting just a little bit of information. This can come in handy if you find other loan calculators too complex, or just want to run some quick loan scenarios. It also doubles as a mortgage amortization calculator if you tick the "Show payment schedule" box. So you'll be able to view the entire amortization table as well. A Simple and Easy to Use Mortgage Payment Calculator This calculator will quickly compute a monthly mortgage payment Including principal and interest only (not incl. taxes/insurance/PMI) Useful if you're considering a refinance and want to know the monthly savings Or if you want to calculate payments for a potential home purchase How to Use the Mortgage Payment Calculator For a home purchase enter the price and down payment For a refinance enter the remaining loan balance and "0" for down payment Then enter the proposed loan term and interest rate Tick show payment schedule to see the monthly payment breakdown and full amortization of the loan To start, simply enter the purchase price and down payment. If you know the home you're buying will cost $400,000, enter that, then the proposed down payment, either in dollars or by percentage. A common down payment is 20%, which is required to avoid mortgage insurance, but a lot of home buyers come in with much less...

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### Early Mortgage Payoff Calculator

- Published: 2018-02-20
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/early-mortgage-payoff-calculator/

If you own real estate and are considering making extra mortgage payments, the "early mortgage payoff calculator" below could be helpful in determining how much you'll need to pay and when to meet a certain financial goal. Put simply, it's a standard mortgage calculator with extra payments built-in, so it's really easy to use. But also very powerful. You input your original mortgage amount and can quickly see what paying extra will do in terms of both interest savings and shaving years off your mortgage. Use the Early Mortgage Payoff Calculator to Determine the Actual Savings This calculator will illustrate the potential savings Of paying off your home loan ahead of schedule Knowing the actual numbers can help you determine if it makes sense To make extra payments based on your financial goals For example, if you're interested in paying off your mortgage off in 15 years as opposed to 30, you generally need a monthly payment that is 1. 5X your typical mortgage payment. So if you're currently paying $1,000 per month in principal and interest payments, you'd have to pay roughly $1,500 per month to cut your loan term in half. Of course, that's just a ballpark estimate. It will depend on the mortgage rate and the loan balance. This early payoff calculator will also show you how much you can save in interest by making larger mortgage payments. You might be surprised at the potential savings, but be sure to consider where you'd put that money elsewhere....

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### Refinance Calculator

- Published: 2018-02-20
- Modified: 2019-11-19
- URL: https://www.thetruthaboutmortgage.com/refinance-calculator/

Wondering if it makes sense to refinance your mortgage? Check out the refinance calculator below to determine the potential savings (or lack thereof). Believe it or not, it doesn't always make sense to a refinance a home loan, even if mortgage interest rates are stellar. One must consider the cost to refinance, along with the expected tenure in the property. If you plan on staying put in the home for life, you still must determine if the loan is a keeper long term or just for a little while. Let this calculator do the heavy lifting so you don't have to. It's probably better that you do the calculations as opposed to an interested party, who only gets paid when you refinance! How to Use the Refinance Calculator To start, enter your original loan amount when you first took out your mortgage (not your current lower loan amount) and the original loan term. For example, a 30-year fixed mortgage has an original term of 30 years or 360 months. And if your original mortgage was for $200,000, enter that number, not what the outstanding balance is today. Also enter the date you took out your current home loan, which is important to determine the current loan balance, the potential savings, and the closing costs on the refinance loan. Next, enter your current mortgage rate, not the interest rate you hope to receive by refinancing your mortgage. The section below that details the proposed refinance loan, including any cash out you'd...

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### USDA Home Loans: Eligibility and Program Requirements

- Published: 2016-06-15
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/usda-home-loans-eligibility-and-program-requirements/

When you see or hear the acronym “USDA,” the first image that probably comes to mind is a big, juicy steak. As in, USDA Prime or Choice. But the U. S. Department of Agriculture isn’t just in the farming business... They also run a pretty substantial home loan program that offers mortgage financing with zero money down. These "USDA loans" are offered to home buyers throughout the country who purchase properties in so-called "rural areas. " What Is a USDA Home Loan? A government home loan that provides 100% financing to home buyers Available to borrowers in rural areas throughout the United States Must have a household income at/below a certain threshold to qualify Offered by private sector banks and lenders on behalf of the USDA A USDA home loan is a government-backed mortgage that allows home buyers to purchase a property in a rural region of the United States with no down payment. It is overseen and managed by the USDA Rural Development (RD) division, whose mission is to promote homeownership in order to create thriving communities and improved quality of life in rural areas. Since program inception in 1991, the USDA Single Family Housing Guaranteed Loan Program has helped roughly 2 million low-to-moderate income residents realize the dream of homeownership. At first glance, a USDA loan (also known as a rural development loan or an RD loan) might not seem like the right fit for you and your real estate needs. But the program actually has fairly high...

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### Purchase Money Mortgage: The Different Types and How They Work

- Published: 2010-11-11
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/purchase-money-mortgage/

A “purchase money mortgage” is a home loan used to purchase a piece of property, whether it be a principal residence, a second home, or an investment property. If you're looking to buy a home, you'll generally need to apply for a purchase money mortgage to obtain financing, unless of course, you plan to pay with cash. Most of us aren't lucky enough to have the necessary amount of funds on hand to buy a home outright, so we must turn to a bank or mortgage lender for financing. Purchase Money Mortgage Loans Are Easier to Qualify For Purchase mortgages have the most flexible underwriting guidelines Including the highest LTV limits available And the lowest credit score requirements Home purchase interest rates may also be cheaper than refinance rates The good thing about home purchase loans is that they generally come with the most flexible mortgage underwriting guidelines relative to refinance loans. In other words, you'll be able to borrow the most amount of money at the highest loan-to-value ratio (LTV ratio) if the purpose of the loan is a home purchase. For example, the FHA allows home purchase financing with as little as 3. 5% down, and specialty programs such as Fannie Mae's HomeReady program only require 3% down, with gifts or grants permitted to cover the small down payment. You can also get USDA loans and VA loans with no money down. Conversely, those looking to pull equity from their homes via a cash-out refinance may be limited...

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### How Balloon Mortgages Work

- Published: 2010-10-04
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/balloon-mortgage/

A “balloon mortgage” is a home loan that does not fully amortize over the life of the loan, leaving a large balance at the end of the shortened term. What Is a Balloon Mortgage? It's like a standard home loan In that you make principal and interest payments each month Based on a 30-year amortization (or similar) But differs in that the loan is due in full in just a fraction of the time Put simply, monthly mortgage payments are based on a typical 30-year loan term, but the loan itself is due in full after just five or seven years, instead of 30. As a result, the final payment on a balloon mortgage will be significantly larger than the regular monthly mortgage payments. Of course, most borrowers expect to either refinance before the balloon mortgage term ends, or sell the associated property. So the final payment likely won't even come into play in the real world. Let's look at an example of a balloon mortgage:7-Year Balloon MortgageInterest Rate: 5. 00%Amortization: 30 YearsLoan Amount: $250,000In the above scenario, the monthly mortgage payment would be $1,342. 05 per month, which is the same exact amount as a standard 30-year fully-amortizing payment. This monthly payment would remain in effect for the first 84 months, leaving a remaining balance of $221,204. 98 left over at the end of the seven-year term. This outstanding balance is the balloon mortgage payment that is due in full after seven years. It probably sounds like a lot...

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### Mortgage Discount Points: How They Can Lower Your Interest Rate and Save You Money

- Published: 2010-08-17
- Modified: 2024-03-16
- URL: https://www.thetruthaboutmortgage.com/mortgage-discount-points/

I think it goes without saying that everyone with a mortgage (or thinking about getting one) wants the lowest interest rate possible. After all, who wouldn't want to save money each month for the next 30 years or so of their life? Remember, this isn't a one-off purchase, it's a decision that will affect your pocketbook month after month for the foreseeable future.   So getting the pricing right is imperative. Let's say you qualify for a mortgage at a rate of 5%, but you're not happy with the rate. Assuming any attempt to negotiate your mortgage rate lower fails, you do have another option. What are mortgage discount points? Discount points are a form of prepaid interest Instead of paying more interest monthly via a higher interest rate You pay more at closing in one lump sum In exchange for a lower interest rate for the life of the loan That brings us to the topic of “mortgage discount points,” which can be paid at closing to reduce your mortgage rate. Simply put, you have the option to pay a percentage of the loan amount, also known as a mortgage point, to lower your interest rate by a certain amount. For the record, the ratio of points to rate discount is never perfectly proportional.   So I can't tell you that one discount point will equate to a . 25% reduction in rate. It always varies. But I can mention that discount points are considered a form of prepaid...

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### How to Get a Mortgage: From Start to Finish

- Published: 2010-04-27
- Modified: 2024-05-26
- URL: https://www.thetruthaboutmortgage.com/how-to-get-a-mortgage/

Mortgage Q&A: “How to get a mortgage? ” If you already know what a mortgage is, you may be wondering how to obtain one. To refresh your memory, a mortgage is just another way of saying a home loan. Of course, mortgages serve different purposes – some are used to purchase a home and others are used to refinance an existing mortgage. You may even open a second mortgage behind an existing first mortgage to tap into the equity of your home (e. g. a home equity line of credit). It's important to have a basic understanding of mortgages before you set out to get one, just like anything else you might shop for. If you're more knowledgeable on the subject, chances are you'll secure a lower rate and choose a more suitable loan product that fits your needs. Let's discuss what the process might look it. First Educate Yourself on Mortgages Always start by educating yourself on the topic at hand This includes understanding how real estate works and if it's right for you Far too many people rush into homeownership without grasping the basics Take the time to research both mortgages and real estate before diving in I've made this plea countless times because I feel like not enough time is devoted to education on personal finance. If you're putting in hours to research a new big screen TV, don't you think a mortgage decision deserves days, if not weeks of research? The interest rate you receive on...

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### Mortgage Pre-Qualification vs. Mortgage Pre-Approval: The Ultimate Guide

- Published: 2010-02-09
- Modified: 2024-05-23
- URL: https://www.thetruthaboutmortgage.com/pre-qualification-vs-pre-approval/

Mortgage Q&A: "Pre-Qualification vs. Pre-Approval" When you initially set out to purchase a new home, the real estate agent(s) and home seller will want to know you can actually afford the thing. Heck, you should want to know too. After all, if you can't afford to buy it, you'll be wasting everyone's time, including your own. Aside from affordability concerns, you may find other issues that disqualify you from obtaining a mortgage (do I qualify for a mortgage? ). And these issues aren't always obvious, especially to the first-time home buyer who has never obtained a home loan before. You might think you're good to go, but because of the nuanced and ever-changing mortgage landscape, it's better to know for sure. You Won't Get Very Far Without a Mortgage Pre-Approval... As noted, real estate agents and home sellers will want to be certain that you're committed to buying a home, as opposed to those just casually browsing, so they don't miss out on a legitimate buyer in the process. After all, if it's between you and another qualified buyer, and they pick you, without knowing you can obtain a mortgage, it'll be a tough sell to go back to that other buyer after the fact. They'll lose a lot of leverage, assuming that other buyer sticks even around. For these reasons, most real estate agents will demand that you get pre-approved for a mortgage loan before they even begin showing you potential properties. Additionally, most agents have a preferred mortgage...

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### What Is a Short Refinance? A Reduced Mortgage Balance to Keep You in Your Home

- Published: 2010-02-09
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/what-is-a-short-refinance/

A “short refinance” is a transaction in which your bank or mortgage lender agrees to pay off your existing mortgage and replace it with new a loan with a reduced balance, essentially helping you avoid foreclosure. In that sense, it's more a loss mitigation tool than it is a standard refinance loan. It benefits both the bank and the homeowner, as the bank ideally loses less than they would via foreclosure, and the homeowner gets to stick around in their property. A Short Refinance to Save Your Home A short refinance may allow you to keep your home Even if you can't afford your existing mortgage(s) The lender provides a principal reduction That lowers your monthly mortgage payments to affordable levels A short refinance is a cross between a short sale, which involves selling your home for less than the existing lien(s), and a rate and term refinance, where you replace an old loan with a new one. So why would someone want to execute a short refinance anyway? Well, if property values plummet, and millions of homeowners are upside down on their mortgages, meaning they owe more on their home loan(s) than the property is worth. Short Refinance Example Purchase price: $500,000 Mortgage balance: $450,000 Current home value: $400,000 Short refinance loan amount: $380,000 Forgiven debt: $70,000 In the above scenario, the homeowner wouldn't be able to refinance without bringing in at least the $50,000 difference between current appraised value and existing mortgage balance. In reality, the homeowner would...

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### What Is Title Insurance? Is It Required for Your Mortgage?

- Published: 2010-01-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-title-insurance/

Mortgage Q&A: “What is title insurance? ” When you apply for a mortgage, keep in mind you'll need to pay a number of closing costs, including a variety of insurance policies to protect the underlying asset, your home. A charge you may have overlooked is title insurance, though it's often one of the largest costs associated with taking out a home loan. As the name suggests, it is a cost associated with and paid to an insurance company, not the mortgage lender. That makes it a third-party fee, and a costly one at that. On the Loan Estimate (LE) disclosure you receive, you'll see it under Section C of Loan Costs, labeled, "Services You Can Shop For. " In other words, you are able to and encouraged to shop around for title insurance, though my assumption is most homeowners just go with the company recommended to them. To make matters even more complicated, there are two types of title insurance policies you may need when you take out a home loan. There is lender's title insurance and owner's title insurance. Let's explore both in depth so you better understand what you're buying here. Lender's Title Insurance Is a Must If You Have a Mortgage There are two types of title insurance The lender's title insurance policy is required when you take out a mortgage It protects the bank/lender from any lawsuits or claims That arise from the chain of title on the subject property If you take out a mortgage...

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### What Do Mortgage Lenders Look For on Bank Statements and Tax Returns?

- Published: 2009-10-06
- Modified: 2024-01-20
- URL: https://www.thetruthaboutmortgage.com/what-mortgage-lenders-look-for/

Mortgage Q&A: “What do mortgage lenders look for? ” Most banks and mortgage lenders are looking for the same basic thing when they review your financials; your ability to repay the home loan. After all, as long as you make your mortgage payments on time each month, there isn't much else for them to worry about. You hold up your end of the bargain and they'll be more than happy to extend financing. Keep in mind that this differs from the priorities of some loan originators, who are more concerned with your ability to qualify for a loan (so they can get paid a commission), as opposed to actually being able to afford it. Lenders want to make money as well, but not by writing bad loans.   And they certainly don't want to let any fraudulent activity make its way through their doors. Here are some useful tips to help you boost your odds of mortgage approval. Pinpoint Potential Red Flags Before the Mortgage Lender Does A home loan application is kind of like a job interview You only get one chance to make a good first impression Make sure you take a hard look at all your financials before the lender does This will allow you to resolve anything beforehand and avoid any major missteps Think of a home loan application like a job interview.   You want to put your best foot forward. You also only get one chance to make a first impression, so make it...

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### Mortgages with No Money Down: There Are Many Options to Avoid a Down Payment

- Published: 2009-08-25
- Modified: 2024-01-25
- URL: https://www.thetruthaboutmortgage.com/mortgages-with-no-money-down/

As of 2024, there are lots of options to get a mortgage with no money down, which is surprising given the devastating financial crisis that took place just over a decade ago. The housing crash in 2008 forced lenders to require larger down payments because home prices plummeted and borrowers simply walked away. Simply put, if homeowners don’t have any skin in the game, otherwise known as home equity, there’s a better chance they’ll walk away from their homes if they fall behind on payments, leading to costly foreclosures. Conversely, if a borrower is required to put down say 10% of the purchase price, the lender has a safety buffer, and the homeowner is more likely to continue making payments, as they won’t want to lose that initial investment. Despite this logic, underwriting guidelines have since loosened and there are countless home loan programs that require zero down payment. The two most common zero-down mortgages are VA loans and USDA loans, though both have limitations that I'll discuss below. There are also zero down options available on conventional loans, typically facilitated via a gift or grant. No Money Down Mortgages Used to Be the Norm It used to be common to buy a home with nothing down But the mortgage crisis changed that in a hurry Now many borrowers are required to bring in a minimum of 3% or 3. 5% down Though no down payment mortgages still exist Back in 2006 and 2007, you couldeasilyobtain 100 percent financing from...

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### Loan Modification Programs: Options to Keep You in Your Home

- Published: 2009-03-08
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/loan-modification-programs/

Since the mortgage crisis took flight, “loan modification programs” have become all the rage. Instead of originating new loans, former mortgage brokers and loan officers are shifting focus to rework outstanding loans that have fallen behind in payments or are in danger of doing so. Ironically, many are getting paid to reverse the damage they caused to begin with. In the past couple years, millions of borrowers have fallen behind on their monthly mortgage payments, creating an unprecedented foreclosure epidemic. And because home prices are falling, many are seeing their home equity sucked dry or even worse, finding themselves underwater on their mortgages. This environment has forced banks and mortgage lenders to begin modifying loans in an effort to recoup losses and prevent foreclosures, which puts even more downward pressure on home prices. Things have become so dire that a number of banks have initiated their own proprietary streamlined loan modification programs to complement their standard loss mitigation efforts. There are also foreclosure prevention coalitions, such as Hope Now, which provide free assistance to struggling homeowners through a streamlined process using existing loss mitigation tools. So now that we have a little background, let’s take a look at some of the most common loan modification options available to at-risk borrowers. Mortgage Repayment Plan Used to get borrowers back on track if they fall behind on payments By adding portion of unpaid balance to monthly payments Until borrower is current on their home loan again A repayment plan is one the...

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### What Caused the Mortgage Crisis? A Game of Hot Potato

- Published: 2009-01-20
- Modified: 2024-04-10
- URL: https://www.thetruthaboutmortgage.com/what-caused-the-mortgage-crisis/

So, "what caused the mortgage crisis" anyway?   In case you hadn’t heard, we went through one of the worst housing busts in our lifetimes, if not ever. After home prices skyrocketed to all-time highs in the early 2000s, they began to take a dive around 2008. And didn't start to recover until around 2012. It was so bad that it set off the Great Recession, leading to countless real estate short sales and foreclosures. And though that much is clear, the reason behind it is much less so. As you might suspect, there has been a lot of finger pointing. But in reality, there wasn’t just one cause, rather a combination of forces behind the housing crisis.   I’ll attempt to list as many as I can think of here. The Originate-to-Distribute Model Banks weren't keeping the home loans they originated Instead they're were quickly selling them to investors on the secondary market Who were then slicing and dicing them into high-risk securities for those thirsty for "yield" The transfer of risk allowed more risky loans to be made In the old days, banks used to make mortgages in-house and keep them on their books. Because they held onto the loans they made, stringent underwriting guidelines were put in place to ensure quality loans were made. After all, if something went wrong with the loans, they’d be accountable.   And they’d lose lots of money. Recently, a new phenomenon came along where banks and mortgage lenders would originate home...

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### Mortgage 101: All the Help Topics You Need to Read Under One Roof

> An extensive list of mortgage help topics you can use to better understand the home loan process and get a better deal on your mortgage.

- Published: 2008-10-03
- Modified: 2024-09-23
- URL: https://www.thetruthaboutmortgage.com/mortgage-help/

Getting a mortgage can be complicated, I know because I used to work directly in the business. For that reason (and many others), I recommend that you learn as much as possible about the process before even thinking about buying a piece of property. After all, it is likely the largest purchase you'll ever make, so why not take the time to make sense of it all (beforehand, not during, or worse, after)? Mortgage Help Categories - Types of Mortgages to Choose From (and How They Work) - The Home Loan Process from Start to Finish - Mortgage Calculators Are Helpful, Use Them - Everything You've Ever Wanted to Know About Mortgage Rates - Mortgage Refinance Questions and Answers - Home Builder Lender Reviews - Top 10 Lists for Those Who Like Lists - Top Mortgage Lenders by Loan Type - Top Mortgage Lenders by City and State - Forbearance, Foreclosure, and Short Sale FAQs - Miscellaneous Mortgage Goodies Below is a list of "mortgage help" topics I feel are beneficial to anyone thinking about buying real estate, getting a mortgage, currently going through the mortgage process, or even those who already have a mortgage. It's not something most folks do very often, so even if you're a seasoned homeowner, it doesn't hurt to brush up on your knowledge, especially as the industry evolves over time. I liken the mortgage process to a visit to your local body shop (assuming you know nothing about cars). Most people don't know the...

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### Payment Shock: How It Can Jeopardize Your Mortgage Approval

- Published: 2008-04-15
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/payment-shock/

You may have heard the phrase “payment shock” get thrown around by your loan officer or mortgage broker, and for good reason. It plays an important role in the underwriting and eventual outcome of your mortgage application, and can sometimes even make or break your chances of approval. Payment shock can be defined in a number of ways, but it is essentially any significant increase in monthly liability that heightens the risk of loan default. In simple terms, the more you need to pay out each month to creditors, the higher the chance you’ll be unable to make a payment, especially if you’re not used to making large payments to begin with. Payment Shock Example Let’s assume your only history of carrying debt involves a car lease payment of $199 per month and rent of $1,000. Over the past few years, you got used to paying roughly $1,200 per month, plus other minor expenses. If you later applied for a home loan that carried a monthly payment of $4,000, payment shock would occur as you wouldn’t be used to shelling out such a large amount of money each month. Would you be able to handle paying $4,000 per month when you were only accustomed to paying $1,200? This is what the loan underwriter will want to figure out. This jump in monthly outlay could be reason enough to get denied that mortgage you've got your eye on. Payment Shock Threshold Might be a set payment increase Such as 200% of...

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### Privacy Policy

- Published: 2008-03-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/privacy-policy/

The privacy of our visitors at TheTruthAboutMortgage. com is very important to us. As with most other websites, we collect and use the data contained in log files. The information in the log files include your IP (internet protocol) address, your ISP (internet service provider, such as AOL or Roadrunner), the browser you use to visit our site (such as Internet Explorer or Firefox), the time you visited our site and the pages you visited throughout our site. Keep in mind that we may use cookies to store information, such as your personal preferences when you visit our site. This could include only showing you a popup once in your visit, or the ability to login to some of our features, such as forums. We never sell your personal information to third parties. We also serve third party advertisements on TheTruthAboutMortgage. com to support our site. Some of these advertisers may use technology such as cookies and web beacons when they advertise on our site, which will also send these advertisers (such as Google through the Google AdSense program) information including your IP address, your ISP, the browser you used to visit our site, and in some cases, whether you have Flash installed. This is generally used for geotargeting purposes (showing New York real estate ads to someone in New York, for example) or showing certain ads based on specific sites visited (such as showing mortgage ads to someone who frequents mortgage websites). You can chose to disable or selectively...

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### What Is a Stated Income Home Loan? How The Liar's Loan Works

> Stated income loans allow borrowers to simply state their monthly income on a mortgage application instead of verifying their salary by furnishing pay stubs and/or tax returns.

- Published: 2008-01-25
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/stated-income-loans/

In short, stated income loans allow borrowers to simply state their monthly income on a mortgage application instead of verifying the actual amount by furnishing pay stubs and/or tax returns. This simplified method was originally intended for self-employed borrowers with complicated tax schedules. It became widespread in the lead-up to the financial crisis, often because borrowers found it that much easier to qualify for a loan by stating their income. For that reason, stated income loans are also occasionally referred to as “liar’s loans” because it is suspected that many borrowers fudge the numbers in order to qualify for a home loan. Back to that in a minute. How Does a Stated Income Loan Work? Instead of documenting and verifying your income when obtaining a home loan By providing the lender with IRS tax returns and employment pay stubs A gross monthly income figure is simply inputted on the home loan application And not actually verified by anyone! Prior to the housing crisis in the early 2000s, it was very common to use stated income to qualify for a mortgage loan. Instead of providing tax returns and pay stubs from your employer, you could verbally state your gross monthly income and that is what would be used for qualification. Clearly this was a high-risk approach to home loan lending, which is why it's basically a thing of the past. However, there are new versions of stated income lending, which I'll discuss below. A Mortgage Doc Type for Every Situation To...

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### Alt-A Mortgages: What Are They and How Do They Work?

- Published: 2008-01-22
- Modified: 2019-11-01
- URL: https://www.thetruthaboutmortgage.com/alt-a-mortgages-alt-a-lending/

The term “Alt-A mortgage” gets thrown around a lot, and for good reason. It’s kind of the generic term for any loan that isn’t prime (A-paper) or subprime. In other words, it falls somewhere in between, but that can result in quite a range in loan quality. Ultimately, its definition is really dependent on the investor who sets the guidelines and how it’s packaged and sold on the secondary market. As such, it’s one of those mortgage terms that isn’t easily defined. It means different things to different banks and lenders, and many characteristics that make up an Alt-A loan are often gray. But I’ll do my best to give you the general idea. Alt-A Loans Typically Feature Limited Documentation Most Alt-A loans aren't full doc (verified tax returns and assets) This means income is either stated r it's some kind of asset-based loan A popular option these days relies on bank statements instead of tax returns While it's an acceptable measure of a borrower's ability to repay the loan, it's perhaps not as sound as traditional underwriting methods Perhaps one of the most overwhelming characteristics of Alt-A mortgages is their tendency to be limited documentation loans. Most so-called Alt-A loans are not full doc, meaning income is not verified, but rather stated or thrown out altogether. The same goes for asset or employment documentation. If a borrower prefers not to verify asset reserves or disclose employment history, the loan may also be referred to as an Alt-A loan. These...

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### Fixed-Rate Mortgages: An Easy Option But Are They a Good Deal?

- Published: 2007-09-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fixed-rate-mortgage/

A "fixed-rate mortgage" is the most basic and uncomplicated home loan available to borrowers today. It is far and away the most popular choice for homeowners because of its conservative and affordable nature. Something like 90% of home buyers (and existing homeowners who refinance) go with a fixed-rate loan. The most common variety is the 30-year fixed, which features a term long enough to keep monthly payments relatively inexpensive. What Is a Fixed-Rate Mortgage? A fixed-rate mortgage is a home loan with an interest rate that does not change during the entire duration of the loan term, which is typically 30 years. This means borrowers don't have to worry about their mortgage rates adjusting higher, which would cause their monthly payments to increase. However, 30-year mortgage rates do come at a premium relative to other loan types in exchange for this assurance. Still, given their predictability and relatively low rates, they remain far and away the most popular type of mortgage. Let's learn more about the features of a fixed-rate mortgage, along with key advantages and disadvantages. Jump to fixed-rate mortgage topics: - Fixed Mortgage Rates Are More Expensive - How Much Cheaper Is an ARM? - Are Fixed-Rate Mortgages a Good Idea? - Why Did My Mortgage Go Up If I Have a Fixed-Rate? - Types of Fixed-Rate Mortgages Available - Fixed Mortgages with Interest-Only Options - Fixed-Rate Mortgage Benefits - Fixed-Rate Mortgage Cons - Can I Refinance a Fixed-Rate Mortgage Fixed-Rate Mortgages Are Easy to Understand and Surprise-Free...

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### Biweekly Mortgage Payments: An Easy Trick to Do Them for Free

- Published: 2007-08-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/biweekly-mortgage-payments/

You’ve probably already heard the claims. That a "biweekly mortgage" can save you thousands of dollars. And that biweekly mortgage payments can shave years off the life of your loan and help you accrue equity in your home super fast. Well, it’s true! Pardon the exclamation point. You probably thought I was going to say it was a bunch of baloney like most gimmicks you hear about. But no, it's legit, and it's pretty straightforward too. It's just basic math, which we'll get into below. It's also fairly easy to set up a biweekly mortgage plan, which requires a payment every two weeks as opposed to every month. In short, biweekly mortgage payments are a sort of accelerated mortgage payoff system that allow you to make an extra monthly payment each year and in turn save money on interest and pay your mortgage faster. As noted, the way it works is rather simple. How Biweekly Mortgage Payments Work Monthly mortgage payment: $2,000 Total paid annually: $24,000 Biweekly payment (payment made every 2 weeks): $1,000 Total paid annually: $26,000Result:One extra payment made each year! Instead of making a single monthly mortgage payment each month, or 12 payments per year, you make a half mortgage payment every two weeks. And because there are 52 weeks in a year, that equates to 26 half payments annually, or13 total monthly mortgage payments. Let's pretend you've got a 30-year fixed mortgage; if your monthly payment were $2,000 per month, under one of these payment plans...

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### Second Mortgages Explained: The 80/20, Piggyback, and More

- Published: 2007-08-14
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/second-mortgages/

When you hear the phrase “second mortgage,” a negative connotation may come to mind. You could be thinking, "Why would I need a second mortgage? I’m not in financial distress! " You might even ask yourself if it's possible to have two mortgages on one house at the same time. These are normal reactions. After all, one mortgage is bad enough, right? Well, there are some reasons why you'd have two, which I'll explain in detail below. What Is a Second Mortgage? It's a home loan that is subordinate to a first mortgage on the same property Typically taken out to extend financing for a home purchase (less money down) Or to tap home equity after you obtain your primary financing Not necessarily a sign of distress or being stretched too thin A second mortgage is simply a home loan that is subordinate to a first mortgage on the same property. For example, if you already have a mortgage on your home, and take out another one, it would be considered a second mortgage. It is also known as a "junior lien" because it paid off second in the event of a foreclosure. The senior lien, which is in the first position, has priority in this regard. A common reason to take out a second loan is to extend financing if purchasing a home. You can get two loans to reduce or completely eliminate the down payment required. Or you might want to tap your home equity without losing the...

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### What Is a Short Sale? Selling Your Home for Less Than the Mortgage

- Published: 2007-07-30
- Modified: 2021-08-23
- URL: https://www.thetruthaboutmortgage.com/real-estate-short-sales/

When the mortgage crisis struck in the early 2000s, missed monthly payments and notices of defaults increased dramatically, leading to the rise of the "short sale. " A combination of plummeting property values and a lack of home equity forced many homeowners to look for a way out, hoping to avoid foreclosure along the way. What Is a Real Estate Short Sale? In short, it's the sale of a property for less than its associated mortgage balance, which allows both the homeowner and mortgage lender to cut their losses if a traditional sale isn't possible. Simply put, if what you owe on your mortgage exceeds the current value of your property, a traditional home sale will be difficult. After all, you'll need to make the lender whole, and if you can't sell for what you owe, that won't be possible. Typically, a home seller will use the proceeds of their sale to pay off the loan amount in full, with the excess going into their pocket. The short sale is essentially a loss mitigation option for a struggling homeowner who wants to sell, but can't. And doesn't want the black-eye of a foreclosure on their credit report. Real Estate Short Sale Example Original purchase price: $500,000 Current appraised value: $350,000 Outstanding mortgage balance: $450,000 In this example, the homeowner wouldn't be able to sell their home and satisfy their outstanding loan balance. Not only do they owe $100,000 more than the home is worth, but there would also be transactional...

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### Negative Amortization Loans: How They Work

- Published: 2007-07-27
- Modified: 2018-06-11
- URL: https://www.thetruthaboutmortgage.com/negative-amortization-loan/

You’ve probably heard the term “negative amortization” by now, as the subprime industry goes down the drain and option-arm mortgages get replaced by 30-year fixed mortgages. What Is Negative Amortization? Amortization is the reduction of debt by regular principal and interest payments Negative amortization is the accrual of debt thanks to monthly payments That aren't large enough to cover the total amount of interest due each month The result is a loan balance that grows over time until a certain maximum is reached Negative amortization is a complicated and highly scrutinized subject, but I’ll try to simplify it here. Let me start by defining amortization as the reduction of debt by regular payments of interest and principal sufficient to pay off a loan by maturity. Now that we know that, negative amortization must be the result of a mortgage repayment plan in which the borrower makes monthly payments that are less than the minimum amount of interest due. This difference in interest is then added to the outstanding loan balance, causing the overall loan balance to increase. Negative amortizing loans are also known as option-arms or "neg-ams," as well as other creative names such as "flex-saver" or "power option" and similar low payment, money-saving titles. Let’s look at an example of negative amortization: Loan Amount: $650,000 Actual interest rate: 6. 5% ($3,520. 83 interest-only payment) Minimum interest rate: 1% ($2,090. 66 minimum payment) Difference in payment: $1430. 17 In our example above, the difference between the interest-only mortgage payment and...

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### PMI vs. Combo Loans: Which Is the Better Choice?

- Published: 2007-05-22
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/private-mortgage-insurance-vs-combo-loans/

Before the mortgage crisis, it was common practice for borrowers short on down payment funds or home equity to take out two mortgages simultaneously to finance their home purchase or home refinance. This was known as a "combo loan. " There is some indication that this practice is becoming popular again, and if you decide to go with a combo, the way you structure your loans could save you a ton of money on your mortgage payment every month. Most banks and mortgage lenders only allow loan-to-value ratios (LTVs) up to 80% because loan amounts exceeding 80% LTV aren't eligible to be purchased or securitized by Fannie Mae and Freddie Mac, which makes them less liquid on the secondary market. This is important, seeing that most banks quickly sell off their loans shortly after origination. Additionally, loans with a LTV ratio greater than 80% typically require private mortgage insurance (PMI), making them a more expensive option compared to loans kept at or below 80% LTV. When private mortgage insurance (PMI) was tax-deductible (from around 2006 through 2016), many borrowers opted for a single home loan instead of tacking on a “piggyback” second mortgage because of the perceived savings. In short, PMI is required for any single home loan over 80% loan-to-value, though it can be avoided if you structure a combo loan, keeping the first mortgage at 80% LTV, while putting the remainder of the balance on a second mortgage. Put simply, if a homeowner breaks up their mortgage into...

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### What Is a Subprime Mortgage? Your Credit Score Is Key

- Published: 2007-04-19
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/subprime-lending-and-subprime-lenders/

"Subprime mortgage lending" is best defined as offering financing to an individual with poor credit, low income, limited documentation, or a combination of all those things, who generally wouldn’t qualify for a mortgage at standard market interest rates or at all. If a borrower fails to meet the underwriting requirements of traditional banks and lending institutions out there, they must resort to using a subprime lender who in turn will offer a higher interest rate in exchange for elevated risk. Seems fair, right? Well, as we know from the massive financial crisis that took place, the subprime market as it was had some major flaws. The Subprime Mortgage Catch-22 Subprime loans are designed for those who may have difficulty paying their bills They feature higher interest rates than standard prime loans To compensate lenders for the increased default risk Unfortunately the higher monthly payment makes the loans even more risky The inherent problem in offering subprime mortgages is that the very people who need them are the same individuals who will probably have the most trouble making their mortgage payments each month. Simply put, if you present a higher risk of default to the lender, you must pay a higher rate of interest to compensate, otherwise lenders wouldn't offer these types of loans to begin with. Unfortunately, this is a bit of a catch-22, seeing that subprime borrowers saddled with even higher interest rates are more likely to default. Think about that for a minute. Subprime Mortgage Definition Varies, But...

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### Seller Carryback Financing: When the Seller Becomes the Bank

- Published: 2007-03-17
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/seller-carryback-financing/

Let’s face it, selling your home can be pretty difficult, and even if you do find a willing buyer, who knows if they can actually obtain financing to purchase it. In a buyer's market, home sellers often entice buyers with special concessions such as seller paid closing costs and seller carryback financing. Carryback Financing: The Seller Acts as the Bank for the Buyer Sometimes a home seller can also be the bank/lender Assuming the home buyer needs help with financing They may agree to carry a second mortgage Which supplements the first mortgage obtained via a traditional bank or mortgage lender Seller carryback financing is basically when a seller acts as the bank or lender and carries a second mortgage on the subject property, which the buyer pays down each month along with their first mortgage. It may also be referred to as owner financing or seller financing. Not only is it offered as a means to getting the home sold, but often it’s necessary to get the deal done if conventional banks and lenders won’t offer the total amount of financing needed. For example, if a borrower only has a 5% down payment, but the bank requires 10% down, they could get that additional five percent from the home seller. By offering seller carryback financing, more prospective borrowers will be able to qualify to buy your home. It also makes your home more attractive to buyers, and can boost the sales price of your home as well. In addition...

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### Hard Money Loans: Solutions for Hard to Close Mortgages

- Published: 2007-03-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/hard-money-loans/

A hard money loan is a mortgage with a higher-than-market interest rate that usually serves as a source of short-term financing for borrowers who can’t qualify for a home loan with a traditional bank or mortgage lender. The phrase could have something to do with the fact that these lenders provide hard-to-find solutions you probably won't find elsewhere. Or possibly because the borrower has fallen on hard times. Either way, many associate these types of loans with a bridge loan because it’s often a quick-fix loan that serves to fill a gap in financing. For example, an investor may need short-term financing to rehab and flip a property, but might not have good credit or the necessary documentation to get approved with a retail bank. Additionally, our investor may not have 30 days at their disposal to get the necessary financing in order. These types of loans can be closed both quickly (say 7-10 days) and more easily (less documentation). Hard money loans might be described as a notch below subprime offerings, and often the last possible way of securing financing. Hard Money Loans Are Often a Last Resort Because the interest rates are high And the terms generally not very attractive Hard money loans are a loan of last resort But it might be your only choice and ideally temporary As noted, they are typically the last resort for borrowers who simply can’t find home loan financing due to poor credit profiles, unverifiable income and/or assets, unique properties, and...

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### The No Cost Refinance: How It Works and What It Really Costs

> A no cost refinance is a home loan where the lender pays all closing costs in exchange for a higher mortgage rate. Find out if it's a good deal.

- Published: 2007-03-04
- Modified: 2024-11-02
- URL: https://www.thetruthaboutmortgage.com/no-cost-refinance-loans/

You may have seen or heard ads for a “no cost refinance” lately, a mortgage loan program that promises no fees or out-of-pocket expenses when you refinance your existing mortgage. While this type of offer is by no means a new concept, or unique to any one lender, it’s definitely a subject worth visiting to ensure you understand what you’re getting when you choose this option. Ultimately, you'll be given the choice to pay lender fees and third party closing costs out of pocket, or have them absorbed via a lender credit. If you opt for the latter, you may not have to pay anything at closing, but in exchange your interest rate will be higher. That's the "catch" I suppose, but that doesn't necessarily mean it's a bad thing. Read on to learn more. What Is a No Cost Refinance? A mortgage refinance usually results in out-of-pocket costs To account for things like lender fees and third-party services A no cost version means you don't pay these fees directly But you might wind up with a higher mortgage rate as a result A no cost refinance is a home loan transaction in which the mortgage lender pays some or all settlement costs on your behalf. This includes typical lender fees such as processing and underwriting fees, the appraisal fee, and loan origination fees, along with third party costs like title/escrow fees and so on. You may be asking yourself how banks and lenders make up for the absence of fees...

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### Documents Needed for a Home Loan

- Published: 2007-02-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/documents-needed-during-the-loan-process/

Mortgages Are Very Paperwork Intensive If you plan to refinance your home loan or purchase a property with a mortgage, you will be required to fill out a loan application and sign a set of disclosures to initiate the process. This bundle of documents includes things like the Loan Estimate (LE), an authorization to run credit, a Social Security release form, the USA Patriot Act disclosure, a homeownership counseling disclosure, and many more. They provide important details about your loan and the company you're working with, and allow the bank or mortgage broker to gather sensitive information about you. Without them, lenders wouldn't be able to access your employment and credit history, bank statements, pay stubs, tax returns, and so forth. When all the initial disclosures are signed, the loan process can formally begin. The Uniform Residential Loan Application (1003) The actual home loan application is known as a Uniform Residential Loan Application (URLA), or 1003 for short (you can see a sample page above and in full here). It contains a ton of information about you and the subject property, including your name, social security number, date of birth, marital status, and more. There is also a section that pertains to employment history, a section dedicated to your assets and bank accounts, and a section that outlines your monthly liabilities (car payments, credit cards, other mortgages). And if you own other real estate, it will be listed below that section, along with the corresponding loan balance, monthly payment, and...

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### Mortgages on Investment Properties

- Published: 2007-01-19
- Modified: 2024-03-27
- URL: https://www.thetruthaboutmortgage.com/investment-properties/

Investment properties, also known as non-owner occupied properties, can be very profitable for everyday homeowners and real estate investors alike. While there is no guarantee that you’ll be successful, extensive research and the right timing could result in a tidy profit. That said, it’s important to know the demographics of a particular neighborhood, and whether the market is set to improve or decline in the near and long term. It’s equally important to find a tenant to rent out your property to ensure you’ll achieve positive cash flow immediately and continuously. Achieving Positive Cash Flow on an Investment Property A good investment property is one where you can easily achieve positive cash flow Effortlessly find a good tenant And realize healthy home price appreciation Year after year for the foreseeable future While it’s not imperative, positive cash flow will allow you to invest in other properties by minimizing losses and out-of-pocket expenses, which will keep your DTI ratio low. It's also quite important if the property you buy isn't expected to increase in value significantly. Cash flow isn't as important if the property is expected to surge in value, but finding a property on the cheap with the potential to appreciate should be the ultimate goal. Discovering that “hot property” is often the impetus for real estate investment. Just take your time to investigate before diving in. Certainly pay attention to local area rents to determine if buying makes more sense than renting.   If the price-to-rent ratio is considerably...

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### Terms of Service

- Published: 2007-01-12
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/terms-of-service/

TheTruthAboutMortgage. com is a free Internet resource that provides information to consumers about residential mortgages and related financial products. The content posted on TheTruthAboutMortgage. com is for informational purposes only and not an advertisement for any products mentioned. The views and opinions expressed herein are those of the respective authors and do not reflect the policy or position of any third-party companies, advertisers, or affiliates. By using this Web site you assume all responsibility and risk for the use of this Web Site. The information provided is “as is”, without any express or implied warranty of any kind. In no event shall TheTruthAboutMortgage. com or its affiliates be liable for any damages whatsoever (including without limitation any special, indirect, or consequential damages, and damages resulting from loss of use, data, profits) arising out of the use of or the inability to use the materials provided, even if TheTruthAboutMortgage. com or its affiliates have been advised of the possibility of such damages. TheTruthAboutMortgage. com will not be responsible for any errors or omissions on the Web Site or information provided on this Web site, any articles or postings, or for hyperlinks embedded in messages, nor for any loss or damage caused by your reliance on information obtained on this Web site or in a hyperlinked site. While TheTruthAboutMortgage. com believes such information to be reliable, we make no claims or representations about the accuracy, reliability, timeliness, usefulness or completeness of such information. Your financial situation is unique and the information on...

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### Mortgage Teaser Rates: Get a Low Start Rate on Your Home Loan

- Published: 2006-12-26
- Modified: 2024-10-06
- URL: https://www.thetruthaboutmortgage.com/teaser-rates/

A "teaser rate" is a low, introductory interest rate that is typically offered for the first few months or years as an incentive to choose a certain mortgage program. The concept is somewhat similar to offers you see for 0% APR credit cards. You get a discount for X amount of time before the actual, higher rate kicks in. Teaser rates are common in adjustable-rate mortgages, as most are now hybrid ARMs.   In other words, they're fixed for a certain period of time before becoming adjustable. The same could be said of temporary buydowns where you get a discounted rate in year one, two, or three, before the rate reverts to the higher note rate for the remainder of the loan term. While you can save some money during the teaser rate period, be sure you can afford the actual interest rate once it goes away! What Is a Teaser Rate? A short-term promotional interest rate that is lower than the note rate Examples include adjustable-rate mortgages (ARMs) and temporary buydowns Rate is fully-amortizing, but will increase once the teaser rate period ends Designed to lure borrowers into a certain loan program or home purchase Watch out for the initial rate adjustment and be sure you can afford the higher payment! A common example is the 5/1 ARM, which comes with a teaser rate for the first five years of the mortgage term before becoming an annually adjustable-rate mortgage (ARM). During those initial five years, you receive a "discount"...

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### Interest-Only Mortgages: Pros, Cons, and How They Work

> An interest-only mortgage can make monthly payments a lot more affordable, but you won't actually pay down your principal balance.

- Published: 2006-12-26
- Modified: 2024-02-07
- URL: https://www.thetruthaboutmortgage.com/interest-only-home-loans/

Let's take a moment to talk about "interest-only mortgages. " A decade ago, very few individuals seemed to be interested in actually paying off their mortgages. Many prospective and existing homeowners alike just wanted to get the cheapest financing available, with the lowest monthly payment options, regardless of the consequences. That meant buying real estate with 100% financing and throwing in an interest-only option on top. Oh, and these loans were typically adjustable-rate mortgages, not 30-year fixed mortgages. However, they were available on pretty much any loan program, from a one month adjustable-rate mortgage to a 30-year fixed rate mortgage. And the once very popular pick-a-pay loan had an interest-only option available as well. Jump to interest-only loan topics: - How Does an Interest-Only Mortgage Work? - Pay Off Your Loan or Keep Payments Low - Interest-Only Home Loans Eventually Adjust Higher - You Pay for the Interest-Only Privilege - How to Calculate an Interest-Only Mortgage - Interest-Only Mortgage Qualification - Can You Still Get an Interest-Only Mortgage? - Pros and Cons of Interest-Only Mortgages With so many exotic mortgage programs available, such as negative-amortization loans and loan programs with introductory teaser rates, it was easy to understand why borrowers did what they did. In fact, interest-only options used to be almost a given on mortgages back then. But we all know how things turned out. We experienced the worst housing crisis in modern history, driven largely by loose mortgage lending. Fortunately, times have changed, and these days it's pretty...

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### No Documentation Mortgage Loans

- Published: 2006-12-05
- Modified: 2019-01-13
- URL: https://www.thetruthaboutmortgage.com/no-doc-2nd-mortgage/

The housing market was on fire in the early 2000s before it eventually burnt to a crisp. This led to rampant speculation and greed as a larger group of prospective home buyers emerged. Unfortunately, because home prices had increased so significantly, many would-be borrowers were forced to go “No Doc” in order to actually qualify for a mortgage. Whether that's really qualifying is a question for another day, or perhaps just too enigmatic. What Are NINJA Loans? A NINJA loan is ironically named Seeing that it requires Very little of the borrower Anyway, the term "No Doc" is usually defined as no income, no asset, and no employment verification. Some silly loan officers refer to these types of loans as NINJA loans, with the "J" representing the word job. It doesn't mean the borrower doesn't have a job, it just means the lender doesn't ask any questions related to their employment. So in essence, the borrower could potentially be unemployed. And that might explain a lot of the trouble these loans eventually caused. Essentially, all the borrower must document with a no-doc loan is their credit history (in the form of a credit report), and the bank or lender will use this alone to determine if they are suitable for home loan financing. Sound scary? It is/was. Most Mortgages Were No Doc Prior to the Crisis Before the housing crisis in the early 2000s It was pretty common just to go stated doc or no doc Because it was far...

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### Private Mortgage Insurance (PMI): When It's Required and How to Remove It

- Published: 2006-11-30
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/pmi-private-mortgage-insurance/

I'm sure most prospective homeowners like the idea of putting little to nothing down when purchasing real estate, but doing so isn't without its drawbacks. In fact, it can cost you quite a bit of money if you don't come to the closing table with a sizable down payment, not to mention a higher loan balance. Aside from having a larger mortgage payment, and a higher mortgage rate, you might also be hit with an extra form of insurance to offset the risk you present to the lender. It's known as "private mortgage insurance," or PMI for short. Let's talk about what it is, and more importantly, how you can avoid PMI! What is private mortgage insurance? PMI is coverage that protects the bank/lender from borrower default It is NOT protection for the homeowner (but you have to pay for it! ) Safeguards the lender in the event you're unable to pay your home loan Allows them to offer low-down payment mortgages that are historically more risky In short, mortgage insurance is all about risk and protection. Simply put, a mortgage with no down payment is more likely to default than one with a large down payment. And even if a borrower with a huge down payment misses their payments, the lender can probably still sell the home for a profit if it falls into foreclosure. If it's a no-down payment mortgage and home prices take a dive, it could turn into an underwater mortgage, which would equate to a...

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### How to Keep Your Home and Avoid Foreclosure

- Published: 2006-11-28
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/foreclosure-help/

If you fail to make your mortgage payments each month, your bank or mortgage lender may take action to repossess your home. After all, it's not technically your home until you've paid the mortgage in full.   Until that time, you AND the bank own the home.   So if you don't hold up your end of the bargain, the bank could come knocking.   And the news won't be good! The legal proceeding is known as a "foreclosure," and will result in the loss of your home, foreclosure fees, additional legal fees, and possibly a deficiency judgment if your outstanding liens exceed the current value of your home.   Your credit will also be shot when all is said and done. The foreclosure process usually goes something like this: Become ill or lose your job (or mortgage adjusts significantly higher) Fall behind on monthly payments Once you've missed 3 mortgage payments lenders can file NOD And begin foreclosure proceedings At any point you can try to save your home in a number of ways You lose your job, become ill, or simply fall behind on your mortgage payments after your adjustable-rate mortgage resets. Unfortunately, these aren’t typically valid reasons to miss your mortgage payment(s). When you originally applied for your mortgage, you probably verified asset reserves to prove to the bank that you could afford to pay the loan for a certain period of time, even if you failed to receive additional income for some period of time. Once...

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### Adjustable-Rate Mortgage 101: How They Work and Why They Can Be a Cheaper Option

> Learn how an adjustable-rate mortgage works and determine if one might be a good fit for you.

- Published: 2006-11-27
- Modified: 2025-02-04
- URL: https://www.thetruthaboutmortgage.com/adjustable-rate-mortgage/

An "adjustable-rate mortgage" is a type of home loan that features a variable interest rate that can move higher or lower during the loan term. It differs from a fixed-rate mortgage, such as the 30-year fixed, which features an interest rate that does not change. All adjustable-rate mortgage programs come with a pre-set margin, and are tied to a major mortgage index. Together, these two numbers determine the fully-indexed rate on the ARM once it becomes adjustable. Common mortgage indexes today include the Secured Overnight Financing Rate (SOFR), which replaced the London Interbank Offered Rate (LIBOR), the Cost of Funds Index (COFI), and the Monthly Treasury Average (MTA). Many of today's ARMs are fixed for some period of time initially before becoming adjustable, typically five or seven years. After that, the interest rate is subject to change on a semi-annual or annual basis. ARMs Got a Bad Name in the Early 2000s Prior to the housing crisis in 2008, adjustable-rate mortgages were synonymous with subprime mortgages. But they aren't inherently bad, especially today's hybrid ARMs. Those older adjustable-rate mortgages were often option ARMs, which allowed for negative amortization. This meant homeowners back then weren't even paying down their mortgages. Instead, they were actually accruing interest. And many of those home buyers then had insufficient income, bad credit, and/or put little to nothing down. Today's ARMs are much more sound, and mortgage lenders actually qualify borrowers properly. In fact, even FHA loans are offered with adjustable rates! In addition, most come...

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### Bridge Loans: Why They're Needed and How They Work

- Published: 2006-11-25
- Modified: 2020-01-20
- URL: https://www.thetruthaboutmortgage.com/bridge-loan/

A "bridge loan" is essentially a short term loan taken out by a borrower against their current property to finance the purchase of a new property. Also known as a swing loan, gap financing, or interim financing, a bridge loan is typically good for a six month period, but can extend up to 12 months. Most bridge loans carry an interest rate roughly double the average fixed-rate product and come with equally high closing costs. Bridge loans are generally taken out when a borrower is looking to upgrade to a bigger home, and haven’t yet sold their current home. A bridge loan essentially “bridges the gap” between the time the old property is sold and the new property is purchased. Bridge Loans Can Help You Drop Home Buying Contingencies If the home you want is in a competitive housing market Home sellers typically won't agree to contingencies from the buyer To solve the buy before you sell quandary A bridge loan might be a good solution to fill the gap Many purchase contracts have contingencies that allow the buyer to agree to the terms only if certain actions occur. For example, a buyer may not have to go through with the purchase of the new home they are in contract for unless they're able to sell their old home first. This gives the home buyer protection in the event no one buys their old home, or if nobody is willing to buy the property at the terms they desire. But...

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### Loan Officer Job Description - Expected Salary and What Your Day Will Look Like

- Published: 2006-11-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/loan-officer-jobs/

So you need a job and you’re thinking about becoming a residential mortgage loan officer? Or a mortgage loan originator (MLO) as they're now known. Well, there are probably job openings right this very second, but it's not for the faint of heart. It’s true, loan officer jobs pay more than most any other occupation out there, assuming you haven’t passed the bar or made your way through medical school. Or happen to be a financial advisor or a pro athlete. But it can’t be that easy, could it? To make six figures without a high school diploma you would think you'd have to invent something or start your own business. Not so - the prospect of being a loan officer has changed conventional thought, especially as the housing market shot off in recent years like a bottle rocket. Jump to loan officer topics: - Loan Officer Job Description - Loan Officer Educational Requirements - Loan Officer Salary - Loan Officer Career Advancement - How to Be a Top Producing Loan Officer - What the Future Holds for Loan Officers So now as we lie in the wake of another possible housing bubble bust, are loan officers still making money? The answer is MAYBE. But the number of loan officers has probably been cut in half, if not more in the past year or so. At the same time, the quality (and quantity) of mortgage loans at the moment isn’t what is once was a few years ago. It seems...

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### How to Quickly Remove Mortgage Lates From Your Credit Report

- Published: 2006-11-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-to-remove-mortgage-lates/

So you got a "mortgage late. " You thought you paid your home loan on time, but for some reason the bank or loan servicer never got your mortgage payment. It happens every day. Homeowners fail to pay their mortgage on time for one reason or another. I've heard every excuse in the book as a former Account Executive. Unfortunately, most fall on deaf ears. Typically, mortgage lates occur when homeowners are struggling financially or between homes. It's understandable when you move from one home to another, paying off one mortgage and acquiring a new one. But you need to be extremely careful during that period to ensure everything is paid as agreed. Again, any excuse you throw out probably won't cut it, even if it was someone else's fault, which it sometimes is. Mortgage Lates Will Sink Your Credit Scores Late mortgage payment(s) must be 30+ days past due to impact credit scores If you're only a few days (or even weeks) late you'll likely only have to pay a late fee So a 30-day late typically doesn't happen by accident (you get a lot of time to sort it out) Impact will vary based on credit history and number/severity of late payments Aside from having to pay any late fee associated with the overdue payment, you'll also see your credit scores sink big time if you're 30 days late (or more) on the mortgage. Depending on where your scores stood prior to the mortgage late, they could fall...

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### Buying Down Your Interest Rate: Determine If It's Worth the Cost

> If you're working with a bank or broker, you can easily buy down your mortgage interest rate by expressing what rate you'd like to pay, and inquiring about the cost to acquire such a rate.

- Published: 2006-11-04
- Modified: 2022-08-25
- URL: https://www.thetruthaboutmortgage.com/buying-down-your-interest-rate/

Some existing and prospective homeowners out there are fixated on obtaining the lowest possible mortgage interest rate, even if it means pulling money out of their own pocket at the time of financing. Though most borrowers usually opt for a slightly higher mortgage rate to avoid paying closing costs when buying a home or refinancing a mortgage, some homeowners will pay the one-time fees in exchange for a lower interest rate to save money over the long term. Of course, this strategy only really makes sense if you plan to stay with the mortgage for a decent chunk of time, as associated savings aren't usually realized for several years into the loan. How Buying Down Your Mortgage Rate Works When you apply for a home loan you'll be given the opportunity to buy down your rate This requires paying mortgage discount points out-of-pocket at closing These points are a form of prepaid interest that reduce your interest rate It's totally optional and ultimately boils down to whether you want an even lower rate If you're working with a bank or mortgage broker, you can easily buy down your interest rate by asking for a series of different rates and associated costs. This is known as "buying down the rate," and is a common practice in the mortgage industry. In short, if you pay mortgage discount points at closing, aside from any commissions and any other lender fees, you can bring your interest rate down to a lower level. And then...

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### Homeowners Insurance: How It Works and What's Actually Covered

> Homeowners Insurance provides coverage in the event that your home is damaged or destroyed, and also provides liability for injuries incurred by visitors to your property.

- Published: 2006-10-25
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/homeowners-insurance/

Homeowners insurance provides coverage in the event your home is damaged or destroyed, and also provides liability for injuries incurred by visitors to your property. In addition, the loss or damage of property in and around the dwelling is covered as well (the contents). The amount of money your home is insured for is called the dwelling limit coverage. It is one of the most important and overlooked aspects of the mortgage process, and most homeowners fail to shop around for it. Mortgage Lenders Typically Require Homeowners Insurance While homeowners insurance might be optional if you own your home free and clear Most mortgage lenders require a specific amount of coverage if you carry a home loan This protects their financial interest in your property Because remember, they let you finance a large chunk of it Most banks and lenders require that homeowners buy enough insurance to cover the amount of their mortgage. And your mortgage broker or loan officer will usually comply with the lender, and ask that you get a policy that simply covers the value of the loan amount. But you should also ensure that your homeowners insurance policy covers the cost of rebuilding your property in the event of serious damage. Your home is probably your greatest liability, and for many its also their nest egg, so full coverage is a must. What is covered by homeowners insurance? - Dwellings and other structures on your property - Personal property - Personal liability What is not covered...

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### Prime Rate, Discount Rate, and the Federal Funds Rate: What It All Means to You and Your Mortgage

- Published: 2006-10-18
- Modified: 2024-12-18
- URL: https://www.thetruthaboutmortgage.com/discount-rate-prime-rate-and-the-federal-funds-rate/

Ever wonder how the economy goes 'round? Or how inflation is controlled and recessions are avoided? Or at least attempted to be avoided. Much of it has to do with the Federal Reserve and its tight control of the money supply. Whenever the Fed gets together and makes a so-called announcement, a lot can change that directly affects your pocketbook. So it's important to have some idea of what it all means. Let's take a closer look to better understand how it works. And how it affects mortgage rates. (Latest rate movementDOWN0. 25% on 12/18/24) Discount Rate (Currently 4. 50%) The discount rate is the interest rate the Fed explicitly sets Money can be borrowed overnight via the "discount window" By member banks and thrifts that are in need of funds Used to prevent their reserves from falling below mandated levels The "discount rate" or "primary credit rate" is the interest rate the Federal Reserve sets and offers to member banks and thrifts that need to borrow money in order to prevent their reserves from dipping below the legally required minimum. This situation can arise if a bank lends too much and/or has too many withdrawals on a given day.   Money is borrowed overnight via the "discount window. " As a rule of thumb, the higher the discount rate, the higher mortgage interest rates will be.   The two tend to correlateover time, though not as strongly as the 10-year bond yield due to its longer maturity. When the...

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### Types of Mortgage Lenders: Retail vs. Wholesale, Correspondents and More

- Published: 2006-10-18
- Modified: 2025-02-07
- URL: https://www.thetruthaboutmortgage.com/types-of-mortgage-lenders/

There are a variety of different types of mortgage lenders out there that originate home loans, from small mom and pop shops that only offer mortgages to institutional, dare I say too-big-to-fail banks that also pitch student loans and credit cards. There are also online mortgage lenders with no brick-and-mortar presence, along with a new breed of so-called mortgage disruptors that are trying to digitize the home loan process. Additionally, there are home loan lenders that specialize in certain types of loans, such as FHA loans and VA loans, or home loans for those with bad credit. Ultimately, you have a lot of options when it comes to getting a mortgage loan, even though it's mostly a commoditized product. By that, I mean mortgages aren't all that different and many lenders offer the same exact loan products, regardless of the channel in which they are obtained. Nor does the branding really matter (no one can see your mortgage and can't you openly flaunt it), though how and where you get one can make a big difference in terms of interest rate and closing costs and saving money! Additionally, there are some nuances that I'll discuss below to give you a better idea of the mortgage ecosystem. Mortgage Bankers A mortgage banker is a generic, all-encompassing term Used to describe an entity or individual that originates mortgages It can refer to banks, non-banks, or even individuals running their own shop Some of the bigger names include Chase, loanDepot, Quicken Loans, and...

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### Mortgage Calculators

- Published: 2006-10-04
- Modified: 2018-06-12
- URL: https://www.thetruthaboutmortgage.com/mortgage-calculators/

The use of a "mortgage calculator" can be very helpful when trying to figure out monthly housing payments, how much one can afford, and how one should structure a mortgage. You really should use these one (or two or three) before you consider buying real estate. Check Out My Web-Based Mortgage Calculators Mortgage payment calculator How much house can I afford calculator Refinance calculator Early mortgage payoff calculator Rent vs. buy calculator There are a number of different mortgage calculators available that serve all types of different purposes. Some are very simple, while others are very involved, including things like property taxes, homeowners insurance, HOA dues, and so forth. There's also the question of accuracy, as some may underestimate the true cost of homeownership. I'd say they more often underestimate rather than overestimate, which is an obvious problem for would-be home buyers, especially first-timers who may also downplay the many hidden costs involved. Anyway, let's stop worrying and start calculating, shall we? You may want to start with the classic mortgage payment calculator, which as the name implies, allows you to calculate a monthly mortgage payment. This is ultra-basic, but also a good first step in determining how much a given loan amount will set you back. And this is before we even factor in insurance, taxes, and utilities. It can really add up. You can use it to calculate a 30-year fixed mortgage, a 15-year fixed, or any other loan term of your choosing. It's very simple to use...

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### Reverse Mortgages: Who They're For and The Pros and Cons

- Published: 2006-10-03
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/reverse-mortgage/

A "reverse mortgage" is a tax-exempt home loan that allows a homeowner to take cash-out of their home using their existing home equity, without taking on a monthly payment or having to sell their property. These types of mortgage loans are only available to homeowners aged 62 or older, who occupy a property as their principal residence. Eligible property types include single-family homes, condominiums, townhouses, and even manufactured homes built after June 1976. Additionally, multi-unit properties are permitted, including duplexes, triplexes, and fourplexes (1-4 unit properties) as long as you occupy one of the units as your primary residence. Reverse mortgage loans come with a variety of terms, including both fixed and variable rate plans, and with varying associated fees such as loan origination fees and servicing fees, as well as other closing costs. With a fixed-rate reverse mortgage, you need to take your loan proceeds as a lump sum. With a variable-rate reverse mortgage, you get the option of taking your proceeds as a monthly payment, line of credit, or lump sum. How a Reverse Mortgage Works It's similar to a "forward mortgage" In that you borrow money from the bank But with a reverse mortgage you don't have a monthly payment Nor does the loan need to be paid back A reverse mortgage works in quite the opposite way of a traditional mortgage, allowing a homeowner with accrued equity in their home to pull cash out on a monthly or lump sum basis with no associated payment. The...

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### Tips for First-Time Home Buyers: What You Should Know Before You Buy a Property

- Published: 2006-09-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/tips-for-first-time-homebuyers/

So you're thinking about buying your first piece of real estate? Congratulations! It's an exciting time... and a nerve-racking one. But before you even begin to comb through real estate listings and attend open houses, you need to make sure you actually qualify for a mortgage on your dream home. And I hope you took a moment to compare renting to buying just to make sure you're cut out for it. By the way, I recommend searching for a mortgage before a home to ensure you actually qualify to buy one! The following are some useful tips for both newbies (first-time home buyers) and seasoned home buyers alike who are looking to experience a mortgage process with as few surprises as possible. Because those types of surprises aren't fun... First-Time Home Buyer Tip #1: Check Your Credit Report and Know Your Credit Scores! Check all 3 of your credit reports from Equifax, Experian, and TransUnion Do this several months before you apply for a home loan (90+ days in advance) Get all 3 credit scores from these bureaus as well to see where you stand numerically Scour the reports and resolve anything that needs fixing ASAP Aim for a FICO score of 780 or above to obtain the best loan pricing The first thing any prospective homeowner should do, especially a first-time home buyer, is obtain a free credit report and view their credit scores. This can be accomplished either from AnnualCreditReport. com (which is backed by the CFPB) or...

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### A Long List of Mortgage Stocks Grouped by Industry: Are Any Good Buys?

- Published: 2006-09-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-stocks/

Let's talk mortgage stocks for a moment, shall we? During the early and mid 2000s, the housing market was on fire in the United States. As a result, the mortgage industry expanded at an unheard of rate, and so did the amount of players in the sector. Alongside the big banks in the industry came a great number of specialty lenders that dealt only with originating home loans. While these companies raked in profits during the mortgage refinance boom, many eventually saw their numbers drop tremendously, with floundering growth, massive mortgage layoffs, and eventual closures. Many investors might have seen this as an opportunity. The low PE ratios. The fresh 52-week lows. The huge earnings just months earlier. Just one little problem. No clear growth trajectory. And a whole lot of risk. We all know the stock market relies on growth to boost ticker prices, right? The problem is that the market got spread too thin when every bank in town wanted a piece of the hot mortgage market. And more players chasing fewer home loans meant tighter margins and lower profits. Once again, the housing market is hot and mortgage interest rates are low, resulting in record mortgage origination volume. But there's a big fear that interest rates will rise and business that is very price-sensitive will dry up. This might explain Rocket Mortgage's P/E ratio of around 6. Still, there are opportunities for investment in the mortgage space just like any industry, especially since it's a very cyclical...

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### The Rate and Term Refinance Explained: What It Is and How It Works

- Published: 2006-09-22
- Modified: 2024-05-10
- URL: https://www.thetruthaboutmortgage.com/rate-and-term-refinance/

In the mortgage world, a "rate and term refinance" refers to the replacement of an existing mortgage(s) with a brand new home loan. The refinance loan comes with a new interest rate (ideally lower) and a fresh mortgage term, such as another 30 years, or a shorter 15 years. The existing mortgage is effectively paid off by the opening of the new refinance loan, with the old loan balance transferred to the new loan. Jump to rate and term refinance topics: - What Is a Rate and Term Refinance? - Which Type of Mortgage Refinance Do You Need? - Rate and Term Refinance Example - Your Mortgage Rate May Rise If You Don't Refinance - Rate and Term Refinance Rates - Consider Closing Costs Associated with a Mortgage Refinance - Is My Refinance Rate and Term or Cash Out? - Why Do a Rate and Term Refinance? Think of it this way – you are re-financing your mortgage, meaning you are obtaining new financing terms for an existing home loan.   Some might refer to it as a mortgage "redo. " The issuer of the new mortgage pays off the old loan with the proceeds from the new loan so everyone is square. What Is a Rate and Term Refinance? The act of replacing your existing home loan(s) with a brand new one In order to obtain a lower mortgage rate and/or different term Which results in a cheaper monthly payment and possibly interest savings over the loan term A...

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### How Option ARM Mortgages Work

> An option ARM is a mortgage that gives homeowners four payment choices, including a 1% rate, interest-only, and a 15- or 30-year option.

- Published: 2006-09-12
- Modified: 2024-01-10
- URL: https://www.thetruthaboutmortgage.com/option-arm-mortgage/

The "option ARM" loan program was one of the most popular mortgage choices for borrowers in the United States during the lead up to the mortgage crisis thanks to its forgiving payment flexibility. This same payment flexibility also made it one of the most scrutinized loan programs in history because of its misleading ability to qualify borrowers for a home they truly couldn't afford. It was offered by some of the biggest former mortgage lenders, including Countrywide Mortgage and Washington Mutual, both of which failed during the Great Recession. I believe Bear Stearns also offered the product. They also failed. What Is An Option ARM? It's a home loan with four payment options That provides for greater payment flexibility In the event the borrower is paid unevenly throughout the year Or simply wants a variety of choices when it comes to paying back their mortgage The option ARM, or pick-a-pay mortgage, is a monthly adjustable rate mortgage tied to one of the major mortgage indexes, including the LIBOR, MTA, or COFI. The program allows a borrower to pay off their loan balance using four payment options, including the following:- 15 year term payment (Principal and interest)- 30 year term payment (Principal and interest)- Interest-only payment (Usually available first 10 years)- Minimum monthly payment (Negative amortization payment)In other words, borrowers can make the standard 30-year fixed payment, an accelerated 15-year fixed payment, a 30-year interest-only payment, or a negative amortization payment. That last option was what got a lot of homeowners...

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### Mortgage Appraisals and Appraised Value: How the Lender Values Your Home

- Published: 2006-09-06
- Modified: 2025-02-06
- URL: https://www.thetruthaboutmortgage.com/appraisals-and-appraised-value/

A "home appraisal" is a comprehensive report that determines the value of your property based on a number of factors, ranging from gross living space, to the view and the year a property was built. If you plan on purchasing a new home with a mortgage or refinancing your current loan (or even getting a reverse mortgage), you will most likely need to order an appraisal. It might also be required for a home equity loan. Typically, a bank or mortgage broker will handle this for you, but you will still have to foot the bill unless the cost is built into your mortgage rate. The appraisal is a key component of the home buying process, and important to both you and your lender. The bank will want to know that the home financing they provide can be supported by the collateral, and you'll want to make sure you're not paying more than the home is worth, within reason. Home Appraisal Costs The cost of a home appraisal can vary Based on property type, location, and size And by bank and mortgage lender But most range from $300 to $600 Often when you apply for a mortgage, a deposit is requested by the lender early on to cover the cost of the appraisal. This is how they keep you invested so you don't go elsewhere during the process. Home appraisals typically cost anywhere from $250 to $750, with most falling somewhere in between $300 and $600. The cost will vary...

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### Loan Origination Fee: What Is It and Do I Need to Pay It?

- Published: 2006-08-30
- Modified: 2024-10-14
- URL: https://www.thetruthaboutmortgage.com/mortgage-dictionary/loan-origination/

The phrase "loan origination" refers to the initiation/completion of the home loan process, while the "loan origination fee" is the cost of the associated service. Yes, mortgage lenders and brokers need to make a living, they aren't working for free, so they must charge fees and/or sell their loans for a profit. It begins when a borrower submits their financial information to a bank or mortgage lender for loan processing. Depending on documentation type, a borrower will have to supply certain credit, income, asset, and employment information to a specified bank or lender to initiate the underwriting of the loan application. Along with that, the borrower will have to sign forms that allow the mortgage broker (if applicable) and bank or lender to pull a credit report and release information about the borrower. Once the information is submitted to the bank or lender, an underwriter will decision the application, either approving, suspending, or declining the loan. To sum it up, loan origination is simply the creation of a mortgage. It may begin with a phone call, an e-mail, a mortgage rate quote, or a referral from a real estate agent. Loan Originators Are Salespeople Those who make homes loans for a living are known as "loan originators" Just a fancy way of saying loan officer or mortgage broker It is simply the individual who helps you get a home loan One way these folks make money is by charging loan origination fees So who's behind all this loan origination activity...

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### Predatory Mortgage Lending: What to Watch Out For

> Predatory mortgage lending is hard to define, but essentially occurs any time a borrower is taken advantage of, whether it be an inflated interest rate or higher than usual fees.

- Published: 2006-08-30
- Modified: 2022-09-16
- URL: https://www.thetruthaboutmortgage.com/predatory-mortgage-lending/

Predatory mortgage lending means different things to different people. To some, it may involve charging too much to obtain a mortgage. For others, it may come down to withholding important information that the borrower has a right to know. Material information that could affect their decision to go through with the loan or go elsewhere. It can also involve more cut and dry shady practices such as deceiving borrowers by failing to include all associated costs upfront, forging documentation, or simply leaving out required loan documents such as the Loan Estimate and Closing Disclosure. Either way, what's clear is that predatory lending involves unethical practices that may harm the borrower. Charging Too Much for a Home Loan? There can be a gray area when it comes to predatory mortgage lending Because lenders and loan originators don't like to be told what they can charge for their work/time This revolves around what people feel is right/fair to charge a borrower Fortunately there are some max fees/caps for certain types of mortgages This is always a touchy subject because individuals, especially those working for themselves, don't like to be told what their time and energy is worth. However, most banks and lenders put a cap on what a broker or loan originator can earn on a given home loan. For prime (A-paper) mortgage companies, this number usually falls between 2-3% of the loan amount. That is still a very hefty payout for a single loan. Imagine a $750,000 loan amount with a...

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### How a HELOC Works: Tap Your Home Equity for Cash

- Published: 2006-08-29
- Modified: 2025-02-26
- URL: https://www.thetruthaboutmortgage.com/home-equity-line-of-credit-heloc/

A "HELOC" or "home equity line of credit," is a type of home loan that allows a borrower to open a line of credit using their home equity as collateral. They can then draw upon it to pay for anything they wish, such as home improvements, or to pay off credit card debt or student loans. The money can even be used for a down payment on a subsequent home purchase. HELOCs are typically taken out as second mortgages that are subordinate to an existing loan. This means you wind up with two monthly payments, but can access cash without disturbing the interest rate or loan term on the first mortgage. As such, you can continue to enjoy your low fixed-rate if you secured a very cheap 30-year fixed mortgage at some point in the past. Jump to HELOC topics: - What Is a HELOC? - How to Get a HELOC? - Accessing Your Funds with a HELOC - HELOC Interest Rates - Downsides of Home Equity Lines of Credit - Term of a Home Equity Line of Credit - Can You Refinance a HELOC? - Types of HELOCs - Home Equity Line of Credit vs. Home Equity Loan - Common HELOC Fees - HELOC Pros and Cons What Is a HELOC? A home loan with a twist because it's actually a line of credit (as opposed to a set loan amount) Your property acts as collateral for the loan similar to a traditional mortgage Can draw upon it when...

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### Right of Rescission Period: When It Starts and Ends and Why It's Necessary

- Published: 2006-08-25
- Modified: 2022-01-16
- URL: https://www.thetruthaboutmortgage.com/right-of-rescission/

Have you ever made a decision you later regretted, only to wish you could have taken it all back? Well, you might be in luck if we're talking about a mortgage. The "right of rescission" period is a provision under the Truth in Lending Act that essentially gives homeowners who are refinancing their mortgages a chance to mull things over before committing to the new loan terms. Are You Sure You Want to Refinance Your Mortgage? When refinancing a mortgage on a primary residence you get 3 days to think it over at the end of the process This is known as a "cooling off" period intended to protect consumers from financing they may not actually want/need It begins the day after you sign loan documents and ends three business days later (including Saturdays) If you have cold feet or simply change your mind you have a right to cancel the loan before it is scheduled to fund If a homeowner decides to refinance their mortgage, once loan documents are signed, they will have the right to rescind the transaction for a period of three business days. The right to rescind is essentially the "right to cancel" the mortgage transaction and have any fees refunded if they aren't happy with the loan for any reason.   It's basically a consumer protection mechanism. Technically,all feesshould be refunded to the consumer if they choose to rescind the mortgage. This includes all lender fees (application, processing, etc. ), broker fees, and third party...

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### Jumbo Loans: What Are They and Do They Still Cost More?

> A jumbo loan is a mortgage that exceeds the maximum loan amount (conforming loan limit) set by the Federal Housing Finance Agency (FHFA).

- Published: 2006-08-24
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/jumbo-mortgage-loans/

What Is a Jumbo Mortgage Loan? A "jumbo loan" is a mortgage with a loan amount that exceeds the conforming loan limit. It is set by the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac. This limit can change annually and is currently $806,500 for a one-unit property in the contiguous United States for 2025, up from $766,550 last year If your loan amount is $806,501 or higher, your home loan is considered jumbo unless it's a multi-unit property and/or located in a high-cost area. Among other things, this means it's not eligible for purchase by Fannie Mae or Freddie Mac. As such, it could be more difficult to obtain/qualify, and the interest rate might be higher too. Jump to jumbo loan topics: - Jumbo Loan Limits - Jumbo Loans vs. Conforming Loans - Getting a Jumbo Loan Can Be More Difficult - Jumbo Loans Tend to Be More Expensive - Jumbo Mortgage Rates - Minimum Down Payments on Jumbo Loans - High Balance Loans - Super Jumbo Loans - Jumbo Mortgage FAQ Determining the Size of a Jumbo Mortgage Each November, the FHFA announces the conforming loan limit for the following year, based on annual home price changes from October to October. If the housing market does well and home prices rise, the conforming limit will go up and so will the minimum loan amount for a jumbo. If home prices happen to fall, which is rare, the loan limits will simply remain flat. Higher...

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### 10 Mortgage Mistakes to Avoid for a Smooth Home Loan Experience

- Published: 2006-08-23
- Modified: 2024-01-17
- URL: https://www.thetruthaboutmortgage.com/mortgage-mistakes/

Common Mortgage Mistakes Borrowers Make Not getting pre-approved for a mortgage Not shopping around for a lower interest rate Failing to check credit scores in advance Opening new credit cards or other loans before/during the mortgage process Making late mortgage payments or worse, filing foreclosure/BK Not saving enough for a down payment and closing costs Not seasoning assets beforehand in a verifiable bank account Applying with limited or inconsistent employment history Changing jobs prior to or during loan process Forgetting to lock your mortgage rate Lying to the bank or lender! I've put together a list of what I feel are the top 10 "mortgage mistakes" individuals should avoid if they're planning to apply for a home loan. These apply whether you're financing a new home purchase or refinancing an existing mortgage. Avoiding these missteps will ensure your home loan process is a smooth one. Or at least not a complete train wreck. Some are obvious. Some less so. But it never hurts to brush up on the basics before an important life event. Otherwise you could end up with a higher-than-necessary mortgage rate, or worse, see your loan application get declined! 1. Filing Bankruptcy or Being Foreclosed Upon While this may be a no-brainer, it still reigns supreme. Avoid bankruptcy and foreclosure, plain and simple. Either could keep you out of the mortgage game for several years (up to seven years in fact! ) for obvious reasons. Also steer clear of late mortgage payments. I'm talking about 30+ day...

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### FHA Loans: Everything You Need to Know

- Published: 2006-08-23
- Modified: 2025-03-26
- URL: https://www.thetruthaboutmortgage.com/fha-loans/

What Is an FHA Loan? “FHA loans” are government-backed mortgages insured by the Federal Housing Administration (FHA). Congress established the FHA in 1934 in conjunction with President FDR's New Deal aimed at overcoming the Great Depression. The goal was to free up credit for home buyers and help lower-income borrowers obtain a mortgage who would otherwise have trouble qualifying. In 1965, the FHA became part of the Department of Housing and Urban Development's (HUD) Office of Housing. Before the FHA was created, it was common for homeowners to put down a staggering 50% of the value of the property as a down payment on short-term balloon mortgages, which clearly wasn't practical going forward. The FHA changed this by insuring the loans if lenders offered long-term fixed-rate, fully-amortizing mortgages, such as the now popular 30-year fixed. Unlike conventional home loans, FHA loans are government-backed, which protects lenders against defaults, making it possible to for them to offer prospective borrowers more competitive interest rates on traditionally more risky loans. How Does an FHA Loan Work? An FHA home loan works like any other mortgage in that you borrow a certain amount of money from a lender to purchase a home and pay it back monthly. Typically, the term on an FHA loan is 30 years and the most common type of mortgage is a 30-year fixed. They can be issued by any FHA-approved lender in the United States. And the majority of banks and lenders out there offer them. As noted, they...

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### What Is an Islamic Mortgage? How Interest Is Avoided

- Published: 2006-08-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/islamic-mortgage/

Mortgage Q&A: "What is an Islamic mortgage? " There are a variety of different types of home loans out there, some pretty conventional and some a little less so. One you may have heard about, but might not be clear on is an "Islamic mortgage," which as the name implies, is intended for someone of the Muslim faith. The Problem Mortgage Lenders Face Most home buyers need a mortgage to purchase a property Since home prices are so expensive and very few people have ample cash on hand But the payment or receipt of interest is prohibited according to certain religious beliefs Which requires different alternatives to finance the property If you're wondering why a mortgage would need to be crafted based on someone's religion, take note of the following. Under the Sharia law of Islam, the payment or receipt of riba (also known as interest) is prohibited, and thus a conventional mortgage that charges interest each month cannot be utilized by a practicing Muslim. Obviously, this poses a potential problem, as home prices are typically far too expensive to allow a prospective home buyer to purchase outright with cash. The Solution(s) There are three ways this issue can be resolved One being to sell the property at a higher price under an installment plan Another being a "lease to purchase" contract Or to create an LLC and own shares in the property However, this can be solved by having the bank purchase the property and sell it back to...

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### VA Loans: All Your Veteran Mortgage Questions Answered

> A VA loan is a mortgage guaranteed by the Dept. of Veterans Affairs that features no down payment or minimum credit score requirement.

- Published: 2006-08-23
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/va-mortgage-loans/

A "VA loan" is a government-backed mortgage guaranteed by the Department of Veterans Affairs (VA) available to both veterans and active duty servicemembers. The loan program was created all the way back in 1944 and signed into law by then President Franklin D. Roosevelt. Perhaps the most notable aspect of a VA home loan is its zero down payment requirement, which is also available to surviving spouses. It's one of the few places (other than a USDA loan) a prospective homeowner can still buy a property with no money down. Other options such as conventional loans require 3% down or more, while the FHA requires at least 3. 5% down. The popular loan program, also referred to as the GI Bill, has been highly successful and has helped millions of American veterans and their families purchase a home. Let's learn more about it. Jump to VA loan topics: - VA Loan Eligibility Requirements - Types of VA Loans - VA Mortgage Rates - VA Loan Closing Costs - Is There a Maximum VA Loan Amount? - Do VA Loans Require a Minimum Credit Score? - Pros and Cons of VA Loans - VA Loan FAQ - VA Loan Highlights VA Loan Eligibility Requirements Must be active duty or veteran in the U. S. Armed Forces Or a surviving spouse or member of the National Guard Requires Certificate of Eligibility from the VA to determine financing available Must occupy property as your primary residence If you serve (active duty) or served...

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### Why It's Super Important to Lock Your Mortgage Rate

- Published: 2006-08-22
- Modified: 2022-12-30
- URL: https://www.thetruthaboutmortgage.com/mortgage-rate-lock/

A "mortgage rate lock" is essential to ensure you actually receive the interest rate you are quoted by a bank or mortgage broker. When you purchase real estate or refinance an existing mortgage, you'll need to lock in a mortgage interest rate at some point during the loan process. You can do this early on or later in the process, depending on your preference. While comparing lenders, you'll you be presented with a mortgage rate quote, but it will mean very little until it's actually secured, or "locked" by a bank or lender. It's kind of like a car dealer telling you a price over the phone, then you show up at the dealership and the price is a lot different for whatever reason. Until you have it in writing, it doesn't carry much weight. What Is a Mortgage Rate Lock? When you lock in a mortgage rate, you are guaranteed that interest rate, assuming your loan actually qualifies under said lender or bank's guidelines. And as long as you close by the lock expiration date. By locking your home loan, you secure a specific interest rate for a given loan program based on the day it is locked. For example, you may be told that the 30-year fixed is being offered at 3. 5% today for your desired loan amount and loan-to-value ratio (LTV). Once you formally apply, you'll be given the opportunity to lock in that quoted rate so it doesn't change if market conditions worsen. Just know...

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### Asset and Reserve Requirements for Mortgages: How Much Money Do You Need?

> If you choose to verify assets, banks and lenders will ask for a certain reserve requirement that must be met to qualify for the loan, including a mortgage down payment

- Published: 2006-08-18
- Modified: 2024-01-10
- URL: https://www.thetruthaboutmortgage.com/assets-and-reserve-requirements/

When applying for a mortgage, a mortgage broker or lender will likely inquire about your assets, and more specifically, your liquid assets. They'll want to know what you've squirreled away in order to come up with a down payment, pay closing costs, and make monthly mortgage payments going forward once you close your loan. Unless you're relying on a documentation type that doesn't require the verification of assets, it's very important to make sure you've got plenty of assets in your personal bank accounts. Jump to mortgage assets and reserve requirements topics: - Season Your Assets for Two Months! - Beware of Large Deposits - Asset Reserve Requirements for a Mortgage - Reserves Needed by Loan and Property Type - Allowable Types of Assets - Ineligible Types of Assets - Useful Tips Regarding Assets Needed for a Mortgage Along with that, you'll want to ensure those assets are "seasoned" for at least two months (60 days) in most cases. Season Assets Two Months Before You Apply for a Mortgage! It's important to have your assets in a verified account At least two months prior to applying for a home loan Because banks and lenders generally ask for your two most recent bank statements To verify your assets for down payment, closing costs, and reserves Many prospective homeowners and those looking to refinance make mistakes when handling their assets prior to a mortgage transaction. They may falsely assume they can just shuffle some assets from a friend or family member's account...

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### 1031 Exchange: How You Can Avoid or Offset Capital Gains

- Published: 2006-08-17
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/1031-exchange-help-rules/

A "1031 exchange," also known as a real estate exchange or a tax-deferred exchange, was created by the IRS in 1990. Simply put, the exchange occurs when the proceeds from one sale are used in the subsequent purchase. It is named after IRS Code section 1031. In terms of real estate and/or mortgage, when a homeowner sells one investment property to buy another, like property, they can offset or even fully defer capital gains tax. The main idea here is you shouldn't have to pay capital gains if your intention is to immediately turn around and buy a similar property with the proceeds. How a 1031 Exchange Works If you plan to buy another investment property shortly after selling one It may be possible to defer any capital gains taxes from the sale Replacement property must be identified within 45 days and purchased 180 days from prior sale Process must be overseen by a qualified intermediary In a 1031 exchange, the property sold is referred to as the "relinquished property" and the property acquired is called the "replacement property". Prior to the introduction of the 1031 exchange, a homeowner had to simultaneously sell one property while purchasing the new property, a practice which proved to be very difficult. The IRS finally proposed a solution with the introduction of the 1031 exchange, which effectively allowed a homeowner to sell their relinquished property and use the proceeds to buy the replacement property later. However, for the exchange to work, it must be...

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### Mortgage Indexes: They Determine Your Rate When Your ARM Adjusts

- Published: 2006-08-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-indexes/

If you have an adjustable-rate mortgage, your interest rate may vary from month-to-month, or year-to-year, based on the index associated with your home loan. It is not fixed, like the 30-year fixed mortgage (or 15-year fixed mortgage). As such, when you take out an ARM your loan will be assigned a corresponding "mortgage index. " This index will come into play once your loan becomes adjustable, which could be as quickly as six months, or as long as seven years. There are a variety of "mortgage indexes" in use today that mortgage loans are tied to, which are discussed at greater length below. Be sure to research the mortgage index assigned to your ARM before you close your loan. This way you'll know what the fully-indexed rate could be in the future. Common Mortgage Indexes In Use Today - Prime rate - (For home equity lines of credit. ) -CODI - Certificate of Deposit Index-COFI- 11th District Cost of Funds Index-COSI - Cost of Savings Index-LIBOR - London Interbank Offered Rate-CMT - Constant Maturity Treasury-MTA - Monthly Treasury Average-SOFR - Secured Overnight Financing Rate (now the most common mortgage index)When you take out an ARM, you are assigned an index, which is variable, along with a pre-determined margin, which is fixed. The margin is the lender markup, which together with the index makes up your fully-indexed rate (FIR). The FIR is your mortgage rate once your home loan becomes adjustable. This might be after one month, six months, a year,...

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### Debt-to-Income Ratio (DTI): What It Is and How to Calculate It

> The debt-to-income ratio, or DTI, is an important calculation used by banks to determine how large of a mortgage payment you can afford based on your gross monthly income and monthly liabilities.

- Published: 2006-08-17
- Modified: 2023-07-20
- URL: https://www.thetruthaboutmortgage.com/dti-debt-to-income-ratio/

The "debt-to-income ratio" or "DTI ratio" as it's known in the mortgage industry, is the way a bank or lender determines what you can afford in the way of a mortgage payment. By dividing all of your monthly liabilities (including the proposed housing payment) by your gross monthly income, they come up with a percentage. This key figure is known as your DTI, and must fall under a certain number in order to qualify for a mortgage. The maximum debt-to-income ratio will vary by mortgage lender, loan program, and investor, but the number generally ranges between 40-50%. Update:Thanks to the new Qualified Mortgage rule, most mortgages have a maximum back-end DTI ratio of 43%. However, there is a temporary exemption for many loans, but a lot of lenders still want this number to be under 43%! Jump to DTI topics: - Front-End and Back-End Debt-to-Income Ratios - Max DTI for Conforming Loans - Max DTI Ratio for FHA Loans - Max DTI Ratio for VA Loans - Max DTI Ratio for USDA Loans - How to Calculate Your DTI Ratio - What's Included in the Debt-to-Income Ratio - What’s Not Included in Your DTI - What Is a Good Debt-to-Income Ratio? - Stated Income to Avoid Debt-to-Income Ratio Problems - Qualifying Rate for Debt-to-Income Ratio Let's look at a basic example of the debt-to-income ratio: Annual gross income (as reported on your tax returns/W-2 form): $120,000 Monthly gross income: $10,000 Monthly liabilities: $3,500 35% debt-to-income ratio In this example, your...

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### Mortgage Pricing Adjustments: How to Read a Mortgage Rate Sheet

- Published: 2006-08-16
- Modified: 2024-07-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-pricing-adjustments/

If you ever get your hands on a mortgage lender rate sheet, you’ll probably get confused in a hurry. The reason being is that they're intended to be read by mortgage professionals, not everyday Joes. They're jam-packed with endless combinations of numbers, columns, loan programs, and confusing industry jargon. They also include the many pricing adjustments you might be charged, which can affect both your mortgage interest rate and closing costs. Allow me to give you a peek behind the curtain of the mortgage industry so you can make sense of these cryptic documents and perhaps gain a better grasp as to why you're being quoted a certain rate on your home loan. Jump to mortgage pricing adjustment topics: - How to Read a Mortgage Rate Sheet - Pricing Adjustments Grouped by LTV - 8 Key Factors to Determine a Borrower’s Overall Credit Risk - Credit Score Adjustments - Occupancy and Property Type - Mortgage Transaction Type - Documentation Type - Other Pricing Hits How to Read a Mortgage Rate Sheet Look at the following sample tables from a mortgage rate sheet: You'll see a series of interest rates with corresponding prices across different lock periods Those closest to 100 are known as par rates meaning little/no cost or credit If the number is over 100, the excess is provided as a credit to the borrower If the number is under 100, the borrower must pay discount points (or a fraction thereof) for the given rate Although each bank or...

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### Mortgage Amortization: Learn How Your Mortgage Is Paid Off Over Time

- Published: 2006-08-09
- Modified: 2023-09-22
- URL: https://www.thetruthaboutmortgage.com/amortization/

How Mortgage Amortization Works While your mortgage payment stays the same each month The composition changes over time as the outstanding balance falls Early on in the loan term most of the payment is interest And late in the term it's mostly principal that you're paying back Ever wonder how your home loan goes from a pain in your neck to real estate free and clear? Well, it all has to do with a magical little thing called "mortgage amortization," which is defined as the reduction of debt by regular payments of interest and principal sufficient to pay off a loan by maturity. In simple terms, it’s the way your mortgage payments are distributed on a monthly basis, dictating how much interest and principal will be paid off each month for the duration of the loan term. Jump to amortization topics: - Principal vs. Interest - Fully Amortized vs. Interest-Only - Mortgage Amortization Example - How to Shorten the Amortization Period - How to Pay Off My Mortgage in 10 Years or Less Understanding the way your mortgage amortizes is a great way to understand how different loan programs work. And an amortization calculator will show you how your balance is paid off on a monthly or yearly basis. It will also show you how much interest you'll pay over the life of your loan, assuming you hold it to maturity. Trust me, you'll be surprised at how much of your payment goes toward interest as opposed to the principal...

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### What Is a Prepayment Penalty? Hard vs. Soft and More

- Published: 2006-08-09
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/prepayment-penalty-mortgage/

Many people don't seem to understand what a "prepayment penalty" is, much to their own detriment months or years after signing mortgage loan documents. This is especially true because it is often poorly explained, or not brought up altogether. Instead, it's buried in the paperwork and glossed over by borrowers who are eager to close on their mortgages and move on. Unfortunately, this can be a costly mistake if you happen to break the rules, whether you realize it or not. There Are Two Types of Prepayment Penalties There are soft prepays and hard prepays A soft prepay allows for the sale of the home without penalty But penalizes you if you refinance the mortgage A hard prepay penalizes you for a home sale or a mortgage refinance A prepayment penalty, also known as a "prepay" in the industry, is an agreement between a borrower and a bank or mortgage lender that regulates what the borrower is allowed to pay off and when. Most mortgage lenders allow borrowers to pay off up to 20 percent of the loan balance each year. At this point, you might be wondering why would anyone pay more than 20 percent of their home loan off in one year? Well, thinking outside the box a bit, paying off a mortgage early can happen in a variety of different ways. If you sell your home, that is one way to paying off the loan in full. And if you refinance the loan, you effectively pay off...

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### Types of Mortgages to Choose From: Learn About the Many Options Available Today

> Quickly learn about the different types of mortgages available to home buyers today. Options include fixed-rate loans, ARMs, and many more.

- Published: 2006-08-08
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/mortgage-loan-types-home-loan-types/

There Are Many Different Types of Mortgages A variety of home loan programs exist today to serve different needs But most borrowers just go with the 30-year fixed mortgage It holds a near-90% market share for home purchase loans (and also a large share of refinances) Take the time to learn about other products that could save you a substantial amount of money Types of Mortgages by Category Conforming Loan: A mortgage backed by Fannie Mae or Freddie Mac (most common) Jumbo Loan: A mortgage with a loan amount that exceeds the conforming loan limit (currently $806,500) for the year 2025. Government Loan: A home loan backed by a government agency (includes FHA, VA, and USDA loans) Conventional Loan: A non-government home loan (can be conforming or jumbo based on loan amount) Fixed-Rate Mortgage: A home loan that features a fixed interest rate (does not change entire loan term) Adjustable-Rate Mortgage: A home loan with a variable interest rate (can adjust higher/lower during loan term) Popular Home Loan Programs Available Today 30-Year Fixed: Interest rate never changes during entire 30-year term 15-Year Fixed: Interest rate never changes during entire 15-year term 5/1 ARM: Interest rate is fixed for first 5 years and adjustable for 25 7/1 ARM: Interest rate is fixed for first 7 years and adjustable for 23 10/1 ARM: Interest rate is fixed for first 10 years and adjustable for 20 Let's talk about the many different types of mortgages and loan programs available to prospective home buyers...

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### Risk-Based Pricing: Your Level of Risk Determines Your Rate

- Published: 2006-07-31
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/mortgage-dictionary/risk-based-pricing-loan/

When shopping for a home loan, you may come across the term "risk-based pricing". It's a method the mortgage industry uses to measure risk and deliver appropriate interest rates based on a borrower's ability to repay their loan. To mitigate the risk of default, banks and mortgage lenders have created pricing adjustments for a variety of loan criteria. In simple terms, a borrower deemed more risky by a bank or lender will receive a higher mortgage interest rate to offset the greater probability of default. Conversely, a more qualified borrower will be granted a lower interest rate seeing that there's a smaller chance of them actually missing a mortgage payment. Less Risk = Lower Mortgage Rate Mortgage lenders use risk-based pricing Which means the less risk you present to the lender The lower your interest rate will be The opposite is also true There are a number of risk-based factors that can affect the pricing of your home loan. One of the most important factors will always be credit score. FICO scores range from 300-850, and can greatly impact the interest rate you ultimately receive. Credit scores of 760 and above are generally considered to be in the highest tier, and may result in a pricing incentive. Look at this example of risk-based pricing:FICO score ≥740 score = . 375% rebateFICO score 680-739 = no fee/rebateFICO score 660-679 = . 25% costAs you can see, FICO scores of 740 and above receive a "rebate" of . 375%, while scores between...

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### Yield Spread Premium (YSP)

- Published: 2006-07-31
- Modified: 2024-01-11
- URL: https://www.thetruthaboutmortgage.com/mortgage-dictionary/yield-spread-premium/

The "yield spread premium," or YSP as it was known in the industry, was a fee paid by a mortgage lender to a mortgage broker in exchange for a higher interest rate, or an above market mortgage rate. It was a common form of compensation prior to the Great Recession, at which point it was banned. Though the borrower may have qualified for a mortgage at a lower interest rate, the broker or loan officer could charge this fee and give the borrower a slightly higher rate in order to make more commission. This practice was originally intended as a way to avoid charging the borrower any out-of-pocket fees, as brokers could earn their commission AND cover closing costs with the YSP. However, as expected, the yield spread premium wound up as just another fee the borrower got stuck paying. Instead of being charged YSP only, borrowers were often charged YSP and an upfront origination fee. Effectively, borrowers were charged twice on their home loans, which explains why this practice has been outlawed. Careful You Aren't Charged Twice on Your Home Loan A mortgage broker or loan officer could effectively charge a borrower twice Once on the back-end via the yield spread premium And also on the front-end of the loan via origination fees This allowed them to make a ton of money per loan (but cost the borrower way too much! ) The big problem with yield spread premiums was homeowners were charged twice on a single transaction. This...

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### Mortgage Dictionary: Key Terms You Should Know Before You Own

> Use this mortgage dictionary to quickly define mortgage terminology you may encounter when buying a home or refinancing your loan.

- Published: 2006-07-31
- Modified: 2024-10-22
- URL: https://www.thetruthaboutmortgage.com/mortgage-dictionary/

Is your bank or broker confusing you with big words? Do you want to sound a whole lot savvier when handling your home loan transaction? This mortgage glossary is a good place to hone up on your mortgage vocabulary to make sense of what can be a very confusing process. The more you know about seemingly complicated mortgage terms, the more fear you'll instill in your lender. Outsmart them early on and they'll think twice before trying to overcharge you or put you in a bad loan. Check out the ever-expanding "mortgage dictionary" below.   Be sure to click on the hyper-linked terms to get a more detailed definition where applicable. 1031 Exchange - a tax-deferred exchange of real estate employed to offset or even avoid capital gains tax. 15-Year Fixed Mortgage - a fixed-rate home loan that has half the typical term of 30 years. 203k Loan - an FHA loan that allows you to finance home improvements and permanent financing in a single mortgage loan. 3/1 ARM - An ARM that is fixed for the first three years (36 months) of the loan term before becoming annually adjustable. 5/1 ARM - An ARM that doesn't have its first adjustment until year six, and then adjusts once annually thereafter. 7/1 ARM - An ARM that doesn't have its first adjustment until year eight, and then adjusts once annually thereafter. Account Executive - a mortgage salesperson employed by a wholesale mortgage lender. Works with mortgage brokers to close loans via the...

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### What Are Mortgage Points?

> A "mortgage point" is a fancy term used in the industry to describe a percentage point of the loan amount. So if you're paying one point on a $100,000 mortgage, it's simply $1,000. Learn more about how it works and why it's charged.

- Published: 2006-07-31
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/mortgage-dictionary/mortgage-loan-points-mortgage-discount-points/

Mortgage Q&A: "What are mortgage points? " The mortgage process can be pretty stressful and hard to make sense of at times, what with all the crazy terminology and stacks of paperwork. Further complicating matters is the fact that banks and lenders do things differently. Some charge so-called loan application fees while others ask that you pay points.   Then there are those that tack on lender fees and points. While shopping for a home loan, you'll likely hear the term "mortgage point" on more than one occasion. Jump to mortgage point topics: - How Much Is a Mortgage Point - How Do You Calculate Points on a Mortgage? - There Are Two Types of Mortgage Points - Paying Mortgage Points for a Lower Interest Rate - How Do Negative Points Work on a Mortgage? - Mortgage Point Examples - Mortgage Points Cost Chart Be sure to pay special attention to how many points are being charged (if any), as it will greatly affect the true cost of your loan. How Much Is a Mortgage Point? It's just another way of saying 1% of the loan amount So for a $100,000 loan one point equals $1,000 And for a $200,000 loan one point equals $2,000 The higher the loan amount, the more expensive a point becomes Wondering how mortgage points are calculated? Don't worry, it's actually really easy. You don't even need a mortgage calculator! Or a so-called mortgage points calculator, whatever that is... When it comes down to it,...

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### What Is a Mortgage? First Let's Define the Word

> A mortgage is a loan offered by a bank to a borrower that allows them to acquire a piece of real estate, such as a house or condo.

- Published: 2006-07-28
- Modified: 2025-03-05
- URL: https://www.thetruthaboutmortgage.com/what-is-a-mortgage-definition/

Mortgage Definition The word "mortgage" is French in origin And literally means death pledge in their native language (mort = death, gage = pledge) Yet the French use a different word for mortgage (they say hypothèque) Go figure, right... Let’s start with the ultra basic: "What is a mortgage? " Over here at The Truth About Mortgage, this is always the word of the day, as you might have guessed. Fortunately, the definition of mortgage has a somewhat interesting origin. You've undoubtedly heard the word "mortgage" thrown around a million times. But you may not know that in the literal sense, it is defined as a "death pledge" in the French language. Ironically, the French don't actually use the word themselves (they use hypothèque, while Spanish speakers use the similar word hipoteca). Broken down, the mort part (pronounced more) means death and the gage part (pronounced gahj) means pledge. This pledge dies (is terminated) when the mortgage is either paid off in full or the property is repossessed (foreclosed) by the bank if not paid as agreed (borrower defaults). So that's the literal definition of mortgage; now let's look at the real-world application. The Many Different Ways to Say Mortgage Home loan Lien Deed of trust Death pledge A mortgage can be referred to in a variety of different ways, with the most common being a "home loan. " Some may refer to a mortgage as a "lien," which represents a security interest by a lender on a piece of property....

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### About Me...

- Published: 2006-07-28
- Modified: 2024-11-11
- URL: https://www.thetruthaboutmortgage.com/about-the-author/

In the early 2000s, I worked as an Account Executive for a large wholesale mortgage lender based in Los Angeles, California. This meant connecting mortgage brokers and their borrowers with financing from my company or the correspondent lenders we worked with. Our company originated billions in loan volume each month as home prices across the United States ascended to new heights. Day in and day out, I discussed loan scenarios, scoured credit reports, reviewed appraisals, compared countless loan programs, submitted files to underwriting, found workarounds, put out fires, and much more. During this time, I saw the good times and the very bad. I experienced the boom years and the doom years before deciding to walk away from the gig while other colleagues were being laid off. Behemoths like Countrywide Financial, IndyMac, and Washington Mutual all disappeared before our very eyes. My old company did too... which is why I began tracking industry layoffs and the mortgage crisis firsthand. It was truly a time like no other in the real estate/mortgage world. I Created This Website Because I Learned a Lot on the Job That I Wanted to Share But all was not lost. In fact, after several grueling, monotonous years in the industry, something occurred to me... I knew a lot about mortgages! Because I had learned so much about the process while working on the frontlines, I decided to share my knowledge and experience with the public. That led to the launch of this very blog in 2006....

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### How Much House Can I Afford: How the Math Works and Rule of Thumb

- Published: 2006-07-27
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/how-much-can-i-afford/

If the term mortgage has crossed your mind recently and you're in the market to purchase a new home, you've probably asked yourself, "How much house can I afford"? This is a very important question all prospective homeowners should know the answer to wellbeforethey begin looking for a property, whether it's a single-family home, condo, or townhouse. Knowing how much mortgage you can afford will streamline your property search so you focus only on listings you can afford to buy. This can save you time and make you more productive. And hopefully successful in finding your dream home. In reality, if you don't already have a mortgage pre-approval in hand, which essentially details how much house you can afford, most real estate agents won't even take you seriously. Why? Because home sellers won't want to waste their time with a prospective buyer that isn't actually qualified in a given price range. Jump to mortgage affordability topics: - Your Salary Alone Doesn’t Answer the Question - Your Down Payment and Affordability - Income vs. Liabilities - Figure Out Your DTI - What You’re Comfortable With vs. What the Lender Will Allow - A Lower Mortgage Rate Means You Can Borrow More How Much Mortgage Can I Afford On... 50k, 100k, 200k You can't just plug in your income to determine mortgage affordability You have to consider your other monthly expenses against your salary And factor in your down payment and current mortgage rates Don't forget local property taxes and homeowners insurance!...

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### What Is My Home Worth?: Free Internet House Values and Math Behind Them

- Published: 2006-07-27
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/home-value-house-value/

When considering a home purchase, or a mortgage refinance for that matter, knowing the true value of the subject property is paramount. Getting a precise assessment of what a property is worth is one of the most important aspects of real estate, and especially critical to the bank or lender providing financing. After all, it is the bank that technically owns your home until the mortgage is paid off, so they too have a financial interest in the property in question, often a far bigger one than the borrower. For example, if you only come in with a 3% down payment on the purchase, the bank is on the hook for the remaining 97% of the home value. That's a big chunk of change. The House Is the Collateral How much of your home do you actually own? If you have a large mortgage on your property The lender might technically own most of it Until you pay it down substantially and/or home prices increase From the lender's standpoint, the house itself acts as collateral, so it is imperative to have an accurate appraised value when providing mortgage financing. This is also very important to the seller, who will want to list their home for the highest price possible, but also to the buyer who will want to acquire the home for the lowest price. Real estate agents will also want to get this right so they can maximize their commission. And while a buyer and seller can agree to...

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### Mortgage Brokers vs. Banks: Which Is Better?

- Published: 2006-07-27
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-brokers-vs-banks/

There are a variety of different ways to obtain a mortgage, but let's focus on two specific channels, "mortgage brokers versus banks. " There are mortgage brokers, who work as middlemen between banks/mortgage lenders and borrowers on the wholesale end to secure financing for homeowners. And there are banks/lenders that work directly with homeowners to provide financing on the retail level, known as consumer-direct lending. Mortgage brokers are a big part of the mortgage business, accounting for more than 10 percent of all home loan originations, give or take. In fact, their share of the mortgage pie was as high as 30 percent during the mortgage boom, but fell precipitously after the mortgage crisis ensued. But brokers still serve an important role in the industry, and can be quite beneficial for both prospective homeowners and those looking to refinance a mortgage. There Are Pros and Cons to Both Both can be a good choice for home buyers and existing homeowners But it depends on your loan scenario and your individual needs It doesn't need to be an either/or discussion when shopping for a home loan Compare the two to ensure you receive the lowest interest rate and fees There are pros and cons to both, and sometimes you will have little choice between the two if you have poor credit or a tricky loan scenario. The majority of homeowners turn to banks or large mortgage lenders when it comes time to get a mortgage. They are the most obvious choice,...

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## Posts

### The Fight for Control of Real Estate Listings Heats Up as Zillow Plays Hardball

- Published: 2025-04-11
- Modified: 2025-04-11
- URL: https://www.thetruthaboutmortgage.com/the-fight-for-control-of-real-estate-listings-heats-up-as-zillow-plays-hardball/
- Categories: Home Buying, Housing Market

A new battle, or perhaps war, is underway for control of real estate listing data. Depending on who you ask, it’s about the consumer. Mostly the home seller, who logically benefits from maximum exposure to their listing. The best way to get the most exposure is by agreeing to syndicate your listing to as many portals as possible like Zillow, Redfin, Realtor, etc. But some real estate brokerages, such as Compass, are moving more of their listings in-house. While critics call it greedy to “hide listings,” it might actually be a bigger play to avoid going extinct. Zillow Aligns with NAR on Clear Cooperation Policy First some quick background. The National Association of Realtors (NAR) introduced Clear Cooperation Policy (CCP) in 2019, which requires a property that is publicly marketed to be put on the MLS within one business day. So if the real estate agent goes so far as to even put up a yard sign or send out an email about the property, the listing must also hit the MLS within 24 hours (if not a weekend or holiday). The idea here is to promote cooperation, transparency, fairness, and ultimately an open housing market where buyers can see everything that is for sale. It came up after pocket listings became prevalent, where agents would hang onto their listings and not share them publicly, perhaps for their own gain. Problem is, there are real estate brokerages that feel this is too restrictive, as they might want to try different...

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### Where Would Mortgage Rates Be Without Liberation Day?

- Published: 2025-04-10
- Modified: 2025-04-10
- URL: https://www.thetruthaboutmortgage.com/where-would-mortgage-rates-be-without-liberation-day/
- Categories: Mortgage Rates

In case you haven’t heard, the tariffs levied against China are now 145%. Yes, you read that right. Not the 125% you may have heard about yesterday because the math apparently left out an additional 20% increase. Oops! They’re now well above the prior 104% tariff rate, and the 84% originally in place. When you start to look at the sequence of events, it becomes clear that it is all just absurd. What’s next? 200% tariffs? And to what end? What is the goal here and how does this actually get us lower mortgage rates? ! Trump Said He Was Bringing Back 3% Mortgage Rates During his campaigning in September, now-President Trump said he was going to bring back the ultra-low mortgage rates we came to know and love. Specifically, he said “Reducing mortgage rates is a big factor. ” We’re going to get them back down to, we think, 3%, maybe even lower than that. ” It wasn’t clear how, but once he selected Scott Bessent as Treasury Secretary, the strategy was to lower the 10-year bond yield. If you didn’t know, the 10-year yield correlates really well with 30-year mortgage rates because they both have a decade-long shelf life. Most homeowners only keep their home loans for about 10 years because they sell, refinance, prepay, etc. Anyway, if you’re able to get 10-year yields down, you can get mortgage rates down too. This appeared to be working in the early months of 2025, but hit a snag in...

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### Mortgage Rates Back to 7% as Tariff Day Rattles Bond Market

- Published: 2025-04-09
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-back-to-7-as-tariff-day-rattles-bond-market/
- Categories: Mortgage Tips

Welp, the question I asked recently, would mortgage rates hit 5. 99% or 7% next, has been answered. And unfortunately, if you’re a prospective home buyer or recent homeowner looking for rate relief, it’s 7%. The latest foe for mortgage rates is a new round of global tariffs, including a whopping 104% tariff on Chinese imports. That was enough to rattle the bond market, which drives the prices of mortgage rates. As a result, the 30-year fixed is now priced exactly at 7%, per Mortgage News Daily. 7% Mortgage Rates Are Back Just when you thought they were gone forever, high mortgage rates they’re back. The 30-year fixed is at an even 7% today, up from 6. 85% yesterday, per MND. That’s a big one-day move, and it came on the heels of another big one-day move on Monday when rates jumped 22 basis points (0. 22%). We’ve now gone from 6. 55% at the end of last week to 7%, which is pretty astonishing. As noted, the driver is the new round of tariffs, which is a sky-high 104% on China, including a “previously imposed 20% duty, a 34% additional tariff and a last-minute 50% increase that Trump signed late Tuesday. ” China responded immediately, raising its tariff on U. S. goods to 84% from a previously announced 34%. The European Union (EU) also approved retaliatory tariffs on U. S. imports, which will go into effect on April 15th. In other words, we are in a full-scale global trade...

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### Mortgage Rates Can Change In an Instant

- Published: 2025-04-08
- Modified: 2025-04-08
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-can-change-in-an-instant/
- Categories: Mortgage Rates

If you’ve been paying attention to mortgage rates lately, you might be wondering what on earth is going on. Mortgage rates appeared to be heading back toward the low 6s before abruptly shifting back toward 7%. It all took place in the span of a day or two, compounding the matter further. In fact, Monday was the worst day of the year for mortgage rates thus far, and one of the worst days for rates in recent years. The takeaway, for now, is that mortgage rates can change fast, and you need to be prepared. Mortgage Rates Jumped Nearly a Half-Point in Just Two Days First, let’s assess the damage. In just the past two days, mortgage rates on the popular 30-year fixed increased about 30 basis points (0. 30%), per MND. What was 6. 55% on Friday (briefly) was back up to 6. 85% this morning, a testament to just how quickly conditions can change. Meanwhile, Wells Fargo was advertising a 6. 625% 30-year fixed, up from 6. 25% late last week. Similar to the stock market, mortgage rates can change daily. In fact, they can change multiple times per day if conditions warrant it. But there are also days when rates are mostly flat or even unchanged. In recent months, there were weeks where rates did basically nothing. That was then though. Ever since President Trump’s trade war ratcheted higher, it’s been volatility-central. If you don’t pay attention for a day, you might be shocked to discover that...

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### A Good Reminder That Lenders Are Always Quick to Raise Mortgage Rates

- Published: 2025-04-07
- Modified: 2025-04-07
- URL: https://www.thetruthaboutmortgage.com/a-good-reminder-that-lenders-are-always-quick-to-raise-mortgage-rates/
- Categories: Mortgage Rates

I keep hearing that lower mortgage rates are the silver lining of a global trade war. That despite the stock market fallout and possibly much higher prices due to tariffs, mortgage rates are at least lower. But how much lower are they really? And at what cost? And is anyone actually biting, other than recent home buyers looking to refi? While there’s nothing wrong with looking for something positive in these challenging times, it should be noted that rates are still not far from 7%. In fact, somehow the 30-year fixed is back to around 6. 75% today! Mortgage Rates Head Back Toward 7% While the last week and change was great for mortgage rates, today hasn’t started so well. As I pointed out a few days, big mortgage rate rallies like the one we saw recently are often stopped in their tracks without warning. Beware of the mortgage rate bounce I said, and that’s exactly what we got today. The 30-year fixed, which had fallen from 7. 25% in mid-January to around 6. 60% on Friday, is back to 6. 75%. It looked destined to keep falling, likely hitting 6. 50% next, but rates jumped back up today, despite another bad day on the stock market. Perhaps bonds have yet to catch up to the stock market, which is highly volatile at the moment. Maybe bonds need a breather while they attempt to determine President Trump’s next move. But the takeaway here is mortgage rates are still only 25...

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### What the Heck Is Going on with Mortgage Rates?

- Published: 2025-04-04
- Modified: 2025-04-04
- URL: https://www.thetruthaboutmortgage.com/what-the-heck-is-going-on-with-mortgage-rates/
- Categories: Mortgage Rates

There’s a lot going on right now with mortgage rates so I’m dedicating a very long post to it. First and foremost, mortgage rates are dropping fast as the economy teeters on the brink of a possible recession. The driver is worldwide tariffs and a global trade war, which has led to a stock market crash and a flight to safety in bonds. When bonds see more demand, their yields fall and so too do mortgage rates. As a result of the calamity, the 30-year fixed has fallen about 25 bps (0. 25%) from 6. 75% to 6. 50% this week. And could come down even more. Global Tariffs and a Trade War Are Good for Mortgage Rates, But Maybe Not Anything Else In the past week, the 30-year fixed has fallen from around 6. 75% to close to 6. 50% today, at least according to MND. Every lender will have different pricing, but it’s clear the trend has been lower. A lot lower in the past week. And it could just be getting started given the turmoil in the financial markets, with stocks now close to entering bear territory. When this happens, investors seek the safety of bonds, and mortgage rates benefit because they’re backed by similar securities (albeit with more risk). So if you’re wondering why mortgage rates dropped, you can thank the global tariffs, trade war, and plunging stock market. Even a decent jobs report released this morning wasn't enough to avert a market selloff, as all...

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### Top Mortgage Lenders of 2024: UWM Beats Rocket for Second Straight Year, But Will It Last?

- Published: 2025-04-03
- Modified: 2025-04-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-of-2024/
- Categories: Mortgage News

Like the year before, United Wholesale Mortgage (UWM) was the top mortgage lender in 2024. It marked their second year as the top dog, beating out their crosstown rival Rocket Mortgage yet again. Rocket had been #1 in the country since 2018 before ceding its lead to UWM, which works solely with mortgage brokers. And it wasn’t very close last year either, with UWM originating nearly $140 billion and Rocket mustering about $92 billion. Read on to see who else cracked the top-10 list overall, as well as in categories like home purchase loans and refinance loans. The Biggest Mortgage Lenders of 2024 (Overall) Ranking Company Name 2024 Loan Volume 1. United Wholesale Mortgage $137. 8 billion 2. Rocket Mortgage $92. 2 billion 3. CrossCountry $39. 3 billion 4. Chase $37. 5 billion 5. U. S. Bank $26. 0 billion 6. Rate $24. 3 billion 7. DHI Mortgage $24. 0 billion 8. Fairway Independent $23. 6 billion 9. Bank of America $23. 3 billion 10. Veterans United $23. 2 billion More than 4,600 banks, direct lenders, wholesalers, and credit unions originated nearly $1. 3 trillion in home loans last year. As noted, UWM took #1 again as they did in 2023, and similar to the year before, by a wide margin. It wasn’t very close and was never really in question, with the Pontiac, Michigan-based wholesale lender originating roughly $140 billion, per newly released

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### Fannie Mae Now Expects Mortgage Rates to Be 30 Basis Points Lower By Year End

- Published: 2025-04-02
- Modified: 2025-04-02
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-now-expects-mortgage-rates-to-be-30-basis-points-lower-by-year-end/
- Categories: Mortgage Rates

The latest mortgage rate forecast from Fannie Mae is a good one, assuming you’re a prospective home buyer or an existing homeowner. The government-sponsored enterprise (GSE) lowered their forecast pretty dramatically from a month earlier. They now expect the 30-year fixed to be a full 30 basis points lower by the end of 2025. And 30 basis points lower at the end of 2026 as well. Instead of a rate of 6. 6% to close out 2025, they now see the 30-year falling to 6. 3% instead. This should come as welcome news to anyone looking to save some money on their mortgage. Lower 10-Year Yields = Lower Mortgage Rate Forecasts Fannie Mae noted that the 10-year Treasury yield has “pulled back notably” from levels seen as recently as mid-January. As such, they now expect mortgage rates to be lower since a lower 10-year yield translates to lower mortgage rates. That happened to coincide with Trump’s inauguration. It seemed to be a sell the news event, where once he entered office stocks fell and bonds began to rally. Of course, this has been driven by a deteriorating economic outlook, so it might be bittersweet news. In other words, you might be able to snag a slightly lower interest rate but your job security could be worse. Not exactly the best tradeoff in the world. Fannie Mae seems to primarily use the 10-year bond yield to come up with their monthly mortgage rate forecast. And because it has fallen about 25...

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### Mortgage Rates Appear to Be Falling as Recession Fears Rise

- Published: 2025-04-01
- Modified: 2025-04-01
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-appear-to-be-falling-as-recession-fears-rise/
- Categories: Mortgage Rates

As always, it’s been hard to determine the path forward for mortgage rates. They’re never easy to predict, but since the new administration took over, it’s been even harder. You can blame it on a few things, whether it’s the DOGE-led government layoffs, the tariffs and wider trade war, or the general uncertainty of it all. For example, just last week the FHA said it will no longer allow non-permanent residents to get mortgages. Simply put, you just don’t know what you’ll wake up to on a given day, which makes forecasting that much harder. But now it appears storm clouds are brewing and that could finally push rates lower. Bad News Starting to Become Good News Again for Mortgage Rates? There’s a saying with mortgage rates that bad news pushes them lower. The general idea is that a slowing economy leads to lower inflation, which in turns leads to lower interest rates. When the going gets tough, investors seek safety in boring investments like bonds, namely U. S. Treasuries like the 10-year bond. They tend to make the move out of riskier stocks and into bonds for their perceived safety and guaranteed return, even if it’s lower. But when stocks are no longer expected to outperform, a lower return is better than no return. Conversely, if the economy (and inflation) is running hot, as it has the past several years, monetary policy would need to be tightened and interest rates would rise. That’s exactly what happened and explains to...

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### Rocket Buying Nation's Largest Loan Servicer Mr. Cooper to Reclaim Top Mortgage Lender Title

- Published: 2025-03-31
- Modified: 2025-03-31
- URL: https://www.thetruthaboutmortgage.com/rocket-buying-nations-largest-loan-servicer-mr-cooper-to-reclaim-top-mortgage-lender-title/
- Categories: Mortgage News

I’ve been saying for a year or two, maybe longer, that recapture was the next big thing in mortgage. Instead of going out and spending a lot of time and money to acquire new customers, why not just tap into the ones you already have? This is especially true when it’s no longer easy to originate a home loans, thanks to much higher mortgage rates. Mortgage companies realized this, and began servicing their own loans so they could turn existing customers into repeat customers. And that’s clearly what Rocket is doing by acquiring the nation’s largest loan servicer, Mr. Cooper. Rocket Wants to Tap Into Mr. Cooper’s Giant Stable of Existing Homeowners In a nutshell, Rocket is acquiring Mr. Cooper to take advantage of millions of recapture opportunities. To give you an idea of how important recapture is to Rocket, the word is used seven times in their press release. For the uninitiated, recapture means to originate another loan for an existing customer you served in the past. An example would be someone who used Mr. Cooper to get a home purchase loan, who later uses Mr. Cooper to conduct a rate and term refinance to obtain a lower mortgage rate. With this tie-up, Rocket would be the one benefitting from any subsequent loans offered to Mr. Cooper customers. And there are a lot of them, given the fact that Mr. Cooper is the largest loan servicer in the country. At last glance, Mr. Cooper had roughly 6. 7 million...

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### Should I Wait for Mortgage Rates to Drop Before Buying a Home?

- Published: 2025-03-27
- Modified: 2025-03-27
- URL: https://www.thetruthaboutmortgage.com/should-i-wait-for-mortgage-rates-to-drop-before-buying-a-home/
- Categories: Mortgage Rates

I’ve seen a lot of posts lately on social media talking about waiting for mortgage rates to drop before buying a home. Or conversely, NOT waiting for mortgage rates to drop before buying a home. The typical argument, when it comes from an interested party, such as a real estate agent or loan officer, is obviously not to wait. If you wait, they don’t get paid. Right? Right. But should you even be trying to time the purchase to begin with? It's Impossible to Time Most Things in Life, Especially Mortgage Rates I remember when mortgage rates were hitting the dreaded 8% mark in late 2023. At that time, there were fears of double-digit rates. But at the same time, a new narrative emerged. Perhaps out of desperation, or perhaps out of some sort of real logic, a cohort of real estate agents and mortgage folk came up with a “beat the rush” narrative. Basically, with interest rates high, there was less competition out there. As such, you could swoop in and buy a home without getting into a bidding war, And maybe you’d even be able to lowball the seller and get a discount while you were at it. Win-win for an other sub-optinal situation. The rationale to do so was that once rates did eventually fall, it’d be bidding war central again. You’d have trouble getting back in. Blah blah blah. This was also around the time that silly marry the house, date the rate line surfaced. The...

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### Non-Permanent Residents No Longer Eligible for FHA Loans

- Published: 2025-03-26
- Modified: 2025-03-31
- URL: https://www.thetruthaboutmortgage.com/non-permanent-residents-no-longer-eligible-for-fha-loans/
- Categories: Mortgage News

A sweeping change took place this morning that blocks non-permanent residents from taking out FHA loans. After conforming loans backed by Fannie Mae and Freddie Mac, they are the most popular loan type available to home buyers today. They also have the most liberal underwriting guidelines, which allow for credit scores as low as 580 with a 3. 5% down payment. As a result of this change, only permanent residents will be able to obtain an FHA loan moving forward. The policy change is intended to both prioritize legal U. S. residents while also protecting “the integrity of government-insured loan programs. ” So-Called Illegal Aliens Barred from Taking Out FHA Loans A new mortgagee letter released today updates “will remove eligibility for illegal aliens from accessing FHA-insured mortgages. ” It does so by completely removing the “Non-permanent Residents” category in both the Single Family Title I and Title II programs. The FHA Title II loan programs include the basic FHA loan, known as 203(b), the home renovation 203(k) loan, and reverse mortgage program known as an HECM. The FHA Title I program includes property improvement loans and the manufactured housing (mobile) home program. As always, mortgage lenders must determine the residency status of borrowers based on information provided on the mortgage application along with other supporting documentation. The letter notes that “a Social Security card is not sufficient to prove immigration or work status. ” But only “Permanent Residents” are eligible for FHA-insured financing, meaning they must have lawful permanent...

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### Mortgage Rates Could Go Up If Foreign Countries Dump Their MBS Holdings

- Published: 2025-03-25
- Modified: 2025-03-25
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-could-go-up-if-foreign-countries-dump-their-mbs-holdings/
- Categories: Mortgage Rates

File this one under unintended consequences of a global trade war. When you start a trade war, or at least threaten one, unexpected things can happen. We already got the sense that mortgage rates don’t like the trade war because of all the uncertainty involved. But there’s another wrinkle to consider here as well, and that’s the massive holdings of mortgage-backed securities (MBS) held by foreign countries. Should they decide to sell as a result of tariffs imposed against them, mortgage rates could jump in the United States. Foreign Investors Own a Good Chunk of Our Mortgages First things first, let’s talk about why foreign investors hold our mortgages and how much they own. In general, foreign countries invest in the United States for the perceived soundness and safety of its assets (and debt). Sure, things didn’t go so well in 2008, but all in all, foreign investors have long invested in agency mortgage-backed securities (MBS) because they’re relatively safe, high-yielding investments. And they’re pretty much guaranteed as well. Agency MBS include loans backed by Fannie Mae and Freddie Mac (conforming loans), which have an implicit government guarantee. And government loans, such as FHA loans, VA loans, and USDA loans, which have an explicit guarantee. Per Ginnie Mae, which provides a guarantee for the government home loans, foreign holdings of agency MBS hit an all-time high of roughly $1. 2 trillion in June 2021, representing nearly 13% of the market. The biggest investors of our agency MBS are Japan, Taiwan,...

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### Veterans United the Top VA Loan Lender in 2024 for Third Straight Year

- Published: 2025-03-24
- Modified: 2025-03-26
- URL: https://www.thetruthaboutmortgage.com/veterans-united-the-top-va-loan-lender-in-2024/
- Categories: Mortgage News

Well, another year is in the books at the VA, and like prior years, Veterans United topped the list as the #1 VA loan lender in America. This marked their third year as the top VA loan lender, beating out United Wholesale Mortgage (UWM) for the top spot this time around. They’ve now taken the top spot in 2024, 2023, and 2022, and as in past years by a large margin. The Columbia, Missouri-based mortgage company funded nearly 62,000 loans totaling over $19 billion during the year. That was more than enough to beat out UWM, which only mustered about $15. 6B. Read on to see the others in the top ten. Top VA Loan Lenders in 2024 Ranking Company Name 2024 VA Loan Volume 1. Veterans United $19. 3 billion 2. UWM $15. 6 billion 3. Rocket Mortgage $8. 0 billion 4. Freedom Mortgage $6. 6 billion 5. Navy Federal $5. 9 billion 6. DHI Mortgage $4. 3 billion 7. Village Capital $3. 8 billion 8. Pennymac $3. 5 billion 9. CrossCountry Mortgage $3. 2 billion 10. loanDepot $3. 1 billion As noted, Veterans United Home Loans was the biggest VA loan lender last year, per new Lender Statistics from the Department of Veteran Affairs. The company funded $19. 3 billion in VA loans, including over $17 billion in home purchase loans. Impressive given 2024 was another tough year for home buyers given the combination of elevated mortgage rates and still rising home prices. That didn’t seem to slow...

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### Where Would Mortgage Rates Be Today If Kamala Harris Won?

- Published: 2025-03-20
- Modified: 2025-03-20
- URL: https://www.thetruthaboutmortgage.com/where-would-mortgage-rates-be-today-if-kamala-harris-won/
- Categories: Mortgage Rates

A couple weeks ago, I wrote about how mortgage rates hadn’t really done much since the U. S. presidential election took place. By not doing much, I meant they didn’t really go anywhere. They definitely moved around a lot since then, but really only went full circle. In other words, rates are more or less the same today as they were back in late October. And I pointed this out because both President Trump and Secretary Treasury Scott Bessent have vocalized making lower interest rates a priority. So I wanted to see if they had actually made any headway, even though it’s only been a few months. Mortgage Rates Advanced Higher Ahead of Trump Win In that earlier post, I questioned whether Trump and Bessent had lowered mortgage rates. I did so because there was some praise that they had brought rates down, with the 30-year fixed falling for a six-week stretch from mid-January to early March. The problem was, the 30-year fixed was arguably elevated due to Trump winning the election, as seen in the MND chart above. And simply came back down after the market relaxed and Bessent did his best to ease rattled nerves. I will say that Bessent has done a good job countering some of Trump’s more volatile actions in this regard. But recently the stock market sold off (and bond yields went up) because of an increasingly nasty trade war that now includes the entire world. There’s only so much Bessent can do if...

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### If Mortgage Rates Don’t Move, They’ll Be Better in a Month

- Published: 2025-03-18
- Modified: 2025-03-18
- URL: https://www.thetruthaboutmortgage.com/if-mortgage-rates-dont-move-theyll-be-better-in-a-month/
- Categories: Mortgage Rates

Lately, mortgage rates have been pretty flat. They enjoyed a nice string of six or seven weeks where they tumbled down from around 7. 25% to 6. 75% before losing steam. While it’s unclear what caused them to plateau, I’ve pointed to things like tariff talk and general uncertainty. It seems like we’re kind of stuck at 6. 75%, which isn’t horrible, but also not what some had hoped when Trump and Bessent spoke about lowering interest rates. But there’s one thing working in favor of mortgage rates right now, and that’s year-ago levels. Like Everything Else, Context Matters to Mortgage Rates Context matters and when mortgage rate surveys are released, they typically include a year-ago level. This provides a more complete picture of where they stand today. And can affect things like home buyer sentiment if they are priced lower or higher than prior periods. In a sense, today’s mortgage rate doesn’t exist in a vacuum. It’s compared to yesterday, last week, and last year. To illustrate this, one simply has to consider that the long-term average for the 30-year fixed is around 7. 75%. Meanwhile, the going rate for a 30-year fixed today is about one full percentage point lower. Hooray! Right? Well, not exactly. Why? Because the 30-year fixed was sub-3% in early 2022, and in the 2-4% range for the prior decade before rates nearly tripled a couple years ago. So while mortgage rates today are below their long-term average, and not even close to those...

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### If You Have a Mortgage, You Are Not Rich

- Published: 2025-03-18
- Modified: 2025-03-18
- URL: https://www.thetruthaboutmortgage.com/if-you-have-a-mortgage-you-are-not-rich/
- Categories: Mortgage Tips

I’ve been a lot more active on social media over the past few years. And one of my observations is that everyone is looking to go viral with some controversial take that ruffles feathers. You’re essentially rewarded for sparking a healthy (or perhaps unhealthy) conversation, so that’s often the goal. One recent tweet I came across said, “If you have a mortgage, you’re not rich. ” Clearly this is challenging people to argue. But is it actually true? Or do tons of rich people have mortgages themselves? Rich People Love Mortgages Without getting too into the weeds on this one, since for me it’s a pretty silly take, I’d argue that more rich people than “not rich people” have mortgages. In other words, you’re more likely to have a mortgage if you’re wealthy. Allow me to explain. For starters, wealthy folks are more likely to be homeowners than renters. And if you’re a homeowner, chances are you have a mortgage since buying a home all-cash just isn’t a reality for most. Even if it is possible, the ultra-wealthy still don’t want to sink a big chunk of cash into an illiquid asset like a single-family home. Why? Because chances are they can earn more on their money elsewhere. Real estate likely isn't the best investment they can make, but it's certainly a good one. And they get to live in it too! The rich know that putting your money to work for you is better than actually working. Just ask...

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### Higher Mortgage Rates Mean Principal Repayment Has Slowed to a Crawl

- Published: 2025-03-17
- Modified: 2025-03-17
- URL: https://www.thetruthaboutmortgage.com/higher-mortgage-rates-mean-principal-repayment-has-slowed-to-a-crawl/
- Categories: Mortgage Rates, Mortgage Tips

I remember when I wrote my mortgage myths post, I pointed out that mortgages aren’t mostly interest. But I did so when mortgage rates were near record low levels, which may have skewed the answer. It’s true that for most of the past century, mortgages haven’t been mostly interest. More has gone toward principal repayment than interest. However, now that interest rates are closer to 7%, this is no longer true if the loan is held to maturity. In addition, it means it takes a whole lot longer for principal to exceed interest on a monthly basis. Something you should know if you’re thinking of buying a home today. Monthly Mortgage Payments Stay the Same, But There’s a Shift in Principal and Interest The way mortgage amortization works on a fixed-rate mortgage, you enjoy the same monthly payment each month for the entire loan term. For example, consider a $400,000 loan amount set at 6. 75% on a 30-year fixed; the principal and interest payment is $2,594. 39 per month for 360 months. It doesn’t change. However, the payment composition does. Because the loan balance shrinks each month with a portion of the payment going to principal, you owe less interest the next month. Simply put, smaller outstanding balance, less interest due. Fairly straightforward concept. When mortgage rates were low, a huge portion of the monthly payment went toward principal (because the rate of interest was low). However, as we all know, mortgage rates aren’t so low anymore. Gone are...

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### 2025 Home Selling Tips to Get Top Dollar: How to Navigate a Cooler Housing Market

- Published: 2025-03-17
- Modified: 2025-03-17
- URL: https://www.thetruthaboutmortgage.com/12-home-selling-tips-for-2019/
- Categories: Housing Market, Mortgage Tips

Let's talk home selling tips. While still-high mortgage rates will undoubtedly make prospective home buyers feel stretched, there's still plenty of hope for home sellers in 2025! Sure, the lofty asking prices of 2022 and early 2023 have perhaps come down, but if you pan out a bit, property values remain well above pre-pandemic levels. In many metros, still up 50%! So while you may have missed your chance to sell at the absolute top, most home sellers today are still making out pretty darn well. Regardless of what happens to the economy this year, chances are those who are planning to buy a home will, assuming they can find one that suits their individual needs. The housing inventory shortage isn't as pronounced, but it remains an issue in markets in the Midwest and Northeast. And home buyer appetite is still relatively healthy, so sellers who list right should fare just fine in 2025. Let’s talk about some potential home selling tips to help you get top dollar if you do decide to list. 1. It’s Finally Becoming a Buyer's Market Nationwide If you happen to be selling a property in 2025, conditions might be a little different this year than in past years. And not in a good way. The main culprit, and really only culprit, has been mortgage rates. The 30-year fixed climbed from the high-2% range in early 2022 to over 8% in late 2023, before coming down some over the past year and change. But it...

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### Mortgage Rate History: Check Out These Charts from the Early 1900s

- Published: 2025-03-15
- Modified: 2025-03-15
- URL: https://www.thetruthaboutmortgage.com/check-out-these-mortgage-rate-charts-from-the-early-1900s/
- Categories: Mortgage Rates, Mortgage Tips

Today we'll take a brief look at some mortgage rate history to gain a little context for where we stand today. It's always helpful to know what came before so you can better guess what might come after. Just about everyone knows that mortgage rates hit all-time record lows in 2021. But do you know what mortgage rates were like in the early 1900s? The 30-year fixed averaged 2. 65% during the week ending January 7th, 2021, its lowest point in history. Later that year, the 15-year fixed hit the lowest point ever, sinking to 2. 10% during the week ending July 29th, 2021. Some lucky homeowners were able to snag fixed interest rates below 2% for the next 15 to 30 years! Freddie Mac's Mortgage Rate Statistics Started in 1971 Most mortgage rate statistics are tied to Freddie Mac's archive Unfortunately, it only goes back to the year 1971 which isn't much to go on I wanted to drill down a bit deeper to see what things were like prior to the 70s And see if I could find data from earlier on in the 20th century to gain more perspective The figure above come from Freddie Mac’s Primary Mortgage Market Survey, which only dates back to 1971. For the record, back in April of 1971, the first month they began tracking 30-year fixed mortgage rates, the national average was 7. 31%. It went as high as 18. 45% in October 1981 and as low as 2. 65% in...

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### If You’re Buying a Home Today, Expect to Keep It for a Long Time

- Published: 2025-03-14
- Modified: 2025-03-14
- URL: https://www.thetruthaboutmortgage.com/if-youre-buying-a-home-today-expect-to-keep-it-for-a-long-time/
- Categories: Home Buying

It seems pretty clear that the housing market has cooled, and is now more of a buyer’s market than a seller’s market. While this does and will always vary by metro, it’s becoming increasingly common to see higher days on market (DOM), price cuts, and rising inventory. This all has to do with record low affordability, which has made it difficult for a prospective home buyer to make a deal pencil. The stubbornly high mortgage rates aren’t helping matters either, calling into question if it’s a good time to buy a home. Or if it's better to just keep renting. But if you do go through with a home purchase today, expect to keep the property for many years to come. Home Price Gains Have Cooled and Could Even Go Negative This Year While economists at CoreLogic still forecast home prices to rise 3. 6% from January 2025 to January 2026, it seems as if the gains are rapidly slowing. And in some markets, particularly Florida and Texas, home prices have already turned negative and have begun falling year-over-year. For example, home prices were off 3. 9% YoY in Fort Myers, FL, 1% in Fort Worth, TX, and 1. 1% in San Francisco. I expect more markets to turn negative as 2025 progresses, especially with more properties coming to market and sitting on the market as DOM goes up. It’s a simple matter of supply and demand, with fewer eligible (or interested) buyers, and more properties to choose from. There...

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### Can the Housing Market Stomach a Return to 7% Mortgage Rates?

- Published: 2025-03-13
- Modified: 2025-03-13
- URL: https://www.thetruthaboutmortgage.com/can-the-housing-market-stomach-a-return-to-7-mortgage-rates/
- Categories: Housing Market, Mortgage Rates

Yesterday, I wrote about how the uncertainty surrounding tariffs was hurting mortgage rates. In short, the market doesn’t know what to make of the tariffs given the constant flip-flopping going on. One day the tariffs are on. The next day they’re off. Then they’re on again. Then there are new ones. Then they’re worldwide! It’s getting old, and in the process other countries seem to be losing interest in doing business with the United States. Apparently, Canadians aren’t buying U. S. -made products now... At the same time, the nice run mortgage rates enjoyed from mid-January to March seems to be over. And there’s now a real fear we could return to 7% mortgage rates. Could Mortgage Rates Go Back to 7%, Again? ! In early March, I asked a seemingly straightforward question. Will mortgage rates go to 5. 99% or 7% next? This was when the 30-year fixed was hovering around 6. 75%, but appeared to be on a clear downward trajectory. It seemed like despite a 75-basis point drop needed, rates were indeed heading to sub-6% as opposed to 7%. But basic math tells us it’s easier to move 25 bps than it is 75 bps, and now we’re knocking on 7’s door once again. If you consider monthly payments, it’s not a huge difference. A $400,000 loan amount set at 6. 75% is $2,594. 39 per month. It’s only about $67 more at a payment of $2,661. 21 with an interest rate of 7%. But it’s a...

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### How to Reduce Closing Costs on Your Mortgage

> Closing costs can be very expensive. Fortunately, there are a number of ways to reduce out-of-pocket costs and hold onto more of your money.

- Published: 2025-03-12
- Modified: 2025-03-12
- URL: https://www.thetruthaboutmortgage.com/how-to-reduce-closing-costs-on-your-mortgage/
- Categories: Mortgage Tips

When you take out a mortgage, whether it’s a home purchase or a refinance, you must pay "closing costs. " These costs can vary considerably from transaction to transaction, but typically amount to 1-6% of the purchase price or loan amount. For example, on a $450,000 home purchase you might pay $13,500 (3%) in closing costs. Ouch! The reason it's so pricey is because of the many people involved in the home loan process. There are fees that must be paid to the bank/lender, and fees that must be paid to third parties, such as title/escrow and insurance. Along with optional costs such as mortgage discount points, which lower your interest rate. You will also have to pay for various inspections, a home appraisal, property taxes, per diem interest, and much more. Whether you pay these fees out-of-pocket is another question, but either way there will be a cost, and you must pay it in one way or another. Key Takeaways on Reducing Mortgage Closing Costs Closing costs vary widely by lender, loan type, and loan amount - be sure to shop fees too! Fees differ because some lenders bake costs into rates while others itemize fees Negotiate everything: Haggle with lenders, tell them you have other quotes, ask for discounts Agent credit: Ask your real estate agent for a commission rebate to reduce your costs Seller contribution: Ask the sellers to offer a credit toward closing costs Lender credit: Ask the lender to give you a credit to offset...

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### The Trade War Matters More to Mortgage Rates Than Cool Economic Data

- Published: 2025-03-12
- Modified: 2025-03-12
- URL: https://www.thetruthaboutmortgage.com/the-trade-war-matters-more-to-mortgage-rates-than-cool-economic-data/
- Categories: Mortgage Tips

It’s clear that the trade war is now the biggest driver of mortgage rates today. Prior to the arrival of tariffs and a wider trade war, inflation and unemployment dictated their direction. Surging inflation was a big reason why mortgage rates climbed to 8% in late 2023. But no longer. At least not for the moment. Despite cool economic data being delivered each week, bond yields (and mortgage rates) are rising again. The latest evidence came via a softer-than-expected CPI report, which would normally result in better interest rates. Instead, the 10-year bond yield was up today when it might otherwise have fallen. What gives? Cooler Inflation Data Is Being Overshadowed by Tariffs If you’ve been paying attention, mortgage rates were enjoying a nice little run of late. But that abruptly ended a week ago. When Trump entered office for his second term in January, the 30-year fixed was averaging close to 7. 25%. In the span of six weeks, from around mid-January until early March, rates fell to roughly 6. 625%, possibly fueled by the mass government layoffs implemented by DOGE, and fears of a recession. But there was always some restraint as mortgage rates inched lower. And that was due to the unknowns surrounding Trump’s policies, including his favored tariffs. While he waffled and delayed planned tariffs on Canada and Mexico in February, he did follow through with 10% tariffs against China. He then imposed tariffs on Canada and Mexico in early March, before delaying them again until...

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### 2025 Could Be the Year of the Rate and Term Refinance

- Published: 2025-03-11
- Modified: 2025-03-11
- URL: https://www.thetruthaboutmortgage.com/2025-could-be-the-year-of-the-rate-and-term-refinance/
- Categories: Mortgage News, Refinance

So far, 2025 is shaping up to be a bit better when it comes to mortgage rates. While the 30-year fixed is only slightly below year-ago levels at the moment, it seems to be trending in a better direction compared to last year. It’s currently around 6. 75%, which is about an eighth below the 6. 875% average seen in early March 2024. But unlike back then, mortgage rates might sink further into spring, instead of rising like they did in April and May. And that could be a boon for existing homeowners looking to refinance an existing home loan. Rate and Term Refis Continue to Gain as Mortgage Rates Improve There are three main types of mortgages – the home purchase mortgage, which is self-explanatory. And the mortgage refinance, which is broken down into a rate and term refinance and a cash out refinance. When mortgage rates kept rising and eventually hit 8% in late 2023, nobody was applying for a rate and term refinance. Why? Because you’d only really do so if you could obtain a lower interest rate in the process. That meant the only real game in town, aside from some purchase lending, was cash out refinances, where existing homeowners were either consolidating debt or tapping equity to pay for other expenses. However, now that mortgage rates are seemingly falling, and well below those scary 8% levels seen about 18 months ago, rate and term refinances have made a little comeback. They’ve actually been the one...

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### Rocket to Acquire Redfin to Boost Home Purchase Lending and Take Back #1 Spot

- Published: 2025-03-10
- Modified: 2025-03-10
- URL: https://www.thetruthaboutmortgage.com/rocket-to-acquire-redfin-to-boost-home-purchase-lending-and-take-back-1-spot/
- Categories: Mortgage News

Just a week after Rocket Mortgage exited Canada, parent company Rocket Companies has announced its intent to acquire Redfin. The Seattle, WA-based real estate brokerage is one of the largest in the United States, as well as the most visited real estate platform on the web. The acquisition will give one of the nation’s largest mortgage lenders a big leg up in the home purchase lending world, potentially allowing it to reclaim the top spot overall. Rocket Mortgage had been the top mortgage lender for several years before being unseated by crosstown rival United Wholesale Mortgage in 2023. With refinance volume falling in recent years as mortgage rates surged higher, it’s been clear that to rise to the top, you need to be originating a lot of purchase loans as well. Given Redfin has more than 2,200 real estate agents under its umbrella, Rocket could once again find its way back to #1. Rocket to Buy Redfin in All-Stock Transaction In terms of the financials, Rocket Companies (NYSE:RKT) has agreed to pay $12. 50 per share for Redfin (NASDAQ:RDFN) in an all-stock transaction, which values the company around $1. 75 billion. That’s quite a premium from its prior closing price last Friday of $5. 88. At last glance, Redfin shares were trading around $10 this morning, signaling more upside to come if the deal closes. The exchange ratio is 0. 7926 of Rocket Class A common stock for each share of Redfin common stock. Shares of Rocket were down about...

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### Navy Federal Mortgage Review: Rates Appear Low and They Keep Your Loan

- Published: 2025-03-07
- Modified: 2025-03-07
- URL: https://www.thetruthaboutmortgage.com/navy-federal-mortgage-review-rates-appear-low-and-they-keep-your-loan/
- Categories: Mortgage Tips

One of the oldest and largest credit unions in the nation, Navy Federal FCU, happens to be a big player in the home loan space. Instead of just offering the same mortgages every other bank has readily available, they go a step further with their own unique offerings. This includes a conventional zero down loan option, conforming and jumbo loans, and even an interest-only option if you’ve got some home equity. Let’s learn more about this company to see if they’re the right fit for your home loan needs. The one caveat with Navy Federal is that not everyone is eligible for a membership. You or a family member must have some affiliation with the Armed Forces, DoD, Coast Guard or National Guard. The good news is that’s a lot of people because Navy Federal has over eight million members nationwide, up from just seven (7 people) when they began all the way back in 1933. Navy Federal is a Top-20 Mortgage Lender Nationwide Largest credit union in the United States Founded in 1933 and based in Vienna, Virginia Offers basic banking services (checking/savings accounts), mortgages, and home equity loans/lines Funded nearly $15 billion in home loans in 2023 (top-20 overall) Most active in the states of Florida, Virginia, and California Membership offered to active duty and veterans and their familes, along with Department of Defense Civilians May offer a price-match if you show them a lower quote from another lender At last glance, Navy Federal is a top-20 mortgage...

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### Don’t Be Surprised If Mortgage Rates Go Up Tomorrow

- Published: 2025-03-06
- Modified: 2025-03-06
- URL: https://www.thetruthaboutmortgage.com/dont-be-surprised-if-mortgage-rates-go-up-tomorrow/
- Categories: Mortgage Rates

Tomorrow is a big day for mortgage rates, potentially. I say that because tomorrow is the release of the monthly jobs report from the Bureau of Labor Statistics (BLS). Known as the Employment Situation, it details how many jobs were added in the prior month, in this case February. It also includes the unemployment rate, average hourly earnings (wage growth), and any revisions from prior months. A month ago, the jobs report was a mixed bag, with jobs added below expectations, but a lower unemployment rate and higher wages. Jobs Report Generally the Biggest Mortgage Rate Mover Mortgage rates have the potential to move daily based on what’s happening in the world and in financial markets. Generally, it is economic data that drives rates, but there are things like geopolitical events and lately, stuff like tariffs impacting mortgage rates. The jobs report tends to be one of the biggest economic drivers of mortgage rates, so loan officers and mortgage brokers pay close attention. They also may advise their clients to lock their mortgage rate before the report is released, given the uncertainty. Ultimately, nobody really knows what will happen on the first Friday of the month, when the jobs report is released. But they know it could be pretty impactful, so floating your mortgage rate before the release is often ill-advised if you expect to close your loan soon. Chances are your LO or broker will tell you, “if you like it, lock it. ” Anyway, tomorrow will be really...

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### Have Trump and Bessent Actually Lowered Mortgage Rates At All?

- Published: 2025-03-05
- Modified: 2025-03-06
- URL: https://www.thetruthaboutmortgage.com/have-trump-and-bessent-actually-lowered-mortgage-rates-at-all/
- Categories: Mortgage Rates

There’s been a lot of optimism about mortgage rates under Trump. After all, rates have fallen for the past six weeks from around 7. 25% to 6. 75%, which is a pretty decent run. It feels as if the campaign promise to lower interest rates wasn’t just talk; it's actually real. But then when you look at a mortgage rate chart from when he became the frontrunner until today, it doesn’t look as great. In fact, it feels like we’ve gone nowhere at all, while the economy now feels a lot shakier. Mortgage Rates Are Simply Back to Pre-Election Levels I annotated a mortgage rate chart from Mortgage News Daily to make my case. By the way, this isn’t political, it’s simply looking at the timeline and the numbers. If we go back to September, the 30-year fixed was at its lowest point in several years, hovering just above 6%. That was actually pretty good at the time, and was driven by the Fed pivot, in which they stop hiking and signal a future cut. When they finally did cut, mortgage rates bounced a little higher. Not by much, but kind of a sell the news event. In other words, everyone knew the Fed was going to cut, and once they finally did, rates didn’t fall. They didn’t fall because the rumor of a Fed rate cut, which is highly telegraphed, was already baked in. Shortly after the Fed cut, a hot jobs report came down the pipe. This was...

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### Renting vs. Buying a Home: 55 Pros and Cons

- Published: 2025-03-04
- Modified: 2025-03-04
- URL: https://www.thetruthaboutmortgage.com/renting-vs-buying-55-pros-and-cons/
- Categories: Housing Market, Mortgage Matchups, Mortgage Tips

It's time for yet another mortgage match-up, so without further ado, here’s a biggie: “Renting vs. buying a home. ” Or a townhouse for that matter... This is certainly an intimidating question, and one that's difficult to sum up in one post, but I’ll do my best to cover as many pros and cons for each as possible (feel free to add more in the comments section! ). First and foremost, there is no universal yes or no answer to this question seeing that real estate is constantly in flux and extremely local (more so than ever). It's also about so much more than money. There are many reasons to buy a home beyond the investment itself. But financials are often a big driver of the decision, so that will be top of mind in this post. Key Takeaways to Consider When Weighing the Rent vs. Buy Decision No One-Size-Fits-All Answer: Renting vs. buying depends on your unique finances, emotions, goals, and local real estate trends — there’s no universal “yes” or “no” answer More than Money: It’s not just about the monthly cost — homeownership builds wealth and offers freedom, while renting provides flexibility with fewer responsibilities Tough Market Today: High home prices and elevated mortgage rates (~7% vs. 3% pre-2022) make buying less affordable; Zillow recently said it takes over a decade to turn a profit Rent vs. Buy Math: Tools like the “rule of 15” (annual rent x 15 = good price) or price-to-rent ratios (1-15 favors...

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### Mortgage Rates Are Now Back to October Levels. How Could They Move Even Lower?

- Published: 2025-03-04
- Modified: 2025-03-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-are-now-back-to-october-levels-how-could-they-move-even-lower/
- Categories: Mortgage Rates

Today was yet another good day for mortgage rates, which came down an additional 10 bps (0. 10%), per the latest daily survey from Mortgage News Daily. The 30-year fixed now sits at around 6. 625%, which is the lowest level seen since early October. It’s down from around 7. 25% in mid-January, representing an improvement of roughly 5/8 of a percentage point. However, they remain about a half-point above levels seen in early September so there could be more room to fall. The big question is will they keep falling, and how might they achieve that with a trade war now in effect and a looming budget proposal that could raise the debt ceiling considerably? Mortgage Rates Are Now at Five-Month Lows As noted, the 30-year fixed hasn’t been lower since early October, per MND, and it could be poised for even more improvement in coming days, weeks, and months. Interestingly, mortgage rates are basically back to where they were around the time Trump became the clear frontrunner to win the presidential election. In a sense, one could argue that the increase in rates driven by an expected Trump victory has simply been unwound. After all, they appeared to rise quite a bit on the expectation his policies would be inflationary. We're only back to where we started. So those rooting on Trump and his Treasury Secretary Scott Bessent should keep that in mind. Rates moved a lot higher around the time of the election and into the inauguration,...

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### Are Mortgage Rates Going to 5.99% or 7% Next?

- Published: 2025-03-03
- Modified: 2025-03-03
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-rates-going-to-5-99-or-7-next/
- Categories: Mortgage News

It’s no secret mortgage rates are falling. I’ve argued they never really stopped falling since the 30-year fixed hit 8% back in late 2023. But there have been periods where rates increased quite a bit along the way, putting that theory into question. Lately, it’s been nothing but roses for mortgage rates, which have now fallen about half a percent since mid-January. And it has me wondering, are mortgage rates going to 5. 99% or 7% next? Mortgage Rates Have Fallen Every Week Since Mid-January Rates on the popular 30-year fixed are now firmly back below 7% again. In fact, they’ve fallen six weeks in a row, per Freddie Mac. And during that time, they’ve made some good headway, especially in the latest week when they dropped from 6. 85% to 6. 76%. That felt like a big move for mortgage rates, which have bounced higher and lower for years now without a clear sense of direction. To some, it might feel like a turning point. For me, it certainly feels like it. There have been lots of head fakes, but this latest move lower feels a little more real than the others. Perhaps it’s the string of “wins” that mortgage rates have seen lately, as opposed to the two steps forward, one step back pattern we’ve seen since they hit 8%. The vibes are better right now in terms of where mortgage rates might go next. Of course, the reason they’re falling, either due to rising government layoffs or...

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### Mortgage Rates Are Down About Half a Percent in the Past Six Weeks

- Published: 2025-02-28
- Modified: 2025-02-28
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-are-down-about-half-a-percent-in-the-past-six-weeks/
- Categories: Mortgage Rates

What a run it has been for mortgage rates lately. In just the past six weeks, the 30-year fixed has fallen about half a percentage point. At last glance, the 30-year fixed is hovering around 6. 75%, down from 7. 25% as recently as mid-January. Mortgage rates are currently enjoying some tailwinds related to cooling economic data and rising unemployment. The obvious next question: Can it continue and what might derail it? Mortgage Rates Enjoying a Nice Downtrend Lately A series of weak economic reports have pushed mortgage rates lower The 30-year fixed is now down from around 7. 25% in mid-January to 6. 75% today The trend is our friend right now and could continue to deliver savings into spring But it might be at the expense of a deteriorating economy (recession) so beware A common phrase in the mortgage world is “the trend is our friend. ” Or conversely, “the trend isn’t our friend. ” At the moment, the trend has certainly been the friend to loan officers, mortgage brokers, and real estate agents. For much of the past six months, since around late September, the trend wasn’t our friend thanks to a hot jobs report and a Trump win. But after some cool economic reports, deteriorating consumer confidence, ongoing government layoffs, and dovishness surrounding tariffs, rates have reversed course and come down. The 10-year bond yield, which is used to track mortgage rates, has fallen from around 4. 79% in to 4. 24% today. It has also...

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### Locking vs. Floating Your Mortgage Rate: Which Is Better and Why?

> Trying to decide between locking and floating your mortgage rate? Discover the pros and cons of each, and how to make the right choice.

- Published: 2025-02-26
- Modified: 2025-02-26
- URL: https://www.thetruthaboutmortgage.com/locking-vs-floating-your-mortgage-rate/
- Categories: Mortgage Matchups, Mortgage Rates, Refinance

To mortgage folks across the country, it’s an age-old question: “Lock or float? ” It’s a question loan officers and mortgage brokers get asked on a daily basis, often over and over again by panicked borrowers and first-time home buyers. And it might just be the most important answer you come up with during the loan process, as it will determine the mortgage rate you ultimately receive and possibly keep for years. The interest rate you pick will dictate what you pay each month for potentially the next 30 years (assuming you don’t refinance), so it’s not a decision to be taken lightly! How Locking vs. Floating a Mortgage Rate Works You get the option to lock or float your interest rate when you apply for a mortgage If you lock, the interest rate won't change as long as you fund your loan before its expiration If you float, rates may go up or down until you finally lock it in Your loan officer or broker may be able to advise you on which move to make When you submit a home loan application, you will be asked if you want to lock in your mortgage rate or float the rate. If you choose to lock the rate, you are guaranteeing yourself a certain interest rate on your mortgage. So if the lender says you can lock in an interest rate of 6. 25% on your 30-year fixed-rate mortgage today, and you’re happy with that, they can lock it in...

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### A Weakening Economy Might Bring Lower Mortgage Rates, But What Else?

- Published: 2025-02-25
- Modified: 2025-02-25
- URL: https://www.thetruthaboutmortgage.com/a-weakening-economy-might-bring-lower-mortgage-rates-but-what-else/
- Categories: Mortgage Rates

It’s been a great week for mortgage rates. You can’t argue that. The 30-year fixed is now averaging around 6. 80%, down from over 7% a week ago. Aside from the psychological win of dropping the 7 for a 6, rates are now nearly the lowest they’ve been since December. There’s also a sense, finally, that they might be trending even lower and building momentum, instead of the head fakes we saw as rates seesawed back and forth. But there’s just one little hitch. What does this mean for the wider economy? Lower Mortgage Rates Are Great, for Now In case you didn’t notice, the 30-year fixed is now firmly back below 7%. At last glance, MND put it at 6. 80% This is down from 7. 13% two weeks ago, an impressive decline of about a third of a percentage point. And if we zoom out a little farther, the 30-year fixed was roughly 7. 25% in mid-January, representing a near-half point decline. I assume this is welcome news for prospective home buyers grappling with affordability issues. It’s also welcome news for home sellers looking to unload their properties at a time when affordability has never been worse. A nice selling point. And it could come at the perfect time, with the spring home buying season started to swing into gear. Timing is crucial, and last year mortgage rates were moving in the wrong direction from March through May. In addition, it will be a boon for existing homeowners...

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### Mortgage Rates Back Below Year-Ago Levels as We Head into Spring

- Published: 2025-02-20
- Modified: 2025-02-20
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-back-below-year-ago-levels-as-we-head-into-spring/
- Categories: Mortgage Rates

As anticipated, mortgage rates are back below their year-ago levels. I had suspected they would be, despite a rough couple of months pre- and post-election. There’s been a lot of uncertainty lately, but bond yields have also cooled thanks to friendlier economic data and a reprieve on most tariffs. Mortgage rates are also simply better today than last year because they've been more and less drifting lower since peaking at 8% in late 2023. The question is will it continue, and if so, can it save the spring housing market? Where Mortgage Rates Stand Today: Lower Than Last Year Both Freddie Mac and Mortgage News Daily posted a 30-year fixed back in the 6s today, which after seeing 7 and 8 doesn’t sound half-bad. Sure, it’s a far cry from 3%, but it’s all psychological and lower is better, even if it’s higher than it was previously. Specifically, mortgage rates fell to 6. 85% during the week ending February 20th, which was just below last year’s average of 6. 90% at this time, per Freddie Mac. Meanwhile, MND pegged the 30-year fixed at 6. 96%, which was below the 7. 11% seen in late February of 2024. It’s not a massive improvement, yet, but it is an improvement. And it does jibe with my take that mortgage rates remain in a falling rate environment. If you consider where the 30-year fixed was in late 2023, rates have improved by over 100 basis points (1%). And if you compare them to...

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### How to Pay Off the Mortgage Early: 30+ Methods You Can Use Right Now

- Published: 2025-02-20
- Modified: 2025-02-20
- URL: https://www.thetruthaboutmortgage.com/how-to-pay-off-the-mortgage-early/
- Categories: Mortgage Tips

Mortgage Q&A: “How to pay off the mortgage early. ” If you're looking to pay off your mortgage quickly, now might be a good time to do so because mortgage interest rates are no longer rock bottom. However, if you've had your existing mortgage for a while, there's a good chance your current interest rate is significantly lower than today's prevailing rates. In this case, it could make sense to just pay your mortgage back on schedule. After all, why rush repayment if the interest rate is a super low 2-4%? Ultimately, you need to look at extra mortgage payments as an investment. And your mortgage rate is the rate of return. For example, if your rate is 2. 75% but a high-yield savings account pays around 5%, why put more of your money toward the mortgage? Conversely, if you took out a home loan more recently and the rate is closer to 7%, paying it off early could be a winning move. Key Points to Consider If You Want to Pay Off the Mortgage Early You always have the option to pay the mortgage off ahead schedule Just be sure there isn't a prepayment penalty for doing so (not common today) Homeowners can allocate extra funds toward principal each month if they choose Ask your loan servicer if you're unsure of how this works (they can help) If you've got a high interest rate, it can make sense to pay off the loan sooner If you have a low...

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### Buying a Home in 2025? Supply Is Finally Rising and Some Are Calling It a Buyer's Market. Here Are 11 Tips to Help Make It Happen!

- Published: 2025-02-19
- Modified: 2025-02-19
- URL: https://www.thetruthaboutmortgage.com/buying-a-home-in-2018-11-tips-to-get-it-done/
- Categories: Home Buying, Housing Market, Mortgage Tips

If you’ve yet to enter the housing market, but are thinking of buying a home in 2025, there’s a lot you need to know. The 2025 housing market is going to be a lot different than in prior years! As I once pointed out, this isn’t your older sibling’s housing market. Not just anyone can get a mortgage these days. You actually have to qualify. But we’ll get to that in a minute. Let’s start by talking about home prices, which surged in recent years and are finally beginning to move sideways (or even lower) after hitting all-time highs. At the same time, mortgage rates remain quite elevated, having more than doubled from their record lows over the course of 2023 and 2024, though they are slated to fall (hopefully) as the year goes on. Taken together, home buying in 2025 should get a little easier from an affordability standpoint, but it still isn't cheap and quality inventory remains scarce. 1. Prepare for More Sticker Shock When Buying a Home in 2025 If you’re preparing to buy a home in 2025, expect to be shocked, and not in a good way. At this point in the cycle, home prices have eclipsed old all-time highs in many parts of the country, if not nearly all places. And while appreciation is now on a downward trajectory, with marginal or even slightly negative annual gains expected, it remains positive in most metros. In other words, homes aren't cheap, nor do they seem to...

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### FHA Layoffs: 40% of Staff to Be Let Go in Latest Government Cuts

- Published: 2025-02-18
- Modified: 2025-02-19
- URL: https://www.thetruthaboutmortgage.com/fha-layoffs-40-of-staff-to-be-let-go-in-latest-government-cuts/
- Categories: Mortgage News

Less than a week after a task force was launched to “eliminate waste, fraud, and abuse” at HUD, it appears nearly half of the Federal Housing Administration (FHA) is set to be laid off. The shock development was reported by Bloomberg, based on “two sources” who are familiar with the plan. Just last Thursday, HUD Secretary Scott Turner unveiled plans to trim down the agency, claiming to identify over $260 million in savings, with more to come. And like other government departments recently affected by layoffs, DOGE appears to be moving very quickly and aggressively at HUD as well. The big question is how the layoffs might affect the agency, and if they will be clawed back if disruptions occur. FHA Layoffs Are the Latest Shock to the System In just under a month, there have been countless government layoffs across many departments, including the Department of Energy, the Department of Education, the EPA, IRS, CDC, and many others. Another 75,000 government employees have accepted voluntary buyouts as well as the Department of Government Efficiency (DOGE) seeks to cut spending. It appears no section of the government is being spared, and the latest cuts have rattled the agencies that play a major role in the housing market. While it’s unclear how many employees will be affected, the parent of the FHA, the U. S. Department of Housing and Urban Development, or HUD for short, employs about 9,600 employees, per its own website. Last week, DOGE said half of the HUD...

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### RocketRentRewards Offers 10% Back on Rent to Use Toward Closing Costs on a Home Purchase

- Published: 2025-02-18
- Modified: 2025-02-18
- URL: https://www.thetruthaboutmortgage.com/rocketrentrewards-offers-10-back-on-rent-to-use-toward-closing-costs-on-a-home-purchase/
- Categories: Mortgage News

In a bid to help more renters make the leap to homeownership, Rocket Mortgage has launched a new program called “RocketRentRewards. ” As the name suggests, you can now earn rewards simply for paying your rent each month. Specifically, renters get 10% of their rent for the past 12 months as a credit toward closing costs. For example, if you currently pay $2,000 per month, you’ll get $2,400 for a year’s worth of rent. This amount can then be applied to closing costs on your mortgage to reduce your out-of-pocket expenses. How RocketRentRewards Works In order to take part in this new program from Rocket Mortgage, you simply need to be a renter who applies for a home loan with Rocket. Once you apply, Rocket will look at your rent payments from the past 12 months that can be verified with documentation (another important reason to not pay cash! ) After confirming your current rental amount, they will multiple that amount by 12 and then give you 10% of that total. For example, they cite a national average rent of $1,800 per month, which translates to $21,600 annually. If we take 10% of that amount, it’d be $2,160, which could then be applied toward your mortgage closing costs. There is a limit of $5,000 offered via this program, meaning the credit caps out at a monthly rent of about $4,200. But the rent could theoretically come from multiple properties if you happened to move in the past year because they...

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### Is Trump’s Plan to Lower Mortgage Rates Mass Government Layoffs?

- Published: 2025-02-17
- Modified: 2025-02-18
- URL: https://www.thetruthaboutmortgage.com/is-trumps-plan-to-lower-mortgage-rates-mass-government-layoffs/
- Categories: Mortgage Tips

I got to thinking the other day that Trump’s plan to lower mortgage rates might be through increased unemployment. While everyone is seemingly focused on the other side of the coin, inflation, maybe it’s the wrong place to look. We’ve been talking about tariffs and deportations when maybe we should be talking about all the jobs being eliminated in Washington and beyond. Remember, the Fed’s dual mandate is price stability and sustainable employment. If we see a surge of layoffs, which we’re already seeing, the Fed could be forced to act. DOGE Says Call My Bluff on Government Layoffs When Trump was running for his second term, he promised to reduce federal spending and the size of the federal government. Helping him fulfill this difficult mission was Elon Musk, who ironically unveiled the "Department of Government Efficiency," or DOGE for short. If you need some quick background on that, it’s basically a play on the longstanding Doge meme, which is a Shiba Inu dog that emerged in the early 2010s. The real-life dog named Kabosu was pictured with silly, broken-English text overlays that used modifiers like “such” and “much. ” For example, if I were to create one (which I just did above) for what’s going on with all these job cuts, it might say something “much layoffs,” “such unemployment,” and “wow. ” And while it’s all totally absurd on the surface, it all got very real when the layoff announcements came streaming in. The DOGE government organization launched about...

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### Can You Use a Credit Card for a Down Payment on a House?

- Published: 2025-02-13
- Modified: 2025-02-13
- URL: https://www.thetruthaboutmortgage.com/can-you-use-a-credit-card-for-a-down-payment-on-a-house/
- Categories: Mortgage Tips

One of the biggest hurdles to homeownership is the down payment. After all, the typical American has barely anything in the way of savings. At last glance, the median amount in a transaction account such as checking, savings, or similar was just $8000, per the Federal Reserve. And for those 35 and under, just $5,400, though the average for this key first-time home buyer cohort is a slightly higher $20,540. The thing is, the average home today is priced higher than $355,000, meaning those savings won’t go very far. How Can You Fund the Down Payment for a Home Purchase? Checking or savings account Money market or CD Investment account Stock options Home equity line of credit (HELOC) Home equity loan Bridge loan Gift funds Grants Down payment assistance While we know Americans aren’t the best savers, the good news (I suppose) is you typically don’t need much in the way of down payment to buy a home. Aside from the many zero down loan programs available, including VA loans and USDA loans, there are also countless down payment assistance programs. And even if you don’t qualify for one of those, conforming loans backed by Fannie Mae and Freddie Mac require just a 3% down payment. So on a $355,000 home purchase, you’d only need about $10,650. For FHA loans, the down payment requirement is a slightly higher 3. 5%, or about $12,425 using the same example. In terms of funding the down payment, mortgage lenders are also very flexible,...

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### Trump Wants to Lower Mortgage Rates without the Fed

- Published: 2025-02-12
- Modified: 2025-02-12
- URL: https://www.thetruthaboutmortgage.com/trump-wants-to-lower-mortgage-rates-without-the-fed/
- Categories: Mortgage Rates

You’ve likely heard that one of President Trump’s goals is to lower mortgage rates. He talked about it on the campaign trail before he got elected, and has continued to call for lower rates since winning the election. Like most others, he is well aware that housing affordability is poor today, and that bringing down rates could help. But instead of calling on the Fed to do something, he’s apparently going to target the 10-year bond yield. In case you’re unaware, long-term mortgage rates track really well with 10-year yields, so it’s a good place to start. But will it be successful? Trump Continues to Call for Lower Mortgage Rates You probably didn’t see this, but during his campaigning back in September, Trump said,
“We’re going to get them back to we think 3%, maybe even lower than that, saving the average home buyer thousands per year. ” While that sounded ridiculous then, and still does today, he hasn’t shied away from continuing to call for lower rates. Just today on his Truth Social account, Trump added, “Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs! ! ! ” Moments later, the CPI report was released and it came in hot, leading to a big bounce in 10-year Treasury yields (and mortgage rates). The closely-watched bellwether increased about 10 basis points (bps) to around 4. 64%. It was as low as 4. 42% a week ago. The 30-year fixed, which had sunk below 7% last...

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### Is It Better to Refinance with Your Current Mortgage Lender?

- Published: 2025-02-10
- Modified: 2025-02-10
- URL: https://www.thetruthaboutmortgage.com/is-it-better-to-refinance-with-your-current-mortgage-lender/
- Categories: Mortgage Tips, Refinance

If you already have a mortgage, you might be curious about refinancing, and more specifically if you have to use your original lender. Or if it’s best to use them versus another option. Let’s talk about that to get a better grasp for how it all works. And why it could make sense to look beyond your current bank/lender instead of using them again. Sure, loyalty can be a great thing, but when it comes to mortgages, it might be more beneficial to shop around instead. This is especially true if a lender reaches out to you before you even put in the time to do your own research. You Can Only Refinance with Your Current Lender? False! First, let’s get a big myth out the way. You may have heard, or worse, been told that you can only refinance with your current lender. This is NOT true. So someone is fibbing or you may have been misinformed. Either way, know that you can refinance with any bank or lender willing to work with you. The same is true for any mortgage broker out there, assuming you used one in the past. Or even if you didn’t. For example, let’s say you got your current mortgage with Bank A and now you want to refinance. You can go back to Bank A, or you can go to Bank B, or mortgage broker A, or mortgage broker B. Or even credit union C. The options are pretty limitless here. And any...

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### The Release of Fannie and Freddie Could Come Down to Mortgage Rates: But Should It?

- Published: 2025-02-08
- Modified: 2025-02-10
- URL: https://www.thetruthaboutmortgage.com/bessent-says-release-of-fannie-and-freddie-depends-on-mortgage-rates/
- Categories: Mortgage Tips

If you’re hoping for a quick release of Fannie Mae and Freddie Mac, you might want to exercise some patience. While the odds of the pair exiting conservatorship increased sharply once Trump’s second term began, it still faces an uphill battle. One of the major sticking points is mortgage rates, which many expect to increase if they’re released. Having a near-explicit guarantee that Fannie and Freddie will buy and securitize mortgages makes them cheaper for consumers. The expectation is if/when they go public, mortgage rates would need to be higher to compensate for increased risk. Fannie and Freddie Have Been in Conservatorship Since 2008 First some quick background. After the worst housing crisis in recent history, Fannie Mae and Freddie Mac, known as the government-sponsored enterprises (GSEs) were placed in conservatorship. This was essentially a government bailout as the pair were “severely damaged” as a result of the early 2000s mortgage meltdown and “unable to fulfill their missions without government intervention. ” The arrangement allowed them to continue to support the very fragile housing market as it recovered over the past decade. But perhaps nobody expected the pair to remain in government hands as long as they have. At last glance, it has now been nearly 20 years! Of course, this isn’t the first time efforts have been made to release them back into the wild. During Trump’s first term that began back in 2017, there was a lot of talk of a release. And the stocks of both companies...

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### What Is Mortgage Matchup? And Why Did UWM Create It?

- Published: 2025-02-07
- Modified: 2025-02-08
- URL: https://www.thetruthaboutmortgage.com/what-is-mortgage-matchup/
- Categories: Mortgage Tips

If you’ve seen commercials for “Mortgage Matchup” lately, perhaps during an NBA game, or on the court itself, you might be wondering what they’re all about. This is actually an interesting question and answer because they are a company that doesn’t work directly with the public. Yet they advertise directly to consumers all the time, which isn’t a very common arrangement. They also happen to be owned by the largest mortgage lender in the United States, a company known as UWM. Fortunately, I can fully explain how their business works so you can make sense of it all. Mortgage Matchup Is an Online Mortgage Broker Directory Owned by UWM An online mortgage broker directory owned by wholesale lender UWM (nation's #1 lender) Allows users to find a local independent broker to work with to get a mortgage A broker is required to apply for loan with UWM (can't apply directly) The website also promotes the mortgage broker business model vs. going retail/direct Mortgage Matchup is the official mortgage partner of the NBA and WNBA In a nutshell, Mortgage Matchup is an online directory powered by UWM that allows you to find and partner with a local mortgage broker in order to apply for a home loan. Once you arrive on this website, there is a field to enter your address to “find your local home loan expert. ” But what’s strange is some of these experts may not even work with UWM, which pays for and maintains the website. I’ll...

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### Mortgage Rates Back Below 7%, But Pricing Remains Cautious

- Published: 2025-02-06
- Modified: 2025-02-06
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-back-below-7-but-pricing-remains-cautious/
- Categories: Mortgage Rates

It’s been a good couple of weeks for mortgage rates, which benefited from a delay on tariffs and some favorable economic data. Between a slowing economy, reduced inflation, and the thought that the tariffs could be overblown, the 10-year bond yield has improved markedly. Since hitting its 2025 high of 4. 81% on January 13th, it has since fallen a sizable 35 basis points in less than a month. This has been driven by cooler inflation/economic data and less fear of tariffs and a wider trade war. However, mortgage rates haven’t fallen by the same amount, which tells you there is a still a lot of defensiveness on pricing. Mortgage Lenders Remain Defensive on Pricing The 10-year bond yield is a good way to track mortgage rates, with the 30-year fixed moving in relative lockstep over time. However, over the past couple years mortgage rate spreads (the premium MBS investors demand) have risen considerably. Over much of this century, since at least the year 2000, the spread has hovered around 170 basis points on average. During late 2023, it widened to around 300 basis points (bps), meaning investors demanded a full 3% spread above comparable Treasuries, as seen in the chart above from Fitch Ratings. This was largely driven by prepayment risk, and to some degree credit risk, such as loan default. But my guess is it has been mostly prepayments that MBS investors fear, because mortgage rates nearly tripled in about a year’s time. In other words, the thought...

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### Better Forever Program Waives Loan Origination Fees for Life

- Published: 2025-02-05
- Modified: 2025-02-06
- URL: https://www.thetruthaboutmortgage.com/better-forever-program-waives-loan-origination-fees-for-life/
- Categories: Mortgage News

A new loyalty program has been launched by Better Mortgage that waives loan origination fees for life. Known as the “Better Forever Program,” it rewards customers by removing these fees when they refinance in the future or purchase a new property. While these fees can vary by bank or lender, it’s not uncommon to see a 1% fee charged as part of your closing costs. For example, a $500,000 loan with a 1% origination fee amounts to $5,000, so it’s not a trivial amount. The big question, as I always ask, is this a good deal! Better Forever Programs Allows You to Refi or Purchase a Home without Some of the Fees First let’s talk program specifics so we know what we’re actually getting here. As stated, Better Forever works as a sort of loyalty program where you aren’t charged loan origination fees if you use them again in the future. But the key here is that you need to use them a first time in order to be eligible. And that ostensibly means you’ll be charged a loan origination fee the first go around. Not all lenders charge these fees, so that’s something to consider. I’ll speak more to that in a moment, but let’s examine the fine print. In order to get the fee waived, you must refinance an existing loan originally secured with Better. Or in the case of a new property purchase, previously get any type of loan with Better. The distinction here is you could...

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### Can You Refinance an Adjustable-Rate Mortgage?

- Published: 2025-02-04
- Modified: 2025-02-04
- URL: https://www.thetruthaboutmortgage.com/can-you-refinance-an-adjustable-rate-mortgage/
- Categories: Mortgage Tips

If you have an adjustable-rate mortgage you’re looking to get out of, the good news is it’s usually as simple as applying for a refinance. The bad news is the interest rate might be a lot higher today, assuming you locked in a super-low rate several years ago. This has been a common scenario lately, with homeowners opting for ARMs when it appeared mortgage rates would never go up again. And failing to refinance before rates went up. Of course, we were all caught by surprise at just how quickly rates increased, and by how much! For reference, the 30-year fixed climbed from around 3. 25% to start 2022 to roughly 6. 5% to end that year, then kept rising from there. Ouch! Why Do You Want to Refinance Out of the ARM? Before we discuss the process, let’s talk about the why. Why do you want/need to refinance out of the adjustable-rate mortgage? My assumption is the number one reason why someone would want to refinance an ARM would be to avoid a rate reset. By rate reset, I mean an adjustment where the interest rate increases, sometimes by a sizable amount. Many ARMs today are hybrids in that there is a fixed-rate period followed by an adjustable-rate period. For example, the 5/6 ARM features a fixed interest rate for the first five years (or 60 months) and the 7/6 ARM is fixed for the first seven years (or 84 months). After that time, the loans can adjust every...

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### Treasury Secretary Bessent Becomes Acting Director of CFPB: How Will It Affect Mortgages?

- Published: 2025-02-03
- Modified: 2025-02-03
- URL: https://www.thetruthaboutmortgage.com/treasury-secretary-scott-bessent-becomes-acting-director-of-the-consumer-financial-protection-bureau/
- Categories: Mortgage Tips

The Consumer Financial Protection Bureau (CFPB) has a new acting director, none other than Treasury Secretary Scott Bessent. The news was announced today after the firing of former CFPB director Rohit Chopra over the weekend, who had been in charge of the agency since September 2021. It now throws into question what comes next for the agency, which was born out of the Great Financial Crisis (GFC) in the early 2000s. One key achievement of the CFPB was the creation of the Ability to Repay/Qualified Mortgage (ATR/QM) Rule. Among other things, it requires mortgage applicants to qualify using verified financial information, while banning risky loan features like negative amortization. Why Was the CFPB Created Anyway? I’ve long said that the difference between the early 2000s housing market and today’s are the rules in place for home loan financing. Back in the early 2000s, you could take out a mortgage with zero down while providing very little financial documentation. Often, all it took was a credit report to get approved for a mortgage. And you could even get by with a subprime credit score, below 620. The amount of layered risk back then was beyond pale. Imagine an investor purchasing a four-unit property with no money down, a 620 FICO score, and zero documentation. And on top of that, taking out an interest-only adjustable-rate mortgage, or perhaps worse, a negative amortization loan where the monthly payment didn’t even cover the minimum amount of interest due. All while home appraisers weren’t well...

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### Housing Inventory Expected to Normalize by Mid-2026

- Published: 2025-02-03
- Modified: 2025-02-03
- URL: https://www.thetruthaboutmortgage.com/housing-inventory-expected-to-normalize-by-mid-2026/
- Categories: Housing Market

It’s no secret for-sale inventory has been in short supply for a long time now, making it increasingly difficult to find your dream home. The supply of available homes fell considerably when the pandemic took hold, though since bottoming around early 2022, it has risen at a fairly steady clip. The obvious driver of increased for-sale supply has been markedly higher mortgage rates, which has led to more homes sitting on the market. This is mainly attributable to a lack of affordability, which grew worse than conditions seen in the early 2000s housing bubble. But there is still a wide variance in supply levels throughout the country, with the South and Southeast seeing a glut while supply in the Midwest and Northeast remains scarce. Available Supply Is Driving the Housing Market While a lot of people believe mortgage rates drive home prices, in that higher ones lower prices, it’s not really true. Sure, there are indirect effects of higher interest rates, such as reduced purchasing power, which in turn can result in fewer buyers. And fewer buyers means less demand, which can increase supply if more homes are sitting on the market. But if you consider that all of the country basically has access to the same mortgage rates, it’s clear that rates are only a contributing factor. The latest

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### Home Builders Urge Trump to Rethink Tariffs That Could Drive Home Prices Up Further

- Published: 2025-02-01
- Modified: 2025-02-01
- URL: https://www.thetruthaboutmortgage.com/home-builders-urge-trump-to-rethink-tariffs-that-could-drive-home-prices-up-further/
- Categories: Housing Market

If you haven’t heard, the Trump administration imposed tariffs on imports from Mexico, Canada, and China today. As of February 1st, there is a 25% tariff on goods from Canada and Mexico, and a 10% tariff on Chinese goods. At issue with the Mexican and Canadian tariffs is the impact it might have on the home building industry, with the pair accounting for nearly 25% of building material imports. The National Association of Home Builders (NAHB) penned a letter to President Trump shortly after his order, asking him to consider the effects of the tariffs. Assuming they remain in place, the cost to build new homes could increase, which would likely be passed onto the consumer via higher home prices. Housing Affordability Could Worsen with Tariffs in Place The NAHB’s letter pointed out that we already face a “severe housing shortage and affordability crisis,” which would only be exacerbated by higher building costs. And while Trump has said he wants to increase the affordable housing supply, the new tariffs could have the opposite effect. In addition, there are the ongoing deportations, which could drive up the cost of skilled labor to build new homes. But the pressing issue now is the tariffs, which will likely lead to higher material costs on key items such as aluminum, gypsum, lumber, and steel. “While home building is inherently domestic, builders rely on components produced abroad, with Canada and Mexico representing nearly 25% of building materials imports,” said NAHB’s chairman Carl Harris in the...

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### Mortgage Rates vs. Tariffs: What's the Impact?

- Published: 2025-01-31
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-tariffs/
- Categories: Mortgage Rates

I knew I was going to have to write this post at some point during Trump’s second term. And here we are, only 10 days in. In case you didn’t hear, the Trump administration has announced new tariffs that go into effect tomorrow. White House press secretary Karoline Leavitt said Trump will be implementing 25% tariffs on both Mexico and Canada, along with 10% tariffs on China. There was word the White House was considering waiting until March 1st instead, to allow time to possibly negotiate. But Leavitt said that was “false. ” Now it’s full steam ahead on tariffs as of February 1st. And guess what? Bonds didn’t like it, which means mortgage rates likely won’t either. Call My Bluff on Tariffs As noted, there was some confusion about when the tariffs would actually roll out, with some saying March 1st. That’s an important detail because it’s not just about 30 days, but rather an additional month to negotiate and even hold off on tariffs entirely. But on the one hand it’s a good thing if they we’re inevitable because there will be no more guessing, no more waiting with bated breath. There’s been so much speculation about these tariffs since late last year that in a sense it’s somewhat of a relief to finally just get them over with. There’s a good chance Trump abruptly delivered them after coming off a bit more dovish in recent weeks. A sort of “call my bluff” moment. Other countries (and investors)...

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### Non-Mortgage Housing Costs Nearly Exceed the Mortgage Itself

- Published: 2025-01-30
- Modified: 2025-01-30
- URL: https://www.thetruthaboutmortgage.com/non-mortgage-housing-costs-nearly-exceed-the-mortgage-itself/
- Categories: Home Buying

If you’re an existing homeowner who purchased your property as recently as 2022, you probably have a really low, fixed mortgage rate. Perhaps something that starts with a 2, 3, or 4. After all, mortgage rates hit record lows in 2021 and were generally very cheap for about a decade. In spring of 2022, that changed and rates began surging higher as inflation took hold and the Fed ended its MBS-buying program known as Quantitative Easing (QE). While 30-year fixed mortgage rates are no longer a screaming bargain, they’re not far from their long-term average of about 7. 75%. But because everything else is so expensive, the mortgage itself actually eats up a smaller share of total housing costs. Housing Costs Go Far Beyond a Simple Mortgage A new survey from Real Estate Witch found that non-mortgage costs have increased to $24,529 for 2025, up from $17,958 in 2024. This includes homeowners insurance, property taxes, home renovations, routine maintenance, and monthly utilities. Broken down it looks like this: Utilities: $7,319 Maintenance: $6,087 Renovations: $5,762 Property taxes: $3,057 Homeowners insurance: $2,304 Depending on where you live, some of these costs might seem low or high, but it’s the average cost taken from various websites utilized for the survey. And chances are homeowners insurance will only be going up next year, pretty much no matter where you live. Meanwhile, the typical household spends $26,508 annually on the mortgage, which isn’t much more than these other costs combined. In other words, the mortgage...

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### What Is a Cash-In Refinance? Lower Your Loan Balance and Your Mortgage Rate

> A home loan where you bring money to the table to lower your loan balance and your mortgage rate at the same time.

- Published: 2025-01-30
- Modified: 2025-01-30
- URL: https://www.thetruthaboutmortgage.com/what-is-a-cash-in-refinance/
- Categories: Mortgage Tips, Refinance

If you’re currently the proud owner of a mortgage, you’ve undoubtedly heard of a cash-out refinance, one that allows you to tap into your home equity. They were quite popular during the early 2000s housing boom, when homeowners serially refinanced and simultaneously pulled “cash” from their homes while property values skyrocketed. You may have also heard the phrase, “using homes as ATM machines. ” Well, the downside to this seemingly lucrative practice is that mortgage balances also grow when you refinance. You don’t just get free money. If you refinance and pull cash out, your loan amount grows, no ifs, ands or buts about it. This can eventually lead to issues if you need to refinance again in the future, or even if you wish to sell your property. If at some point your outstanding mortgage balance exceeds the property value, you could wind up with an underwater mortgage. Did You Run Out of Home Equity? Many borrowers serially refinanced during the early 2000s housing boom And zapped all their home equity in the process At the same time home prices dropped rapidly Making it impossible to refinance via traditional channels When the housing appreciation party came to a sudden end around 2006, many of these homeowners became the proud owners of underwater mortgages – that is, they owed more on their mortgages than their properties were worth. For example, a home buyer may have acquired their property for $400,000, then eventually refinanced it at a value of $500,000. If...

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### What Happens If the Appraisal Comes In Low?

- Published: 2025-01-29
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/what-happens-if-the-appraisal-comes-in-low/
- Categories: Mortgage Tips

With home prices dare I say a little frothy these days, low appraisals are becoming a concern again for home buyers. It wasn’t uncommon for appraisals to come in low in the early 2000s when home prices were flying ever higher. This happened towards the end of the cycle when banks and lenders could no longer justify slapping an astronomical valuation onto a property. As a result, lots of mortgage deals fell apart based on the collateral alone and the financing spigot essentially got shut off. While we fortunately aren’t back to those days, here’s what you need to know if your appraisal happens to come in low. Why an Appraisal Is Important for a Home Purchase One of the key qualifying criteria for getting approved for a home loan is the collateral value of the property. Aside from your own borrower characteristics, such as your credit score and DTI ratio, the property also has to be valued by an independent party. After all, you might be an excellent borrower and a low default risk, but the bank will still want to know the property itself is worth taking a risk on. Lenders also need to know how leveraged you’ll be, and simply that there’s an independent assessment of the value beyond the buyer and seller to ensure there’s no funny business. This is the job of a third-party home appraiser, who will be hired early on in loan process to determine the property’s present value. The appraiser has the...

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### Down Payment Assistance Programs May Be Affected by Federal Funding Pause

- Published: 2025-01-29
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/down-payment-assistance-programs-may-be-affected-by-federal-funding-pause/
- Categories: Mortgage News

While it appears that Trump’s funding freeze won’t affect home buyers who use a government-backed mortgage, there’s now another concern. It came to my attention that homebuyer assistance programs could actually be affected by the federal funding pause. I received an email from Johnna Szegda at Down Payment Resource regarding a possible disruption to hundreds of federally-funded programs. This too is up in the air, as the FHA/VA loan programs were yesterday, but it is a major concern at the moment given the uncertainty. DPR estimates that if the freeze is enforced, it could impact funding for roughly one-third of available homebuyer assistance programs nationwide. Nearly 750 Homebuyer Assistance Programs at Risk of Losing Funding While a judge has temporarily blocked the president’s Office of Management and Budget (OMB) pause on federal funding until Monday, DPA programs hang in the balance. As noted, the impact is unknown at this time, but it has the potential to affect hundreds of programs home buyers rely on to purchase properties. Not all DPA programs are federally-funded, but a good chunk of them are. An estimated 734 of the nation’s 2,466 homebuyer assistance programs rely upon the federal government. Assuming they are subject to the memo, they could be put on hold or even scrapped entirely. That total includes 469 programs supported by HUD’s HOME initiative and 265 that rely on Community Development Block Grant (CDBG) funds. Down Payment Resource founder and CEO Rob Chrane said it "is working closely with program administrators" to...

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### Trump’s Funding Freeze Causes Uncertainty for Government-Backed Mortgages

- Published: 2025-01-28
- Modified: 2025-02-08
- URL: https://www.thetruthaboutmortgage.com/trumps-funding-freeze-causes-uncertainty-for-government-backed-mortgages/
- Categories: Mortgage News

Yesterday, President Trump released a memo calling for the temporary pause of grants, loans, and other financial assistance programs. The executive order was intended to address the “more than $3 trillion” in federal financial assistance doled out in fiscal year 2024 (of the $10 trillion total). It went on to say that “federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance. ” The move was intended to allow for a review of the programs offered by these agencies to ensure they align with the President's priorities of reducing government spending. Instead, it sparked widespread confusion, including concerns that the FHA, VA, and USDA home loan programs would be disrupted in the process. MBA President Calls for Clarity on President’s Memo After fears of a mortgage disruption began to spread, the Mortgage Bankers Association (MBA) released a statement on the matter. MBA President and CEO Bob Broeksmit sought clarity on the memo to ensure it “did not apply to the single family and multifamily loan insurance or guarantee programs at their agencies. ” “Americans are going to the closing table tomorrow and deserve to know that their loan will close on their home purchase. Without this clear assurance that the federal government will insure new loans or pay claims under these programs, there will be severe harm to borrowers and disruption to the mortgage market. ” While individual banks and lenders are the ones that actually fund the mortgages backed by these government...

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### Trump May Get His Wish of Lower Mortgage Rates Granted, But Not for the Right Reasons

- Published: 2025-01-27
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/trump-may-get-his-wish-of-lower-mortgage-rates-granted-but-not-for-the-right-reasons/
- Categories: Mortgage Rates

Last week, President Donald Trump demanded that “interest rates drop immediately” while addressing the World Economic Forum in Davos, Switzerland virtually. He mentioned the falling price of oil as a driver for this to happen, along with his “historic victory” in the recent presidential election. The general idea is that lower inflation should usher in lower interest rates, which is basically how it works. However, the big question is why would inflation be lower under Trump’s second term? Because of positive developments like lower government spending, or due to an economic crisis? Bond Yields Drop as AI Stocks Fall This morning, the stock market sold off as AI companies nosedived, driven by news of a Chinese AI company called DeepSeek. Long story short, the early take is that DeepSeek has revolutionized AI by relying upon inference-time computing, which uses far less resources and computing power. As such, chipmakers like stock market darling Nvidia (NASDAQ: NVDA) could be under pressure if demand for their chips turns out to be overblown. Of course, the counterargument is that more efficiency leads to higher usage. This phenomenon is known as “Jevons Paradox. ” It means AI could become even more popular, eventually leading to even greater chip demand, despite falling prices, the end result being higher sales/profits for these companies. So one might not want to get too caught up on this fast-moving story if they’re trying to ascertain the direction of the economy or the stock market. However, it does call into question...

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### Existing Home Sales Fall to Lowest Level Since 1995

- Published: 2025-01-24
- Modified: 2025-02-03
- URL: https://www.thetruthaboutmortgage.com/existing-home-sales-fall-to-lowest-level-since-1995/
- Categories: Housing Market

To say it’s been a bad 12 months for home sales would be a massive understatement. Today, the National Association of Realtors (NAR) reported that existing home sales fell to the lowest level in nearly 30 years last month. So if you’re wondering if something broke after the Fed raised rates 11 times, look no further than the residential housing market. Per NAR, existing-home sales declined to an annual rate of 4. 06 million in December, the lowest total since 1995. For perspective, many real estate agents today weren’t even born in 1995, nor were the loan originators who helped buyers obtain the mortgages. What’s Behind the Drop in Home Sales? While home sales actually ticked up to close out 2024, the annual volume was pretty abysmal and the worst since the mid-1990s. Driving the lack of home sales has been two main things. A lack of for-sale inventory and a lack of affordability. And one could argue that mortgage rates are behind a lot of it, whether it’s mortgage rate lock-in causing homeowners to stay put. Or the record low mortgage rates seen in 2021, leading to investors and others gobbling up what little was out there and refusing to let go. Now that 30-year fixed mortgage rates are around 7%, it has become unaffordable for new buyers to enter the fray. NAR noted that completed transactions, which include single-family homes, townhomes, condominiums and co-ops, rose 2. 2% from November and 9. 3% from December 2023. That was the...

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### The Largest HELOC Lenders in the Nation (Updated for 2025)

- Published: 2025-01-23
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/top-heloc-lenders/
- Categories: Mortgage Tips

Now that tapping home equity is back in fashion, I figured it’d be helpful to see who the top HELOC lenders are. This is especially timely with the prime rate finally falling after 11 successive hikes, making these loans cheaper again! As you probably know, the year 2023 was a rough one for mortgage lenders thanks to much higher interest rates, and second mortgages were impacted as well. The latest annual figures from the Consumer Financial Protection Bureau (CFPB) revealed that HELOC volume fell from 1. 4 million units in 2022 to just 1 million in 2023. That's quite the drop-off, which the agency attributed to a sort of leveling off after volume surged in 2022 when homeowners gave up on cash-out refinances. HELOC Volume Slipped in 2023 After a Very Big Year As noted, HELOC volume reversed course pretty markedly in 2023 (the latest full year of data currently available as of early 2025), falling 23. 5% after a very strong year in 2022. Banks and mortgage lenders doled out about 1. 4 million home equity lines of credit (HELOCs) in 2022, per the latest HMDA data, but only about one million in 2023. That 2022 total was 41. 2% higher than the 962,000 HELOCs opened in 2021, and the second consecutive annual increase after several years of falling volumes. I expected HELOC applications to show increases again in 2023 and 2024 since mortgage rates on existing mortgages are so low relative to what’s available today. After all, homeowners...

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### FHA Life of Loan Premiums Might Be Scrapped Under Trump

- Published: 2025-01-21
- Modified: 2025-01-21
- URL: https://www.thetruthaboutmortgage.com/fha-life-of-loan-premiums-might-be-scrapped-under-trump/
- Categories: Mortgage Tips

Well, we’re just one day into Trump’s second term and there are already rumblings of new residential housing policy. While it’s still all just talk, at least there is some talk going on, especially so early on. Trump issued an executive order yesterday, calling on all departments and agencies to deliver emergency price relief to help the American people during this “cost-of-living crisis. ” This included pursuing actions to lower the cost of housing while expanding the housing supply. While building ourselves out of this inventory crisis won’t happen overnight, there are quicker fixes. One of those is adjusting premiums on government back FHA loans. First a Quick Background on Annual FHA Mortgage Insurance Premiums (MIP) Through the Years 2000-2008: 50 basis points (bps) 2008: 55 bps (Mortgagee Letter 2008-16) 2010: 90 bps (source) 2011: 115 bps (source) 2012: 125 bps (source) 2013: 135 bps (source) 2015: 85 bps (source) 2023: 55 bps (source) Back in early 2013, the FHA began requiring borrowers to pay an annual mortgage insurance premium for the life of the loan. Prior to the change, annual insurance premiums on FHA loans would be removed once the loan balance fell to 78% of the original purchase price. This made them a lot less appealing compared to other options where mortgage insurance typically rolls off at an 80% loan-to-value ratio (LTV). In addition, the FHA raised premiums as loan defaults increased, making FHA loans more expensive and less attractive relative to other options, such as conforming loans....

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### Mortgage Rates Begin Above 7% to Start Trump’s Second Term in Office

- Published: 2025-01-20
- Modified: 2025-01-20
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-begin-above-7-to-start-trumps-second-term-in-office/
- Categories: Mortgage Rates

Well, President Donald Trump is officially back in office after the long-awaited inauguration took place today in Washington D. C. He was sworn in as the 47th president of the United States to go along with his 45th. After what felt like a long waiting game between early November and today, we’re finally going to find out what action he’ll take. Like most politicians, there’s always a lot of talk, but it doesn’t always result in action. For the purpose of this website (and this article), my focus is on the direction of mortgage rates, which will be led to by both policy and economic conditions. Mortgage Rates Are Over 7% to Start Trump’s Second Term Mortgage Rates Under Trump 30-Year Fixed Rate First Term Second Term Start 4. 25% 7. 08% End 2. 85% ? ? ? ? ? High 5. 05% ? ? ? ? ? Low 2. 76% ? ? ? ? ? When it comes to mortgage rates, to say things are different this time around would be a huge understatement. Of course, Trump is talking about a lot of the same stuff eight years later, namely China. But for reference, the 30-year fixed stood at 4. 25% when Trump first took office as president number 45 back on January 20th, 2017. And was in the mid-3% range when he unexpectedly won the presidential election in November 2016. Given that the average rate is closer to 7. 125% today (I use eighths like mortgage lenders do),...

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### HELOC Rates Expected to Continue Falling in 2025

- Published: 2025-01-20
- Modified: 2025-01-20
- URL: https://www.thetruthaboutmortgage.com/heloc-rates/
- Categories: Mortgage Rates, Mortgage Tips

Let's talk about HELOC rates. If you’ve had a home equity line of credit (HELOC) for a while, you likely saw your interest rate rise significantly over the past few years. The reason is HELOCs are adjustable and tied to the prime rate, which moves in lockstep with the fed funds rate. Since early 2022, the Federal Reserve has raised its target rate 11 times, pushing the prime rate up from 3. 25% to 8. 50%. This means homeowners with HELOCs have seen their rates increase 5. 25% in less than two years. But here’s the good news; HELOC rates seemed to peak last year and the Fed has since cut rates 100 basis points (bps), providing some much-needed payment relief in the process. There Were Three Fed Rate Cuts in 2024 After a Series of Hikes While the financial markets are dynamic and always subject to change, data has signaled that the Fed rate hikes are done. And even better, that more rate cuts are on the horizon between now and the end of 2025. The CME FedWatch Tool, which tracks the likelihood that the Fed will change its target rate at upcoming FOMC meetings, no longer has additional rate hikes as odds-on favorites. Instead, it has flat rates for several months until another 0. 25% rate cut as the most probable move slated for the June 2025 Fed meeting. In the meantime, rates are expected to remain unchanged, though a rate cut could arrive even sooner. These percentage...

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### WaFd Bank Exits Single-Family Mortgage Lending Business

- Published: 2025-01-17
- Modified: 2025-01-17
- URL: https://www.thetruthaboutmortgage.com/wafd-bank-exits-single-family-mortgage-lending-business/
- Categories: Mortgage News

Welp, another day in 2025, another mortgage lender calling it quits. This time it’s depository Washington Federal Bank, or WaFd for short. The Seattle-based bank, which has been in the home loan business for over 100 years, cited lower profits and more risk for the decision. As we all know, it’s also been a very tough few years in the mortgage industry, with mortgage interest rates nearly tripling during that time. This has made refinancing a lot less common, while also putting pressure on prospective home buyers. The decision represents yet another loss for banks in the residential mortgage space, which continue to see their market share decline as nonbanks gain. WaFd Will No Longer Offer Home Loans to Its Customers Washington Federal Bank (NASDAQ: WAFD) made the announcement to exit its home loans business in its first quarter earnings release yesterday. And it was a pretty interesting revelation because they went into detail about why they’re exiting. Unlike the fast and loose days of the early 2000s when banks and lenders went under because of shoddy underwriting, today it’s more about mortgages being a commodity. In other words, they’re all pretty much the same these days. Boring old 30-year fixed-rate mortgages backed by government-entities such as Fannie Mae and Freddie Mac, or the FHA/VA. This means borrowers can get the same loan just about anywhere, so if you’re not serious about competing, what’s the point? That competition all fighting for the same thing, and a lot less of it...

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### Mortgage Rates Get Boost from Bessent and Soft Economic Data

- Published: 2025-01-16
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-get-boost-from-bessent-and-soft-economic-data/
- Categories: Mortgage Rates

As I’ve said before when talking about mortgage, what a difference a week makes. Or even a couple days. If you’re new to mortgage rates, know that first and foremost, they can be very volatile. And can change from one day to the next. Similar to a stock, the price might not be the same tomorrow (it could be higher or lower or possibly unchanged). On top of that, the price could even change multiple times per day, typically when there’s a lot going on. That happened today, with an afternoon reprice coming in after rates had already improved from the day before. Why Did Mortgage Rates Fall Today (and Yesterday)? In short, weak economic data was the driver and lower mortgage rates were the beneficiary. We had several economic reports come in cooler-than-expected this week, including PPI, CPI, initial jobless claims, and retail sales. It was basically the best you could ask for in terms of economic data. And as we all know, weaker economic data leads to lower mortgage rates (and vice versa). So if you’re rooting for lower mortgage rates, unfortunately you also kind of have to root for the economy to cool off. Granted you don’t have to root for it to collapse, so it’s not totally cynical to hope for some weakness. Inflation has been running hot for years, and it’s okay if it comes down while the economy continues to move forward at a more reasonable pace. There’s a good middle ground, generally known...

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### What Is a Letter of Explanation? Your Chance to Talk to an Underwriter

- Published: 2025-01-16
- Modified: 2025-01-16
- URL: https://www.thetruthaboutmortgage.com/what-is-a-letter-of-explanation/
- Categories: Mortgage Tips

Mortgage Q&A series: “What is a letter of explanation for a mortgage? ” If you’re currently going through the joyful process of obtaining a home loan, you may have been asked to furnish a “letter of explanation,” otherwise known as a LOE. Simply put, it allows you to provide a little more color to what the underwriter might feel is a complicated matter. You can think of the mortgage underwriter as a home loan sleuth, one hired to uncover anything abnormal that may show up in your loan file as documentation is submitted. Sure, the required paperwork might all be there, and your credit score and DTI ratio might be spot on, but it is the underwriter’s job to read between the lines. Otherwise, mortgage applications truly could be fed through automated underwriting systems and that would be the end of it. We wouldn’t need human beings anymore. This isn’t the case, at least not yet, so expect your mortgage application to be scrutinized, and be prepared to “explain yourself” if anything that the underwriter feels needs explaining comes up. Definitely don’t argue with the underwriter or be defiant, that’s never a very good strategy. When I worked for a lender, I always went out of my way to be nice to the underwriters. You should too. Ultimately, the quicker you can get them the answers they need, the faster you can get your home loan closed and move on with your life. What Is the Purpose of a Letter...

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### What Is a 3/1 ARM? A 30-Year Loan That's Only Fixed for the First Three Years

- Published: 2025-01-15
- Modified: 2025-03-21
- URL: https://www.thetruthaboutmortgage.com/what-is-a-3-1-arm/
- Categories: Mortgage Tips

If you haven’t been feeling 30-year mortgage rates recently, maybe an ARM could suit you better. This is especially true if you don’t plan to stay in the home for a very long period of time. There are a variety of adjustable-rate mortgages available to homeowners today, with varying fixed-rate periods. One of the shorter of the hybrid-ARMs, which are home loans that are fixed before becoming adjustable, is the “3/1 ARM. ” Let’s learn more about how it works to see if it could be a good alternative to the 30-year fixed mortgage. 3/1 ARM Meaning It's a hybrid home loan program with a 30-year term Meaning it's fixed before becoming adjustable You get a fixed interest rate for the first 3 years Then it can adjust once annually for the remaining 27 years As the name suggests, it’s an adjustable-rate mortgage with two key components. The first number (the "3") indicates the period of time in which the mortgage interest rate is fixed. In this case, it’s three years. This means your initial interest rate won’t budge for 36 months. This is great news if you fear a rate adjustment (higher), and also quite handy if you only need short-term mortgage financing. The second number (the "1") represents the adjustment frequency, which as you may have guessed, is annually. Yep, this means the rate can adjust each year once the first three years are up. For the record, the 3/1 ARM is still a 30-year loan, so you...

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### 10 Simple Ways You Can Save Money on Your Next Mortgage

- Published: 2025-01-15
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/10-ways-to-save-money-on-your-next-mortgage/
- Categories: Mortgage Rates, Mortgage Tips

You’ve heard the news – mortgage rates jumped from close to 6% back in September to over 7% in less than a few months, before climbing even higher. And they don’t appear to be heading back down anytime soon, despite some mild improvement this morning thanks to a cooler-than-expected CPI report. While that’s still up for debate, the trend is clearly NOT your friend when it comes to securing a low interest rate on your home loan. But that doesn't mean you just throw the rules out the window and apply with any bank or lender willing to approve your mortgage application. Nor should you just accept the first lowish interest rate presented to you, as enticing as it might be. This is actually a great time to be even more aggressive when it comes to lender selection, especially as home buying competition remains fierce in many parts of the country. 1. Shop Your Mortgage Rate! Seriously I’ve said it once and I’ll say it again, and again after that. Because apparently folks aren't getting the memo. You have to take the time to compare rates from multiple lenders if you want to secure the lowest interest rate on your mortgage. There are real studies that prove this – it’s not just boilerplate advice. A recent study from Freddie Mac revealed that getting just two quotes as opposed to one could save you thousands over the life of your loan. And it actually gets better the more you shop. Three...

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### Can You Refinance a Home Equity Loan or a HELOC?

- Published: 2025-01-14
- Modified: 2025-01-14
- URL: https://www.thetruthaboutmortgage.com/can-you-refinance-a-home-equity-loan-or-a-heloc/
- Categories: Mortgage Tips

With second mortgages like home equity loans and home equity lines of credit (HELOCs) growing in popularity lately, I figured it’d be prudent to talk about next steps. For example, what happens if you want to refinance the loan, either to switch loan programs or to obtain a lower rate? Well, similar to a first mortgage, there are lots of refinance options for HELOCs and home equity loans too. In fact, you can even pay off the HELOC or home equity loan with your first mortgage. Although with interest rates on existing first mortgages so cheap at the moment, that’s probably not going to be the move! Can You Refinance a Home Equity Loan? Old Home Equity Loan New Home Equity Loan Balance $50,000 $100,000 Interest Rate 8% 7% Loan Term 20 years (15 remaining) 20 years Monthly Payment $418. 22 $775. 30 Yes. Similar to a first mortgage, you can refinance a home equity loan in order to take advantage of a lower rate. Or to obtain a larger loan amount, perhaps because you need to borrow more money for additional projects or expenses. You can also refinance the loan if you’re looking for a different type of loan, or to consolidate the loan into a first mortgage. It’s also possible to reduce your monthly payment by extending the loan term, assuming you are okay with paying additional interest. Conversely, it’s possible to refinance the home equity loan into a shorter-term loan to reduce the interest expense and pay...

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### Fannie, Freddie, FHA, and Chase Announce Mortgage Relief for LA Wildfire Victims

- Published: 2025-01-13
- Modified: 2025-01-14
- URL: https://www.thetruthaboutmortgage.com/fannie-freddie-fha-and-chase-announce-mortgage-relief-for-la-wildfire-victims/
- Categories: Mortgage News

While the Los Angeles wildfires are still ongoing, some mortgage relief options are beginning to roll out. This morning, both Fannie Mae and Freddie Mac unveiled disaster relief options for borrowers affected by the fires. They are both offering up to 12 months of mortgage forbearance, meaning payments can be suspended for a year. In addition, homeowners won’t incur late fees or face foreclosure or similar legal proceedings during this window. There are more options once the forbearance ends as well, including payment deferral and flex loan modifications. What Kind of Mortgage Relief Is Available for Los Angeles Fire Victims? As you’re probably aware, several wildfires ravaged the Los Angeles area in the past week, including the in the Palisades Fire in the Pacific Palisades and the Eaton Fire in Altadena. Both have caused widespread destruction, leading to the loss of tens of thousands of structures. At last count, some 10,000 structures were destroyed in the Palisades Fire and 7,000 in the Eaton Fire. Sadly, many will need to be rebuilt, but it could take years depending on how quickly insurance companies, the government (think permitting, etc. ), and builders are able to respond. The good news is that for those with a mortgage, there is disaster relief being offered by certain entities, including the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. They own or insure the majority of home loans today, so in many instances your loan is likely owned by one of the two. You can check...

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### What Is the Downside of Getting a Mortgage?

- Published: 2025-01-10
- Modified: 2025-01-10
- URL: https://www.thetruthaboutmortgage.com/what-is-the-downside-of-getting-a-mortgage/
- Categories: Mortgage Tips

I saw his seemingly straightforward question posed and was surprised I’d never really addressed it. I’ve been writing about mortgages on this blog since 2006, so chances are I’ve covered most things. But I rarely think in terms of a mortgage being a choice. For most, it’s compulsory, given how expensive homes are these days. Few can buy a property with cash, so the mortgage is often a given when we’re discussing a home purchase. That being said, we can discuss the pros and cons of getting a mortgage (and keeping it long term). Pretty Much Everyone Needs a Mortgage First things first. If you’re reading this and want to buy a home (or already own a home), chances are you either need a mortgage or have one. It’s just not practical to buy a home with cash for the majority of the population. Your average American can’t even muster a 20% down payment, so the chances of them buying a home outright is slim. But beyond that, even those who can afford to buy a home with cash often don’t. just look at Beyoncé or Mark Zuckerberg. When given the chance, they still opted for a mortgage. Why? Because financing is often a better play than locking up all their cash in an illiquid investment. Their money is put to better use (theoretically) in other investments, whether it’s the stock market or something else. All they really need to do is earn a rate of return higher than the...

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### Ally Financial Calls It Quits on Mortgage Lending, Will Lay Off Staff

- Published: 2025-01-08
- Modified: 2025-01-08
- URL: https://www.thetruthaboutmortgage.com/ally-financial-calls-it-quits-on-mortgage-lending-will-lay-off-staff/
- Categories: Mortgage News

Well, 2025 is off to a rough start with one fairly large mortgage lender calling it quits already. Ally Financial is reportedly done with mortgage lending entirely, per a statement from their spokesman Peter Gilchrist. He told the Charlotte Observer that the company plans to exit the mortgage origination business in the first quarter of the year. As a result, the company will see “less than 5% of its workforce” impacted by layoffs. Apparently they will “right-size” the company, reducing staff in some areas (like mortgage lending) but hiring in others. Ally Financial Exits the Mortgage Business Despite only being in the mortgage business under the Ally Financial name for just over a decade, they’re apparently done. And the culprit this time is likely higher-for-longer mortgage rates, not subprime lending or skyrocketing mortgage defaults like it was back in the early 2000s. Speaking of, Ally Financial was previously known as GMAC until 2010, a unit of General Motors. They also owned Residential Capital (ResCap), their subprime lending division that was caught up in the massive mortgage crisis back then. They eventually shuttered ResCap as their multi-billion-dollar subprime loan portfolio went kaput, leading to a bankruptcy and bailout from the Treasury. But as things settled down, they transformed the brand into Ally Bank and a year later renamed it Ally Financial. Then Ally Home was born, focused on consumer-direct mortgage lending and offering everything from conforming loan to jumbo loans. Their strategy was to provide a “high-touch experience” unlike many of...

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### Should You Drive Until You Qualify for a Mortgage?

- Published: 2025-01-07
- Modified: 2025-01-07
- URL: https://www.thetruthaboutmortgage.com/should-you-drive-until-you-qualify-for-a-mortgage/
- Categories: Home Buying, Housing Market, Mortgage Tips

In the mortgage/real estate world there’s a saying: “Drive until you qualify. ” It’s a cute way of saying if you can’t afford a home in a certain (desirable) area, hop on the highway and keep driving until home prices get more affordable! This could mean driving an hour away from where you work, an obvious negative for someone who has to commute five days a week, especially if traffic is a bear (hint: it often is). This was common during the previous housing boom, with home builders often buying up cheap land in the outskirts of towns, known as the "exurbs," to construct their massive new tracts. Because inventory was either non-existent, or simply out of price range, prospective home buyers would opt to buy in these far-out places instead. Homes Tends to Get Cheaper the Farther You Drive There's a good chance home prices are out of your budget in desirable areas As such you might want to consider additional areas further outside your target zone While sometimes frowned upon, the suburbs offer lots of advantages and are back en vogue Benefits include more living space, outdoor features, and better schools (good for families) We’re beginning to see this phenomenon again thanks to dwindling existing-home inventory and higher and higher home prices. It might explain why prospective buyers are beginning to look where they may not have initially looked for a property. The difference today is that the work office environment has changed, partially due to COVID-19. In...

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### New Rule Removes Medical Bills from Credit Reports, Could Lead to 20K More Mortgage Approvals Annually

- Published: 2025-01-07
- Modified: 2025-01-07
- URL: https://www.thetruthaboutmortgage.com/new-rule-removes-medical-bills-from-credit-reports-could-lead-to-20k-more-mortgage-approvals-annually/
- Categories: Mortgage News

The Consumer Financial Protection Bureau (CFPB) has finalized a rule that will remove medical debts from consumer credit reports. In doing so, Americans' credit scores should rise by an average of roughly 20 points, increasing the number of mortgage applicants who get approved for a home loan. The agency noted that “medical debts provide little predictive value to lenders about borrowers’ ability to repay other debts. ” And are often reported by consumers to be inaccurate or in dispute, leading to more harm than good. Going forward, the inclusion of medical bills on credit reports will be banned and lenders will be prohibited from using medical information in their credit decisioning. No More Medical Debt on Credit Reports Specifically, the new change from the CFPB will amend Regulation V by removing an exception that allowed creditors to obtain and consider medical debt in credit eligibility determinations. As such, the Fair Credit Reporting Act (FCRA) will now prohibit creditors from considering medical information when underwriting new loans. And the credit reporting bureaus (Equifax, Experian, TransUnion) won’t be able to provide consumer credit reports to lenders that contain information related to medical debt. Previously, the trio had announced the removal of medical collections if the amounts were under $500. And the two main credit scoring companies, FICO and VantageScore, had adjusted their algorithms to lessen the degree to which medical bills impacted a consumer’s credit score. But now all medical bills will be banned on credit reports, other than medical-based forbearance plans...

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### Mortgage Rates Are Back at 2001 Levels

- Published: 2025-01-06
- Modified: 2025-01-06
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-are-back-at-2001-levels/
- Categories: Mortgage Rates

The popular 30-year fixed averaged 6. 91% to begin 2025, per the latest Freddie Mac data. This means mortgage rates are now on par with 2001 levels, when the 30-year averaged 7. 03% in the month of January. During that year, the 30-year fixed basically remained flat, ending 2001 at 7. 07%. This got me to thinking. What if mortgage rates do nothing in 2025, sort of like they did in 2001? It’s certainly a possibility and something to think about and prepare for if you’re a prospective home buyer (or a loan originator). 2001 Mortgage Rates in 2025 Jan: 7. 03% Feb: 7. 05% Mar: 6. 95% Apr: 7. 08% May: 7. 15% Jun: 7. 16% Jul: 7. 13% Aug: 6. 95% Sep: 6. 82% Oct: 6. 62% Nov: 6. 66% Dec: 7. 07% After a really good decade for mortgage rates, the 30-year fixed is back closer to its long-term average of around 7. 75%. It’s actually a bit better than that since it’s hovering around 7% today, which puts it very close to levels last seen in 2001. If you look at that year, listed above by month, which is now a staggering 24 years ago, the 30-year fixed did very little. It stayed within a tight range just over 7%, dipping slightly below 7% late in the year, but bouncing back to where it started to close out the year. What if mortgage rates do the same thing in 2025? Tip:Even if mortgage rates stay flat...

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### Is the 30-Year Fixed Even a Good Deal Anymore?

- Published: 2025-01-06
- Modified: 2025-01-06
- URL: https://www.thetruthaboutmortgage.com/is-the-30-year-fixed-even-a-good-deal-anymore/
- Categories: Mortgage News

It’s no secret that the 30-year fixed was the best deal ever a few short years ago. Back in 2021 (and in surrounding years) you could lock-in a sub-3% mortgage rate for a full 30 years. Yes, you could get an interest rate of say 2. 75% for the next three decades, with no worry of the rate adjusting higher. EVER. In retrospect, it’s pretty bonkers that we weren’t falling over one another to go get one. Sure, lending volume during those years was sky-high, but sometimes I’m surprised it wasn’t even higher. But now that the 30-year fixed is no longer on sale, why do borrowers keep opting for one over other options? 30-Year Fixed Mortgage Rates Are Decidedly Average Using Freddie Mac data going back to 1972, the 30-year fixed has averaged roughly 7. 75%. That number takes into account those super-high mortgage rates in the 1980s, when the 30-year ascended to nearly 20%. And the super-low mortgage rates seen over much of the past decade, when the 30-year fixed hit an all-time record low 2. 65% in January 2021. So it appears we are right smack dab in the middle again. Mortgage rates aren’t a terrible deal today, but they’re no longer a bargain either. They’re simply hovering near their long-term average, which goes back more than 50 years now. The problem is that the typical American is/was used to seeing a mortgage rate that started with a 2 or 3, and now a rate that starts...

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### What Is a Mortgagee? Hint: It's Not a Typo Nor Is It Misspelled

- Published: 2025-01-06
- Modified: 2025-01-06
- URL: https://www.thetruthaboutmortgage.com/what-is-a-mortgagee/
- Categories: Mortgage Tips

Are You a Mortgagee or Mortgagor? It's 2025 and it's time for some fresh mortgage Q&A! Today's question: “What is a mortgagee? ” No, it's not a typo. I didn't leave an extra “e” on the word mortgage by mistake, though it may appear that way. I may have also needed to ignore the "misspelling" when I conducted the spell check for this article. Despite its similar appearance, it's actually a completely different word, somehow, simply with the mere addition of the letter E. Don't ask me how or why, I don't claim to be an expert in word origins. Seems like a good way to confuse a lot of people though, and it has probably been successful in that department for years now. You can blame the British English language for that, or maybe American English. Anyway, let's stop beating up on the English language and define the darn thing, shall we. What Is a Mortgagee? A “mortgagee” (two Es! ) is the entity that originates (makes) and sometimes holds the mortgage, otherwise known as the bank or the mortgage lender. They lend money so individuals like you and I can purchase real estate without draining our bank accounts. It could also be your loan servicer, the entity that sends you a mortgage bill each month, and perhaps an escrow analysis each year if your loan has impounds. The mortgagee extends financing to the “mortgagor,” who is the homeowner or borrower in the transaction. So if you're reading this...

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### Lender Credits: The Opposite of Paying Points on Your Mortgage

> A lender credit can eliminate the closing costs on your mortgage. But it will increase your mortgage rate as a result.

- Published: 2025-01-03
- Modified: 2025-01-03
- URL: https://www.thetruthaboutmortgage.com/what-is-a-lender-credit/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “What is a lender credit? ” If you've been shopping mortgage rates, whether for a new home purchase or a refinance, you've likely come across the term “lender credit. ” These optional credits can be used to offset your closing costs. But they will bump up your interest rate in the process. Let's learn more about how they work and if it makes sense to take advantage of them. Jump to lender credit topics: - How a Lender Credit Works - Lender Credit vs. Paying Points - What Can a Lender Credit Be Used For? - Lender Credit Limitations - Lender Credit Example - A Lender Credit Will Raise Your Mortgage Rate - Does a Lender Credit Need to Be Paid Back? - How to See If You're Getting a Lender Credit - Is a Lender Credit a Good Deal? - Lender Credit Pros and Cons How a Lender Credit Works Mortgage lenders know you don't want to pay any fees to get a home loan So they offer "credits" that offset the customary closing costs associated with a mortgage Credits can be applied to things like title insurance, appraisal fees, and so on You don't pay those costs out-of-pocket, but wind up with a higher mortgage rate Everyone wants something for free, whether it's a sandwich or a mortgage. Unfortunately, both require manpower and cost money, and one way or another you're going to have to pay the price as the consumer. When you take out a...

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### We Are Entering 2025 with Mortgage Rates on the Rise

- Published: 2025-01-03
- Modified: 2025-01-03
- URL: https://www.thetruthaboutmortgage.com/we-are-entering-2025-with-mortgage-rates-on-the-rise/
- Categories: Mortgage Rates

What a difference a year makes. Toward the end of 2023, mortgage rates fell nearly 150 basis points to ring in the New Year. Meanwhile, mortgage rates jumped about 100 basis points to close out 2024. Ouch! In other words, things were looking bright heading into 2024, and feel a bit bleak by comparison going into 2025. Despite that, the 30-year fixed isn’t all that different than it was a year ago. Rates were actually about neck-and-neck until they diverged in mid-to-late December. Mortgage Rate Sentiment Has Worsened At last glance, the 30-year fixed averaged about 7. 07%, per Mortgage News Daily, and 6. 91%, per Freddie Mac. According to Freddie, it’s the worst average going back to July, meaning it’s been a rough stretch for the 30-year fixed. Whether that points to some relief soon is another question, but it’s certainly a stark contrast to late 2023 and early 2024. A year ago, the 30-year fixed was finally starting to show signs that it had topped out and that the worst was behind us. After all, the 30-year fixed climbed just above 8% in October 2023 and had fallen to around 6. 625% by the end of the year. So things were looking up as we rang in 2024, largely because the Fed had indicated it was ready to pivot. It wasn’t going to hike its own fed funds rate anymore, and chances of a rate cut were now on the table. That held true, though it took about...

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### 2025 Mortgage and Real Estate Predictions: Where Is the Market Headed Next?

- Published: 2024-12-30
- Modified: 2025-02-08
- URL: https://www.thetruthaboutmortgage.com/2025-mortgage-and-real-estate-predictions/
- Categories: Mortgage Tips

1. Mortgage rates will move lower and hit the 5s at some point I always start my New Year predictions post with a guess about which way mortgage rates will go. It’s very difficult to predict mortgage rates and just about nobody gets it right. But we can make some educated guesses based on what we know. Complicating 2025 is a new incoming presidential administration. And not just any, but a second term for Donald Trump. This time around, he has promised some sweeping changes, including widespread tariffs, mass deportations, and big tax cuts. All three spell higher inflation, which is what the Federal Reserve has been battling since at least early 2022. They’ve made a lot of progress, but there are fears Trump’s policies could unwind that in a hurry. This is partially why 10-year bond yields, which are used to determine mortgage rates, have risen so much recently in spite of three separate Fed rate cuts. However, there is also growing unemployment and fears of a recession, which could counteract some of Trump’s inflationary policies. There's also the idea he may not actually do what he said he would do. For me, the economic data will matter more and I see the economy slowing and beginning to struggle. That’s not good news for the economy, obviously, but it could be good news for mortgage rates. Like past years, they won’t move in a straight line down, but I do believe they’ll be lower in 2025 than in 2024,...

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### One Major Reason Why the Housing Market Is Much Better Off Than It Used to Be

- Published: 2024-12-23
- Modified: 2024-12-23
- URL: https://www.thetruthaboutmortgage.com/one-major-reason-why-the-housing-market-is-much-better-off-than-it-used-to-be/
- Categories: Housing Market

With home prices out of reach for many and affordability the worst it’s been in decades, a lot of folks are talking about another housing crash. However, just because buying conditions aren’t affordable doesn’t mean we’ll see cascading home price declines. Instead, we could just see years of stagnant growth or real home prices that don’t actually keep up with inflation. All that really means is that homeowners won’t be seeing their property values skyrocket like they had in years past. At the same time, it also means those waiting for a crash as a possible entry point to buy a home might continue to be disappointed. This Chart Perfectly Sums Up Then Versus Now Just consider this chart from the Federal Reserve, which breaks down the vintage of today’s mortgages. In other words, when they were made. It shows that a huge chunk of the outstanding mortgage universe was made in a very short window. Basically 60% of outstanding home loans were made from 2020 to 2022, when 30-year fixed mortgage rates were at their all-time lows. To contrast that, something like 75% of all outstanding loans were originated from 2006 to 2008. Why does that matter?   Because underwriting standards were at their absolute worst during those years in the early 2000s. This meant the vast majority of home loans originated at that time either shouldn’t have been made to begin with or simply weren’t sustainable. In short, you had a housing market that was built on a...

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### Mortgage Rates Increased About a Quarter Percent This Week.  What Does That Actually Mean?

- Published: 2024-12-20
- Modified: 2024-12-20
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-increased-about-a-quarter-percent-this-week-what-does-that-actually-mean/
- Categories: Mortgage Rates

If you’ve scanned the headlines lately, you probably saw that mortgage rates went up yet again. And they did so despite another Fed rate cut, which has a lot of folks pretty confused. I already touched on that strange relationship, but today I wanted to talk actual numbers. Yes, mortgage rates jumped up over 7% again this week, and yes, they moved up by a sizable 25 basis points (0. 25%). But how does that affect the typical monthly mortgage payment? You might be surprised. Mortgage Rates Climbed Back Into the 7s This Week It’s no secret this week has been rough for mortgage rates. They were actually trending lower post-Thanksgiving and into early December before jumping back up on Wednesday. The 30-year fixed had approached 6. 625% before an abrupt about-face to 7. 125%. What prompted the move was a new dot plot from the Fed, which detailed fewer rate cuts in 2025. Fed chair Powell also indicated that inflation was stickier than they originally thought back in September, and that unemployment wasn’t quite so bad. Translation: the economy is performing better than expected, so additional rate cuts might not be necessary. And higher inflation could still rear its ugly head again if economic growth continues at a hotter clip. Of course, this flip-flopping is super common in all financial markets. It’s why you see stocks go up one day and down the next. Then rinse and repeat. New economic data is released pretty much daily, all of which...

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### The Reason Mortgage Rates Jumped After the Fed Rate Cut

- Published: 2024-12-19
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/the-reason-mortgage-rates-jumped-after-the-fed-rate-cut/
- Categories: Mortgage Rates

Well, it happened again. The Federal Reserve announced another rate cut and mortgage rates surged higher. In fact, the 30-year fixed now starts with a 7 instead of a 6 for most loan scenarios. What's going on? While it seems to defy logic, it’s a pretty common occurrence. It actually happened back in September too. This should make it crystal clear that the Fed doesn’t set mortgage rates. In other words, if they cut, mortgage rates don’t also go down. And if they hike, mortgage rates don’t also go up. But indirect effects are certainly possible. What Does the Fed Rate Cut Mean for Mortgage Rates? Yesterday, the Federal Reserve announced its third rate cut since it pivoted from hikes about a year ago. They lowered the federal funds rate (FFR) another 25 basis points (0. 25%) to achieve employment and inflation goals, known as its dual mandate. In short, inflation is at risk of reigniting, but unemployment is also at risk of rising. So they felt another cut was warranted. On a normal day, this might have zero effect on mortgage rates, which are long-term rates like the 30-year fixed. Fed policy involves short-term rates, with the FFR being an overnight lending rate that banks charge one another when they need to borrow. So the key here is the FFR and 30-year fixed are very different in terms of maturity, and thus often have little correlation. However, the Federal Reserve does more than just cut or raise the FFR....

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### 2025 Mortgage Rate Predictions: Where Do They Go From Here?

- Published: 2024-12-17
- Modified: 2025-02-21
- URL: https://www.thetruthaboutmortgage.com/2025-mortgage-rate-predictions/
- Categories: Mortgage Rates

It’s that time of the year when I look at what the next year might have in store for mortgage rates. It’s never easy to accurately forecast mortgage rates, and this past year was no exception. The 30-year fixed ranged from a low of 6. 08% in September to as high as 7. 22% in May, and interestingly, is not far off year-ago levels today. For reference, it ended the year 2023 at 6. 61%, per Freddie Mac data, and averaged 6. 60% last week. So what will 2025 look like? Well, it’s anybody’s guess. But let’s look at some popular forecasts (including my own) to attempt to make some educated predictions. Quick Insights on 2025 Mortgage Rates: Most 2025 rate forecasts predict a modest decline this year, with year-end estimates ranging from 5. 875% (my apparently optimistic view) to 6. 5% (First American’s upper bound) High volatility is expected, driven by economic conditions and potentially sizable policy shifts under a new presidential administration The 30-year fixed mortgage rate is currently near levels last seen in 2001 But spreads between mortgage rates and government bonds remain elevated (around 75 basis points above average) due to higher credit/prepayment risk Rates could improve if spreads compress, economic conditions cool, and Trump's policies (tariffs, tax cuts, etc. ) don't stoke inflation Forecasts Expect Mortgage Rates to Improve, But Stay Elevated in 2025 First off, let’s start with the general consensus, which is somewhat positive on mortgage rates in 2025. Like last year, most...

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### Larger Loan Amounts Require Smaller Mortgage Rate Decreases for a Refinance to Pencil

- Published: 2024-12-13
- Modified: 2024-12-13
- URL: https://www.thetruthaboutmortgage.com/larger-loan-amounts-require-smaller-mortgage-rate-decreases-for-a-refinance-to-pencil/
- Categories: Mortgage Tips, Refinance

While 2025 offers some hope mortgage rates will move lower, that’s still very much up in the air. There are renewed worries that inflation could reignite, pushing rates higher in the New Year. Especially as we welcome a new president who has promised to introduce some inflationary policies, such as widespread tariffs. This not only affects prospective home buyers grappling with strained affordability, but also existing homeowners looking to refinance. After all, millions still managed to take out mortgages when rates were in the 7-8% range, and they’re quite rightfully looking for relief. How Can We Make the Decision to Refinance a Little Easier? One thing I want to point out first is that there’s no single refinance rule of thumb. Sure, I wish there was. It’d be great if you could make one blanket statement to help homeowners decide if they could benefit or not. But this just isn’t the case. There are far too many variables involved with mortgages and real estate to do that. But we can at least pluck out some tips to make the decision easier. Today, I’m focusing on rate and term refinances, which allow borrowers to trade in their old loan for a new one with a lower interest rate and new term. These are pretty much the only game in town right now because cash out refinances don’t make much sense given rates aren’t all that attractive. Anyway, one thing to consider when making a refinance decision is the size of your...

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### If You’re Serious About Selling Your Home, List Below the Zestimate

- Published: 2024-12-12
- Modified: 2024-12-12
- URL: https://www.thetruthaboutmortgage.com/if-youre-serious-about-selling-your-home-list-below-the-zestimate/
- Categories: Housing Market

Recently, I’ve encountered two very different types of for-sale listings in the market. There are the properties that go pending in about a week, essentially flying off the shelf. And there are the listings that fester on the market for months with little to no action. Often, the difference is simply in the price, not the quality or amenities of the home. So if you’re serious about selling in today’s housing market, think lower instead of higher. Choose a Listing Price Below the Zestimate or Redfin Estimate One of the easiest ways to drum up a lot of excitement for your home is to simply price it right. This generally entails listing it for a lower price versus a higher price. But what’s low and what’s high? Well, your real estate agent should be able to help you out on that one, but there are also simple clues to figure this out. Most properties have an associated Zestimate, which is Zillow’s estimate of a home’s market value. No, it’s not an actual home appraisal, nor can it be used in lieu of an appraisal, but it’s often a decent starting point to determine value. The same feature can be found on Redfin and is known as a Redfin Estimate. Same concept, just a different company. And even Realtor has its so-called "RealEstimate," which features three different home value estimates. Sometimes these estimates are higher or lower than the other. For example, your Zestimate might be lower than your Redfin Estimate....

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### Homeowners Who Refinanced Recently Saw the Biggest Mortgage Rate Improvement in Decades

- Published: 2024-12-10
- Modified: 2024-12-10
- URL: https://www.thetruthaboutmortgage.com/homeowners-who-refinanced-recently-saw-the-biggest-mortgage-rate-improvement-in-decades/
- Categories: Mortgage Tips

When mortgage rates fell to around 6% in August, homeowners jumped at the opportunity to refinance. In the months of September and October, more than 300,000 borrowers closed on a refinance, including nearly 150,000 rate and term refinances, per the latest Mortgage Monitor report from ICE. This pushed refinance volumes to their highest levels in more than two-and-a-half years. And more than a quarter of October mortgage lending consisted of refinances in a market long dominated by home purchase loans. Perhaps most interesting, borrowers who refinanced in these months saw some of the biggest rate improvements in decades. The Average Refinancer Obtained a Mortgage Rate About 120 Basis Points Lower You’ve probably heard the phrase marry the house, date the rate. But if you haven’t, it was basically an argument to buy a home if you wanted one, and hope to refinance sooner rather than later to get a better rate. In other words, the home is a keeper, but the mortgage is disposable. This didn’t work out well in early 2022 as mortgage rates nearly tripled from 3% to 8% by late 2023, but it worked out recently. Per ICE, the average homeowner who applied for a rate and term refinance reduced their mortgage rate by more than a full percentage point in both September (-1. 07%) and October (-1. 17%). This resulted in monthly savings of $310 and $320 respectively, which is a pretty compelling reason to refinance. At the same time, nearly a third of these borrowers...

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### Are We Still in a Falling Mortgage Rate Environment?

- Published: 2024-12-09
- Modified: 2024-12-09
- URL: https://www.thetruthaboutmortgage.com/are-we-still-in-a-falling-mortgage-rate-environment/
- Categories: Mortgage Rates

It’s been a wild ride for mortgage rates this year. The 30-year fixed began 2024 at around 6. 625% and is currently not far from those levels. Despite that, rates were as low as 6% and as high as 7. 50%. So there has been quite a range over the past 50 weeks or so. Rates rallied last December after the Fed revealed it was ready to pivot and begin loosening monetary policy. But as always, they ebbed and flowed along the way, instead of simply falling lower and lower, with the past couple months quite the rollercoaster higher. However, we remain in a falling rate environment, even if rates aren’t currently at their 2024 lows. Allow me to explain. Mortgage Rates Are Better Than Their Year-Ago Levels Many things, including home prices and mortgage rates, are measured both monthly and year-over-year. The latter can give you a bigger picture of where something is trending, whether it’s home prices or mortgage rates. For example, home prices might fall month-to-month, but still register year-over-year gains thanks to stronger months along the way. When it comes to mortgage rates, I’ve argued since mid-September that we remained in a falling rate environment. Why did I have to? Because rates on the 30-year fixed climbed from about 6% to 7% in the span of less than two months. This had many fearing for the worst. That the recent improvement in rates was another head fake. And a return to 8% or higher was imminent....

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### Opt-Out Before You Begin Mortgage Shopping

- Published: 2024-12-09
- Modified: 2024-12-09
- URL: https://www.thetruthaboutmortgage.com/opt-out-before-you-begin-mortgage-shopping/
- Categories: Mortgage Tips

Often times when you apply for a mortgage, you’ll be bombarded by offers from competing banks and lenders. The reason this happens is because the credit bureaus sell your information to these other companies. They’re known as trigger leads, which are triggered when you submit a loan application and your credit report is pulled. It acts as a signal that you’re currently applying for a home loan and lets others in on that secret. To avoid getting inundated with texts, phone calls, and emails, you can opt-out beforehand. First Some Background on How This Works As noted, a credit application, such as a mortgage that involves a hard credit pull, triggers an inquiry with the credit bureaus. These bureaus, which include Equifax, Experian, TransUnion, and even a fourth one, Innovis, are notified that you’re looking for a loan. While this is all good and well since you generally need a credit check to get approved for a mortgage, the credit bureaus are for-profit companies. So instead of simply making money on the credit pull, they will also sell mortgage and refinance leads to banks, loan officers, mortgage brokers, etc. This allows them to make even more money, and it allows the loan originators who buy them to close more loans. Assuming they can win your business. However, the collateral damage might be you, the consumer, by way of major annoyance. You see, it’s not just the odd phone call or email. It could be dozens or even close to a...

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### Winter Is Coming for Mortgage Rates. Why That Might Be a Good Thing

- Published: 2024-12-05
- Modified: 2024-12-05
- URL: https://www.thetruthaboutmortgage.com/winter-is-coming-for-mortgage-rates-why-that-might-a-good-thing/
- Categories: Mortgage Rates

Mortgage rates have been on a wild ride the past few years. In fact, it was still possible to obtain a 3% 30-year fixed mortgage in early 2022. By late 2023, you may have faced an 8% mortgage rate. And today, your rate might start with a 5, 6, or a 7. Volatility has reigned supreme as the Fed battles inflation and economic uncertainty makes it difficult to ascertain the longer-term direction of rates. But one thing I’ve noticed is that rates tend to perform better during certain times of the year. Namely in the winter months, which in the Northern Hemisphere include December, January, and February. Winter Is a Historically Great Season for Mortgage Rates Without getting overly technical here, winter runs from December 1st until the end of February. It’s three months more or less, though if you want to get technical, there is an astronomical season and a meteorological season. Anyway, I’ll keep it simple and focus on the months of December, January, and February. These are your core winter months, and also when it tends to be coldest. While I don’t like being cold (as I reside in Southern California), winter isn’t all bad. In fact, there is actually a perk to winter when it comes to mortgage rates. And possibly shopping for a home too. I crunched the numbers going back to 1972 and found that mortgage rates tend to be lowest in the winter months. Using Freddie Mac’s Primary Mortgage Market Survey (PMMS), I...

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### The U.S. President Doesn’t Set Mortgage Rates

- Published: 2024-12-04
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/the-u-s-president-doesnt-set-mortgage-rates/
- Categories: Mortgage Tips

Mortgage rates are a pretty complex subject. They’re also commonly misunderstood and oversimplified, with many myths perpetuated by those who work in the industry. Some folks think that when the Fed cuts rates, mortgage rates fall by the same amount. Others might believe the government somehow sets the rates and then lenders offer them accordingly. The fact of the matter is that none of this is true. Ultimately, mortgage rates are set by the market, just like many other things you buy. Does the President Set Mortgage Rates? The short answer is no. When it comes to mortgage rates, there is a supply and demand dynamic, just like other goods. Driving this mortgage pricing is investor appetite for mortgage-backed securities (MBS), which are bonds consisting of bundles of home loans. Simply put, if there is more investor demand for these bonds, MBS prices go up and mortgage rates can come down. If there isn’t a lot of demand for MBS, prices must fall and interest rates must be increased to attract more purchases from investors. This all speaks to the market determining the direction of rates, not a politician or any other individual. So where does the president of the United States factor into all of this? Well, you could argue that the president definitely plays an indirect role in where rates go because they are driven by the economy. However, there’s not a direct order by President Biden or President Trump saying rates should be X so they are...

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### Bilt Card to Offer Point Earning on Mortgage Payments

- Published: 2024-12-03
- Modified: 2024-12-03
- URL: https://www.thetruthaboutmortgage.com/bilt-card-to-offer-point-earning-on-mortgage-payments/
- Categories: Mortgage Tips

Well, it sounds like the new Mesa Homeowners Card got the attention of one of its competitors. Bilt is best known for its credit card that allows its members to earn points on rent, but soon homeowners will be able to earn points on mortgage payments too. We heard rumblings of this possibility a while back, but it never materialized, possibly because the numbers just didn’t pencil. Now it seems like some good old fashioned competition may have proven to be the mother of innovation. And if you’ve been paying attention, Mesa, which is planning the same thing, just so happened to be built by some former Bilt employees, among others. Bilt MasterCard Will Reward Homeowners in 2025 In its Letter to Bilt Members released today, Bilt Rewards CEO Ankur Jain said, “We’ll announce the first phase of plans in the mortgage space, creating a whole new category of value for homeowners. ” This includes the ability to earn points on mortgage payments, and points when refinancing a mortgage, likely a referral style program. As I always say with those referral programs, don’t use the lender unless the total cost is lower than other options, even if you can earn points! Anyway, the fact that you’ll be able to use a credit card to pay the mortgage is the biggie here, at least for me. It’s been very difficult to pull off, and even when it is permissible, there are often hefty fees that negate the benefit of using plastic....

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### Why You Might Want to Steer Clear of a Cash Out Refinance Right Now

- Published: 2024-12-03
- Modified: 2024-12-03
- URL: https://www.thetruthaboutmortgage.com/why-you-might-want-to-steer-clear-of-a-cash-out-refinance-right-now/
- Categories: Refinance

It’s no secret that mortgage rates aren’t cheap anymore. In the first quarter of 2022, you could still get a 30-year fixed in the 3% range. Within a year, rates were pushing 8%, before easing in 2024 to around 6% then rising again to 7% in the lead up to the election. It's been a wild ride. Today, the 30-year stands at around 7% for your typical loan scenario, but can be even higher for certain transactions like a cash-out refinance. Making matters worse is the typical homeowner already has a rock-bottom rate, so losing it might be a big mistake. A Cash-Out Refinance Pays Off Your Existing Mortgage Lately, I’ve been hearing firsthand more stories of folks struggling financially. The easy-money days of the pandemic are in the rear-view mirror. There’s no more stimulus and prices on just about everything are a lot higher than they were a few years ago. Whether it’s the homeowners insurance policy or even a trip to your favorite fast food restaurant, prices are not your friend right now. This may have forced you to start relying on credit cards more lately, racking up debt in the process. And perhaps now you’re looking for a way to lighten the load and reduce your interest expense. After all, credit card APRs are also through the roof, with typical interest rates pushing past 23% for those who are actually assessed interest, per the Federal Reserve. Clearly that’s not ideal. Nobody should be paying rates that high....

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### Mortgage Rates Tend to Fall Within 12 Weeks of a First Fed Rate Cut

- Published: 2024-12-02
- Modified: 2024-12-02
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-tend-to-fall-within-12-weeks-of-a-first-fed-rate-cut/
- Categories: Mortgage Tips

Lately, there’s been a ton of speculation surrounding the direction of mortgage rates. I too have taken part in this quite a bit as I’ve attempted to determine what’s next for rates. Despite the recent increase in the 30-year fixed from around 6% to 7%, I have remained bullish that they remain in a downward trend. Really, I haven’t changed my view since they began to fall about a year ago when they appeared to top out at 8%. Many other economists and pundits have flip-flopped since the Fed first cut rates in September, but that might prove to be a mistake. Mortgage Rates Tend to Move Lower Before a First Fed Rate Cut The first Fed rate cut this cycle took place on September 18th, with the Federal Reserve opting for a 50-basis point cut to its federal funds rate (FFR). This marked the “pivot” after the Fed raised rates 11 times beginning in early 2022 to combat inflation. The reason they finally pivoted after increasing rates so much was because they felt inflation was no longer a major concern, and that keeping rates higher for longer could affect employment. Their dual mandate is price stability and maximum sustainable employment, the latter of which could suffer is monetary policy remains too restrictive. Anyway, that led to their first rate cut and much to everyone’s surprise, the 30-year fixed climbed about a full percentage point since, as seen in the chart from MND above. Many people believe the Fed controls...

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### Mortgage Rates Improve After New Treasury Secretary Bessent Announced

- Published: 2024-11-25
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-improve-after-new-treasury-secretary-bessent-announced/
- Categories: Mortgage Rates

As I’ve been saying for a while now, all of the potential bad news (for mortgage rates) has been largely baked in over the past couple months. And then some! Meanwhile, anything potentially positive for mortgage rates, such as easing inflation and higher unemployment, has largely been ignored. Rates can’t seem to catch a break. Simply put, we have experienced a very defensive bond market lately, which in turn drives consumer mortgage rates higher. Nobody has wanted to stick their neck out given the incoming administration’s proposed sweeping economic changes. But as I suspected, many of the much talked about policies like tariffs and trade wars may not actually materialize, which should help mortgage rates get back on their downward track. Treasury Secretary Bessent Viewed as a Less Inflationary Choice Without getting too convoluted here, the appointment of Treasury secretary Scott Bessent has eased inflation concerns. He is seen as a less volatile, more conservative choice to implement some of Trump’s ideas without ruffling as many feathers. This includes lowering government spending and using the threat of tariffs to improve trade relations. It all points to easing inflation instead of rising prices. Lower inflation is good for bonds, and thus good for mortgage rates since they track longer-maturity bond yields like the 10-year. Prior to this announcement, there was a lot of fear surrounding Trump’s policies, which include tax cuts and a trade war with China and other countries. Specifically, his tariffs are seen as inflationary as the costs are...

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### Watch Out for Mortgage Mailers That Look Super Official But Aren’t

- Published: 2024-11-22
- Modified: 2024-11-22
- URL: https://www.thetruthaboutmortgage.com/watch-out-for-mortgage-mailers-that-look-super-official-but-arent/
- Categories: Mortgage Tips

Lately we’ve been hearing a lot about trigger leads due to legislation trying to ban them. If you’re unaware, when a lender pulls your credit, the credit bureaus will happily sell your information to competing banks and lenders letting them know you’re shopping for a mortgage. The result is getting absolutely bombarded by phone calls and text messages with offers to use them instead. They have yet to be outlawed, partially because agencies like the CFPB actually want consumers to comparison shop more. And this is one way to kind of enforce it. Even if you haven't applied for a mortgage recently, homeowners (including myself) have received official-looking mailers that appear to be from their existing bank or loan servicer. What on Earth Is an Equity Reserve Summary? Recently, I got an “Equity Reserve Summary” in the mail (that I’m glad I opened so I can share it with you). First off, I’ve never heard this phrase in life, but I believe some version of it is used by mortgage lenders to solicit homeowners. The gist of it is that you have “equity reserves” that can be tapped if you call the number on the notice. My particular letter listed the name of my old loan servicer (they didn’t know my loan got transferred to a new one I guess), my property address, and a hypothetical amount of equity available to tap. It’s also featured some arbitrary file ID number and a customer support center phone number with hours listed,...

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### Three Key Differences Between HELOCs and Home Equity Loans

- Published: 2024-11-21
- Modified: 2025-01-14
- URL: https://www.thetruthaboutmortgage.com/three-key-differences-between-helocs-and-home-equity-loans/
- Categories: Mortgage Tips

Lately, homeowners have been turning to their equity for their cash needs. After all, most already have a super low fixed mortgage rate and don’t want to disturb it in any way. If they were to go the cash out refinance route, they’d lose their old low rate and wind up with a much higher one. To avoid this, they can take out a second mortgage instead and keep the existing first mortgage intact. Question is: Do you go with a HELOC or a home equity loan? How HELOCs and Home Equity Loans Are Similar If you’re like a lot of folks trying to understand the difference between a home equity line of credit (HELOC) and home equity loan, allow me to help. There are basically three main differences between the two, despite both options sharing a lot of the same qualities. Let’s discuss those first before we get into their differences. First off, they both often act as second mortgages. And they both allow you to tap into your home equity. You can get cash from either and you can do so without disturbing your first mortgage. Nothing changes with your first mortgage when you take out a second mortgage like a HELOC or home equity loan. And that’s a good thing if you’ve got one of those 3% 30-year fixed mortgage rates that were available for much of the past decade. So either one you choose will allow you to continue enjoying that low rate, unlike a cash...

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### It’s Okay to Negotiate with Your Real Estate Agent

- Published: 2024-11-20
- Modified: 2024-11-20
- URL: https://www.thetruthaboutmortgage.com/its-okay-to-negotiate-with-your-real-estate-agent/
- Categories: Mortgage Tips

The big NAR settlement is expected to be finalized next week, but the changes already took effect back in August. They include needing a written buyer agreement prior to touring a home and removing offers of compensation from the Multiple Listing Services (MLS). That upfront agreement is also supposed to lay out the compensation charged by the agent, such as a flat fee dollar amount or percentage of the sales price. There also needs to be “a conspicuous statement that broker commissions are not set by law and are fully negotiable. ” Yet whenever I bring up the idea of a real estate agent reducing or discounting their fee, it is met with resistance. Real Estate Agent Commissions Are Negotiable NAR has been quick to point out that “agent compensation for home buyers and sellers continues to be fully negotiable. ” And that the negotiability of commissions needs to be communicated to the consumer explicitly via disclosures. So we know whatever fee an agent proposes isn’t set in stone. For example, an agent might say they charge 3% of the purchase price. On a $500,000 home, that’d be $15,000, though it is important to point out that this amount is often shared with the brokerage. Meaning an agent may only see a portion of that. Conversely, if you walk into a retail store or a restaurant, you will likely see set prices. For example, a pizza might cost $15. 99, and a stick of deodorant might be $5. 99. You...

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### Normal Mortgage Rates? The Average Mortgage Rate Since 1972 Is Roughly 7.75%

- Published: 2024-11-18
- Modified: 2024-11-18
- URL: https://www.thetruthaboutmortgage.com/normal-mortgage-rates-the-average-mortgage-rate-since-1972-is-roughly-7-75/
- Categories: Mortgage Tips

Lately, I’ve been a hearing a lot of people say that mortgage rates are “average” or “normal. ” As in, they aren’t high or low. They’re just typical. This is usually in response to someone pointing out that they’re much higher than they were just a couple years ago. In a way, it feels like a dismissal that rates are high today. And it’s usually accompanied by something like, “Do you know how high rates were when I bought my first home? ! ” Problem is, that doesn’t do anyone any good. Who cares what they were decades ago. Or what they averaged since the 1970s? What Is the Historical Average 30-Year Mortgage Rate? While it doesn’t necessarily matter what the long-term average of the 30-year fixed is, I might as well tell you. I did the research and put in some time with spreadsheets tallying up historical Freddie Mac data, so it’d be a waste not to share it. Since 1972, the first complete year Freddie Mac compiled mortgage rate data, through the end of 2023, the 30-year fixed has averaged roughly 7. 75%. Technically 7. 74%, but who’s counting (a single basis point)? At last glance, the 30-year averaged 6. 78%, per the company’s latest weekly Primary Mortgage Market Survey (PMMS). So someone could arguably tell you that rates aren’t that high at the moment. After all, they’re about a full percentage point below their long-term average. They could also point out those notorious 1980s mortgage rates in...

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### What Does It Actually Mean to Return to Lower Mortgage Rates?

- Published: 2024-11-14
- Modified: 2024-11-14
- URL: https://www.thetruthaboutmortgage.com/what-does-it-actually-mean-to-return-to-lower-mortgage-rates/
- Categories: Mortgage Tips

Recently, a lot of people have argued that we won’t return to lower mortgage rates. That there’s no possible way we can go back to low mortgage rates. Thing is, when they say that, they’re always thinking about 3% mortgage rates, maybe 4%. In reality, mortgage rates could go down quite a bit from current levels and still be a lot higher than they used to be. Simply put, they can go lower without being considered “low” again. Remember When a 4. 5% Mortgage Rate Sounded Super High? A couple years ago, a friend of mine purchased a home and took out an adjustable-rate mortgage (ARM). Back then, he got a rate of 4. 5%, which at the time sounded super steep. Not in the least bit attractive. And again, it was an ARM, so it’s not like it was a slightly costlier 30-year fixed. It was both higher in price than what everyone had been used to and not fixed for more than five years. Back then, 4. 5% sounded super high. Why? Because we were used to rates in the twos and threes. Months before he locked in his rate, you could still get a 30-year fixed at 3. 25%. So it’s always relative to what you’re used to. And he and everyone else was used to seeing rates that started with a 2 or a 3. I wrote a while back that once we saw higher rates, our brain would think a rate of 5% or 6%...

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### Do the Home Builders Need to Offer Mortgage Rate Buydowns to Make the Math Work?

- Published: 2024-11-13
- Modified: 2024-11-13
- URL: https://www.thetruthaboutmortgage.com/do-the-home-builders-need-to-offer-mortgage-rate-buydowns-to-make-the-math-work/
- Categories: Mortgage Tips

If you’ve been home shopping since early 2022 when mortgage rates surged higher, you’ve likely come across the buydown. The buydown is used to lower a home buyer’s mortgage rate, either temporarily or permanently. It can make the mortgage payment cheaper for the first few years of the loan term, or for the entire 30 years. These buydowns serve as an incentive to purchase a home, even if interest rates and home prices are high. And the home builders are all-in on them, partially because they don’t want to lower their prices. And maybe because they need to offer them to move product. Rate Buydowns Are Nice, But Might Even Be Necessary As mentioned, the home builders are big on mortgage rate buydowns, offering them in earnest since the 30-year fixed began climbing rapidly in early 2022. Before spring 2022, mortgage rates had been near record low levels, but once the Fed ended its mortgage-backed securities (MBS) purchasing program known as QE and starting raising the fed funds rate, conditions changed fast. The 30-year fixed was in the 3s to start 2022, and quickly increased to around 6% by the same summer. It eventually went as high as 8% before pulling back into the 6s. Meanwhile, home prices continued to rise, albeit at a slower clip than previously. This clearly dampened affordability, but home builders aren’t in the business of lowering their prices. Nor can they sit on their inventory like an individual can. They need to move their inventory....

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### Can Mortgage Rates Improve Much Before Trump’s Inauguration?

- Published: 2024-11-12
- Modified: 2024-11-12
- URL: https://www.thetruthaboutmortgage.com/can-mortgage-rates-improve-much-before-trumps-inauguration/
- Categories: Mortgage Rates

While mortgage rates have already seen some improvement since the election dust settled, they remain quite elevated. At last glance, the 30-year fixed was hovering around 6. 875%, down about 0. 25% from its recent highs. It’s been a good few days, but rates are still at least 0. 75% higher than they were in mid-September. The reason they’re higher is up for debate, but I believe most of the move higher was driven by the expectation Trump would win the election. Simply put, his policies are expected to be inflationary. And inflation is bad for mortgage rates. The question is can rates continue to improve before he gets into office in January? Mortgage Rate Movement Might Be Limited During the Presidential Transition The United States will celebrate its 60th presidential inauguration on Monday, January 20th, 2025 in Washington, D. C. That’s roughly 70 days from now. While we will undoubtedly hear lots of speculation about Trump’s policies for his second term, it’ll be just that. It won’t be until he’s in office that we’ll know more concrete details. So that uncertainty might restrict the movement of mortgage rates for the next few months. Even once he’s in office, we could still be awaiting answers on policy questions, such as tariffs and tax cuts and other objectives. As it stands now, most market participants expect Trump’s second term to be an inflationary one, due to those expected policies. For example, tariffs on things like lumber and steel could increase the...

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### Don’t Attempt to Time the Housing Market

- Published: 2024-11-11
- Modified: 2024-11-11
- URL: https://www.thetruthaboutmortgage.com/dont-attempt-to-time-the-housing-market/
- Categories: Housing Market

It’s a tale as old as time. Someone attempts to time the market, only to fail miserably. Then they either miss out completely, or chase an opportunity that is no longer there and perhaps overpay in the process. Recently over dinner, a friend told me a story that seemed worthy of sharing. It had to do with two families who sold their townhomes, but only one purchased another property, while the other rented. And guess what. Nearly five years later, the renter is still renting. It’s Never Easy to Get the Timing Right, Especially with Real Estate The year is 2019. The housing market had seen some pretty impressive gains since bottoming around 2012 (see this chart from the FHFA for more on that). Home prices had doubled in a lot of markets nationwide. For sellers, it seemed like a pretty great time to cash out and move on. Of course, if you were selling a primary residence, you still needed new accommodations. This meant either renting or buying another home. A friend of mine had his first child and was expecting a second. Like many young families, they had purchased a smaller townhome to get their feet wet. But it was now time to find a larger space, and make a move from an urban area to a more suburban setting to raise their family. The good news was their townhome had increased in value tremendously since they purchased it. This meant a good chunk of sales proceeds and...

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### Is This Housing Market Cycle Just Getting Started?

- Published: 2024-11-08
- Modified: 2024-12-30
- URL: https://www.thetruthaboutmortgage.com/is-this-housing-market-cycle-just-getting-started/
- Categories: Housing Market

I sometimes wonder with so little equity extracted this cycle if it’s still early innings for the housing market. At least in terms of the next collapse. Sure, home sales volume has plummeted thanks to unaffordable conditions, driven by high home prices and significantly higher mortgage rates. But do we still need a flood of HELOCs and cash out refis before the market inevitably overheats again? Otherwise it’s just an unaffordable market that is likely just going to get more affordable as mortgage rates ease, home prices stall, and wages increase. Where's the fun in that? Homeowners Were Maxed Out in the Early 2000s If you look at outstanding mortgage debt today, it really hasn’t risen much over the past 16 or so years when the housing bubble popped. It skyrocketed in the early 2000s, thanks to rapidly rising home prices and zero down financing. And a flood of cash out refinances that went all the way to 100% LTV and beyond (125% financing anyone? ). Basically homeowners and home buyers back then borrowed every penny possible, and then some. Either they cashed out every six months on higher valuations, fueled by shoddy home appraisals, or they took out a HELOC or home equity loan behind their first mortgage. Many also purchases investment properties with no money down, and even without any documentation. Whatever it was, home buyers back then always maxed out their borrowing capacity. It was kind of the move back then. Your loan officer or mortgage broker...

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### What Will Happen to Mortgage Rates During Trump's Second Term?

- Published: 2024-11-07
- Modified: 2025-01-31
- URL: https://www.thetruthaboutmortgage.com/what-will-happen-to-mortgage-rates-during-trumps-second-term/
- Categories: Mortgage Rates

It’s been no secret that most everyone thinks mortgage rates will be higher under President Trump. But because it’s been so telegraphed this time around, we’ve seen a very defensive bond market leading up to the election. Many have argued that him winning the election was already priced in to the bond market. After all, the 10-year yield increased from 3. 65% in mid-September to around 4. 40% today. Likewise, the 30-year fixed increased nearly a full percentage point from roughly 6. 125% to 7. 125%. In other words, Trump was expected to win the election and did win the election. So what happens next for mortgage rates during this second term in office? Are Trump’s Policies Already Baked in to Mortgage Rates? While there’s never 100% certainty, especially with mortgage rates, one could make a pretty compelling argument that Trump’s win is baked in. As noted, the 30-year fixed has already risen about one full percentage point in the span of about six weeks. And this took place shortly after the Federal Reserve pivoted and made its first rate cut after 11 consecutive rate hikes. The Fed did so because it felt inflation was coming down and monetary policy didn’t need to remain so restrictive. Keep in mind that the federal funds rate (FFR) is still a lot higher than it was in early 2022, even with the most recent cut and the expected cuts to come. So it’s not as if we’re entering an easy money policy period...

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### First-Time Home Buyer Share Hits Record Low: Why That Might Be a Good Thing

- Published: 2024-11-05
- Modified: 2024-11-05
- URL: https://www.thetruthaboutmortgage.com/first-time-home-buyer-share-hits-record-low-why-that-might-be-a-good-thing/
- Categories: Housing Market

The National Association of Realtors (NAR) reported that the first-time home buyer share fell to a historic low of just 24%. That was down from 32% a year earlier based on transactions between July 2023 and June 2024. At the same time, the typical home buyer age reached an all-time high of 56 years old. This all speaks to a housing market that has becoming increasingly unaffordable, especially for renters and young people. But there is a silver lining; we aren’t seeing a flood of questionable home purchases as we did in the early 2000s. Improved Underwriting Standards Prevent Risky Home Sales I’ll start by saying the data is clearly negative. Those statistics from NAR certainly don’t paint a pretty picture for the housing market at the moment. The FTHB share hit a record low 24% in 2024, going all the way back to 1981. And it’s well below the historic norm of 40% prior to 2008. It’s a sign that homes have become unaffordable for most, especially those who have never owned one before. Without a large amount of sales proceeds (think repeat home buyers), it’s difficult to come up with the necessary down payment. And without a big salary, it’s near-impossible to afford the monthly payment at today’s prices. So obviously not great if you’re a young person or a renter without a parent willing to gift you a down payment.   Or co-sign your mortgage. Contrast that to the early 2000s when we had similar conditions in...

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### Chase Relationship Pricing Offers Discounted Mortgage Rates for Up to 1% Off

- Published: 2024-11-04
- Modified: 2024-11-04
- URL: https://www.thetruthaboutmortgage.com/chase-relationship-pricing-offers-discounted-mortgage-rates-for-up-to-1-off/
- Categories: Mortgage Rates

If you recall, Chase took over troubled First Republic Bank back in May 2023. Prior to First Republic going under, they were the leading jumbo home loan lender in the 
United States. They catered to very wealthy homeowners and businesspeople. And it was ironically their ultra-low rate mortgages that eventually took them down. Today, Chase is the top jumbo loan lender in the nation, with production of more than $8 billion in the first half of 2024, per Inside Mortgage Finance. Like First Republic, they too are wooing high-net worth individuals with special mortgage rate discounts. Up to 1% Off Mortgage Rates If You Bring Money to the Bank In 2023, Chase was the third largest mortgage originator in the country, per HMDA data. And the largest depository issuer of home loans. They were only beaten out by two nonbanks, United Wholesale Mortgage and Rocket Mortgage. Their acquisition of troubled First Republic has only made them bigger, and put an even stronger emphasis on jumbo loan lending at the bank. In essence, they are carrying on some of the same principles, though likely with added guardrails to avoid the same fate. One of those practices is offering mortgage rate discounts to their wealthiest customers, namely those willing to park lots of money at the bank. The NYC-based bank’s so-called “Relationship Pricing Program” offers mortgage rate discounts ranging from 0. 125% and 1% based on new and existing balances at the bank. These apply whether you’re buying a home or refinancing...

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### How Did Almost Half of Recent Home Buyers Snag a Mortgage Rate Under 5%?

- Published: 2024-11-04
- Modified: 2024-11-04
- URL: https://www.thetruthaboutmortgage.com/how-did-almost-half-of-recent-home-buyers-snag-a-mortgage-rate-under-5/
- Categories: Mortgage Rates

Everyone knows high mortgage rates have been a total drag lately, especially for prospective home buyers facing extremely high asking prices. But what if I told you that nearly half of those who purchased a home recently still got an interest rate below 5%? Sounds pretty unlikely, given the fact that the 30-year fixed is back over 7%, and never went lower than 6% for the duration of 2024. However, that didn’t stop 45% of “mortgage buyers” (non-cash buyers) from obtaining a sub-5% mortgage rate, per a new survey from Zillow. As for how, the most common reason cited was special financing offered by the seller or home builder. Special Mortgage Rates from Home Builders One of the most common ways to get a below-market mortgage rate has been via the home builders. They often operate in-house mortgage companies to ensure their customers make it to the finish line. And thanks to a financing tool call “forward commitments,” they’re able to offer super low mortgage rates to the customers who use their captive lender. Those commitments involve buying low mortgage rates in bulk, ahead of time, and then deploying the low rates to customers who buy properties in select communities. While some only offer temporary rate buydowns, lately many have offered permanent rate buydowns for the full 30-year loan term. This probably sounds pretty sweet, but keep in mind you need to buy a newly-built home to get your hands on a special rate. Some have argued that the discount...

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### Mortgage Rates Are in a Holding Pattern Until After the Election

- Published: 2024-11-01
- Modified: 2024-11-01
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-are-in-a-holding-pattern-until-after-the-election/
- Categories: Mortgage Rates

Seems pretty clear now that it doesn't matter what economic data shows up between now and next week. Mortgage rates aren't going to improve by any significant margin this week or until after the election. Unfortunate for those who need to lock their rate and/or close this week. And the past month for that matter. Lenders are essentially in a holding pattern and continuing to price defensively until at least next Wednesday. Likely longer... Simply put, the outcome of the election matters more than the data right now. Biggest Presidential Election in Years We all know next week’s presidential election is a big one. One of the bigger ones in years. Aside from it being very contentious, a lot is at stake regarding the direction of the economy. Thus far, the markets have priced in a Trump victory, at least in a defensive type of way. Without getting political here (I never have any interest in doing that), it doesn’t appear that either candidate winning is helping 10-year bond yields at the moment. The best way to track mortgage rates is via the 10-year bond yield, which works well historically because 30-year fixed mortgages often last about a decade too. Despite being offered for 30 years, most are paid off earlier due to a refinance or a home sale. Lately, the 10-year yield has climbed higher and higher, with most market pundits pointing to increased government spending as the culprit. Long story short, with more government spending expected, any way...

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### Figure Launches a Piggyback Second Mortgage

- Published: 2024-10-30
- Modified: 2024-10-30
- URL: https://www.thetruthaboutmortgage.com/figure-launches-a-piggyback-second-mortgage/
- Categories: Mortgage News

Figure Lending has unveiled a new piggyback loan at a time when housing affordability has rarely been worse. Call it a sign of the times, and maybe an eerie reminder of the early 2000s housing market. But perhaps with a few added safeguards this time around, such as actual loan underwriting! The new product, which is a home equity line of credit (HELOC), will serve both new home buyers and existing homeowners looking to access more of their equity. It will be available at Figure and via their partner network of lenders, banks, credit unions, loan servicers, and home builders. Figure’s New Piggyback HELOC Allows for Lower Down Payments As noted, Figure’s new Piggyback HELOC aims to serve both new home buyers and existing homeowners. Those still searching for that right property can use the HELOC as a second mortgage that closes concurrently with a first mortgage, hence the name piggyback. For example, they can take out a first mortgage at an 80% loan-to-value ratio (LTV) and the HELOC for another 10% or more. This is known as an 80/10/10 loan. Other variations include 80/20 loans, which indicates zero down payment. These were quite popular during the early 2000s. It’s unclear how high Figure will go on this product, but my understanding is their max CLTV is 95%. In other words, you might be able to take out a first and second mortgage while bringing in just five percent down payment. This would be an 80/15/5. The use of a...

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### Would-Be Sellers vs. Must-Sell Sellers

- Published: 2024-10-30
- Modified: 2024-10-31
- URL: https://www.thetruthaboutmortgage.com/would-be-sellers-vs-must-sell-sellers/
- Categories: Housing Market

I wanted to take a moment to talk about the types of sellers that exist in the housing market. There are typically two types of sellers in the marketplace: would-be sellers and must-sell sellers. The first group are folks who would sell their property, but only for the right price. They're often in no big rush nor interested in negotiating much if it all. The second group consists of motivated sellers who must sell, even if the price isn’t right. These homeowners will usually slash their listing price quickly and offer concessions to buyers. At the moment, the market appears to be dominated by the first group. It's why you're seeing a lot of properties sitting, even if they're "overpriced. " And coupled with a continued lack of for-sale inventory, it's a big reason why home prices continue to go UP. This is very different than the early 2000s when sellers were in desperate need to unload their properties, which led to cascading price declines nationwide. Let’s discuss why this is important and how it impacts today's housing market. What Is a Would-Be Home Seller? As the name suggests, a “would-be seller” is a homeowner that is interested in selling their property, but only if the conditions are right. Typically, this means they’ll only part with the property for the right price. And that right price is usually a high price. For example, you might see a home listed for $500,000 in a neighborhood where most other properties are selling...

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### Home Buyers: Use High Mortgage Rates as an Excuse to Get a Lower Price

- Published: 2024-10-29
- Modified: 2024-10-29
- URL: https://www.thetruthaboutmortgage.com/home-buyers-use-high-mortgage-rates-as-an-excuse-to-get-a-lower-price/
- Categories: Home Buying

I often try to find silver linings in bad situations. The latest issue facing prospective home buyers is a return to 7% mortgage rates, up from around 6% just one month ago. While there’s not a clear, negative correlation between mortgage rates and home prices, in that one goes up and the other down, you can still make that argument to a home seller. If you’re currently in the market to buy a home, you can use this big move higher in mortgage rates to your advantage. Simply put, home buyers can make the argument that it got more expensive to buy a home and therefore ask for a discount. Buying a Home? Ask for a Discount in Light of Higher Mortgage Rates A month ago, you could get a 30-year fixed mortgage for around 6%. Today, prospective home buyers are looking at a rate closer to 7%. Or higher! And it’s possible it could get even worse before it gets better given all the uncertainty flowing at the moment. Instead of fretting about the higher monthly payment, you can use this to your advantage and make a lowball offer. Home sellers will be well aware that mortgage rates have risen, and that housing affordability has worsened. As such, you can lower your offer price and hope the seller goes with it. When making an offer, be sure to have your agent communicate this to their agent so your lower offer price has a better chance of being accepted. While...

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### Fannie and Freddie Expand Appraisal Waivers to Even More Home Buyers

- Published: 2024-10-28
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/fannie-and-freddie-expand-appraisal-waivers-to-even-more-home-buyers/
- Categories: Mortgage News

Both Fannie Mae and Freddie Mac announced newly expanded appraisal waivers to reduce costs and help more first-time home buyers purchase a property. The pair already offer appraisal waivers on some of the loans they guarantee, but the loan-to-value ratio (LTV) is currently capped at 80%. This means you must come in with a least a 20% down payment to avoid the cost and potential hassle of a traditional appraisal. To further streamline this process and ease the burden on lower-income borrowers, this number will increase to 90% LTV beginning in the first quarter of 2025. And it will be expanded to the program limits (e. g. 97% LTV) for their more robust inspection-based appraisal waivers. You Might Not Need an Appraisal for Your Next Home Purchase While appraisal waivers aren’t all that new; they were introduced by Fannie Mae in 2016 for refinance transactions and later expanded to home purchases in 2017, they’re limited in reach. In other words, many home buyers still need to pay for an appraisal when they apply for a mortgage. This results in an added cost, which can range from say $400 to $1,000 or more. And a longer home loan process as the appraisal is ordered, conducted, and submitted. It can also lead to uncertainty regarding the collateral value, possibly jeopardizing the loan late in the game if the human appraiser returns with a value below the purchase price. For these reasons, receiving an appraisal waiver can be a blessing. What’s not to...

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### The Second Mortgage Sales Pitch Is Coming, Be Ready

- Published: 2024-10-24
- Modified: 2024-10-25
- URL: https://www.thetruthaboutmortgage.com/the-second-mortgage-sales-pitch-is-coming-be-ready/
- Categories: Mortgage Tips

We’re currently in a strange sort of housing crisis where existing homeowners are in a fantastic spot, but prospective buyers are mostly priced out. The issue is both an affordability problem and a lack of available inventory problem. Namely, the type of inventory first-time home buyers are looking for. So you’ve got a market of haves and have nots, and a very wide gap between the two. At the same time, you’ve got millions and millions of locked-in homeowners, with mortgages so cheap they’ll never refinance or sell. This exacerbates the inventory problem, but also makes it difficult for mortgage lenders to stay afloat due to plummeting application volume. The solution? Offer your existing customers a second mortgage that doesn’t disturb the first. Loan Servicers Want to Do More Than Service Your Loan Over the past several years, mortgage loan servicers have been embracing technology and making big investments to ramp up their recapture game. They’re no longer satisfied with simply collecting monthly principal and interest payments, or managing your escrow account. Realizing they’ve got a goldmine of data at their fingertips, including contact information, they’re making big moves to capture more business from their existing clientele. Why go out and look for more prospects when you’ve got millions in your own database? Especially when you know everything about your existing customers? Everyone knows mortgage rate lock-in has effectively crushed rate and term refinance demand. And cash out refinances are also a non-starter for many homeowners unless they have other...

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### Calque Looks to Solve the Buy Before You Sell Problem

- Published: 2024-10-24
- Modified: 2024-10-24
- URL: https://www.thetruthaboutmortgage.com/calque-mortgage-looks-to-solve-the-buy-before-you-sell-problem/
- Categories: Mortgage News

Another fintech has been quietly growing in the mortgage space, looking to solve the age-old “buy before you sell” conundrum. A major challenge for prospective move-up buyers these days is unloading their old property while securing a new residence. Exacerbating the issue is a continued lack of for-sale inventory, coupled with waning affordability thanks to high home prices and mortgage rates. This can make it difficult to float two mortgage payments while finding a buyer for their old home. Enter Calque, which partners with local mortgage lenders to ensure the home loan piece is solved. Calque’s Trade-In Mortgage The Austin, Texas-based company actually offers two products to make it easier to buy and sell a home at the same time. Their so-called “Trade-In Mortgage” allows home sellers to gain access to their home equity ahead of time without needing to sell first. This second mortgage acts as a bridge loan, freeing up liquidity so you can make a stronger offer. And it comes with a guaranteed back-up offer where Calque will buy your old home, allowing you to submit cash-like offers. This gives buyers increased purchasing power in a number of different ways, whether it’s an increased down payment, larger cash reserves, or the ability to pay off other high-cost debt. It can also make the buyer more competitive in a housing market that continues to be plagued by low inventory. If you find yourself in a bidding war, coming in with a larger down payment can help you win...

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### Use a Higher Mortgage Rate When Shopping for a Home to Stay Within Budget

- Published: 2024-10-23
- Modified: 2024-10-23
- URL: https://www.thetruthaboutmortgage.com/use-a-higher-mortgage-rate-when-shopping-for-a-home-to-stay-within-budget/
- Categories: Mortgage Tips

With mortgage rates surging higher again, somewhat unexpectedly, a thought came to my mind if you’re currently home shopping. A couple years ago, I threw out the idea to adjust your maximum purchase price lower when looking for a property. That post was driven by the many home sales that were going way above asking at the time. In other words, a home may have been listed for $600,000, but eventually sold for $700,000 in a bidding war. That was all to do with a very hot housing market, driven in large part by a combination of record low mortgage rates and very low for-sale supply. Today, we still have relatively low inventory, but the cheap mortgage rates have come and gone. And now that they’re so volatile, you may want to input a higher rate into your mortgage calculator to ensure you don’t get caught out. Mortgage Rates Are Highly Volatile Right Now At the moment, mortgage rates are super unpredictable. While they had enjoyed a very good 11 months, falling from as high as 8% to nearly 6% in early September, they’ve since reversed course. The 30-year fixed was nearly back into the high 5% range before the Fed cut rates and a better-than-expected jobs report arrived. Sprinkle in some doubting about the Fed’s pivot and the upcoming uncertainty regarding the election outcome and home buyers are now facing a rate nearly 1% higher. Per MND, the 30-year fixed has risen from a low of 6. 11% on...

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### Is It Time to Bring Back the Mortgage Prepayment Penalty?

- Published: 2024-10-22
- Modified: 2024-10-23
- URL: https://www.thetruthaboutmortgage.com/is-it-time-to-bring-back-the-mortgage-prepayment-penalty/
- Categories: Mortgage News

When the housing market crashed in the early 2000s, new mortgage rules emerged to prevent a similar crisis in the future. The Dodd-Frank Act gave us both the Ability-to-Repay Rule and the Qualified Mortgage Rule (ATR/QM Rule). ATR requires creditors “to make a reasonable, good faith determination of a consumer's ability to repay a residential mortgage loan according to its terms. ” While the QM rule affords lenders “certain protections from liability” if they originate loans that meet that definition. If lenders make loans that don’t include risky features like interest-only, negative amortization, or balloon payments, they receive certain protections if the loans happen to go bad. This led to most mortgages complying with the QM rule, and so-called non-QM loans with those outlawed features becoming much more fringe. Another common feature in the early 2000s mortgage market that wasn’t outlawed, but became more restricted, was the prepayment penalty. Given prepayment risk today, perhaps it could be reintroduced responsibly as an option to save homeowners money. A Lot of Mortgages Used to Have Prepayment Penalties In the early 2000s, it was very common to see a prepayment penalty attached to a home loan. As the name suggests, homeowners were penalized if they paid off their loans ahead of schedule. In the case of a hard prepay, they couldn’t refinance the mortgage or even sell the property during a certain timeframe, typically three years. In the case of a soft prepay, they couldn’t refinance, but could openly sell whenever they wished...

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### Do Mortgage Payments Increase? Here Are 4 Ways They Can Get More Expensive

> This might sound like a no-brainer question, but there are several scenarios where mortgage payments can rise, even if your rate is fixed.

- Published: 2024-10-21
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/do-mortgage-payments-increase/
- Categories: Mortgage Tips

Mortgage Q&A: “Do mortgage payments increase? ” Wondering why your mortgage keeps going up? While this sounds like a no-brainer question, it's actually a little more complicated than it appears. You see, there a number of different reasons why a mortgage payment can increase, aside from the obvious interest rate change. But let's start with that one and go from there. And yes, even if you have a fixed-rate mortgage your monthly payment can increase! You're not out of the woods. While that might sound like bad news, it's good to know what's coming so you can prepare accordingly. Why Did My Mortgage Go Up? Your property tax bill increased (and your loan has impounds) Your homeowners insurance bill increased (and your loan has impounds) You have an adjustable-rate mortgage (ARM) and it adjusted higher You had a temporary rate buydown that ended Your interest-only period came to an end Mortgage Payments Can Increase with Interest Rate Adjustments If you have an ARM your monthly payment can go up or down This is possible each time it adjusts, whether every six months or annually To avoid this payment surprise, simply choose a fixed-rate mortgage instead FRMs are actually pricing very close to ARMs anyway so it could be in your best interest just to stick with a 15- or 30-year fixed Here's the easy one. If you happen to have an adjustable-rate mortgage, your mortgage rate has the ability to adjust both up or down, as determined by the interest...

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### Mortgage Rates Take Time to Fall, So Be Patient

- Published: 2024-10-21
- Modified: 2024-10-21
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-take-time-to-fall-so-be-patient/
- Categories: Mortgage Rates

If you’ve been paying attention, you may have noticed that mortgage rates have quietly crept back up to nearly 7%. While it appeared that those 7% mortgage rates were a thing of the past, they seemed to return just as quickly as they disappeared. For reference, the 30-year fixed averaged around 8% a year ago, before beginning its descent to nearly 6% in early September. It appeared we were destined for 5% rates again, then the Fed rate cut happened. While the Fed itself didn’t “do anything,” their pivot coincided with some positive economic reports. Combined with a “sell the news” event of the Fed cut itself, rates skyrocketed. However, now might be a good time to remind you that rates do tend to fall for a while after rate cuts begin. Falling Rates Often Play Out Over Years, Not Months As noted, the Fed pivoted, aka lowered its own fed funds rate, in September. They did so after increasing their rate 11 times during a period of tightening. Hence the word “pivot,” as they switch from raising rates to lowering rates. In short, the Fed determined monetary policy was sufficiently restrictive, and it was time to loosen things up. This tends to result in lower borrowing rates over time. While many falsely assumed the pivot would lead to even lower mortgage rates overnight, those “in the know” knew those cuts were mostly already baked in, at least for now. So when the Fed cut, mortgage rates actually drifted a...

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### Is Home Equity Lending Really That Crazy Today?

- Published: 2024-10-17
- Modified: 2024-10-17
- URL: https://www.thetruthaboutmortgage.com/is-home-equity-lending-really-that-crazy-today/
- Categories: Mortgage News

I came across a report from CoreLogic the other day that said home equity loan lending increased to its highest level since 2008. Whenever anyone hears the date “2008,” they immediately think of the housing bubble in the early 2000s. After all, that’s when the housing market went absolutely sideways after the mortgage market imploded. It’s the year we all use now as a barometer to determine if we’re back to those unsustainable times, which can only mean one thing: incoming crisis. However, nuance is important here and I’m going to tell you why the numbers from 2008 and the numbers from 2024 aren’t quite the same. First Let’s Add Some Context CoreLogic economist Archana Pradhan noted that home equity loan lending (not HELOCs) grew to the highest point since the first half of 2008 during the first two quarters of 2024. During the first half of this year, mortgage lenders originated more than 333,000 home equity loans totaling roughly $23. 6 billion. For comparison sake, lenders originated $29. 9 billion in home equity loans during the first half of 2008, just before the housing market began to crash. It was the last big year for mortgage lending before the bottom fell out. For reference, home equity lending totaled just $6. 4 billion in 2009 and barely surpassed $5 billion annually up until 2021. Part of the reason it fell off a cliff was due to credit conditions becoming frozen pretty much overnight. Banks and lenders went out of business,...

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### UWM Is Now Offering 90% LTV Cash Out Refis.  Should We Worry?

- Published: 2024-10-16
- Modified: 2024-10-16
- URL: https://www.thetruthaboutmortgage.com/uwm-is-now-offering-90-ltv-cash-out-refis-should-we-worry/
- Categories: Mortgage News

The nation’s largest mortgage lender, UWM, has launched a new 90% LTV cash-out refi to drum up more business. While it’s being sold to mortgage broker-partners as a way to “win more business,” it doubles as a worrisome trend of loosening underwriting guidelines. Typically, homeowners are capped at 80% LTV when it comes to a cash out refinance, but UWM is taking things a little further. This could be the symptom of low volume, which has plagued many mortgage lenders ever since mortgage rates jumped in mid-2022. And it could be a sign that some American consumers are struggling to make ends meet as they grapple with surging inflation. Conventional Cash-Out 90 Lets You Borrow More Than the Other Guys Cash out refinance up to 89. 99% LTV Loan amount capped at the conforming loan limit Must be a primary residence Minimum FICO score of 680 required No mortgage insurance required (might be built into rate) First let’s talk about this new loan program, known as "Conventional Cash-Out 90," then we’ll talk about whether it’s worrisome or not. As noted, United Wholesale Mortgage (UWM) will now let you cash out up to 90% of your property value. Technically, it’s capped at 89. 99% LTV, but it’s still considered a conventional loan. Note that there’s a difference between conventional and conforming loans. Both are non-government loans, but conforming loans must meet the guidelines of Fannie Mae or Freddie Mac. And Fannie Mae and Freddie Mac have a maximum 80% loan-to-value ratio...

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### Assumable Mortgages Have a Down Payment Problem

- Published: 2024-10-15
- Modified: 2024-10-15
- URL: https://www.thetruthaboutmortgage.com/assumable-mortgages-have-a-down-payment-problem/
- Categories: Home Buying

At first glance, assumable mortgages sound like an awesome solution to a problem home buyers have been facing lately. With mortgage rates now closer to 6. 5% instead of 3%, housing affordability has suffered greatly. It’s now at its worst levels in decades. Coupled with ever-rising home prices, many would-be buyers have essentially been locked out of the housing market. But with an assumable loan, you can take on the seller’s mortgage, which these days is often super low, sometimes even sub-3%. While that all sounds good and well, there’s a pretty sizable (literal) problem: the down payment. Wait, How Much Is the Down Payment? As noted, an assumable mortgage allows you to take on the seller’s mortgage. So the mortgage rate, the remaining loan balance, and the remaining loan term all become yours. For example, say a home seller got a 2. 75% 30-year fixed five years ago when mortgage rates hit record lows. Let’s pretend the loan amount was $500,000. Today, they’re selling the property and the outstanding balance is roughly $442,000. The remaining loan term is 25 years. It’d be great to inherit that low-rate mortgage from the seller instead of settling for a rate of say 6. 5%. Here’s the tricky part. The difference between the new sales price and the outstanding loan amount. Let’s pretend the seller listed the property for $700,000. Remember, home prices have surged over the past decade, and even over just the past five years. In some metros, they’re up about...

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### A Temporary Buydown Could Make Sense While Mortgage Rates Continue to Fall

- Published: 2024-10-14
- Modified: 2024-10-14
- URL: https://www.thetruthaboutmortgage.com/a-temporary-buydown-could-make-sense-while-mortgage-rates-continue-to-fall/
- Categories: Refinance

Last week, I argued that mortgage rates remain in a downward trend, despite some pullback lately. The 30-year fixed had almost been sub-6% when the Fed announced its rate cut. That “sell the news” event led to a little bounce for rates. Then a hotter-than-expected jobs report days later pushed the 30-year up to 6. 5% and rates kept creeping higher from there. They’re now closer to 6. 625% and have reignited fears that the worst may not yet be behind us. Whether that’s true or not, you can’t get a rate as low as you could just three weeks ago, and that makes the temporary buydown attractive again. You Don’t Get Your Money Back on a Permanent Buydown While some home buyers and mortgage refinancers were able to lock-in sub-6% rates in September, many are now looking at rates closer to 7% again. This has made mortgage rates unattractive again, especially since there aren’t many lower-cost options around these days, such as adjustable-rate mortgages. You’re basically stuck going with a 30-year fixed that isn’t worth keeping for anywhere close to 30 years. And you’re paying a premium for it because the rate won’t adjust for the entire loan term. One option to make it more palatable is to pay discount points to get a lower rate from the get-go. But there’s one major downside to that. When you buy down your rate with discount points, it’s permanent. This means the money isn’t refunded if you sell or refinance early...

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### Is This Mortgage Rate Scare Going to Get Home Buyers Off the Fence?

- Published: 2024-10-10
- Modified: 2024-10-10
- URL: https://www.thetruthaboutmortgage.com/is-this-mortgage-rate-scare-going-to-get-home-buyers-off-the-fence/
- Categories: Home Buying

It’s not quite Halloween just yet, but home buyers may have already gotten a good scare. The 30-year fixed mortgage, for which most buyers rely upon, jumped from around 6% to nearly 6. 75% in the span of about three weeks. And this took place right after the Fed finally pivoted and cut its own fed funds rate. Good timing I know. Prior to this rate reversal, mortgage rates had steadily fallen all the way from 8%, their present cycle high that ironically took place just before last Halloween. Talk about a good year for rates, moving down two full percentage points. But the trend is no longer our friend, at least in the interim. Now I’d like to make a case for why this actually might be good for the housing market. Higher Mortgage Rates Might Motivate More Than Lower Rates I know what you’re thinking, higher mortgage rates can’t possibly be good for the struggling housing market. Especially this housing market, which is presently one of the most unaffordable in recent history. But bear with me here. I got to thinking recently how the low mortgage rates didn’t seem to get prospective home buyers off the fence. As noted, rates came down quite a bit from their cycle highs, falling about two percentage points. In Mid-September, you could get a 30-year fixed for around 6% for the average loan scenario. And in reality, much lower if you had a vanilla loan (high FICO, 20% down, etc. ) and/or...

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### Are Mortgage Rates Just a Distraction for High Home Prices?

- Published: 2024-10-10
- Modified: 2024-10-10
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-rates-just-a-distraction-for-high-home-prices/
- Categories: Housing Market

Over the past several years, we’ve been entirely focused on high mortgage rates. The 30-year fixed surged from sub-3% levels to around 8% in the span of less than two years. This obviously got the attention of everyone, whether it was the media or everyday Americans. But often it felt like home prices were overshadowed by interest rates, despite also surging higher. In the United States, home prices have risen nearly 50% since just 2019, and have basically doubled since bottoming a decade ago. We’re Focused on Mortgage Rates, But What About Home Prices? I get it, the rise in mortgage rates was unprecedented. While they only went up to around 8% this cycle, the increase in such a short period is record-breaking stuff. For context, the 30-year fixed went from about 3% to 8%, which is a 167% gain, from early 2022 to late 2023. That’s an extremely small window of time to see such an increase. Conversely, the 1980s mortgage rates went from 9% to 18%, only a 100% increase. And it took four years. They only didn’t stay that high for more than a few months before retreating back to the low teens. Either way, it’s clear mortgage rates have been top of mind for everyone because of this dramatic rise. And the higher rates have had real implications. Housing affordability was historically okay prior to the mortgage rate run-up, but quickly surpassed the early 2000s housing bubble peak late last year, per ICE (see chart below)....

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### Five Million Refinances Hinge on Mortgage Rates Falling Back to 5.5%

- Published: 2024-10-09
- Modified: 2024-10-09
- URL: https://www.thetruthaboutmortgage.com/five-million-refinances-hinge-on-mortgage-rates-falling-back-to-5-5/
- Categories: Refinance

In the mortgage rate world, it’s sometimes a game of inches. This can be true for both prospective home buyers and existing homeowners looking for rate relief. Granted, if you’re that marginal when it comes to affording a home, maybe you should consider renting until it’s a little more decisive. But if you already own a home and hold a high mortgage rate, the next six months or so could make or break your refinance opportunity. Lately, mortgage rates have retraced from their recent lows of just over 6%, returning to levels around 6. 625%. As a result, many millions of homeowners are no longer “in the money” for a refinance. But that could change in an instant, just as it already has. Are Current Mortgage Rates at Least 0. 75% Below Your Rate? A new report from ICE revealed that the refinance population climbed to over 4. 3 million thanks to the rally in rates that came to an abrupt end, ironically after the Fed cut rates. At that time, the 30-year fixed mortgage was averaging around 6. 125%, down from nearly 7% as recently as late July. That meant the refinanceable population had surged from around 1. 2 million to 4. 3 million in a matter of less than two months. Of these 4. 3M, a whopping 65% received their mortgages over the past two years, including 1. 4M in 2023 and 1. 3M this year. So that whole date the rate, marry the house thing could actually...

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### If You Can’t Refinance, You Can Make Larger Mortgage Payments Each Month Instead

- Published: 2024-10-09
- Modified: 2024-10-09
- URL: https://www.thetruthaboutmortgage.com/if-you-cant-refinance-you-can-make-larger-mortgage-payments-each-month-instead/
- Categories: Mortgage Tips

Did those higher mortgage rates ruin your plans to refinance your mortgage? Well, there might be a temporary solution to save some money while you wait for interest rates to move lower again. Assuming you have the extra cash on hand, you can reduce your interest expense by simply paying more each month until you refi. For example, pay an additional $100, $250, or $500 per month and you’ll save on interest and knock down your loan balance. In the process, you will reduce the effective interest rate on your existing home loan and potentially make it easier to refinance later. You Can Still Save Money Without a Refinance First off, you can save money on your mortgage without refinancing if you simply pay extra each month. Let’s consider a simple example where you’ve got a 7% mortgage rate and a $400,000 loan balance. The monthly principal and interest payment is $2,661. 21. In just one year, you’d pay $27,871. 29 in interest. Now imagine you pay an extra $500 per month to save on that interest. The payment is $3,161. 21 per month. After a year, your outstanding balance would be $389,740. 45 instead of $395,936. 77. After 24 months, the balance would drop to $378,739. 26 instead of $391,579. 82. Your total interest expense for that period would fall from $55,448. 86 to $54,608. 30. That’d be about $840 in interest saved and a balance that is $12,841 lower. The cost would be $12,000 ($500x24 months) for savings...

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### Mortgage Rates Don’t Move in a Straight Line Up or Down

- Published: 2024-10-08
- Modified: 2024-10-08
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-dont-move-in-a-straight-line-up-or-down/
- Categories: Mortgage Rates

Ever since the Fed announced their 50-basis point cut, mortgage rates have been climbing higher. In fact, they’re basically 50 bps higher since the Fed cut their own federal funds rate (FFR) 50 bps lower. While we know the Fed doesn’t control mortgage rates, it does seem unusual to see such a disconnect. But the first important thing to remember here is the Fed’s rate is a short-term one, and mortgage rate are long-term rates, aka the 30-year fixed. So it’s not really about the Fed. However, this is a good reminder that mortgage rate trends never move in a straight line. Mortgage Rates Seesawed on the Way Up If you recall mortgage rates’ ascent from sub-3% to 8% (yes, 8%! ), it wasn’t just a straight line up. Just take a look at my annotated chart from Mortgage News Daily for evidence of this, where I highlighted all the pullbacks. There were days, weeks, and even months when mortgage rates went down. For example, the 30-year fixed climbed from around 3% in January 2022 to roughly 6. 25% that June. Then mortgage rates “rallied” a bit and fell to around 5% (quotes in the high-4% range) by that August. Did that mean the worst was behind us? Nope. It sure didn’t. Instead, mortgage rates resurged and climbed to a new cycle high above 7% by that October. Things were looking pretty bleak until another relief rally took place, sending the 30-year fixed back down to 5. 99% by February...

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### Don’t Buy a Home with Friends

- Published: 2024-10-07
- Modified: 2024-10-07
- URL: https://www.thetruthaboutmortgage.com/dont-buy-a-home-with-friends/
- Categories: Mortgage Tips

Recently, Zillow began airing a commercial called “Homeowner Mates. ” It depicts three women moving into a home together. It shows their individual “BuyAbility” followed by “Your BuyAbility,” the latter of which combines the purchasing power of all three. The three women have individual buying power of $117,000, $124,000, and $131,000, but a combined $372,000 when pooled together. This apparently allows them to go in on that near-$400,000 home purchase, despite not being anywhere close on their own. While having co-borrowers does indeed boost your purchasing power, the question is it a good idea when it's a friend (or two)? It’s Hard Enough to Buy a Home on Your Own When I first saw this commercial, I was pretty taken aback. It felt somewhat irresponsible, and a lot related to the current housing market being unaffordable for most. For me, that doesn’t mean forcing your way into a purchase. It might mean holding off on your homeownership goal, saving up more money, perhaps hoping for a raise, and generally getting all your ducks in a row. Oh, and maybe lowering your maximum purchase price to something you can actually afford! Instead, Zillow presents a solution to just find a couple close friends and buy the house today. It pretty much ignores what happens after the dust settles and the moving boxes are unpacked. It doesn't get into what happens when one of the roommates wants to move out. It also seemingly glosses over who gets what room, or what happens...

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### Maybe Homeowners Are Struggling with Mortgage Loan Amount Lock-In

- Published: 2024-10-01
- Modified: 2024-10-01
- URL: https://www.thetruthaboutmortgage.com/maybe-homeowners-are-struggling-with-mortgage-loan-amount-lock-in/
- Categories: Housing Market

When mortgage rates surged off their record lows in early 2022, the housing market ground to a halt. In the span of less than 10 months, 30-year fixed mortgage rates climbed from the low-3% range to over 7%. While a 7% mortgage rate is historically “reasonable,” the percentage change in such a short period was unprecedented. Mortgage rates increased about 120% during that time, which was actually worse than those 1980s mortgage rates you’ve heard about in terms of velocity of change. The rapid ascent of interest rates was severe enough to introduce us to a new phrase, mortgage rate lock-in. In short, existing homeowners became trapped in their properties seemingly overnight because they couldn’t leave their low rates behind and exchange them for much higher ones. Either because it was cost-prohibitive or simply unappealing to do so. And there isn’t a quick fix because your typical homeowner has a 30-year fixed mortgage in the 2-4% range. Mortgage Rates Have Come Down, But What About Loan Amounts? There’s been so much focus on mortgage rates that I sometimes feel like everyone forgot about sky-high loan amounts. Mortgage rates climbed as high as 8% a year ago, but have since fallen to around 6%. And can be had for even lower if you pay discount points. So in some regard, mortgage rate lock-in has eased, yet housing affordability remains constricted. For the typical home buyer who needs a mortgage to get the deal done, there are two main components of the...

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### Did Mortgage Lenders Raise Their Early Bird 2025 Conforming Loan Limits Too High?

- Published: 2024-10-01
- Modified: 2025-01-15
- URL: https://www.thetruthaboutmortgage.com/did-mortgage-lenders-raise-their-early-bird-2025-conforming-loan-limits-too-high/
- Categories: Mortgage Tips

Over the past several years, mortgage lenders have been offering “early bird” conforming loan limits for the upcoming year. This allows them to make bigger loans that adhere to the underwriting guidelines of Fannie Mae and Freddie Mac without them being considered jumbo loans. Instead of waiting until January 1st, they make a projection for where the loan limit will land the next year and offer it around the fourth quarter. For example, in early October 2023 some lenders raised the 2024 loan limit to $750,000 ahead of the announcement that came in late November. That loan limit wound up being $766,550, which meant the lenders who offered the higher loan limits ahead of time didn’t get caught out. But that only worked because home prices kept on marching higher and higher. Some Lenders Are Already Offering 2025 Conforming Loan Limits as High as $803,500 Like last year, lenders haven’t waited for the conforming loan limit announcement in late November to raise it. And this year it has come even earlier than in years’ past. It has actually become a sort of game between competing mortgage companies to be the first out of the gate. Rocket Pro TPO, the wholesale division of Rocket Mortgage, was first to come out with the 2025 loan limits this year. On September 13th, they announced a limit of $802,650, up from the current limit of $766,550. This represents a 4. 7% increase. While that seems like a fairly reasonable estimate, home price appreciation has...

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### Those Double-Digit Mortgage Rates from the 80s Required You to Pay Points Too!

- Published: 2024-09-30
- Modified: 2024-09-30
- URL: https://www.thetruthaboutmortgage.com/those-double-digit-mortgage-rates-from-the-80s-required-you-to-pay-points-too/
- Categories: Mortgage News, Mortgage Rates

Even though mortgage rates have fallen quite a bit from their highs seen a year ago, they remain quite elevated relative to much of the past decade. Sure, a 6% 30-year fixed is better than an 8% 30-year fixed, but it’s still a far cry from a 3 or 4% 30-year fixed. This might explain why prospective home buyers haven’t exactly rushed back into the housing market in recent months. And now we’re being told this is as good as it’s going to get for mortgage rates. That remains to be seen, but what’s interesting is I’ve seen quotes down into the high-4s for mortgage rates recently too. So how are lenders able to advertise rates that low if the Freddie Macs of the world are telling us rates are still above 6%? Well, the secret is a little thing called mortgage discount points. Mortgage Rates Are Lower When You Pay Points After mortgage rates surged since beginning in early 2022, the secondary market where investors buy and sell mortgage-backed securities (MBS) got all out of whack. Basically, uncertainty and volatility surged while volume plummeted. Long story short, MBS investors wanted more assurances, which generally meant borrowers had to pay points upfront. This ensured a profit even if the mortgage was short-lived and paid off in a short period of time. It also allowed lenders to keep mortgage rates from going even higher, completely decimating lending volume in the process. Conditions have since improved, and it’s again possible to get...

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### Is This as Good as Mortgage Rates Get For Now?

- Published: 2024-09-27
- Modified: 2024-09-27
- URL: https://www.thetruthaboutmortgage.com/is-this-as-good-as-mortgage-rates-get-for-now/
- Categories: Mortgage News, Mortgage Rates

Well, it’s been over a week since the Fed cut rates and mortgage rates went up. While this may have come as a surprise to some, seasoned mortgage industry peeps didn’t bat an eye. It’s pretty common for the Fed to do one thing and mortgage rates to do another. Without getting too convoluted, the Fed adjusts short-term rates while mortgages are long-term rates, aka the 30-year fixed. In other words, the cut (and future cuts too) were already priced in to mortgage rates. So much so that they actually increased over the past week in a sort of “sell the news” correction. Are Mortgage Rates Still Dropping? Fitch Ratings recently came out and said the 50-basis point Fed rate cut was already priced in to both the 10-year Treasury yield and 30-year fixed mortgage rates. In addition, they argued that the 10-year yield, which tracks mortgage rates historically, has “less room to decline” because of that. It basically already came down in anticipation and might be difficult to drop much lower. In fact, we’ve seen it rise since the Fed cut last week. The 10-year yield was as low as 3. 61% and now sits around 3. 77%, putting some mild upward pressure on mortgage rates since then. Rates actually looked destined for the high-5% range before pulling back and inching their way back toward 6. 25%. And with little economic data out this week, there’s been no reason for them to rally. But next week we get the...

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### The Other Reason You Should Shop Around for Your Mortgage

- Published: 2024-09-26
- Modified: 2024-09-26
- URL: https://www.thetruthaboutmortgage.com/the-other-reason-you-should-shop-around-for-your-mortgage/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips, Refinance

I know, I know, mortgage shopping is the worst. It’s not a fun thing to do. It’s not like shopping for a new car or a new TV, or even a new house. But it’s a necessary evil unless you’ve got a boatload of cash. The reason it’s not fun is because there’s lot of math, paperwork, and high-pressure salespeople involved. Not to mention lots of mortgage lingo that will likely go over your head. But there’s a silver lining to putting in all that time to shop; you’ll learn a lot about mortgages. I Get It, Mortgages Aren’t Fun Look, I’ll be the first person to tell you that mortgages are boring af. I’ve been writing about them for nearly 20 years now. And before that, I was working on the frontlines with mortgage brokers and loan processors and underwriters. None of it was fun, and it’s probably even less fun when you’re new to it and simply trying to get through it. Conversely, you might have a blast shopping for a new car and doing test drives while checking out all the cool features. The same goes for new clothes, a new TV, computer, etc. They call it retail therapy for a reason. I’ve never heard anyone say mortgage shopping is therapeutic. In fact, it’s usually the exact opposite. Typically, people say they’d rather go to the dentist than go through the mortgage process. Okay, so what’s the point here? Well, as mentioned, you can learn a lot...

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### Home Purchase Lending Expected to Be Lackluster in 2025 Despite Lower Rates

- Published: 2024-09-25
- Modified: 2024-09-25
- URL: https://www.thetruthaboutmortgage.com/home-purchase-lending-expected-to-be-lackluster-in-2025-despite-lower-rates/
- Categories: Home Buying, Housing Market, Mortgage Rates

While lower mortgage rates have reinvigorated hope for the stalling housing market, 2025 might not wind up much better than 2024. Sure, lower interest rates boost affordability, but there are other components to a home purchase that remain cost-prohibitive. Whether it’s simply an asking price that’s out of reach, or rising insurance premiums and lofty property taxes. Or other monthly bills that eat away at the housing budget. This explains why mortgage origination forecasts for purchase lending continue to be pretty dismal. However, the emerging trend of rising mortgage refinance volume should get stronger into 2025. 2024 Purchase Volume Has Been Revised Down A new report from iEmergent revealed that 2024 purchase mortgage originations are projected to fall in terms of loan count when compared to 2023. In other words, despite lower mortgage rates, the number of home purchase loans is now expected to fall below 2023 levels. However, thanks to an increase in average loan size, the company believes purchase loan volume will still see a modest increase of 3. 5% year-over-year. To blame is still-high mortgage rates, which peaked about a year ago and have since fallen nearly two percentage points. But home prices remain elevated, and when combined with a 6% mortgage rate and steep insurance premiums and rising property taxes, the math often doesn’t pencil. Adding to affordability woes is the continued lack of existing home supply. There simply aren’t enough homes for sale, which has kept prices high in spite of reduced demand. Refis Expected...

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### Mesa Wants to Reward You for Every Dollar You Spend on Your Home

- Published: 2024-09-24
- Modified: 2024-12-03
- URL: https://www.thetruthaboutmortgage.com/mesa-wants-to-reward-you-for-every-dollar-you-spend-on-your-home/
- Categories: Home Buying, Mortgage News

There is apparently a “home cost crisis,” and a new fintech company called Mesa is looking to solve that. It’s no secret that home prices are through the roof, and when coupled with much higher mortgage rates and things like skyrocketing homeowners insurance, it can put homeownership out of reach. Or at the very least, make it a struggle for the average American to keep up. To ease this burden, the company has rolled out a suite of products to make homeownership a little more affordable. Perhaps ironically, this new company operates out of Austin, Texas, one of the hardest hit housing markets nationwide. The popular metro has suffered from a glut of housing supply as many remote tech workers packed their bags and moved back to wherever they came from. What Is Mesa? Referred to as the “first homeowner membership platform,” Mesa is actually a group of offerings aimed at making homeownership cheaper and more valuable. This means putting better mortgage deals in front of prospective home buyers and giving them rewards when they make housing-related purchases. Their first two products are the Mesa Mortgage Marketplace and the Mesa Homeowners Card. The marketplace appears to operate similar to the Zillow Mortgage Marketplace. Prospective home buyers and existing homeowners looking to refinance can compare lenders in one place. And aside from maybe scoring a lower rate and/or reduced closing costs, they can earn a portion of the loan amount back in rewards points. Those who take out a loan via...

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### You Could Try a Mortgage Rate Modification Instead of a Refinance

- Published: 2024-09-23
- Modified: 2024-09-23
- URL: https://www.thetruthaboutmortgage.com/what-is-a-mortgage-rate-modification/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Want to lower your mortgage rate without a traditional refinance? Look into a “mortgage rate modification,” which does just that. Instead of having to contact lenders, fill out applications, and provide stacks of paperwork, you might be able to get payment relief by simply signing a modification agreement. Aside from it being easier than a refinance, it could cut the processing time down from a month plus to just a week or so. That means if you start the process early in the month, your very next mortgage payment could be lower. While that all sounds great, there are some limitations you should be aware of, and like a refinance, fees are typically charged as well. How a Mortgage Rate Modification Works As the name suggests, a mortgage rate modification allows you to lower the interest rate on your existing home loan without going through the formal refinance process. Instead, you are simply asked to fill out a modification agreement with your current loan information, including mortgage rate and loan product, along with desired loan program and current interest rate. For example, if you currently hold a 30-year fixed-rate mortgage set at 7%, you’d enter that into the form and then select the type of loan you’d like going forward. This could be another 30-year fixed, or perhaps a 15-year fixed or even an adjustable-rate mortgage if permitted. Or it’s possible you hold an ARM loan and want to move into a fixed-rate product at the same time, removing future...

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### Fed Rate Cut, But Mortgage Rates Up: What Gives?

- Published: 2024-09-19
- Modified: 2024-09-19
- URL: https://www.thetruthaboutmortgage.com/fed-rate-cut-but-mortgage-rates-up-what-gives/
- Categories: Mortgage News, Mortgage Rates

Anyone who works in the industry probably saw this coming. But those who don't might be left scratching their head. Yesterday, the Fed finally pivoted and cut its own fed funds rate, yet mortgage rates went up. Why does this always seem to happen? Shouldn’t good news on the interest rate front push rates lower across the board? Seems perfectly logical until you dig into the details. There are two main reasons why mortgage rates often defy the Fed’s own move. One is that the Fed’s policy is often fairly telegraphed and not a surprise, and the other is that the data is typically baked in already. The Fed Simply Follows the Economic Data First things first, the Federal Reserve is simply making monetary policy decisions (hike, cut, nothing) based on the economic data in front of them. So their FOMC statement and accompanying interest rate decision generally don’t come as much of a surprise. Yesterday, there was a little more uncertainty than normal, with both a 25-basis point and 50-basis point cut a possibility. The Fed opted to go with a 50-bps cut, which had been the favorite with a ~60%+ likelihood per CME FedWatch. In other words, the Fed did what the market expected, as they often do. The reason the Fed does what the market expects is because they base their decisions on publicly available data. And the data is somewhat old by the time the Fed makes its announcement. That removes much of the element of...

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### Why You Probably Don’t Want to Lock Your HELOC

- Published: 2024-09-18
- Modified: 2024-09-18
- URL: https://www.thetruthaboutmortgage.com/why-you-probably-dont-want-to-lock-your-heloc/
- Categories: Mortgage Rates, Mortgage Tips

If you’ve got a home equity line of credit (HELOC), payment relief may finally be here. The Fed is expected to “pivot” today, meaning they’ll shift from a tightening monetary policy to a loosening policy. In other words, they’re going to start cutting rates instead of raising them! While this won’t have a direct impact on long-term mortgage rates, it directly affects loans tied to the prime rate, including HELOCs. This means your HELOC rate will go down by whatever the Fed cuts. So if they cut 25 basis points today, your HELOC rate will be adjusted down 0. 25%. Though one cut isn’t likely to provide major relief, there are expectations that this is the first cut of many, with possibly 200+ bps of cuts penciled in over the next 12 months. So if you’ve been given the option to “lock your HELOC rate,” it’s probably best to give it a hard pass. How HELOC Rates Are Determined As a quick refresher, HELOCs are variable-rate loans, meaning they can adjust each month based on the prime rate. To come with your HELOC rate, you combine the HELOC's margin, which is fixed, and the prevailing prime rate, which moves in lockstep with the fed funds rate. Whenever the Fed decides to raise or lower its own fed funds rate (FFF), the prime rate will also go up or down by the same amount. Since early 2022, the Fed has raised the FFF 11 times, from near-zero to a range of...

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### Rate and Term Refinances Are Up a Whopping 300% from a Year Ago

- Published: 2024-09-17
- Modified: 2024-09-17
- URL: https://www.thetruthaboutmortgage.com/rate-and-term-refinances-are-up-a-whopping-300-from-a-year-ago/
- Categories: Mortgage Tips

What a difference a year makes. While the mortgage industry has been purchase loan-heavy for several years now, it could finally be starting to shift. A new report from Optimal Blue revealed that rate and term refinance volume increased nearly 110% in August from a month earlier, and 310% from the year before. Driving the emerging trend is cheaper mortgage rates, which have finally begun to accelerate lower in recent months. Assuming they continue on their newfound trajectory, there’s a good chance refis will be back en vogue in 2025 and beyond. Mortgage Refinance Share Highest Since Spring 2022 It has been a rough few years for loan officers and mortgage brokers, but it’s possible the worst is over. As mortgage rates nearly tripled from sub-3% levels in early 2022 to over 8% last year, originators came up with the saying, “Survive ‘til 25. ” The idea was that if you could hang on and ride out the storm (of low lending volume) in 2024, you’d be rewarded in 2025. And while that sometimes felt far-fetched, it looks like it could actually come to fruition, and perhaps even ahead of schedule. The latest Market Advantage report from Optimal Blue found that mortgage refinances accounted for 26% of total home loan production, the highest share since March 2022. At that time, you could still get a 30-year fixed in the 3% range. But rates ascended rapidly from there, basically wiping out all refinance activity in a matter of months. So it’s...

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### Mortgage Rates Could Fall Another Half Point Just from Market Normalization

- Published: 2024-09-16
- Modified: 2024-09-16
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-could-fall-another-half-point-just-from-market-normalization/
- Categories: Mortgage News, Mortgage Rates

It’s been a pretty good year so far for mortgage rates, which topped out at around 8% last year. The 30-year fixed is now priced about one full percentage point below its year ago levels, per Freddie Mac. And when you consider the high of 7. 79% seen in October 2023, is now over 150 basis points lower. But the recent mortgage rate rally may still have some gas in the tank, especially with how disjointed the mortgage market got in recent years. Simply getting spreads back to normal could result in another 50 basis points (. 50%) or more of relief for mortgage rates going forward. Forget the Fed, Focus on Spreads There are a couple of reasons mortgage rates have improved over the past 11 months or so. For one, 10-year treasury yields have drifted lower thanks to a cooler economy, which is a boost for bonds. When demand for bonds increases, their price goes up and their yield (interest rate) goes down. Long-term mortgage rates follow the direction of the 10-year yield because they have similar maturities (mortgages are often prepaid in a decade). So if you want to track mortgage rates, the 10-year yield is a good place to start. Anyway, inflation has cooled significantly in recent months thanks to monetary tightening from the Fed. They raised rates 11 times since early 2022, which seemed to finally do the trick. This pushed the 10-year yield down from nearly 5% in late October to about 3. 65%...

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### UWM Launches KEEP to Recapture Prior Mortgage Clients for Its Broker Partners

- Published: 2024-09-13
- Modified: 2024-09-13
- URL: https://www.thetruthaboutmortgage.com/uwm-launches-keep-to-recapture-prior-mortgage-clients-for-its-broker-partners/
- Categories: Mortgage News, Refinance

I’ve said for a while that the mortgage recapture game was going to ramp up and get more aggressive. Customer retention has always been a big thing in every industry, but thanks to new technology and “AI,” companies are getting better at it. Many of the largest mortgage companies have also been growing their mortgage servicing portfolios for this very reason. Instead of handing off their borrowers to third-party companies, they’re retaining servicing rights so they can mine their database of homeowners for future offers. And with mortgage rates finally showing some real promise, there could be a lot of opportunity going forward. The Refi Boom Is, Apparently, Here UWM just proclaimed that “the refi boom is officially here,” and wants to make sure its mortgage broker partners are “ready for it. ” To help give them a boost, they have launched a new initiative called KEEP, which leverages artificial intelligence (AI) to help brokers stay in front of their old clients. The way it works is fairly simple. It continuously scans the data from UWM’s portfolio and identifies borrowers “who will benefit from a mortgage refinance. ” Once a match is found, it automatically sends an email to the customer with a pre-validated offer, including the contact information of the originating broker. Borrowers will see their current monthly payment, estimated new payment, and estimated monthly savings. It will also include disclosures such as the loan type, loan-to-value ratio (LTV), amount of discount points required, and APR. It’s unclear what...

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### I Pay My Mortgage Around the 15th of Every Month

- Published: 2024-09-12
- Modified: 2024-09-12
- URL: https://www.thetruthaboutmortgage.com/i-pay-my-mortgage-around-the-15th-of-every-month/
- Categories: Mortgage Tips

Lately, savings accounts have been paying a pretty solid return. Companies like Capital One and Discover have been offering over 4% APY. It’s not necessarily free money, given the high rate of inflation, but it’s been one way to keep your dollars from eroding in value versus just putting them in a bank account earning a measly 0. 01%. When savings rates began to rise a few years ago, I started to make my mortgage payments later in the month. The logic was that I could earn more interest on my money if I kept more of it in a savings account for a longer amount of time. While maybe not a massive amount of money, still more money. You Don’t Get Any Savings by Paying on the 1st of the Month First a quick overview. Mortgage payments are typically due on the first of the month, but not actually late until 15 days later. In other words, most loan servicers will give you a grace period to pay any time between the first of the month and the 15th without penalty. So while “technically due” on the first, it’s not actually late until the 16th. I never looked into why they do this, but this tends to be the universal rule (always check with your bank/servicer to be sure! ). And because most mortgages in the United States are simple interest and calculated monthly, it doesn’t matter when you pay in terms of interest charges. If you pay on...

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### Surge in FHA Loans with Piggyback Second Mortgages Could Spell Future Problems

- Published: 2024-09-11
- Modified: 2024-09-11
- URL: https://www.thetruthaboutmortgage.com/surge-in-fha-loans-with-piggyback-second-mortgages-could-spell-future-problems/
- Categories: Home Buying, Housing Market, Mortgage News

A recent report from CoreLogic revealed that “piggybacked purchase loans” for FHA borrowers reach a new high in June of this year. While piggybacked home purchases tend to be higher historically for those who take out FHA loans, they’ve surged in recent years. The culprit is likely high home prices, which have made it increasingly difficult to come up with down payment funds, even if you only need 3. 5%. For reference, a piggyback loan is a second mortgage that is taken out concurrently with the first mortgage to extend the total amount of financing. An example would be a first mortgage for 96. 5% of the purchase price and a piggyback second for the remaining 3. 5%. While this is helpful for home buyers who have little set aside for down payment and closing costs, it could present problems if and when they attempt to refinance or sell. FHA Piggyback Share Rises to 18% of Home Purchase Loans From June 2022 to June 2024, the piggybacked FHA purchase loan share increased from 10. 8% to 18%, per CoreLogic. That’s nearly double the 9. 8% share seen back in 2017 when the housing market was seemingly normal. And while FHA loans tend to have a higher piggyback share in general, the recent increase is a whopping 67%. It illustrates how stretched home buyers have become lately, especially those who need an FHA loan to qualify for the purchase. FHA loans tend to go to lower-income home buyers and/or those with...

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### More Consumers Think Mortgage Rates Will Go Down and That Home Prices Are Going to Fall

- Published: 2024-09-09
- Modified: 2024-09-09
- URL: https://www.thetruthaboutmortgage.com/more-consumers-think-mortgage-rates-will-go-down-and-that-home-prices-are-going-to-fall/
- Categories: Home Buying, Housing Market, Mortgage Rates

The latest monthly national housing survey from Fannie Mae revealed an interesting contradiction. Last month, a new survey-high 39% of respondents said they expect mortgage rates to go down over the next 12 months. At the same time, fewer expect home prices to go up over the same period. And more believe home prices will fall. So despite a home purchase becoming more affordable thanks to a lower interest rate, consumers don’t think prices will increase. What does this say about home buyer demand as mortgage rates go down? But We Were Told Bidding Wars Would Return When Mortgage Rates Fell Fannie’s monthly Home Purchase Sentiment Index (HPSI) did increase very slightly (0. 6 points) to 72. 1 in August from a month earlier. But it remains very low, with most of the 1,000 respondents saying it’s a poor time to buy and also an increasingly bad time to sell. Just 17% said it was a “good time” to buy a home in August, which has remained relatively flat for several months and remains just above all-time survey lows. Meanwhile, 83% said it was a “bad time” to buy a home, the highest share since the survey’s inception. At the same time, only 65% say it’s a good time to sell, while 34% say it’s a bad time. Since August 2021, the “net good time” to sell has fallen from 54% to just 31%. So it appears no one is happy with the current state of the housing market, which...

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### It’s Not a Mortgage Rate Story Anymore

- Published: 2024-09-06
- Modified: 2024-09-06
- URL: https://www.thetruthaboutmortgage.com/its-not-a-mortgage-rate-story-anymore/
- Categories: Home Buying, Housing Market, Mortgage Rates

The other day I noticed that mortgage rates were being advertised at some really low levels. Many quotes in the mortgage rate table on my own site were in the mid-5s. That got me curious how low rates could be with a really favorable loan scenario, such as a 760+ FICO, 20% down home purchase, owner-occupied, single-family residence. So I headed over to Zillow’s Mortgage Marketplace to see what I could come up with. Knowing that VA loan rates are typically the lowest, I threw that in too and lo and behold, saw 30-year fixed rates that began with a “4. ” I threw the screenshot up on Twitter and simply said, “Guys, it’s not a mortgage rate story anymore. ” What Did I Mean? The tweet got a good amount of traction, likely because of those very low 4. 875% 30-year fixed rate quotes in the screenshot. And some felt it was deceiving to post rates like that, which might not be reflective of the entire borrower universe at the moment. After all, not everyone has a 760 FICO score or the ability to put down 20%, nor might they be eligible for a VA loan. I also threw in two discount points, since most of the low rates advertised today require the borrower to pay some money at closing in order to obtain a “below-market” rate. In reality, you can put nothing down on a VA loan and get the same pricing since there aren’t mortgage pricing adjustments...

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### The Hidden Problem with FHA Loans

- Published: 2024-09-05
- Modified: 2024-09-05
- URL: https://www.thetruthaboutmortgage.com/the-hidden-problem-with-fha-loans/
- Categories: Home Buying, Mortgage News, Mortgage Tips

If you’re thinking about purchasing a property, you’ve likely sifted through available home loan options to determine what’s best. There are lots of loan types of choose from, including conventional loans (those not backed by the government) and government-backed loans, such as FHA, USDA, and VA loans. While each have their pros and cons, there is one hidden danger to taking out an FHA loan, especially if you’re buying a home as opposed to refinancing an existing loan. In competitive markets where there are multiple bidders vying for the same property, the financing you choose matters. Sellers want assurances that you can actually close your loan, and that could make or break your offer. Home Sellers Care What Type of Mortgage You Use Over the past decade, home buying has been very competitive. It’s been a seller’s market for as long as I can remember. In fact, even when the housing market bottomed in 2012-2013, it was still difficult to find a property. While short sales and foreclosures were prevalent then, inventory was still relatively scarce and many savvy buyers entered the fray quickly to scoop up bargains. Over the years, it has only gotten worse, thanks in part to underbuilding since the mortgage crisis, and also due to record low mortgage rates. That combination of limited inventory and low mortgage rates propelled home buyer demand to new heights. And the fact that millions were entering the prime home buying age (of 34 years old) didn’t help either. Long story...

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### Researchers Says Don’t Wait on the Fed Rate Cut to Refinance Your Mortgage

- Published: 2024-09-04
- Modified: 2024-09-04
- URL: https://www.thetruthaboutmortgage.com/researchers-says-dont-wait-on-the-fed-rate-cut-to-refinance-your-mortgage/
- Categories: Mortgage Tips

A new paper from Yale professor Kelly Shue argues that consumers mistakenly wait to take out mortgages and other long-term loans when the Fed is expected to cut rates. Their confusion seems to be related to conflating short-term and long-term rates, which don’t necessarily move in tandem. In fact, short-term rate moves are typically already baked in to long-term rates, meaning there’s no need to wait until the cut is official for an even lower interest rate. The savings of short-term rate cuts should already be reflected in the interest rate of a long-term loan such as a 30-year fixed mortgage. Despite this, home buyers and even professional forecasters tend to get this wrong according to the research. Short-Term Rates vs. Long-Term Rates Consumers have long misunderstood the relationship between the Fed and mortgage rates. Many incorrectly believe that the Fed directly controls mortgage rates. So when the Fed announces a rate cut, prospective home buyers expect mortgage rates to come down as well. For example, the Fed is widely expected to lower its fed funds rate by 25 (or maybe 50 basis points) at its September 18th meeting. When this takes place, there will be a slew of articles written about how “mortgage rates fall” and the like. Some may even assume that the 30-year fixed fell by the same amount, whether it’s 0. 25% or . 50%. So if the 30-year fixed was 6. 50% the day before the meeting, a hypothetical home buyer might think the going...

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### Home Buyers Were Urged to Beat the Rush, But Are Now Being Told They Might Want to Wait

- Published: 2024-09-03
- Modified: 2024-09-03
- URL: https://www.thetruthaboutmortgage.com/home-buyers-were-urged-to-beat-the-rush-but-now-told-that-they-might-want-to-wait/
- Categories: Home Buying, Housing Market

They say not to time the market. It’s a chump’s game. If anyone had any real success at it, they’d be rich. This type of advice typically applies to the stock market, but it can apply to just about anything else too. It’s hard enough to predict something to happen at any given time. And exponentially harder to predict something to happen in a short window of time. In other words, don’t bother. Don’t try to time it. It won’t go as expected. When it comes to home buying, the same holds true. But unlike investing, there are so many factors to consider beyond price. Now That Rates Are Lower, You No Longer Need to Beat the Rush? It’s funny how the media jumps onto certain narratives, runs with them, exhausts them, and then moves on to the next one. All while forgetting about (and essentially ignoring) the prior one in the process. It’s, for a lack of better words, old news. That piece of old news was the argument that it made sense to dive into a home purchase while mortgage rates and home prices were high, before the herd followed. Simply put, there’d be less competition if you purchased when no one else was, and you could snag a home before the others inevitably came after you and bid up the price. Despite paying a high price and getting an equally expensive mortgage rate, there was the promise of a lower rate in the near future thanks to...

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### New Flat-Fee AI-Powered Real Estate Buyer Agent Service Called Landian Launches

- Published: 2024-08-29
- Modified: 2024-09-03
- URL: https://www.thetruthaboutmortgage.com/new-flat-fee-ai-powered-real-estate-buyer-agent-service-called-landian-launches/
- Categories: Home Buying, Housing Market

What’s better than taking on the National Association of Realtors (NAR) and winning? Well, launching your own flat-fee, AI-powered real estate service just months after of course. In the wake of the new real estate commission rules, which were born from the Sitzer-Burnett class-action lawsuit, a new service called Landian has launched. The word is a play on land and guardian and aligns with their mission to “safeguard homebuyers from the excessive fees typically charged by real estate agents. ” Shots fired! And yes, Josh Sitzer is one of the company founders, along with Bryce Galen and Neal Batra, per TechCrunch. Why Landian? Per their mission, they want to bring down what they refer to as “excessive fees” charged by real estate agents. In the not-too-distant past, it wasn’t uncommon for a seller to pay 6% of the sales price, with 3% going to both listing agent and buyer’s agent. This fee structure was the focus of the NAR lawsuit, and because of it, agents can no longer advertise compensation via the MLS. However, for many transactions it's still business as usual, just a little different procedurally. Going a step further, Landian wants to bring down the buyer’s agent fee instead of sellers simply baking it into the sales price. The company aims to save home buyers a year’s worth of mortgage payments with pay-as-you-go fees. Instead of the usual 2. 5% to 3% commission a home buyer must cough up, the newly-launched proptech (still in beta) charges as little...

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### I am Debt-Averse, But Don’t Mind Having a Mortgage

- Published: 2024-08-29
- Modified: 2024-08-29
- URL: https://www.thetruthaboutmortgage.com/i-am-debt-averse-but-dont-mind-having-a-mortgage/
- Categories: Home Buying, Mortgage Tips

I went for a walk today and starting thinking about mortgage debt. I know, pretty lame. But that’s what apparently goes through my head when I make a conscious effort to put my phone down and exercise. Anyway, I began thinking about how I really don’t like debt. I don’t know if it’s psychological or what. Even if it’s 0% APR debt that isn’t accruing interest, I’m simply not a fan. I am not one of those people who would take out massive loans to launch a project. Or feel comfortable with tons of debt in general, even if investing elsewhere, perhaps for a better return. However, the one exception is a mortgage. For whatever reason, I don’t mind holding onto one (or several). A Housing Payment Feels Standard For one, I feel like having a housing payment is just part of life. So it’s not strange to pay a mortgage each month. It could even feel strange not to have one as an adult. If I wasn’t paying a mortgage, I’d likely be paying rent someplace else, every month in perpetuity. So in that regard, it doesn’t feel like it’s an extra burden. It’s really just par for the course. To make this easier to swallow, mortgage rates were ultra-cheap the past decade or so. I hold very inexpensive mortgage debt today, especially relative to prevailing rates on home loans today. We’re talking 3% rates when the 30-year fixed today is closer to 6. 5%. Even if the 30-year...

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### New Study Says Mortgage Brokers Save Consumers More Than $10K

- Published: 2024-08-28
- Modified: 2025-02-07
- URL: https://www.thetruthaboutmortgage.com/new-study-says-mortgage-brokers-save-consumers-more-than-10k/
- Categories: Mortgage News

If you’re looking to save money on your next mortgage, a mortgage broker might be able to help. A firm by the name of Polygon Research conducted a study and found that mortgage brokers can save consumers money versus other channels, such as retail. The research, which was supported by the nation’s top mortgage lender (also a wholesale-only lender) United Wholesale Mortgage, found “substantial savings for consumers on average” via the wholesale channel. For reference, the wholesale channel is B2B, where mortgage brokers provide financing to consumers from their lender partners. Instead of being captive to a single bank or lender, they can shop the borrower’s loan scenario with multiple partners at once to find the best combination of rate and fees. On the other hand, a retail loan officer can only offer pricing and loan programs from their captive lender. Lower Rates and Lower Fees with Mortgage Brokers The research found that for loans originated in 2023, consumers would save an average of $10,662 over the life of their loan when working with an independent mortgage broker compared to a nonbank retail lender. Some of the largest nonbank retail lenders include Rocket Mortgage, CrossCountry Mortgage, loanDepot, Rate (formerly Guaranteed Rate), and Movement Mortgage. Polygon also said upfront fees were lower on broker-originated loans compared to those originated by retail loan officers. And the study found higher loan approval rates in Minority Majority Census Tracts (MMCT) via the wholesale channel (70%) versus retail (58%). The average interest rate extended to...

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### Rocket Mortgage Unveils New 2-1 Rate Buydown for Lower Income Home Buyers

- Published: 2024-08-26
- Modified: 2024-08-26
- URL: https://www.thetruthaboutmortgage.com/rocket-mortgage-unveils-new-2-1-rate-buydown-for-lower-income-home-buyers/
- Categories: Mortgage Tips

In an effort to boost affordability for those most in need, Rocket Mortgage has launched a new program called “Welcome Home RateBreak. ” Similar to their Inflation Buster product rolled out two years, it is a lender-paid interest rate buydown. It allows home buyers to enjoy a discounted mortgage rate for the first two years of their loan term. After that, the rate reverts back to the note rate that they qualified for the remainder of the term. Home buyers with area median income (AMI) of 80% or less are eligible for the potential savings. How Rocket Mortgage Welcome HomeBreak Works As noted, it’s a temporary buydown offered by Rocket Mortgage to home buyers with area median income (AMI) of 80% or less. Rocket has estimated that some 90 million people nationwide meet this definition. You can look up your local AMI here. You must also be purchasing a single-family home (apparently condos aren’t eligible) and you must meet all other underwriting criteria, such as minimum credit score, max DTI ratio, and so on. Rocket cited an example where a home buyer qualifies for a $250,000 loan at a rate of 6. 99% (APR 7. 399%). This would normally result in a monthly principal and interest payment of $1,661. But thanks to the temporary buydown, their mortgage rate the first year would be 4. 99%, reducing the payment to $1,340. In year two, the rate discount would be just 1%, or 5. 99% in this example, with a monthly payment...

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### How Does Real Estate Commission Work Now?

- Published: 2024-08-20
- Modified: 2024-08-26
- URL: https://www.thetruthaboutmortgage.com/how-does-real-estate-commission-work-now/
- Categories: Home Buying, Housing Market, Mortgage News

In the not-so-distant past, aka before August 17th, 2024, real estate commissions worked a lot differently. Or at least the rules governing them did. Back then, listing agents would put a property on the multiple listing service (MLS) that included an explicit, stated commission (offer of compensation) to the buyer’s agent. This commission was actually paid for by the home seller, who also paid their listing agent, out of the sales proceeds. The offer of compensation ensured both agents would be paid for their services and representation. Real Estate Commissions Inflated? While that setup was all good and well on the surface, some argued that it allowed agents to collude with one another and keep commissions inflated. At the same time, there was an argument that agents didn’t exactly highlight the fact that commissions were negotiable either. So both buyer and seller were often told the fee is 2. 5%, or 3%, end of story. The end result was a 5-6% commission paid by the seller to both agents on the transaction. A pretty penny to be sure. Perhaps more problematic, buyers were often told they didn’t have to pay for representation and that the buyer’s agent services were “free. ” After all, they didn’t have to pay anything out of pocket. It was funded via the sales proceeds of the transaction. Of course, the argument was that the home buyer actually did pay for it via a higher sales price needed to absorb some or all of that cost....

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### Can Real Estate Commissions Be Financed via the Mortgage?

- Published: 2024-08-16
- Modified: 2025-01-17
- URL: https://www.thetruthaboutmortgage.com/can-real-estate-commissions-be-financed-via-the-mortgage/
- Categories: Home Buying, Mortgage Tips

You’ve probably heard about the big NAR settlement that could completely change how real estate works going forward. But if you haven’t, or are unsure of what’s changing, there are two new rules set to go into effect August 17th, 2024. The first is that offers of compensation will be prohibited on Multiple Listing Services (MLSs). In other words, listing agents won’t be able to say they’re offering 2% or 3% to the buyer’s agent on the MLS. The logic is that this type of co-op commission leaves the buyer out of the conversation, which isn't fair if the buyer ultimately pays for it. While they may not pay it directly, a pre-determined commission might result in a higher sales price. In addition, there’s also not much transparency about the fee, nor do consumers know such fees are negotiable. Simply put, this move is intended to boost transparency and ideally lower fees for consumers by letting buyers negotiate with their agents separately ahead of time. But there might be some unintended consequences as a result, which I’ll get to in a moment. The other major change is that buyers must sign a written agreement before they can tour a property. At that time, compensation will also be discussed. Real Estate Agent Fees May Drop, However... Now about those unintended consequences I alluded to. While the standard commission might go down thanks to these new rules, from say 2. 5% to 1. 5% or even 1% on the buy-side, there’s still...

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### I Refinanced My Mortgage Without Making a Single Phone Call

- Published: 2024-08-09
- Modified: 2024-08-11
- URL: https://www.thetruthaboutmortgage.com/i-refinanced-my-mortgage-without-making-a-single-phone-call/
- Categories: Mortgage News, Refinance

In recent years, new technologies have been rolled out to increase efficiency, lower costs, and improve the borrower experience during the home loan process. For example, there's now digital verification, which allows borrowers to electronically share their financial information with lenders, including bank account and payroll data. This in turn allows banks/lenders to verify income, employment, and assets without bugging the borrower and asking for mountains of paperwork. At the same time, it improves accuracy and reduces mistakes since the information is coming direct from the source. Still, many feel that getting a mortgage is a major pain and stuck in the stone age. While I agree, I’d be lying if I said it hasn’t gotten easier. However, it still takes a month or more to get a mortgage, which in today’s day and age just doesn’t seem good enough. Personal-Touch Has Significantly Declined That brings me to a new study that was conducted by Fannie Mae to better understand adoption rates of said technologies. Fannie surveyed recent home buyers who purchased a property with a mortgage acquired by the company between January 2023 and November 2023. One of the survey’s key findings was that the use of personal-touch-only channels when obtaining a mortgage (for example in-person or by-phone) have "significantly declined. " In other words, fewer mortgage applicants are picking up the phone to speak to a loan officer. And probably a lot less are driving down to the local bank branch. They simply don’t have to thanks to...

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### Is It Better to Buy a Home When Mortgage Rates Are High?

- Published: 2024-08-07
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/is-it-better-to-buy-a-home-when-mortgage-rates-are-high/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Over the years, there’s been a popular argument that it’s better to buy a home when mortgage rates are high. The logic is that home prices should be lower if rates are high, and thus you get a property for less. And the cherry on top is that if/when mortgage rates fall, you can get a lower interest rate too! When all is said and done, you basically get the best of both worlds. A lower purchase price and low mortgage rate. But is this scenario actually reality? And do home prices and mortgage rates even have such a relationship? Buying a Home When Interest Rates Are High On the surface, buying a home when interest rates are high seems like a pretty bad deal. After all, your monthly mortgage payment is going to be more expensive if the interest rate is higher. For example, imagine a $500,000 home purchase with 20% down. That’s a $400,000 loan amount. 7% mortgage rate: $2,661. 21 4% mortgage rate: $1,909. 66 The difference in just principal and interest each month is a whopping $750! That’s not a small amount by any measure. Tack on insurance and taxes and it gets worse, possibly even cost-prohibitive. *You can quickly compare other monthly payments on my mortgage rate charts page. This large difference in payment could make many would-be home buyers ineligible for a mortgage if they exceed maximum DTI limits. Remember, you have to qualify for a home loan, so if your income doesn’t cover...

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### Will Home Prices Go Up When Interest Rates Go Down?

- Published: 2024-08-05
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/will-home-prices-go-up-when-interest-rates-go-down/
- Categories: Home Buying, Housing Market, Mortgage Tips

Well, here we are. It took longer than expected, but mortgage rates have finally strung together a decent rally after nearly three years of increases. They fell below year-ago levels a week or two ago, per Freddie Mac, and took another big leg down after a softer-than-expected jobs report on Friday. As for why, fewer new hires, increased unemployment, and slowing wage growth all point to a slowing economy. And interest rates tend to drop when the economy cools. In addition, the Fed is expected to pivot and begin cutting rates, which could act as another tailwind for lower mortgage rates. This has many thinking we’ll see another surge of home buyer demand, and potentially a big jump in home prices. But is it true? Do lower interest rates increase housing prices? Do Lower Interest Rates Actually Increase Home Prices? It’s entirely logical on the surface. If something people want becomes cheaper overnight, demand for it should hypothetically increase. And if demand increases, the price might rise as supply decreases, especially if there are already too few homes for sale. But if that were true for single-family homes, why didn’t asking prices crash over the past year and change? Shouldn't demand have fallen as mortgage rates spiked higher, leading to price cuts? After all, rates on the 30-year fixed mortgage nearly tripled from its record lows in the mid-2s in early 2021 before peaking at just above 8% last fall. Using the same logic above, home prices would surely nosedive...

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### Will the Housing Market Crash in 2025?

- Published: 2024-07-25
- Modified: 2024-09-13
- URL: https://www.thetruthaboutmortgage.com/will-the-housing-market-crash-in-2025/
- Categories: Home Buying, Housing Market, Mortgage News

I got active on Twitter over the past year and change and to my surprise (not sure why it’s surprising really), encountered lots of housing bears on the platform. Many were/still are convinced that the next housing crash is right around the corner. The reasons vary, whether it’s an Airbnbust, a high share of investor purchases, high mortgage rates, a lack of affordability, low home sales volume, rising inventory, etc. etc. And the reasons seem to change as each year goes on, all without a housing crash... So, now that we’re halfway through 2024, the obvious next question is will the housing market crash in 2025? Next year’s got to be the year, right? But First, What Is a Housing Crash? The phrase “housing crash” is a subjective one, with no real clear definition agreed to by all. For some, it’s 2008 all over again. Cascading home price declines nationwide, millions of mortgage defaults, short sales, foreclosures, and so on. For others, it might just be a sizable decline in home prices. But how much? And where? Are we talking about national home prices or regional prices? A certain metro, state, or the nation at large? Personally, I don’t think it’s a crash simply because home prices go down. Though it is a pretty uncommon occurrence to see nominal (non-inflation adjusted) prices fall. Over the past few years, we’ve already experienced so-called home price corrections, where prices fell by 10%. In 2022, we were apparently in a housing correction, defined...

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### Presidential Candidate Kamala Harris Has a 7-Year Adjustable-Rate Mortgage

- Published: 2024-07-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/presidential-candidate-kamala-harris-has-a-7-year-adjustable-rate-mortgage/
- Categories: Mortgage News, Mortgage Rates

By now you’ve heard the news. President Biden dropped out of the 2024 presidential race and paved the way for current VP Kamala Harris to run in his place. That was big news that shook up the election overnight, and now there is a renewed focus on Harris, including her financial disclosures. The WSJ ran a story today about how she manages her money, pointing out her penchant for index funds and her ultra-low rate 2. 625% mortgage. I dug a little deeper to see what kind of mortgage she had, along with when and where she got it. And it turns out it’s an adjustable-rate mortgage, which we all know aren’t for the faint of heart. Kamala Seems to Really Love the 7-Year ARM With regard to that 2. 625% mortgage Kamala Harris holds, it turns out it’s a 7-year adjustable-rate mortgage (ARM). This is a popular type of ARM these days because it provides 84 months of interest rate stability before the first adjustment. In that respect, homeowners can take one out and not worry about their rate increasing for many years. And in the meantime, either sell their property or refinance the mortgage if need be. Harris obtained her latest mortgage in 2020 and was able to get a very low interest rate set at 2. 625% until the year 2027. It’s unclear what the exact loan amount is, but it was revealed to be somewhere between $1,000,000 and $5,000,000. We also know that the lender in...

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### Beware of Inferior Mortgage Refinance Offers from Your Original Lender

- Published: 2024-07-11
- Modified: 2025-02-10
- URL: https://www.thetruthaboutmortgage.com/beware-of-inferior-mortgage-refinance-offers-from-your-original-lender/
- Categories: Mortgage Tips, Refinance

In case you haven’t heard, there’s talk of a “refinance boom” as soon as 2025. Yes, you read that right. While it seemed like high mortgage rates were going to spoil the party for a long time, things can change quickly. Thanks to the millions who took out high-rate mortgages over the past couple years, even a slight improvement in rates could open the floodgates. But now more than ever it’s going to be important to go with the right lender, the one who ultimately offers the lowest rate with the fewest fees. This is especially true now that banks and lenders are working hard to improve recapture rates for past customers. A Refinance Boom in 2025? What? First let’s talk about that supposed refinance boom. This hopeful news comes courtesy of the latest Mortgage Lender Sentiment Survey® (MLSS) from Fannie Mae. The GSE surveyed over 200 senior mortgage executives and found that almost three in five (58%) expect a refinance boom to start in 2025. And some even believe it could kick off later this year, though that would take a pretty big move lower for mortgage rates in a hurry. Either way, many are now anticipating that the Fed will cut their own rate in September as inflation continues to cool. This expectation may lend itself to lower mortgage rates as bond yields drop and take the 30-year fixed down with it. Assuming this all plays out according to plan, we could see a nice uptick in mortgage...

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### More Than 4 Million Mortgages Originated Since 2022 Have Rates Above 6.5%

- Published: 2024-07-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/more-than-4-million-mortgages-originated-since-2022-have-rates-above-6-5/
- Categories: Mortgage News, Mortgage Rates, Refinance

Want to hear some good news about mortgage rates that involves them being a lot higher than they previously were? Yes, I know that sounds absurd, but hear me out. There are now millions more mortgages that feature rates above 6. 5%, and many with rates above 7%. There are also millions less that feature rates below 5% than there were just a couple years ago. Why is this good you ask? Well, it means the effects of mortgage rate lock-in are beginning to wane. It also means millions of borrowers might stand to benefit from a refinance as rates eventually drop. Nearly a Quarter of Mortgage Holders Have an Interest Rate Above 5% The

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### Will Mortgage Rates Ever Go Back Down to 3% Again?

- Published: 2024-06-28
- Modified: 2024-10-02
- URL: https://www.thetruthaboutmortgage.com/will-mortgage-rates-ever-go-back-down-to-3-again/
- Categories: Mortgage Tips

They say to never say never. But why? Because if you say it, whatever you said would never happen typically happens. Go figure. Well, speaking of, Fannie Mae chief economist Doug Duncan recently said barring a “catastrophic economic event,” not to expect mortgage rates to return to 3% in our lifetimes. I wrote about it on Twitter and it garnered a big reaction, with most saying he’s right. And others asking how old he was... My take was that when I hear things like “not in our lifetime,” I naturally expect them to occur sooner rather than later. How Did We Get 3% Mortgage Rates to Begin With? Before we talk about the possibility of mortgage rates being 3% again, let’s discuss how they got there in the first place. After the early 2000s mortgage crisis led to the Great Recession between 2007 and 2009, the Fed took action to lower its own lending rate (the federal funds rate) to nearly zero. This was done to increase economic output by encouraging banks to lend money and for consumers and businesses to take out loans. Despite the Fed’s best efforts, the economy continued to contract, leading to the advent of an unconventional monetary policy called Quantitative Easing, or QE. Without getting too wordy here, the Fed began buying long-dated treasuries and mortgage-backed securities (MBS) to stimulate lending and turn the economy around. Thanks to a very large, new buyer in the market, bond prices went up and their yields (aka interest...

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### Can I Mortgage a House That Is Paid Off?

- Published: 2024-06-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/can-i-mortgage-a-house-that-is-paid-off/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “Can I mortgage a house that is paid off? ” When you own a home without any associated mortgages, it’s known as a “free and clear” property. Some view this as a good thing, while others see mortgages as a good debt that doesn’t need to be paid off ahead of schedule (or ever). Others argue that you shouldn’t take a mortgage into retirement, as you’ll be on a fixed income and it can be a large expense. If you do happen to have a home that is completely paid off, you might be wondering if you can take out another mortgage. Let’s talk about it. Yes, You Can Take Out a Mortgage on a Home That’s Free and Clear Without getting too technical here, the short answer is yes. If your property is free and clear of any debts or liens, you can take out a mortgage, assuming you qualify otherwise. This means having the income, assets, employment and credit history to qualify for the loan. In truth, it shouldn’t be much different than when you got your original loan. Though it would be considered a cash out refinance as opposed to a home purchase loan. If you own your home outright and there are no existing loans associated with the property, taking out a new loan means tapping equity. When you tap equity, it’s known as a cash out refinance because you’re taking what you already own and depositing it into your bank account. The loan...

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### If I Have a Mortgage, Do I Actually Own My House?

- Published: 2024-06-26
- Modified: 2024-06-26
- URL: https://www.thetruthaboutmortgage.com/if-i-have-a-mortgage-do-i-actually-own-my-house/
- Categories: Mortgage Tips

I’ve heard this argument many times, whether in real life or on social media. That if you hold a mortgage (or two), you don’t actually OWN your house. The logic is that the bank/lender is the one that truly owns the property because they lent you the money to purchase the property. And you must pay them each month for the right to continue living in the home. If you don’t, they have the right to repossess the property via the foreclosure process. On top of that, many home buyers only put down 3-5%, meaning borrowers technically own very little and owe a whole lot to the bank. So is it true that mortgage holders don’t actually own their homes? You Still Own Things That Have Loans Attached While there’s some logic to the idea that a home with loans attached isn’t truly owned, it’s a pretty abstract thought. Sure, one can argue that if you have a mortgage, it means you only OWN the portion that is paid off. For example, if you bought a house for $500,000 and put down 20%, you’ve only got $100,000 in ownership, also known as home equity. When people refer to equity, it means the part of your real estate that is paid off, or simply the present value minus any outstanding liens. Over time, this same $500,000 property will likely appreciate in value, and the loan will be paid down. This means ownership will increase as time goes on and with each...

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### Freddie Mac’s Pilot Program to Buy Second Mortgages Probably Isn’t a Big Deal

- Published: 2024-06-25
- Modified: 2024-10-25
- URL: https://www.thetruthaboutmortgage.com/freddie-macs-pilot-program-to-buy-second-mortgages-probably-isnt-a-big-deal/
- Categories: Mortgage News, Refinance

In case you missed it, the Federal Housing Finance Agency (FHFA) granted conditional approval to Freddie Mac to purchase single-family closed-end second mortgages. What this means is lenders will now be able to originate second mortgages and sell them off to one of the two government-sponsored enterprises (GSEs). Arguably, this should improve access to such lending products, and potentially result in cost savings if increased competition drives down interest rates and fees. At the same time, some have argued that this is inflationary (since it makes it easier for homeowners to take on more debt), while others have said it’s not part of the GSEs core mission to boost homeownership. I’m here to argue that this new pilot program is very limited and likely won’t change much, at least anytime soon. What Is Freddie Mac’s New Second Mortgage Pilot Program? In a nutshell, Freddie Mac is now permitted to purchase second mortgages that meet certain criteria. As a result, there will be added liquidity in the lending markets for home equity loans, which are closed-end loans. At the moment, most second liens, whether open-end HELOCs or closed-end home equity loans, are originated by large depository banks that typically keep them on their books. The nonbanks often don’t have this luxury because it’s capital intensive, so the end result is that fewer mortgage companies offer such loans. Notice the lack of home equity lending in the chart above provided by

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### The Other Major Downside to a Higher Mortgage Rate (Aside From the Payment)

- Published: 2024-06-10
- Modified: 2024-06-10
- URL: https://www.thetruthaboutmortgage.com/the-other-major-downside-to-a-higher-mortgage-rate/
- Categories: Mortgage Tips

If you’re currently thinking about buying a home, or somehow in a position to refinance an existing loan, current mortgage rates don’t look great. While they might not be as high as they were in the 1980s (when they averaged 18%), the rapid ascent from sub-3% to 7% is no doubt painful. The obvious issue is that a higher mortgage rate equates to a much larger monthly payment. You pay more each month and that’s both undesirable and potentially unaffordable. But assuming you are still able to qualify a mortgage, there’s another huge downside to a higher rate. Look at the Mortgage Payment Composition Home buyers tend to focus solely on the total monthly mortgage payment But it's important to look at the allocation between principal and interest When mortgage rates are high a large portion of the payment goes toward interest When mortgage rates are low much more of the payment goes toward principal (aka paying down the loan! ) As I’ve written before, a mortgage payment consists of four components: principal, interest, taxes, and insurance. For short, we refer to it as PITI (see more mortgage lingo here). The tax and insurance piece is mostly driven by the purchase price, while the principal and interest is dictated by the loan amount and mortgage rate. Simply put, the higher your mortgage rate, the higher your monthly payment, all else equal. So if you took out a $500,000 (30-year fixed loan) at 7%, it’d be a lot more expensive than...

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### Is a 0% Down Home Purchase Much Different Than a 3% Down Purchase?

- Published: 2024-06-04
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/is-a-0-down-home-purchase-much-different-than-a-3-down-purchase/
- Categories: Home Buying, Mortgage News

You may have heard that the nation’s largest mortgage lender just rolled out a zero down mortgage. If you were around for the housing market crash in the early 2000s, it could feel like déjà vu. And not in a particularly good way. After all, it was toxic home loans that sunk the market then, sending home prices crashing and short sales and foreclosures surging. Does this mean we’re going down a familiar path, which will likely see a familiar outcome? Or is it a big to do about nothing? UWM’s New 0% Down Purchase Program United Wholesale Mortgage (UWM), which works exclusively with mortgage brokers, recently unveiled a new loan program called “0% Down Purchase. ” As the name implies, it allows a home buyer to purchase a property with nothing out of pocket, at least with respect to down payment. Upon first glance, this looks and sounds like a bad idea, especially with how high home prices are at the moment. Not to mention mortgage rates either... But before we get into the judgment of the program, let’s talk about how it works. It’s essentially a 97% LTV loan, widely available from both Fannie Mae and Freddie Mac, featuring a 3% silent second mortgage provided by UWM. The silent aspect of the second mortgage means it doesn’t carry any monthly payments, or interest for that matter. Instead, this lien just quietly sits behind the first loan and only comes due if the borrower sells the property, or refinances...

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### What Is a Conditional Loan Approval?

- Published: 2024-05-22
- Modified: 2024-05-23
- URL: https://www.thetruthaboutmortgage.com/what-is-a-conditional-loan-approval/
- Categories: Home Buying, Mortgage Tips, Refinance

When you apply for a home loan, an underwriter will review your file in order to make a lending decision. They can approve your loan, deny your loan, or possibly suspend your loan pending additional information. The two most common outcomes are approval and denial, but even an approved loan is typically “conditional. ” This means it’s actually a conditional approval that requires certain requirements to be met before you’re issued a final approval. Only at that point can you sign loan documents and eventually fund your loan. Not All Mortgage Approvals Are Created Equal There are various levels of loan approval in the mortgage world. If you’ve been considering a home purchase, you’ve likely come across the terms mortgage pre-qual or mortgage pre-approval. As the names suggests, it’s a preliminary step in the home loan approval process, a sort of “seeing where you stand. ” A pre-qual is the less robust of the two and often just involves light calculations (sans any real paperwork) to determine your purchasing power. Depending on the bank or lender in question, a pre-approval may involve a credit pull and the furnishing of certain documentation such as pay stubs, tax returns, and bank statements. With this information in hand, a lender can give you a fairly good idea of how much house you can afford and whether you qualify for a home loan. It’s still pretty preliminary though, which explains why it’s called a pre-approval. And it’s also not a formal loan application, nor...

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### What Is a Mortgage Account Executive?

- Published: 2024-05-21
- Modified: 2024-05-22
- URL: https://www.thetruthaboutmortgage.com/what-is-a-mortgage-account-executive/
- Categories: Mortgage Tips

There are many different people involved in the home loan process. I wrote about this in detail already, but probably didn’t even include everyone. Because getting a mortgage is a pretty big deal, a lot of hands are needed to ensure it goes according to plan. There are also several ways to obtain a home loan, which require different participants. For example, if you choose to use a mortgage broker to get your loan, an “account executive” will be in the mix. The Role of a Mortgage Account Executive A mortgage account executive, or AE for short, works as a liaison between a mortgage broker and the wholesale lender they represent. With regard to mortgage lending, wholesale simply means business-to-business (B2B) instead of retail, which is direct-to-consumer (B2C). Simply put, AEs are NOT consumer-facing and have no interaction with borrowers whatsoever. Instead, they communicate with the mortgage broker, who in turn corresponds with the borrower. Typically, AEs hold an internal role at the wholesale lender they represent, meaning they don’t leave the office unless they’re doing a sales pitch. They simply field phone calls from third-party mortgage brokers and work with their staff internally to originate and close loans. Mortgage brokers rely on AEs to get loan pricing, submit loans to underwriting, clear conditions once approved, provide status updates, and eventually fund their loans. In a way, they act similarly to a retail loan officer, but deal with another mortgage professional as opposed to a consumer. What a Typical Day...

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### HELOC vs. Credit Card: Why the Plastic May Work Out Better

- Published: 2024-05-15
- Modified: 2024-05-15
- URL: https://www.thetruthaboutmortgage.com/heloc-vs-credit-card-why-the-plastic-may-work-out-better/
- Categories: Mortgage Matchups, Mortgage Tips

You may have heard recently that "tappable" home equity has reached an all-time high, thanks to rapidly appreciating home prices and conservative borrowing on behalf of existing homeowners. If you haven’t, know that some 48 million homeowners have around $11 trillion in equity at their disposal. This assumes a maximum 80% loan-to-value ratio (LTV), according to ICE’s latest Mortgage Monitor report for May 2024. That figure is about double what it was back in early 2018, when it stood at around $5. 5 trillion, which sounds pretty unbelievable. Put another way, millions of homeowners with a mortgage have the ability to tap into their home equity, either via a home equity line of credit (HELOC), home equity loan, or a traditional cash-out refinance. And the average borrower can access about $206,0000, up from $185,000 at the same time last year. In addition, they can do so while keeping a 20% cushion between outstanding loan balances and their property value. But because current mortgage rates are more than double recent lows, borrowers may not be interested in doing any of those things. Ironically, this will just drive up that amount of tappable equity, as borrowers continue to eschew borrowing and pay down their mortgages. Instead of a HELOC, Why Not Just Use a Credit Card? If you need cash for home renovations you don't necessarily need to tap equity It's possible to get a fairly high-limit credit card and 0% APR for nearly 2 years Some contractors even allow credit card...

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### Want to Move But Have a Super Low Mortgage Rate? Here’s What My Friend Is Doing

- Published: 2024-05-13
- Modified: 2024-06-28
- URL: https://www.thetruthaboutmortgage.com/want-to-move-but-have-a-super-low-mortgage-rate/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

I spoke to a friend the other day who is selling their home and moving up to a bigger one. Crazy I know! What with home prices where they are the mortgage rates more than double their early 2022 levels. Despite this, they needed more space (and wanted a new locale) and were ready to move on from their old home. Sure, it might not be the best time to buy a home, but it’s not always about the financials. And even so, they’ve got a plan to offset the big jump in interest expense. They’ve Currently Got a 30-Year Fixed Mortgage Set at 2. 75% First some background on the deal. They purchased their existing home around 2012, which was basically the housing market bottom post-GFC. This was one of the very best times to purchase a home in recent memory. Aside from seeing their home nearly triple in value, they also snagged a crazy low mortgage rate. A 30-year fixed at 2. 75%. Pretty hard to beat. The purchase price of the home was around $400,000, and is expected to sell for around $1 million today. Also pretty hard to beat! Problem is, mortgage rates are now closer to 7% and home prices on replacement homes are comparatively high as well. In short, if you sell today you take on a much higher mortgage rate and sales price. This means a significantly higher payment. They can actually absorb the higher payment, but they know swapping a 2. 75%...

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### Which Mortgage Should I Pay Off First?

- Published: 2024-05-01
- Modified: 2024-05-02
- URL: https://www.thetruthaboutmortgage.com/which-mortgage-should-i-pay-off-first/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A : “Which mortgage should I pay off first? ” Today we're going to talk about strategy if you hold multiple mortgages and want to reduce your total interest expense by paying one off ahead of schedule. It's not uncommon to have multiple mortgages, such as a first and second mortgage tied to the same property. Or perhaps a couple mortgages on separate properties, such as one on a primary home and another on a second home (or investment property). Before we dig into the details, paying down the loan with the higher interest rate is generally advised. Generally Best to Pay Off Highest Interest Rate First Like any other loan or credit card you have it's typically beneficial to pay off the one with the highest interest rate first This usually means a second mortgage (as they often feature very high mortgage rates) Or a mortgage tied to a second home or investment property (they also carry higher rates) But you should do the math with an early payoff calculator to be sure of your decision Let's consider an example. If you’ve got a first mortgage with an interest rate of 6%, and a second mortgage set at 12%, it’d probably be in your best interest to knock out that second mortgage sooner rather than later. That means making extra mortgage payments on the second mortgage if you’ve got the money handy (assuming you actually wish to pay down your mortgage ahead of time). These days you have...

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### Assumable Mortgages: Do They Finally Make Sense with 7%+ Mortgage Rates?

> How an assumable mortgage works and why they might get super popular with mortgage interest rates above 7%.

- Published: 2024-04-30
- Modified: 2025-02-21
- URL: https://www.thetruthaboutmortgage.com/assumable-mortgages-set-to-get-popular-once-rates-rise/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

It's time to talk about assumable mortgages. Everyone knows mortgage rates are no longer super cheap. The popular 30-year fixed was in the low 3% range just last year and today is closer to 7. 5%. And it's possible mortgage rates could move higher before they move lower, though they could be close to peaking. For existing homeowners, this has created a strange dynamic where they are effectively "locked-in" by their low rates. In other words, they have less incentive to move out if they need to buy again and subject themselves to a higher interest rate on their next home purchase. But if their mortgage is "assumable," they could use it as a leverage to sell their home for more money. Key Takeaways on Assumable Mortgages Assumable mortgages let buyers take over a seller’s home loan, including the outstanding loan amount, interest rate, and remaining loan term FHA, VA, and USDA loans are assumable, while conventional loans (such as Fannie/Freddie) typically are NOT Assuming a 3% 30-year fixed is much more attractive than taking out a new 7% mortgage But home sellers might list their property higher if you can assume their loan And you might need a very large down payment or second mortgage to bridge the gap between purchase price and outstanding loan amount Also note that loan assumptions can be time-consuming and difficult to close How an Assumable Mortgage Works Assumable mortgages can be transferred from one borrower to another on the same property A homeowner...

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### What Do Mortgage Loan Processors Do? In Short, Everything to Close Your Loan!

- Published: 2024-04-29
- Modified: 2025-01-16
- URL: https://www.thetruthaboutmortgage.com/what-do-loan-processors-do/
- Categories: Mortgage Tips

I’ve already covered the mortgage underwriter’s role, so let’s take a look at what mortgage loan processors do too. After you speak to a mortgage broker or loan officer and agree to move forward with a loan application, a processor may reach out to gather required paperwork. This individual is responsible for prepping and organizing your loan file and getting it over to the underwriting department for approval. Other than that, they can also answer questions, provide status updates, and guide you through the loan process from start to finish. In that sense, they play an integral role in getting your loan funded while acting as a liaison between you and all parties to the loan. Loan Processors Are the Workhorse Behind Your Mortgage A loan processor's main function is to assist mortgage brokers and loan officers from application to funding They compile and review important paperwork from the borrower like pay stubs and bank statements And look out for any red flags along the way that could create issues or headaches They also communicate with all parties to the loan from start to finish to ensure everything goes smoothly Loan processors, also known as loan coordinators, are very important figures in the home loan process, and often quite knowledgeable about mortgages as well. They are the loan officer's right-hand man/woman that assists with loan prep and all the day-to-day stuff that happens from loan origination to loan funding. This includes gathering paperwork from the borrower, determining loan eligibility, reviewing...

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### What Do Mortgage Underwriters Do? Decide If You're Approved!

- Published: 2024-04-23
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/what-do-underwriters-do/
- Categories: Home Buying, Mortgage Tips

Here’s some Q&A with regard to the home loan approval process: “What do underwriters do? ” Once you actually apply for a home loan, your mortgage application will be organized by a loan processor and then sent along to a loan underwriter, who will determine if you qualify for a mortgage. The underwriter can be your best friend or your worst enemy, so it's important to put your best foot forward. The expression, "you've only got one chance to make a first impression" comes to mind here. Trust me, you'll want to get it right the first time to avoid going down the bureaucratic rabbit hole. The Underwriter Will Approve, Suspend, or Decline Your Mortgage Application After you formally apply for a home loan your file will be submitted to the underwriting department A human underwriter will then review your loan application and decision it Their job is to approve, suspend, or decline your application based on its contents It's paramount to submit a clean file to boost your chances of loan approval Simply put, the loan underwriter's job is to approve, suspend, or decline your mortgage application. If the loan is approved, you'll receive a list of "conditions" which must be met before you receive your loan documents.   So in essence, it's really a conditional loan approval. If the loan is suspended, you’ll need to supply additional information or loan documentation to move it to approved conditional status. If the loan is declined, you’ll more than likely need...

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### Portfolio Lenders: A Solution for Hard to Close Mortgages

- Published: 2024-04-22
- Modified: 2024-08-17
- URL: https://www.thetruthaboutmortgage.com/use-portfolio-lenders-for-hard-to-close-mortgage-deals/
- Categories: Mortgage Tips

If you’re having trouble obtaining a home loan, perhaps after speaking to multiple banks, lenders and even a mortgage broker, consider reaching out to a "portfolio lender. " Simply put, portfolio lenders keep the loans they originate (instead of selling them off to investors), which gives them added flexibility when it comes to underwriting guidelines. As such, they might be able to offer unique solutions others cannot, or they could have a special loan program not found elsewhere. For example, a portfolio lender may be willing to originate a no-down payment mortgage while others are only able to provide a loan up to 97% loan-to-value (LTV). Or they could be more forgiving when it comes to marginal credit, a high DTI ratio, limited documentation, or any other number of issues that could block you from obtaining a mortgage via traditional channels. What Is a Portfolio Loan? A home loan kept on the bank's books as opposed to being sold off to investors May come with special terms or features that other banks/lenders don't offer Such as no down payment requirement, an interest-only feature, or a unique loan term Can also be useful for borrowers with hard-to-close loans who may have been denied elsewhere In short, a "portfolio loan" is one that is kept in the bank or mortgage lender's portfolio, meaning it isn't sold off on the secondary market shortly after origination. This allows these lenders to take on greater amounts of risk, or finance loans that are outside the...

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### How Does Mortgage Refinancing Work?

> A detailed overview of how mortgage refinancing works, including examples and a breakdown of different types of refinances.

- Published: 2024-04-17
- Modified: 2025-02-10
- URL: https://www.thetruthaboutmortgage.com/how-does-refinancing-work/
- Categories: Mortgage Tips, Refinance

Trade In Your Old Home Loan for a New One Fundamental mortgage Q&A: “How does mortgage refinancing work? ” When you refinance a mortgage, you trade in your old home loan for a new one in order to get a lower interest rate, cash out of your home, and/or to switch loan programs. In the process, you'll also wind up with a new mortgage term, and possibly even a new loan balance if you elect to tap into your home equity. You may choose to obtain this new mortgage from the same bank (or loan servicer) that held your old loan, or you may refinance your home loan with an entirely different lender. That choice is up to you. It's certainly worth your while to shop around if you're thinking about refinancing your mortgage, as your current lender may not offer the best deal. I've seen first-hand lenders try to talk their existing customers out of a refinance simply because there wasn't an incentive for them. So be careful when dealing with your current lender/servicer. Anyway, the bank or mortgage lender that funds your new mortgage pays off your old loan balance with the proceeds from the new loan, thus the term refinancing. You are basically redoing your loan. In a nutshell, most borrowers choose to refinance their mortgage either to take advantage of lower interest rates or to access equity they've accrued in their home. Two Main Types of Mortgage Refinancing As noted, a mortgage refinance is essentially a...

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### What Mortgage Rate Can I Get With My Credit Score?

- Published: 2024-04-16
- Modified: 2024-04-16
- URL: https://www.thetruthaboutmortgage.com/what-mortgage-rate-can-i-get-with-my-credit-score/
- Categories: Mortgage Rates, Mortgage Tips

A reader recently asked, “What mortgage rate can I get with my credit score? ”  So I figured I’d try to clear up a somewhat complex question. With mortgage rates no longer at all-time lows (sigh), borrowers looking to refinance a mortgage or purchase a home are facing an uphill battle. Today, it's much more common for your rate to start with a 6 or 7 as opposed to a 2 or 3. While these higher rates aren't bad historically, the velocity of change over the past few years has been dramatic. This contrasts those 1980s mortgage rates, which were already high before simply moving even higher. But no matter where mortgage rates are, your credit score will play a huge role in determining whether you get a good, average, or not-so-good rate. What you see advertised isn't always what you get, and could in fact be a lot higher if you've got marginal credit scores. Conversely, you might be able to score a below-market rate if you've got an excellent FICO score. Let's explore why that is so you can set the right expectations and avoid any unpleasant surprises when you finally speak to a lender. Mortgage Rates Are Based on Your Credit Score The illustration above should give you an idea of the importance of credit scores When it comes to mortgages even a small difference in rate can equate to thousands of dollars Someone could have a rate 0. 75% higher (or more) based on credit score...

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### Top Mortgage Lenders of 2023: UWM Finally #1 After Rocket's Reign Comes to an End

- Published: 2024-04-15
- Modified: 2025-04-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-2023/
- Categories: Mortgage News

We’ve finally got data for 2023 and United Wholesale Mortgage (UWM) left no doubt that it was the top mortgage lender during the year. And by a wide margin. The Pontiac, Michigan-based company mustered an impressive $108. 5 billion in home loan volume, despite only operating in the wholesale lending channel. That was more than enough to unseat Rocket Mortgage from the top spot, with their crosstown rivals only able to originate about $76. 3 billion. It then dropped off significantly, with third place Chase closing just $38. 4 billion in home loans. In total, more than 5,000 mortgage companies nationwide funded roughly $1. 8 trillion in home loans during 2023, a sizable drop from the $2. 3 trillion seen in 2022. Last year was a very difficult year for the mortgage industry, with rapidly rising mortgage rates wreaking havoc on refis and challenging home buyer affordability. Still, some companies managed to increase market share and climb the leaderboard. Read on to see who else made the top 10. Top Mortgage Lenders of 2023 (Overall Leaders) Ranking Company Name 2023 Loan Volume 1. United Wholesale Mortgage $108. 5 billion 2. Rocket Mortgage $76. 3 billion 3. Chase $38. 4 billion 4. Wells Fargo $32. 1 billion 5. CrossCountry Mortgage $29. 6 billion 6. Bank of America $28. 5 billion 7. Fairway Independent $26. 9 billion 8. U. S. Bank $25. 7 billion 9. DHI Mortgage $21. 7 billion 10. loanDepot $21. 5 billion As noted, UWM claimed the #1 spot...

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### Why Are Refinance Rates Higher? It All Has to Do With Risk

- Published: 2024-04-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-refinance-rates-higher/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Mortgage Q&A: “Why are refinance rates higher? ” If you’ve been comparing mortgage rates lately in an effort to save some money on your home loan, you may have noticed that refinance rates are higher than purchase loan rates. This seems to be the case for a lot of big banks out there, including Chase, Citi, and Wells Fargo, which while enormous institutions, aren’t necessarily the leaders in the mortgage biz anymore. In fact, today United Wholesale Mortgage in the #1 spot, followed by Rocket Mortgage, then a mix of these big banks and nonbanks, including CrossCountry Mortgage, Fairway Independent Mortgage, and others. So why is that some of the big guys list “purchase rates” and “refinance rates” separately, with different pricing, points, and APRs? Well, for starters a home purchase is not the same as a mortgage refinance, despite both processes being very similar, and the underlying loans themselves not much different. Ultimately, a home purchase loan is for someone who has yet to buy a property, whereas a mortgage refinance is for an existing homeowner who wants to redo their home loan. We know they are different objectives, but if the underlying loans are both 30-year fixed mortgages with the same loan amounts, the same borrower credit scores, and the same property types, why should rates be any different? Let's find out. Home Purchase Mortgages Default the Least There are three main types of mortgages, including home purchase loans, rate and term refinances, and cash out refinances. The...

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### Does the Fed Control Mortgage Rates?

- Published: 2024-03-28
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/does-the-fed-control-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: “Does the Fed control mortgage rates? ” With all the recent hubbub concerning mortgage rates, and the Fed, you might be wondering how it all works. Does the Federal Reserve decide what the interest rate on your 30-year fixed mortgage is going to be? Or is it dictated by the open market, similar to other products and services, which are supply/demand driven. Before getting into the details, we can start by saying the Fed doesn’t directly set mortgage rates for consumers. But it’s a little more complicated than that. The Federal Reserve Plays a Role in the Direction of Mortgage Rates A more accurate way of defining the Fed/mortgage rate relationship Is that it might be an indirect, long-term one that takes a lot of time to materialize If the Fed is raising rates over time, long-term mortgage rates may eventually follow The same is true if the Fed is guiding rates lower, as common economic factors typically affect both As noted, the Federal Reserve doesn’t set mortgage rates. They don’t say, “Hey, the housing market is too hot, we’re increasing your mortgage rates tomorrow. Sorry. ” This isn’t why the 30-year fixed started the year 2022 at around 3. 25%, and is now closer to 7% today. But you could argue that the Fed indirectly influences mortgage rates. Ultimately, the Fed is just trying to control inflation via short-term rates. This in turn dictates how longer-term rates may play out. Essentially, the market for longer-term rates such...

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### Fannie Mae and Freddie Mac Expect Mortgage Rates to Be Higher for Longer

- Published: 2024-03-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-expect-mortgage-rates-to-be-higher-for-longer/
- Categories: Mortgage News, Mortgage Rates

Well, so much for mortgage rates falling just in time for the spring home buying season. While many expected interest rates to be lower by now, they’ve proven to be pretty sticky at current levels. At last glance, the 30-year fixed is still hovering close to 7%, albeit better than October 2023 when it was around 8%. But there was hope we’d see rates in the 6% range by now and maybe even lower if the Fed had cut rates earlier. Interestingly, rates are actually pretty well aligned with the 2024 mortgage rate predictions made at the end of last year. The likes of Fannie Mae and the Mortgage Bankers Association pegged the popular loan program at 7% for the first quarter of 2024. And that’s pretty much where we stand today. The bad news is they’ve now indicated that it could take longer for rates to fall to more agreeable levels. Fannie Mae Has Adjusted Its Mortgage Rate Forecast Higher for 2024 and 2025 In Fannie Mae’s March forecast, they noted that their “interest rate forecast has been upgraded. ” And not upgraded in a good way. Upgraded as in expect higher mortgage rates for the foreseeable future. Just how bad is it? Well, after making adjustments a month earlier, they’ve since made upgrades of four-tenths and five-tenths, for the years 2024 and 2025, respectively. This puts the 30-year fixed at an average of 6. 6% in 2024 and 6. 2% in 2025. In other words, no sub-6% mortgage...

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### President Biden Proposes New $10,000 Mortgage Relief Credits

- Published: 2024-03-07
- Modified: 2024-03-09
- URL: https://www.thetruthaboutmortgage.com/president-biden-proposes-new-10000-mortgage-relief-credits/
- Categories: Home Buying, Mortgage News

The Biden Administration has just unveiled a number of proposals to make homeownership more affordable. Aside from legislation to build and renovate more than two million homes, they are calling on Congress to approve a pair of new “mortgage relief credits. ” One targets prospective home buyers grappling with significantly higher mortgage rates, while the other addresses home sellers dealing with mortgage rate lock-in. Both are intended to increase the supply of homes for sale, which has been below healthy levels for several years now. The question remains whether incentivizing home buying is what’s necessary for the housing market at the moment. $5,000 Tax Credit for Two Years for First-Time Home Buyers The mortgage relief that targets home buyers would provide a tax credit of $5,000 for two years to first-time home buyers. Generally, this is defined as someone without ownership interest in the three years preceding the home purchase. In total, these new home buyers could snag $10,000 in tax savings over the first two years. A tax credit directly reduces your tax bill, unlike a deduction, which simply reduces your taxable income. This piece of legislation is intended to tackle the high mortgage rates currently available, which nearly tripled from below 3% to above 8% recently. Per the White House fact sheet, the $10,000 in savings is the equivalent of reducing the borrower’s mortgage rate by more than 1. 5 percentage points on a median-priced home. At last glance, the median home was valued at roughly $418,000. Of...

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### Why Won’t Home Builders Lower Prices If Mortgage Rates Are Way Higher?

- Published: 2024-03-07
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/why-dont-home-builders-lower-prices-if-mortgage-rates-are-way-higher/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Lately, mortgage rates have surged higher, climbing from as low as 2% to over 8% in some cases. Despite this, home builders have been enjoying healthy sales of newly-built homes. And somewhat incredibly, they haven’t had to lower their prices in many markets either. The question is how can they continue to charge full price if financing a home has gotten so much more expensive? Well, there are probably several reasons why, which I will outline below. Home Builders Don’t Have Competition Right Now The first thing working in the home builders’ favor is a lack of competition. Typically, they have to contend with existing home sellers. A healthy housing market is dominated by existing home sales, not new home sales. If things weren’t so out of whack, we’d be seeing a lot of existing homeowners listing their properties. Instead, sales of newly-built homes have taken off thanks to a dearth of existing supply. In short, many of those who already own homes aren’t selling, either because they can’t afford to move. Or because they don’t want to lose their low mortgage rate in the process. This is known as the mortgage rate lock-in effect, which some dispute, but logically makes a lot of sense. At the same time, home building slowed after the early 2000s housing crisis, leading to a supply shortfall many years later. Simply put, there aren’t enough homes on the market, so prices haven’t fallen, despite much higher mortgage rates. They Don't Need to Lower Prices...

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### The Power of Extra Mortgage Payments

- Published: 2024-03-04
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/the-power-of-extra-mortgage-payments/
- Categories: Mortgage Tips

Mortgages can be viewed very differently. Some see them as a positive financial instrument, a way to free up their money so it can be invested elsewhere, ideally for a better return. Then there are those who view mortgages as the root of all evil, as a debt overhang that must be terminated as quickly as possible. Whatever your stance, you’ve probably entertained the idea of making “extra mortgage payments,” though you may not know the exact impact, due to the complexity of mortgage amortization. Fortunately, there are early payoff calculators available that take the guesswork out of the process and make it easy to see how much you can save in a number of different scenarios. Adding an Extra Mortgage Payment of $10 Per Month Even adding a nominal amount such as $5 or $10 On a monthly basis over a long period of time Can save you thousands of dollars on your mortgage And shorten your loan term at the same time Let’s start with a simple scenario where you add just $10 a month in extra payment to principal. Assuming you’ve got a $100,000 loan amount set at 4% on a 30-year fixed mortgage, that extra $10 payment would save you $3,191. 81 over the full loan term. It would also shorten your mortgage by 13 months, meaning your 30-year mortgage would be a 28-year (ish) mortgage. So that’s good news, right? You save thousands and you only have to pay a measly $10 extra per month....

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### UWM Is Officially the Nation’s Largest Mortgage Lender

- Published: 2024-02-28
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/uwm-is-officially-the-nations-largest-mortgage-lender/
- Categories: Mortgage News

It’s official. United Wholesale Mortgage (UWM) is the nation’s largest mortgage lender. The Pontiac, Michigan-based wholesale lender took the top spot for all of 2023 after easily beating out former #1 lender Rocket Mortgage. In total, the company funded $108. 3 billion in home loans during the year, compared to Rocket’s $78. 7 billion tally. Crosstown rival Rocket, based in Detroit, had been the nation’s top mortgage lender since 2018. Prior to that, Wells Fargo was the top dog, though the San Francisco bank has steadily shrunk its mortgage footprint over the years. Still, they remain in third place. UWM Generated the Most Loan Volume of Any Mortgage Lender for All of 2023 Similar to their predecessors, UWM was able to beat out the rest of the competition in a quarter or two before getting to the top of the pile. But they finally mustered outright victory for an entire year in 2023, without even needing their fourth quarter production of $24. 4 billion. That’s pretty impressive. Of course, it wasn’t all good news. The company still saw production fall year-over-year from $127. 3 billion in 2022. And they lost money last year as well. UWM recorded a net loss of $69. 8 million in 2023, compared to $931. 9 million of net income in 2022. Though UWM Chairman and CEO Mat Ishbia said they are “operationally profitable,” and that the loss was the result of MSR markdowns related to interest rate movements. Given how difficult of a year it...

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### What Is a Mortgage Loan Servicer? The Company That Collects Your Payments

- Published: 2024-02-27
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/what-is-a-mortgage-loan-servicer/
- Categories: Mortgage Tips

Perhaps one of the most confusing aspects of getting a mortgage is knowing who you actually pay once the thing funds. And to that end, when your first mortgage payment is due. While Bank X may have closed your loan, an entirely different company could send you paperwork and a payment booklet. What gives? Well, this highlights the difference between a mortgage lender and a mortgage servicer. The former funds your loan and the latter collects payments each month thereafter until the loan is paid off. Sometimes it's the same company, sometimes it's not, assuming your loan is sold off after closing. Mortgage Lender vs. Mortgage Servicer The bank or mortgage lender processes and funds the home loan Once it closes it may be sold off to a loan servicer or retained in portfolio The job of a loan servicer is to collect monthly mortgage payments And manage escrow accounts if your home loan has impounds As noted, a mortgage loan servicer, also known simply as a loan servicer, is the company that collects your monthly mortgage payments once the loan funds. Each month, you will send payment to this company, which could go on for 30 years depending on how long you keep your loan. They will also manage your escrow account if your home loan has impounds, collecting a portion of property taxes and homeowners insurance each month, before making those payments on your behalf when due. So really, there’s a good chance you’ll deal with your loan...

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### The Refinance Rule of Thumb: Only Refinance Your Mortgage If...

- Published: 2024-02-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-refinance-rule-of-thumb/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

How Much Lower Should Mortgage Rates Be to Refinance? Unfortunately there is no one-size-fits-all answer to this question Because no two loan scenarios (or homeowners) are the same You have to factor in existing home loan details along with old rate vs. new And future plans/financial objectives/expected tenure in home, etc. If you’ve considered refinancing your mortgage, you may have searched for the “refinance rule of thumb” to help you make your decision. Funnily enough, there isn’t just a single refinance rule of thumb. There are numerous ones that exist. And before we dive into them, it should be noted that rules don't tend to work universally because there is a laundry list of reasons to refinance a mortgage. What works for one person might not work for another, and if you're relying on some sort of shortcut to make a decision, you might wind up shortchanging yourself in the process. That being said, let's look at some of these "refinance rules" to see if there are any takeaways we can use to our advantage. Only Refinance If the New Mortgage Rate Is 2% Lower Some say to only refinance if you can get a rate 2%+ lower This is definitely not a rule to live by and ultimately very conservative It's possible to save lots of money with a rate that is less than 1% lower There are also other reasons to refinance that aren't always interest rate-dependent One popular refinance rule says you should only refinance if your...

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### What’s the Best Mortgage for First Time Buyers?

- Published: 2024-02-22
- Modified: 2024-02-22
- URL: https://www.thetruthaboutmortgage.com/whats-the-best-mortgage-for-first-time-buyers/
- Categories: Home Buying, Housing Market, Mortgage Tips

If you’re new to real estate and preparing to make an offer on a property, you might be wondering what mortgage is best for a first-time home buyer. This is especially important now that mortgage rates have essentially doubled, putting budgets front and center. It also means the popular 30-year fixed is no longer the default option for home buyers, with cheaper adjustable-rate mortgages now a consideration. While both seasoned homeowners and first-time buyers may wind up with the same exact home loan, there are additional options to consider if you’ve never bought a home before. Let's explore the many loan choices available today to determine what might be best in the current environment. Home Loan Types to Consider If You're a First-Time Buyer Fannie Mae HomeReady (3% down payment) Freddie Mac Home Possible (3% down payment) FHA loans (3. 5% down payment) VA loans (0% down payment for vets/active duty) USDA loans (0% down payment for rural home buyers) State Housing Finance Agency loans (down payment assistance and help with closing costs) Also look for local and national grants for first-time home buyers and Mortgage Credit Certificates (MCCs) I've listed the most common loan types available to first-time home buyers, many of which are also an option for existing homeowners. These generally don't require much in terms of down payment, which seems to be a chief need/want for first-time buyers that don't have the equity of move-up buyers. Personally, I prefer to put down 20% on a home purchase...

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### Cash Out vs. HELOC vs. Home Equity Loan: Which Is the Best Option Right Now and Why?

- Published: 2024-02-20
- Modified: 2025-01-14
- URL: https://www.thetruthaboutmortgage.com/cash-out-vs-heloc-vs-home-equity-loan/
- Categories: Mortgage Matchups, Mortgage Rates, Mortgage Tips, Refinance

It's time for another mortgage match-up: "Cash out vs. HELOC vs. home equity loan. " Yes, this is a three-way battle, unlike the typical two-way duels found in my ongoing series. Let’s discuss these options with the help of a real-life story involving a buddy of mine. Now that mortgage rates are closer to 7% than they are 3%, there's little reason for existing homeowners to refinance. After all, if you were lucky enough to lock in a fixed mortgage rate in the 2-4% range, why would you exchange it for a rate nearly double that? Chances are you wouldn't, which explains why second mortgages like home equity loans and HELOCs have surged in popularity. Let's take a closer look at popular home equity extraction options to see which may be the best fit for your situation. Perhaps the biggest consideration will be your existing mortgage rate, which you'll either want to desperately keep or be happy to give away. Cash Out Your First Mortgage or Take Out a HELOC/Home Equity Loan Instead? If you have a mortgage and need cash, you've got two main options to access home equity You can refinance your first mortgage and take cash out on top of the existing balance Or you can take out a second mortgage to avoid disrupting the rate/term on the first mortgage This can be in the form of a variable-rate HELOC or a fixed-rate home equity loan A couple years ago, a friend told me he was refinancing...

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### 15-Year Fixed vs. 30-Year Fixed: The Pros and Cons

> An in-depth look at the 15-year fixed vs. 30-year fixed mortgage, and the reasons one may be better suited for you.

- Published: 2024-02-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/30-year-fixed-vs-15-year-fixed/
- Categories: Mortgage Matchups, Mortgage Tips

It's time for another mortgage match-up: "15-year fixed vs. 30-year fixed. " As always, there is no one-size-fits-all mortgage solution because everyone is different and may have varying real estate and financial goals. For example, it depends if we're talking about a home purchase or a mortgage refinance. Or if you're a first-time home buyer with nothing in your bank account or a seasoned homeowner close to retirement. Ultimately, for home buyers who can only muster a low down payment, a 30-year fixed-rate mortgage will likely be the only option from an affordability and qualifying standpoint. So for some, the argument isn't even an argument. It's over before it starts. But let's explore the key differences between these two loan programs so you know what you're getting into. 15-Year Fixed vs. 30-Year Fixed: What's Better? The 15-year fixed and 30-year fixed are two of the most popular home loan products available. They are very similar to one another. Both offer a fixed interest rate for the entire loan term, but one is paid off in half the amount of time. That can amount to some serious cost differences and financial outcomes. While it's impossible to universally choose one over the other, we can certainly highlight some of the benefits and drawbacks of each. As seen in the chart above, the 30-year fixed is cheaper on a monthly basis, but more expensive long-term because of the greater interest expense. The 30-year mortgage rate will also be higher relative to the 15-year...

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### Mortgage Impounds vs. Paying Taxes and Insurance Yourself: The Pros and Cons

- Published: 2024-02-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-impounds-vs-paying-taxes-and-insurance-yourself/
- Categories: Mortgage Matchups, Mortgage Tips

If you’ve been researching mortgages, or are in the process of taking out a home loan, you may have come across the term “impounds” or “escrows. ” When you hear these seemingly complex words, the loan officer or mortgage broker is simply referring to an impound account, also known as an escrow account. Here's how it works. Each month, a portion of property taxes and homeowners insurance are collected along with your regular mortgage payment, then disbursed to the appropriate parties when due. This arrangement ensures the lender that taxes and insurance are paid on time, instead of relying on the homeowner to make the payments themselves. It protects the lender's interest in the property since taxes are compulsory and insurance shields the collateral from harm. What Are Mortgage Impounds? A housing payment includes a mortgage, homeowners insurance, and property taxes Impounds (or escrows as they're also known) refers to the automatic collection of taxes and insurance It ensures the homeowner has funds available to make these important payments when due A portion of these costs is taken out of your housing payment each month and set aside until disbursement Many mortgages these days require an escrow account to ensure the timely disbursement of property taxes and homeowners insurance premiums. This account is managed by a third-party intermediary, typically a loan servicer, who collects and disperses funds on behalf of the homeowner. Homeowners pay money into the escrow account at loan closing, and each month after that with their mortgage...

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### Is Rent Out and Rent the New Way to Move to a Different House?

- Published: 2024-02-15
- Modified: 2024-02-15
- URL: https://www.thetruthaboutmortgage.com/is-rent-out-and-rent-the-new-way-to-move-to-a-different-house/
- Categories: Home Buying, Housing Market

I had a conversation with a friend the other day about his current housing situation. In a nutshell, the home he resides in isn’t large enough for his family, nor does it have certain amenities like a swimming pool. At the same time, he loves his home and the very cheap mortgage attached. Like millions of other Americans, he’s got a 30-year fixed in the low 3% range. This has created a dilemma for him and many others, who want to move, but can’t make it pencil at today’s rates and asking prices. But one thought is to rent out his current home and then rent another, as opposed to buying. Or selling for that matter. It’s Possible to Rent Out Your Current Home and Rent Yourself One trend that has emerged of late is the ‘rent out and rent’ scheme. The way it works is relatively simple. If you’re an existing homeowner, you simply rent out your property to someone else and then go rent a different home. This allows you to keep your low-rate mortgage intact, and it allows you to rent for less than what a new mortgage would cost. It works because the PITI on the old house is so low, and asking rents are pretty attractive in many markets nationwide. Sure, there might be a premium for rent on the new property, but it can still be the cheaper option relative to buying a home. And the homeowner doesn’t need to worry about a large...

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### 18 Important Mortgage Refinance Questions Answered

- Published: 2024-02-14
- Modified: 2024-02-20
- URL: https://www.thetruthaboutmortgage.com/refinance-questions/
- Categories: Mortgage Tips, Refinance

With mortgage rates no longer at or near record lows, the refinance question has become a lot more complex. It used to be a no-brainer to refinance if you hadn't in a while, with 30-year fixed rates in the 2-3% range for many years thanks to the Fed and their mortgage-backed securities (MBS) buying spree. But those days have come and gone, and today the only homeowners looking to refinance probably got their mortgage when rates were closer to 8%. Of course, there are myriad reasons to refinance and you’ve likely pondered one at some point if you’re already a homeowner. You probably have a lot of questions too, especially if it’s your first time refinancing a home loan. Let’s clear up some of the confusion by tackling some of the most common refinance questions out there. 1. When is a good time to refinance? As noted, mortgage rates are no longer near their record lows, sadly. In fact, they've since more than doubled as inflation finally forced the Fed's hand. This has made refinancing attractive to only a select few at the moment. In the not-too-distant past, it used to be anyone with a stale interest rate. No longer... But there are other reasons to refinance too, such as to tap home equity to furnish improvements or to pay down other debt or other expenses. You just have to be mindful of losing your low rate in the process, assuming you currently have a low rate. If you do,...

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### Should You Only Buy a House If You Can Afford a 15-Year Fixed Mortgage Payment?

- Published: 2024-02-13
- Modified: 2024-03-19
- URL: https://www.thetruthaboutmortgage.com/should-you-only-buy-a-house-if-you-can-afford-a-15-year-fixed-mortgage-payment/
- Categories: Housing Market, Mortgage Tips

I’ve already written at length about the pros and cons of a 15-year fixed mortgage, but some financial experts claim you shouldn’t even buy a home if you can’t afford this shorter-term mortgage option. You know, guys like Dave Ramsey, and perhaps more reasonable folks like that financial planner you visited recently. The problem is that many, many Americans simply can’t afford the higher monthly payments tied to a 15-year fixed mortgage, for better or worse. And that shouldn't necessarily stop them from purchasing a home. This isn't dissimilar to buying a home with less than 20% down if it means getting in the door several years earlier. 15-Year Mortgage or Bust? Some financial gurus argue if you can't afford the 15-year fixed mortgage payment You're buying too much home or simply shouldn't be buying at all But this "rule" is simply too rigid for my liking and could set you back in the long run You can always pay more each month, refinance if rates improve, or put your cash to use elsewhere Let’s talk about the rationale behind this theory first to see why it's often suggested. With a 15-year fixed mortgage, you own your home in, you guessed it, half the time. Just a decade and a half versus the lengthy three decades it takes to pay off a more common 30-year fixed-rate mortgage. That’s the first big benefit, obviously. Another is you save an absolute ton on interest because the amortization period is cut in half...

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### 10 Big Mortgage Myths Proved Wrong, Once and For All

- Published: 2024-02-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-myths/
- Categories: Credit Scores, Mortgage Rates, Mortgage Tips, Refinance

These days, the world is full of misinformation. You can thank the Internet for that, which has led to an explosion in content, both good and bad. Social media isn't much help either, with everyone looking to go viral regardless of what they say is actually true. Let's put some common mortgage myths to bed once and for all so you don't inadvertently miss out on becoming a homeowner. After all, property owners tend to acquire a lot more wealth than renters, so why let these falsehoods stand in your way? You Need Perfect Credit to Get a Mortgage Let’s start with credit because it’s a biggie. Lots of renters seem to think you need a 700+ FICO score to get a home loan. This simply isn't true, nor anywhere close to the truth. Sure, a higher credit score can help you get a lower mortgage rate, but it’s not necessary to qualify. In fact, you can get an FHA loan with a credit score as low as 500, and there’s technically no minimum score for VA loans (though lenders do impose floors). When it comes to a conforming loan backed by Fannie Mae or Freddie Mac (the most common loan type), you only need a 620 FICO. These aren’t particularly high credit scores, or anything I’d refer to as “good” or even “average credit. ” At last glance, the average FICO score was over 700. Simply put, you can get a mortgage with a low credit score. And while...

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### When Should You Start Looking for a House?

- Published: 2024-02-07
- Modified: 2024-02-07
- URL: https://www.thetruthaboutmortgage.com/when-should-you-start-looking-for-a-house/
- Categories: Housing Market, Mortgage Tips

Real estate Q&A: "When should you start looking for a house? " The short answer: Immediately. That is, if you want to buy a home at some point in the next year, or any time thereafter. We’ll get into the specifics in a moment, but there’s really no sense in waiting if you want to own a home or condo because it’s always going to be a lengthy process. Sure, once you find “the one” it might only take a month, or even less, to close escrow, thanks to new technologies that are making the actual transactional piece faster. But the sale is just one slice of the pie, and usually the fastest part. Personally, whenever I’ve looked for real estate, it’s been a long, long search. We’re talking many months if not a year or longer. Consider All Aspects of the Home Buying Process Decide you want to buy a home (might be a long or short process) Determine if you're able to afford one (seek out mortgage pre-approval) Might need additional time to save for down payment and/or improve credit Start looking at listings (set saved searches and alerts on popular apps) Find a real estate agent to work with (can be early on or late in the process) Attend open houses, tour properties, and find one you like Make an offer the seller accepts Conduct inspections of the property Secure financing and close your loan It’ll Probably Take You Over a Year to Find a Home If...

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### Does Refinancing Hurt Your Credit Score?

- Published: 2024-02-06
- Modified: 2024-05-28
- URL: https://www.thetruthaboutmortgage.com/does-refinancing-hurt-your-credit-score/
- Categories: Credit Scores

Mortgage Q&A: “Does refinancing hurt your credit score? ” Everyone seems to be obsessed with their credit scores and what impact certain actions may have on them. Perhaps the credit bureaus are to blame since they're constantly urging us to check our scores for any changes. Let's cut right to the chase. When it comes to mortgage refinancing, your credit score probably won’t be negatively impacted unless you’re a serial refinancer. Like anything else, moderation is key here. And the savings could easily outweigh any drop in scores, which will likely be minimal and temporary anyway. A Mortgage Refinance Will Result in a Credit Pull A refinance is treated as a new line of credit (since it's a new loan! ) It will also involve a credit report pull (possibly several if you shop around) And the closure of the old loan that is being paid off via the transaction All three of these actions MAY reduce your credit scores, at least temporarily When you refinance your home loan, the bank or mortgage lender will pull your credit report and you’ll be hit with a hard credit inquiry as a result. It'll stay on your credit report for two years, but only affect your scores for the first 12 months. What's more, it will show up on all three credit reports with all three credit bureaus. This includes Equifax, Experian, and TransUnion. The credit inquiry alone might lower your credit score 5-10 points. But if you’re constantly refinancing and/or applying...

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### Do Mortgage Rates Change Daily?

> Similar to stocks and bonds, mortgage rates can move higher or lower daily based on economic reports and market conditions.

- Published: 2024-02-02
- Modified: 2024-02-03
- URL: https://www.thetruthaboutmortgage.com/do-mortgage-rates-change-daily/
- Categories: Mortgage Rates, Mortgage Tips

The latest mortgage Q&A: “Do mortgage rates change daily? ” It’s that time again folks, where I answer your burning mortgage questions. Mortgage rates are hot news right now. After the 30-year fixed surpassed 8% in October, a near-21st century high, it has since come down to below 7%, though just barely. The hope is this trend continues into 2024 and rates eventually dip below 6%. But as always, expect the unexpected when it comes to mortgage rates or you'll be caught off guard. Lately, mortgage rates have been extremely volatile as a result of ongoing inflation concerns, the end of the government's MBS buying program, and the economy at large. So when shopping for a home loan, it’s now more important than ever to keep a close eye on rates, because they can and will change daily (learn more about how mortgage rates are determined). Mortgage Rate Sheets Are Printed Monday Through Friday New lender rate sheets are released daily throughout the week Monday through Friday unless it's a holiday (not on weekends) Sometimes interest rates will be different, sometimes they'll remain unchanged It depends what transpired the day before and/or the morning of the release Each morning, Monday through Friday, banks and their loan officers get a fresh "mortgage rate sheet" that contains loan pricing for that day. I know because when I first started in the industry, I got tasked with handing them out to fellow employees (back when we used paper). I'll never forget kicking the...

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### Are Mortgage Points Worth the Cost?

- Published: 2024-02-01
- Modified: 2025-02-19
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-points-worth-the-cost/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: "Are mortgage points worth it? " When taking out a mortgage, whether for a new home purchase or to refinance an existing loan, one decision you’ll have to make is if it’s worth paying mortgage points to obtain an even lower interest rate. Before we get into that, it’s important to note that the term “points” gets thrown around loosely, and can refer to the loan origination fee and/or discount points. The loan origination fee is the commission charged by the bank or loan officer in exchange for working on your loan, whereas discount points are optional costs used to buy down your interest rate. It’s an important distinction because the loan origination charge is basically unavoidable (they need to eat, right? ). Whereas paying discount points (prepaid interest) is entirely optional depending on the interest rate you desire. Note that not all lenders charge loan origination fees, but that could just mean the cost is already baked into the (higher) interest rate. Either way, take the time to compare lenders' rates and fees to ensure you get the best combination of both. Key Takeaways on Paying Mortgage Points Discount points lower your mortgage rate in exchange for an upfront fee Example: Upfront cost of $5,000 to save $100/mo. on your mortgage This would take 50 months to break even and begin saving money If you keep the loan past the break-even period (cost ÷ savings) you "win" Be careful paying points if you think you'll refi/sell in...

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### Mortgage Lingo: 26 Terms You Should Know Before You Apply

- Published: 2024-01-24
- Modified: 2024-08-17
- URL: https://www.thetruthaboutmortgage.com/mortgage-lingo/
- Categories: Mortgage Tips

Applying for a mortgage can be stressful, what with all the money that’s on the line. Oh, and the possibility that you could be denied entirely, perhaps while starting a family or attempting to relocate to a new state. Making matters worse is the fact that all types of new words are thrown your way, which aside from being confusing, can make it difficult to negotiate a great mortgage rate on your home loan. If you don't know what the salesperson is talking about, how are you going to make your case for a better rate or lower fees? My central message here at TTAM has always been empowerment through knowledge, with the reward being a better mortgage, whether it’s a lower interest rate, fewer closing costs, or simply the right product. If you’re new to the game, you’ve probably got a lot of mortgage questions, and even if it’s not your first time, it never hurts to brush up on the basics. Let’s discuss some common mortgage lingo you might hear as you navigate the housing market, what the words mean, and how knowing them could save you some dough! 1. FICO Let’s start with what’s arguably the most important mortgage-related term out there; your FICO score. I say that because it can greatly impact what mortgage rate you ultimately receive, which can affect your wallet in a major way each and every month for many years to come. If you’re applying for a mortgage, you’ve probably already heard...

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### 25 Mortgage Questions You Should Know the Answer To

> The most popular mortgage questions from aspiring home buyers and existing homeowners, all answered in one convenient place.

- Published: 2024-01-18
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/21-mortgage-questions-that-are-commonly-asked-answered/
- Categories: Mortgage Rates, Mortgage Tips

I figured it'd be helpful to create a post that answers the top "mortgage questions" people ask, all in one convenient place. You should know the answers to these questions if you're serious about getting a mortgage and ready to buy a home. And you might be better off hearing it from an objective source, before you make contact with a loan officer or real estate agent. Armed with this knowledge ahead of time, you'll be more confident in your decision-making and recognize if you're being taken for a ride. Mortgage Questions and Answers 1. What will my mortgage rate be? 2. How long is my mortgage rate good for? 3. How do you calculate a mortgage payment? 4. What is a mortgage refinance? 5. How much will my housing payment really be? 6. When is the first mortgage payment due? 7. What credit score do I need to get approved? 8. What is an FHA mortgage? 9. How large of a mortgage can I afford? 10. Do I need to get pre-qualified for a mortgage? 11. Do I even qualify for a mortgage? 12. Why might I be denied a mortgage? 13. What documents do I need to provide to get a home loan? 14. What does a mortgage broker do? 15. What type of mortgage should I get? 16. How big of a down payment do I need? 17. Do I need to pay mortgage insurance? 18. What are mortgage points? Do I need to pay them? 19....

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### What Is a Trigger Lead?

- Published: 2024-01-16
- Modified: 2024-12-09
- URL: https://www.thetruthaboutmortgage.com/what-is-a-trigger-lead/
- Categories: Mortgage Tips

If you’ve recently applied for a home loan and been bombarded by competing offers, a “trigger lead” might be to blame. Simply put, when your credit is pulled, other creditors may be alerted in real-time. Armed with your contact information and your intent, they can reach out with competing offers via phone, email, or even snail mail. And the best part is the credit bureaus themselves are the ones selling this information! On the one hand, this can be seen as a major nuisance and/or invasion of privacy. But on the other, a means to shop around for your mortgage with a little less effort. Your Mortgage Application Could Alert the Competition When you apply for a mortgage, a tri-merge credit report will be ordered to determine your FICO scores and associated credit history. This allows lenders to qualify you based on your credit history, which is a key component of mortgage underwriting. A credit score is generated by Equifax, Experian, and TransUnion, collectively known as the three major credit reporting agencies (CRAs). In the process, a credit inquiry is also created, which is a record that you applied for a certain form of credit, be it a credit card, auto loan, or a mortgage on a certain date. This information can then be sold to other creditors who wish do business with you, whether it’s a mortgage lender, insurance company, auto lender, and so on. Your contact information, including name and address, along with your FICO scores, credit history,...

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### How Much Does a Real Estate Agent Make?

- Published: 2024-01-09
- Modified: 2024-08-20
- URL: https://www.thetruthaboutmortgage.com/how-much-does-a-real-estate-agent-make/
- Categories: Home Buying, Housing Market

Ever wonder how much that real estate agent you constantly see on bus benches or your grocery store receipts makes? Given the ongoing commission lawsuits, and possible shakeup regarding how they earn money going forward, this is an even more interesting datapoint. Fortunately, the National Association of Realtors (NAR) releases an annual report that details the earnings of its many members. The “2023 National Association of Realtors Member Profile” covers the approximately 1. 58 million active real estate agents in the United States. It found that the median gross income for a “Realtor” was $56,400 in 2022, up from $54,300 in 2021. Very Few Real Estate Agents Earn Six Figures There seem to be really big winners and equally big losers in the residential real estate business Top producers are capable of bringing in $150k+, while many others earn $10k or less annually Median gross income of Realtors increased to $56,400 in 2022 from $54,300 in 2021 The typical agent closed 12 transactions yearly as sales volume increased to $3. 4 million from $2. 6 million First things first, most real estate agents don't make six figures. In fact, median earnings are about half of that. And it's actually even lower for those who function as sales agents as opposed to real estate brokers. These agents earned a median $46,300 in 2022, which surprisingly was up pretty big from $33,800 in 2021. However, there was quite a range in earnings based on years of experience. For a Realtor with 16...

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### A Record High Share of Consumers Believe Mortgage Rates Will Go Down Over the Next 12 Months

- Published: 2024-01-08
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/a-record-high-share-of-consumers-believe-mortgage-rates-will-go-down-over-the-next-12-months/
- Categories: Housing Market, Mortgage News, Mortgage Rates

With the winter break now finally behind us, it’s time to talk mortgage rates again. Lately, they’ve been on the minds of anyone even remotely interested in buying a home. Or selling a home for that matter, as that can affect home buyer demand as well. The good news is most forecasts are calling for lower mortgage rates throughout 2024. And now there’s another piece of favorable data from Fannie Mae regarding mortgage rates and consumer sentiment. Survey-High 31% of Consumers Expect Mortgage Rates to Fall This Year A report released by Fannie Mae this morning revealed that consumers are growing increasingly bullish on mortgage rates in 2024. Their Home Purchase Sentiment Index (HPSI), which reflects both existing views and future expectations for the housing market, asks respondents which way mortgage rates will go. In the latest survey, a record 31% said they believe mortgage rates will fall over the next 12 months. While 31% may not sound like a lot, consider this share was around 16% in October, and just 4% in December 2021! In other words, sentiment has shifted big time, with mortgage rate expectations doing a virtual 180. Simply put, consumers no longer expect mortgage rates to rise, but rather see them drifting lower after peaking last fall. This is important for the housing market, which suffered mightily in 2023 as transactions plummeted in the face of 8% mortgage rates. But with the expectation that the worst is now behind us and a return to rates in...

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### 2024 Mortgage and Real Estate Predictions: Lower Rates and Falling Home Prices?

- Published: 2023-12-28
- Modified: 2024-08-16
- URL: https://www.thetruthaboutmortgage.com/2024-mortgage-and-real-estate-predictions/
- Categories: Home Buying, Housing Market, Mortgage Rates, Mortgage Tips, Refinance

Well, another year is nearly in the books, which means it’s time to look ahead to what the next 365 days have in store. While 2022 felt like it couldn’t get any worse, 2023 surprised all of us by being an even rougher year. Thanks to the highest mortgage rates in nearly a century, loan origination volume ground to a halt, as did home sales. The only real bright spot was new home sales, though builders had to make some big concessions to unload their inventory. So what does 2024 have in store? Well, the good news might just be that the worst is finally behind us. 1. Mortgage rates will drop below 6% (maybe even 5%) First things first, mortgage rates. While I (and many others) expected mortgage rates to fall in 2023, they defied expectations. Rates began the year 2023 on a downward slope, but quickly reversed course and surpassed 7% by spring. Then things got even worse as rates climbed beyond 8% in October. However, inflation has since cooled and economic reports continue to signal that the worst of it could be over. The Fed has also gotten on board, with their latest dot plot signaling rate cuts for 2024. After raising rates 11 times in less than two years, there could be three or more cuts next year. While the Fed doesn’t control mortgage rates, their monetary policy tends to correlate. So if they’re cutting rates due to a cooling economy, mortgage rates should also fall....

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### How to Track Mortgage Rates: It's Easier Than You Might Think

- Published: 2023-12-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-to-track-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

If you’re thinking about buying a home, or refinancing an existing home loan, mortgage rates are likely top of mind. As you may or may not know, mortgage rates can change daily based on market conditions, similar to the stock market. This means they can be higher one day and lower the next. Or they may do next to nothing at all from day to day, or even week to week. But having an idea of which direction they’re going can be helpful, especially if you’re actively shopping your rate. Let’s discuss a simple way to track mortgage rates using readily available economic data. You Can Track Mortgage Rates Using the 10-Year Bond Yield Simply look up the 10-year bond yield on your favorite finance website Check the direction it’s going (like you would a stock ticker) If it’s up then mortgage rates will likely be higher than yesterday If it’s down then mortgage rates will likely be lower than yesterday Hands down, the simplest way to track mortgage rates is the 10-year treasury bond yield. Over time, mortgage rates and the 10-year yield have moved in near lockstep, as seen in the graph above from FRED. In other words, when 10-year yields fall, so do mortgage rates. And when yields rise, mortgage rates climb higher. As for why, many 30-year fixed mortgages are paid off in about a decade. This means the duration is similar to a 10-year bond. But because mortgages have prepayment risk, there is a “spread,”...

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### Do We Need a Mortgage MSRP?

- Published: 2023-12-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/do-we-need-a-mortgage-msrp/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage rate pricing can be a bit of a mystery. And also super complex. I’ve written about it in detail (how mortgage rates are determined). But you could go on and on about it, eventually generating more confusion than clarity. At the end of the day, there are many different loan types and countless loan scenarios. There are also thousands of banks, credit unions, mortgage lenders, brokers, and so on. Which begs the question; do we need a mortgage MSRP? First Off, What Is MSRP? And Why Is It Useful? First off, what is MSRP? Well, it stands for manufacturer's suggested retail price. It’s essentially what the manufacturer of the product suggests a consumer should pay. Typically, it’s found at dealerships because auto dealers are required by law to post it on the windows of new vehicles on the lot. You might also see it on a book at the bookstore, or even a bag of chips at a convenience store. When purchasing a vehicle, it is known as the “sticker price,” and may include manufacturing and sales costs along with the retailer markup. It’s all supposed to improve price transparency for the consumer, even though the final sales price could be above or below the MSRP. But by knowing what the price of an item should be, you’ll know if you’re being overcharged. For example, if a car has an MSRP of $25,000 and the dealer is attempting to sell it to you for $35,000, you might raise an...

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### Mortgage Rates Fall to Lowest Levels Since Spring As Fed Indicates Cuts on the Way in 2024

- Published: 2023-12-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-fall-to-lowest-levels-since-spring/
- Categories: Mortgage News, Mortgage Rates

Just when it appeared that the recent rally was running out of steam, mortgage rates sunk even lower. Despite a lackluster CPI report yesterday that merely met expectations, an updated dot plot and dovish comments from Fed chairman Jerome Powell seemed to do the trick. That resulted in a big move downward for mortgage rates, which are now the lowest they’ve been since May. The 30-year fixed is now priced at around 6. 75%, or even lower if you pay points. Ironically, home buyers weren’t thrilled with those rates back then, but they might be moving forward. Thank human psychology. Why Did Mortgage Rates Fall So Much Today? The Fed left the federal funds rate unchanged, as was widely expected. So that wasn’t it. And remember, the Fed doesn’t control mortgage rates anyway. But along with that announcement, they released an updated dot plot and Fed chair Jerome Powell held a press conference. In prepared remarks he said, “While we believe that our policy rate is likely at or near its peak for this tightening cycle, the economy has surprised forecasters in many ways since the pandemic, and ongoing progress toward our 2 percent inflation objective is not assured. ” Powell essentially confirmed that the rate hike in July was likely the last for this economic cycle. He added that, “If the economy evolves as projected, the median participant projects that the appropriate level of the federal funds rate will be 4. 6 percent at the end of 2024, 3....

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### It’s Easier to Save More Money When Refinancing a High-Rate Mortgage

- Published: 2023-12-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/its-easier-to-save-more-money-when-refinancing-a-high-rate-mortgage/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Over the past year and change, mortgage refinance applications have fallen off a cliff. We had some of the biggest refi years in 2020 and 2021, followed by the worst year for mortgage applications this century. And it’s all because mortgage rates hit all-time lows, then abruptly surged to around 8% in just over 12 months. Rates on the 30-year fixed have since settled in around 7%, and there’s hope they’ll continue to drop into 2024. If so, we might see a return to rate and term refinancing as recent home buyers seek out payment relief. Does Anyone Refinance Their Mortgage Anymore? As noted, mortgage refinancing hasn’t been very popular in 2023. After a few banner years, the low-rate mortgage party came to an end. After all, most homeowners already took advantage when rates were low. And very few are forgoing their 2-4% mortgage rate to tap into their home equity. Instead, they’re opting for a second mortgage if they need money, such as a home equity loan or HELOC. This allows them to retain their low-rate first mortgage while still accessing their equity. But because mortgage rates have hovered in the 6-8% range for much of the past year, and rates have since improved a bit, the refi applications are beginning to trickle in. Per the latest Originations Market Monitor report from Optimal Blue, the 30-year fixed improved by 67 basis points during the month of November. For some lenders, we’re talking a rate drop from around 8% to...

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### K. Hovnanian American Mortgage Review: Big Mortgage Rate Deals for Home Builder Customers

- Published: 2023-12-11
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/k-hovnanian-american-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a look at another home builder’s lender, K. Hovnanian American Mortgage. They are the affiliated lender of K. Hovnanian Homes, which is a top-15 home builder nationally. Like other builders, they created their own financing division to streamline their new home sales. And to better control the customer experience from start to finish. The biggest perk to using them is the financing specials you likely won’t find elsewhere. Read on to learn more. K. Hovnanian American Mortgage Serves Its Home Buyer Customers Affiliated mortgage lender for K. Hovnanian Homes Provides home purchase loans for new home buyers Founded in 2002, headquartered in Boynton Beach, FL Parent company is one of the largest home builders nationwide Licensed to do business in 14 states and the District of Columbia Funded more than $1. 1B in mortgages last year Most active in the states of Arizona, California, Delaware, Texas, and Virginia As noted, K. Hovnanian American Mortgage is the lending division of K. Hovnanian Homes, a top U. S. home builder. Their parent company Hovnanian Enterprises, Inc. is a publicly traded company (NYSE:HOV), currently valued at nearly $1 billion dollars. They’ve been around since 1959, and operate 128 residential communities across 14 different states. Those states include Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, West Virginia, and Washington, D. C. These are the places where K. Hovnanian American Mortgage is licensed to lend as well, since they only exist to serve their home...

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### Buy Now, Refinance for Free Deals Aren’t All They're Cracked Up to Be

- Published: 2023-12-07
- Modified: 2024-02-14
- URL: https://www.thetruthaboutmortgage.com/buy-now-refinance-for-free-deals-arent-all-their-cracked-up-to-be/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Lately, some mortgage lenders have pitched “buy now, refinance for free” offers to get more home buyers to take the plunge. The thinking is mortgage rates will be lower in the near future. And when that time comes, you won’t have to pay any lender fees. This can even sway the decision to buy a home, assuming you’re on the fence about renting vs. buying because it feels too expensive today. These offers sound like a win-win for the home buyer, as they’ll get a lower interest rate and potentially avoid thousands in closing costs. But there are quite a few issues with this line of thinking that are worth discussing. Nobody Knows If Mortgage Rates Will Rise or Fall Last I checked, mortgage rate predictions have been a tough game. Prior to early 2022, mortgage rates defied the forecasts. While most expected them to rise, they hit fresh all-time lows and stayed at those levels for much longer than expected. Then the Fed announced an end to it Quantitative Easing (QE) program and the start of Quantitative Tightening (QT), which sent shockwaves through the mortgage market. Accompanied by 11 Fed rate hikes, the 30-year fixed surged from around 3% in January 2022 to as high as 8% in October 2023. Once again, no one expected this, and most predictions called for improvements in 2023 after a rough 2022. Instead, mortgage rates climbed even higher, leading to the lowest mortgage demand in decades. People stopped buying homes and virtually nobody...

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### Should I Use the Home Builder’s Mortgage Lender or a Different One?

- Published: 2023-12-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/should-i-use-the-home-builders-mortgage-lender-or-a-different-one/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Lately, new home sales have surged as existing housing supply continues to be hard to come by. This is partially because mortgage rates more than doubled in less than two years, effectively locking in existing homeowners. With many of these homeowners unwilling to budge, home builders have gained a lot more market share. After all, they need to move their inventory, and there isn’t a borrower living in the property with a low interest rate to worry about. To boost sales in spite of high rates, many builders have offered impressive mortgage rate deals that everyday lenders just can’t seem to match. Does this mean there's no need to look anywhere else? Most Home Builders Have Their Own Financing Department Despite being in the business of building homes, many home builders also operate financing divisions. This means they are also fully-fledged mortgage lenders with the ability to offer home loans on the properties they sell. And several of them are quite large. For example, D. R. Horton’s DHI Mortgage is a top-25 mortgage lender in the nation. The same goes for Lennar Mortgage. Both companies originate tens of billions of dollars in mortgages annually to their home buyer customers. On top of this, they also operate title/escrow companies and insurance agencies. This means a prospective home buyer can do one-stop shopping. Convenience aside, these builder lenders are also able to offer aggressive financing offers that outside lenders often can’t beat. So if you’re buying a new home, why look anywhere...

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### Will Mortgage Rates Go Down in 2024? Here Are All the Latest Predictions From the Biggest Names

- Published: 2023-12-05
- Modified: 2024-12-17
- URL: https://www.thetruthaboutmortgage.com/will-mortgage-rates-go-down-in-2024/
- Categories: Home Buying, Housing Market, Mortgage Rates, Mortgage Tips

Well, another year is nearly in the books, which means it’s time to look ahead at what 2024 might have in store. As is customary, I take a look at mortgage rate predictions from a variety of economists and offer up my own take for the upcoming year. I also look back at the predictions for the current year to see how everyone did (hint: not well! ). The big story in 2023 was out of control inflation. The story going forward might be cooling inflation. Though there’s also the risk it resurges, at which point mortgage interest rates could rise again. Mortgage Rates Are Expected to Go Down in 2024 First let’s talk about the general outlook. Most expect mortgage rates to go down in 2024, which was actually the call in 2023 as well. But guess what? Everyone was wrong. Expectations that the 30-year fixed would fall back into the 5% range were way off. Instead, interest rates on the popular loan program surpassed the 8% mark before finally letting up over the past month. So while many economists are optimistic for the coming year, take note that they felt the same way a year ago. And got it wrong. But things aren’t exactly the same. The Fed increased its fed funds rate 11 times, which many believe has worked to corral inflation. And this could lead to weak economic output and rising unemployment, which could result in Fed rate cuts as early as March 2024. This doesn’t...

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### Newrez Enters the 1% Down Mortgage Fray with RezSource

- Published: 2023-12-04
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/newrez-rezsource-1-down-mortgage/
- Categories: Mortgage News

A new week, a new 1% down mortgage product, the latest coming from Fort Washington, Pennsylvania based lender Newrez. Call it a sign of the times, with housing affordability the worst it has been in decades thanks to high home prices and elevated mortgage rates. Known as "RezSource," the new program relies upon a 2% lender contribution to minimize out-of-pocket costs. It takes a standard 3% down payment mortgage backed by Freddie Mac and whittles it down to just 1%. And it’s available to both low-income borrowers and first-time home buyers. Read on to learn more. RezSource 1% Down Offers Up to $5,000 in Lender Contributions Similar to other programs, the latest 1% down mortgage from Newrez includes a 2% lender contribution. This means the borrower winds up with a mortgage set at 97% LTV, the maximum allowed for a conforming loan backed by the likes of Fannie Mae or Freddie Mac. The end result is less money required from the borrower, an equity cushion, and potentially easier qualification. The maximum dollar amount of the lender contribution is $5,000, which is determined by the lesser of 2% of the appraised value or purchase price. My understanding is this 2% doesn’t need to be paid back as it is a credit to the borrower. For example, someone buying a $250,000 property would be able to maximize the credit while only needing $2,500 via their own contribution. And even this 1% can come from a variety of flexible sources, whether it’s gift...

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### HomeAmerican Mortgage Review: Interest Rate Specials for Those Buying a Richmond American Home

- Published: 2023-11-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/homeamerican-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a hard look at “HomeAmerican Mortgage,” yet another home builder affiliated mortgage lender. They offer home purchase financing to Richmond American Homes customers, which is a top-10 home builder nationally. Because they are operated by the same parent company, they can offer a streamlined process and home buying experience. And perhaps more importantly, extend special financing offers like big mortgage rate buydowns. Read on to see if you should use their in-house lender or look elsewhere for a better deal. HomeAmerican Mortgage Is the Captive Lender of Richmond American Homes The affiliated mortgage lender of Richmond American Homes Offers home purchase financing on newly-built homes Founded in 1983, headquartered in Denver, Colorado Licensed to do business in 16 states and Washington D. C. Funded $2. 75B in home loans last year Most active in Arizona, California, and Colorado Also operate a title/escrow company and insurance agency HomeAmerican Mortgage is a full-service, direct lender based out of Denver, Colorado. They got their start way back in 1983 and are a subsidiary of MDC Holdings, Inc. , which is a publicly-traded company (NYSE: MDC). MDC also owns Richmond American Homes, which builds single-family residences in more than a dozen states throughout the country. Simply put, HomeAmerican Mortgage exists to serve these home buyers, offering purchase loans only (no refinances). This is similar to Lennar Mortgage and DHI Mortgage, which exist to serve Lennar and D. R. Horton home buyers, respectively. They are currently licensed to do business in 16...

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### Silverton Mortgage Launches 100% Financing Across All Loan Types

- Published: 2023-11-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/silverton-mortgage-launches-100-financing-across-all-loan-types/
- Categories: Mortgage News

Silverton Mortgage has rolled out a series of mortgages that feature 100% financing in light of ongoing affordability woes. Some of the loan programs rely on down payment assistance via a second mortgage that can cover both closing costs and the down payment. These options are available on conventional loans and FHA loans, complementing other zero down options already available via the VA and USDA. As home prices continue to move higher, mortgage lenders are increasingly looking for options to keep homeownership in reach. They join several other banks and lenders that have recently launched zero down options for home buyers. Silverton's Conventional Program with Down Payment Assistance While home loans backed by Fannie Mae and Freddie Mac typically require at least a 3% down payment, Silverton Mortgage has a solution to offer 100% financing. Their “Conventional Program with down payment assistance” features a conforming mortgage loan set at 97% combined with a second mortgage. The second mortgage can be used for a down payment and/or toward closing costs. Together, these two loans can provide 100% financing to help prospective home buyers get into a new property with little or nothing out of pocket. It is available in 32 states throughout the nation (Silverton does business in 45 states). In September, San Antonio-based Frost Bank re-entered the mortgage biz with its Progress Mortgage, a zero down conventional loan that doesn’t require mortgage insurance (PMI). A month earlier, Zillow Home Loans began piloting a 1% down mortgage via the use of...

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### 2024 FHA Loan Limits Rise to $498,257

- Published: 2023-11-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/2024-fha-loan-limits-rise-to-498257/
- Categories: Home Buying, Mortgage News

The Federal Housing Administration (FHA) announced new loan limits for 2024 this week, bumping up the “floor” on FHA loans to $498,257. This represents a 5. 56% increase from the current 2023 FHA loan limit of $472,030, which is based on home price movement over the past year. There is also a ceiling loan limit for FHA loans for high-cost areas, which was increased to $1,149,825 from $1,089,300. Together, this should boost access to the FHA’s low-down-payment home loan program at a time when affordability has rarely been worse. FHA loans comes with various perks, whether it’s a cheaper mortgage rate or a lower minimum required credit score. 2024 FHA Low-Cost Area Floor Loan Limits One-unit property: $498,257 Two-unit property: $637,950 Three-unit property: $771,125 Four-unit property: $958,350 For 2024, the low-cost area “floor” FHA loan limit will be $498,257 for a one-unit property. It will rise as high as $958,350 for a four-unit property in these low-cost areas, which includes metros like Chicago, Tampa, and Tucson, Arizona. The floor is set at 65% of the 2024 conforming loan limit, which also announced an increase to $766,550 this week. It applies to areas of the country where 115 percent of the median home price is less than the floor limit. Given the large difference in maximum loan amounts, roughly $250,000, it could sway the decision to choose a conventional loan instead of an FHA loan. For example, if buying a $525,000 home with 3. 5% down, you’d be forced to go...

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### 2024 Conforming Loan Limit Climbs to $766,550

- Published: 2023-11-28
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/2024-conforming-loan-limit-climbs-to-766550/
- Categories: Mortgage News

Another year, another increase in the conforming loan limit, thanks to continued home price gains. The FHFA announced today that the new limit for loans backed by Fannie Mae and Freddie Mac would be a whopping $766,550 in 2024. This figure is up $40,350 from the current loan limit of $726,200 for 2023. The conforming loan limit is dictated by the annual change in home prices, which as you may have guessed, went up, again. These loan limits are even larger in high-cost regions of the United States, special designated areas like Hawaii, and for multi-unit properties. New Conforming Loan Limits for 2024 One-unit property: $766,550 Two-unit property: $981,500 Three-unit property: $1,186,350 Four-unit property: $1,474,400 As noted, the 2024 conforming loan limit has increased to $766,550 for one-unit properties. This is the result of home prices rising 5. 56% between the third quarters of 2022 and 2023. Specifically, seasonally-adjusted nominal house prices from the expanded-data FHFA HPI are used to determine annual home price appreciation. While it’s yet another increase, it’s nearly half the increase seen from 2022 to 2023, a sign of slowing home price appreciation. Home prices still went up over the past year, but as mortgage rates more than doubled before surpassing 8%, the gains expectedly slowed. But even if home prices decline in the future, this baseline loan limit will not decrease. Rather, it would remain flat, and would need to “make up” any losses before it could increase further. This happened from the third quarter...

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### Foreclosures Halted for VA Loan Holders Until June 2024 (Extended to December 31st)

- Published: 2023-11-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/foreclosure-halted-for-va-loan-holders-until-june-2024/
- Categories: Foreclosure, Mortgage News

In an effort to keep more veterans and servicemembers in their homes, the VA has paused foreclosures for the next six months. The move was made following an investigation and a series of new stories alleging that tens of thousands of VA loan holders were at risk of foreclosure. It all stems from the end of COVID-19 related forbearance, which expired in October and left homeowners with large bills for missed payments. While there is a plan in place to help these borrowers transition back to making normal payments, it will apparently take 4-5 months to implement. As a result, the VA has called on loans servicers to enact a foreclosure moratorium until the changes can be made. No Foreclosures for VA Loan Borrowers Through May 31st, 2024 While the VA works to implement new loss mitigation procedures, they are asking loan servicers to pause foreclosures for military servicemembers and veterans. There are an estimated 147,000 veteran homeowners behind on their mortgage payments at this time. This means no foreclosures should be processed between now and May 31st, 2024. The move comes after an NPR investigation found that the Department of Veterans Affairs ended its Partial Claim Payment program and loan servicers began asking for lump sum payments. But this isn’t how it was supposed to work. Borrowers were told that missed mortgage payments would simply be tacked on to the back of their mortgages. The Veterans Assistance Partial Claim Payment (VAPCP) program would allow them to simply resume payments...

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### Guaranteed Rate Launches Lock It, List It: Real Estate Agents Can Secure a Discounted Mortgage Rate for the Buyer Before They List

- Published: 2023-11-16
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-launches-lock-it-list-it/
- Categories: Home Buying, Mortgage News, Mortgage Rates

A new program called “Lock It, List It” allows real estate agents to secure a mortgage rate for a buyer before the property even hits the market. Chicago-based Guaranteed Rate launched the product just weeks after mortgage rates surpassed the dire 8% threshold. This has pushed housing affordability to the brink, while also turning off prospective home buyers and making it harder to sell a home. A below-market interest rate that is guaranteed could boost demand, and make it easier for a seller to unload their property. It'd be a win-win for all parties involved, including the buyer, seller, listing agent, and loan officer. How Lock It, List It Works As the name suggests, a mortgage rate is locked in before the property is listed on the market. Known as a mortgage pre-lock in industry jargon, the interest rate is secured before a buyer is found for the property. This is a rather novel approach, as pre-locks are typically for home buyers who lock in a rate for themselves then search for a property. In this scenario, the home seller is essentially locking in a rate on the home buyer’s behalf ahead of time. But it only works if the buyer agrees to use Guaranteed Rate to obtain their mortgage. Once a buyer makes an offer on the property, they would need to get approved for a mortgage with GR to take advantage of the offer. The deal would be structured by the listing agent and a Guaranteed Rate loan...

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### Is Now a Good Time to Refinance My Home?

- Published: 2023-11-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/is-now-a-good-time-to-refinance-my-home/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Mortgage Q&A: “Is now a good time to refinance my home? ” If you’re one of the few people asking this question right now, the short answer is most likely no. And the reason it’s a no is because mortgage rates have skyrocketed over the past 18 months or so. But like everything else in the mortgage world, the answer does depend on the situation. Not everyone has the same mortgage rate, nor do they have the loan product, or the same needs. Very Few Homeowners Benefit from a Refinance Right Now A refinance typically only makes sense if you can obtain a lower mortgage rate in the process This is very difficult to accomplish at the moment with rates averaging 7%+ Most homeowners already refinanced a couple years ago when rates were priced around 3% Refinancing will make sense again once rates fall and/or more borrowers take out mortgages at today's higher rates (giving them a future refinance opportunity) First things first, there are two main mortgage refinance options available to homeowners, including the rate and term refinance and the cash out refinance. There is also the streamline refinance, which is a fast-tracked type of rate and term refinance. For simplicity sake, a rate and term refinance allows a borrower to lower their interest rate, change their loan term, and/or switch loan products. The cash out refinance allows a borrow to tap their home equity and perhaps change their rate, term, and loan product as well. At the moment,...

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### Zillow Home Loans Review: Best-in-Class Service Offered By a Household Name, But How Are the Rates?

- Published: 2023-11-15
- Modified: 2025-03-21
- URL: https://www.thetruthaboutmortgage.com/zillow-home-loans-review/
- Categories: Mortgage Tips

In the spring of 2019, “Zillow Home Loans” was launched by its parent company Zillow. You probably know them best for their popular Zestimates, which are quick and dirty home value estimates. Given their strong engagement with prospective home buyers and existing homeowners, they eventually decided to launch their own mortgage division. The goal was to become “more of an end-to-end provider for housing-related services” like the many other companies out there trying to do it all. For you as the customer, it’s yet another mortgage lender to consider when seeking financing. Read on to learn more about them. Zillow Home Loans Fast Facts Direct-to-consumer mortgage lender Offers home purchase and refinance loans Founded in 2019, headquartered in Irvine, CA Parent company is publicly-traded Zillow Group Licensed to do business in 49 states and the District of Columbia Funded about $1. 5 billion in home loans last year Most active in California, Florida, Georgia, and Texas Zillow Home Loans, LLC is a subsidiary of Zillow Group (NYSE:Z). The company was officially launched in April 2019 after acquiring Mortgage Lenders of America in the fourth quarter of 2018. This gave them a quick in to the mortgage business, instead of having to start from the ground up. They originally operated out of Mortgage Lenders of America’s former headquarters in Overland Park, Kansas. But now appear to be headquartered in Irvine, CA, with an office in Seattle, WA as well. Mortgage Lenders of America was founded in the year 2000 and had...

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### Down Payments on Houses Rise to Highest Levels in Over 20 Years

- Published: 2023-11-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/down-payments-on-houses-rise-to-highest-levels-in-over-20-years/
- Categories: Home Buying, Housing Market, Mortgage News

Gone are the days of the zero-down mortgage. At least for the typical home buyer. Instead, the 2023 Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) revealed that down payments haven’t been higher in decades. This, despite the widespread availability of low-down and zero-down home loan options. As for why, it could be because inventory remains low, which has kept competition lively in spite of much higher mortgage rates. Another reason might be those high interest rates themselves, which make it less attractive to take out a large loan. Median Down Payments Highest Since 1997 for First-Time Home Buyers Per the NAR report, the typical down payment for a first-time home buyer was 8%, which might not sound like a lot. But it is the highest figure since 1997, when it stood at 9%. If you look at the chart above, you’ll notice it dipped pretty close to zero in those bad years back in 2005-2006. At that time, creative financing and lax underwriting (aka no underwriting at all) allowed home buyers to purchase a property with nothing down. While that may have been risky on its own, they could also use stated income to qualify for the loan. And they could choose a super toxic loan type, such as the now forgotten option ARM, or qualify via an interest-only payment. That may explain why we experienced the worst mortgage crisis in recent history, followed by the nastiest housing market crash in generations. So certainly...

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### It Now Takes More Than a Decade to Break Even on a Home Purchase

- Published: 2023-11-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/it-now-takes-more-than-a-decade-to-break-even-on-a-home-purchase/
- Categories: Home Buying, Housing Market

I’ve already written about it not being the best time to buy a home right now, at least from a pure investment standpoint. In short, home prices are expensive relative to incomes, mortgage rates have more than doubled, and there’s little quality inventory. And now we can quantify just how long it takes to break even on a house, per a new analysis from Zillow. Hint: it’s a long, long time, even if you’re able to muster a big 20% down payment. So if you’re thinking about buying a home today, prepare to stick around for the long-haul. How Long to Break Even on a House These Days? - 3% down payment: 13 years and six months to make a profit. - 5% down payment: 13 years and three months to make a profit. - 10% down payment: 12 years and seven months to make a profit. - 20% down payment: 11 years and three months to make a profit. A new Zillow analysis tried to determine how long you’d need to own your home before you could sell it for a profit. This factors in the closing costs associated with the home purchase, the mortgage interest paid, home maintenance costs, and the sales costs once it came time to list the property. Specifically, they assume 3% closing costs at purchase, 1% home maintenance fees, and 6% in closing costs at the time of sale, along with all that mortgage interest. In reality, it could be even higher. It’s not...

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### What Mortgage Has the Best Interest Rate and Why?

> The longer the loan term and/or fixed-rate period, the higher the mortgage rate. If you want the cheapest mortgage rate, think shorter.

- Published: 2023-11-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-mortgage-has-the-best-interest-rate/
- Categories: Mortgage Rates, Mortgage Tips

Here’s an interesting question: “What mortgage has the best interest rate? ” Before we dive in, “best” questions are always a bit difficult to answer universally. What’s best to one person could be the worst for another. Or at least not quite the best. This is especially true when discussing mortgage questions, which tend to be a bit more complex. But we can still talk about what makes one mortgage rate on a certain product better than another. In a recent post, I touched on the different mortgage terms available, such as a 30-year, 15-year, and so on. That too was a “best” article, where I attempted to explain which mortgage term would be best in a particular situation. Related to that is the associated mortgage interest rate that comes with a given loan term. Together, they can drive your mortgage product decision. Longer Loan Term = Higher Mortgage Rate The longer the fixed-rate period, the higher the interest rate This compensates the lender (or their investor) for taking on more risk Because they're agreeing to a certain interest rate for a longer period of time For example, a 30-year fixed loan will price higher than a 15-year fixed loan Now I'm going to assume that by best you mean lowest, so we'll focus on that definition, even though it might not be in your best interest. A lot of puns just happened by the way, but I'm trying to ignore them. Simply put, a longer mortgage term generally translates...

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### Inspire Home Loans Review: You Might Be Able to Snag Major Savings When Buying a New Home

- Published: 2023-11-09
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/inspire-home-loans-review/
- Categories: Mortgage Tips

It's time to check out "Inspire Home Loans," which is the lending partner of home builder Century Communities. They pride themselves on knowing how their parent company’s construction timelines work so your home (and) loan remain on schedule. In addition, they offer special financing deals that are reserved only for the buyers of properties in their communities. This means you might be able to get your hands on a low mortgage rate that outside lenders just can’t beat. Read on to learn more about them to determine if they could be a good fit for your mortgage needs. Inspire Home Loans Offers Big Rate Buydowns Direct-to-consumer mortgage lender Offers home purchase loans Founded in 2016, headquartered in Newport Beach, CA A wholly owned subsidiary of Century Communities Parent company is publicly traded (NYSE: CCS) Licensed to lend in 18 states across the nation Funded about $2 billion in home loans in 2022 Most active in California, Colorado, Georgia, and Texas Also operates a title company and insurance agency Known for offering big mortgage rate buydowns Inspire Home Loans is a wholly owned subsidiary of Century Communities, which offers to-be-built and quick move-in homes in a handful of states nationwide. Their parent company consider themselves a top-10 home builder nationally, and is publicly traded under the NYSE symbol CCS. The lending division has been around since 2016 and is headquartered in Newport Beach, CA. Their primary focus is providing home purchase loans to buyers of newly-built homes in the many communities...

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### Redfin Says It’s the Best Time to Buy a Home Since Mid-September: Should You Buy Now or Hold On?

- Published: 2023-11-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/redfin-says-its-the-best-time-to-buy-a-home-since-mid-september-should-you-buy-now-or-hold-on/
- Categories: Home Buying, Housing Market

Thanks to a record number of price cuts and a big improvement in mortgage rates, home buying conditions have improved tremendously. Taken together, you might be able to snag a lower purchase price and finance the property with a mortgage rate about . 50% lower than what was on offer last month. Does this mean it’s time to rush out to buy a home? Or does it continue to pay to be patient? Personally, I’m still in the no-rush camp, but if you do see something you love, the price tag could be a little lower. And there may be less competition as it tends to drop off later in the year as buyers get consumed with other things. Unseasonal Increase in For-Sale Listings as Asking Prices Drop Redfin reported this morning that some “glimmers of hope” are emerging for prospective home buyers. The first one being that new listings increased 1. 5% from a year ago during the four weeks ending November 5th. This was just the second such increase since July 2022, a testament to the continued short supply plaguing the housing market. They noted that this increase is partly because new listings were falling during this period last year. At the same time, active listings are at their highest level since the beginning of 2023, and months of supply ticked up 0. 2 points to 3. 6 months. Inventory remains constrained nationally, with 4 to 5 months typically signifying healthy supply. But it is rising, which appears...

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### Toll Brothers Mortgage Review: The Builder's Lender Is Hard to Beat

- Published: 2023-11-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/toll-brothers-mortgage-review/
- Categories: Mortgage Tips

It’s time to check out “Toll Brothers Mortgage,” which is a subsidiary of home builder Toll Brothers. Toll Brothers is one of the largest home builders in the United States, priding itself on being a luxury home builder. Instead of relying on third-party lenders to provide financing to their customers, they have a built-in financing division. This allows them to oversee the process firsthand and navigate the complexities of new construction financing. They say they’ve got a proven track record of smooth closings, and if they can offer you a mortgage rate the other guys can’t, they could be worth looking into. Toll Brothers Mortgage Offers Rate Specials to Its Home Builder Customers Direct-to-consumer retail mortgage lender Provides new construction lending and home purchase loans Parent company is nation’s 5th largest home builder Founded in 1967, headquartered in Fort Washington, PA Licensed to do business in 24 states nationwide and D. C. Funded nearly $2 billion in home loans last year Most active in California, Pennsylvania, and Texas Offers mortgage rate specials to Toll Brothers customers Also operates a full-service title and insurance company As noted, Toll Brothers is a major home builder, the fifth largest at last glance, behind only D. R. Horton, Lennar, Pulte, and NVR. They are a publicly-traded company (NYSE:TOL) and are currently valued at around $9 billion. The company was founded in 1967 and refers to itself as the nation’s leading builder of luxury homes. This includes both new construction homes and quick move-in homes....

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### CEO of Nation’s #1 Mortgage Lender Expects Mortgage Rates to Be Lower Before the Election

- Published: 2023-11-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/ceo-of-nations-1-mortgage-lender-expects-mortgage-rates-to-be-lower-before-the-election/
- Categories: Mortgage News, Mortgage Rates

Mortgage rates finally caught a break last week after steadily rising throughout much of 2023. The 30-year fixed fell about a half a percentage point in the matter of a week as softer economic data eased inflation concerns. At the same time, the Fed left its key policy rate unchanged and signaled it could be done raising rates. Now, investors are hoping the next policy move is a rate cut, as data is expected to continue to cool into 2024. Taken together, that could mean a return to more palatable mortgage rates in 2024. Lower Mortgage Rates Before the Presidential Election? The president and CEO of the nation’s top mortgage lender, United Wholesale Mortgage (UWM), is bullish on mortgage rates next year. During his monthly 3Points video, former college basketball player Mat Ishbia said he expects mortgage rates to drop before the election. The election in question is the 2024 Presidential Election, which takes place on Tuesday November 5th, 2024. “And I think it might even happen sooner like March, April, May,” he said in the video. But how much lower will rates fall? Well, that’s another story, as a return to 3% mortgage rates likely isn’t in the cards. Same goes for 4% rates, and maybe even 5% rates. However, that doesn’t mean smaller improvements can’t be impactful for the struggling mortgage industry. “We’re talking about dropping to 5 and a half, 6, even 6 and a half,” he added. “And it’ll be a massive refi opportunity. ” It’s...

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### Taylor Morrison Home Funding Review: Huge Mortgage Rate Buydowns Make Them Hard to Beat

- Published: 2023-11-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/taylor-morrison-home-funding-review/
- Categories: Mortgage Tips

If you’ve got your eye on a Taylor Morrison home, you may have come across their affiliated lender “Taylor Morrison Home Funding. ” As with many other home builders, they’ve got their own in-house mortgage lender to streamline the home buying process. This affords them better control, ideally boosting customer service, and gives them the ability to offer special pricing incentives. With fewer parties involved, they should be able to get you from application to closing quicker than the other guys. And if they can throw in a big mortgage rate buydown as well, it might be a win-win. Read on to learn more about the company. Taylor Morrison Home Funding Is All About Home Buyers Affiliated lender for home builder Taylor Morrison Offers home purchase financing to new home buyers Founded in 1982, headquartered in Maitland, Florida Has 84 licensed mortgage loan officers Parent company is publicly traded (NYSE: TMHC) Licensed to lend in 11 states nationwide Funded over $3 billion in home loans in 2022 Most active in Texas, Florida, Arizona, and California Taylor Morrison is one the largest home builders in the United States, serving home buyers and renters in 19 markets across 11 states. Only a handful of builders are larger, including D. R. Horton, Lennar, Pulte, NVR, and Toll Brothers. The company was formed in 2007 after Taylor Woodrow Inc. and Morrison Homes Inc. merged. Dispute this recent development, their building operations date back to the early 1900s. They are now headquartered in Scottsdale, Arizona...

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### Low Mortgage Rates Are the #1 Reason Homeowners Aren't Moving

- Published: 2023-10-31
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/low-mortgage-rates-are-1-reason-homeowners-arent-moving/
- Categories: Mortgage Tips

While there has been some debate about the so-called mortgage rate lock-in effect, it appears to be a pretty legit force in the housing market today. As the logic goes, existing homeowners aren’t moving because their mortgage rates are so low. But it’s not only that they’re so low, it’s also the cost of replacement, with prevailing market rates now edging closer to 8%. So it just doesn’t make a lot of financial sense for homeowners to move unless they absolutely have to. And for many, it’s probably not even doable, thanks to a massive increase in costs if exchanging a 3% rate for a near-8% rate. Is Mortgage Rate Lock-In a Real Thing? A new survey from Fannie Mae explored mortgage rate lock-in and found that while it is certainly a reason for staying put, it’s not the only reason. The company asked homeowners via their National Housing Survey if they planned to stay in their current homes longer than originally intended. And if so, why. They found that an equal 29% share of owners with a mortgage (mortgage borrowers) and outright owners (homeowners without a mortgage) planned to stay put longer. Of the mortgage borrower population, 21% indicated the decision was primarily due to having a low mortgage rate. But Fannie points out that this subset of homeowners only represents 6% of all mortgage borrowers. “These survey results lead us to conclude that there are multiple factors contributing to the historically low supply of existing homes for sale....

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### loanDepot accessZERO: You Can Buy a Home with Zero Down Again

- Published: 2023-10-31
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/loandepot-accesszero/
- Categories: Mortgage Tips

In order to make homeownership more accessible, loanDepot has launched a new program called “accessZERO. ” As the name suggests, it allows prospective home buyers to purchase a property without a down payment. It comes at a time when affordability has rarely been worse, thanks to a combination of significantly higher mortgage rates and record high home prices. At last glance, the popular 30-year fixed was approaching 8%, up from around 3% in early 2022. And home prices continue to climb higher in most parts of the country, thanks to an ongoing lack of inventory. How loanDepot accessZERO Works To combat eroding affordability, SoCal-based direct lender loanDepot has unveiled accessZERO. It combines a regular 3. 5% down FHA loan with a repayable second mortgage that covers up to 5% of the purchase price. This 5% can be used for both the down payment and for closing costs, allowing a home buyer to come to the table with nothing out of pocket. The second mortgage is a 10-year, fully-amortized mortgage that is repaid like a normal mortgage. As such, the borrower has two mortgage payments to make each month, but nothing is required upfront at closing. For example, a buyer purchasing a $400,000 home could get a first mortgage for $386,000 and a $20,000 second mortgage to cover down payment and closing costs. The resulting payments could be something like $2,700 on the first mortgage, assuming a 7. 5% mortgage rate, and a somewhat nominal amount on the second because of...

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### Lender Will Split the Difference If You Give Up Your 3% Mortgage Rate

- Published: 2023-10-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/lender-will-split-the-difference-if-you-give-up-your-3-mortgage-rate/
- Categories: Home Buying, Mortgage News, Mortgage Rates

You’ve probably heard of the mortgage rate lock-in effect, where homeowners are unwilling (or unable) to give up their ultra-low mortgage rates. Also known as golden handcuffs, these low rates have arguably prevented many existing homeowners from moving, and certainly from refinancing. But now one bank may hold the key to unlocking some of these borrowers with their so-called “split-the-difference” mortgage rate program. As the name suggests, they’ll give you a mortgage rate in between your old rate and prevailing market rates if you apply for a new home loan. This could lessen the blow of moving at a time when home prices remain near all-time highs and mortgage rates also hover close to 21st century highs. Would You Be Willing to Move If Mortgage Rates Were a Little Bit Lower? Glenville, New York-based TrustCo Bank has come up with a novel concept to get homeowners moving again, literally. They’re offering below-market mortgage rates to existing home loan customers when they move into a new home. The catch is that they have to pay off their old home loan, which likely carries a significantly lower interest rate. The idea here is that the bank can get rid of a low-yielding mortgage while simultaneously giving their customer a more palatable mortgage rate in an 8% mortgage rate world. It’s arguably a win-win situation for both bank and borrower, assuming the homeowner wants to move elsewhere. The program works for TrustCo Bank because they’re a portfolio lender, meaning the loans they underwrite...

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### NVR Mortgage Review: A One-Stop Shop for a New Home and a Loan

- Published: 2023-10-26
- Modified: 2024-10-02
- URL: https://www.thetruthaboutmortgage.com/nvr-mortgage-review/
- Categories: Mortgage Tips

The fourth largest home builder in the country, NVR, also operates its own financing division called “NVR Mortgage. ” This allows them to complete more of the home buying process in-house, as opposed to relying on third-party lenders. They exist exclusively to serve home buyers who work with Ryan Homes, NVHomes, and Heartland Homes. Ideally, this means they’re laser-focused on helping home buyers get to the finish line without any unnecessary costs or delays. Read on to learn more about their history, processes, rates/fees, and customer reviews. NVR Mortgage Provides Financing to Ryan Homes, NVHomes, and Heartland Homes Customers Wholly-owned subsidiary of NVR, Inc. , a top-5 home builder Parent company is publicly traded (NYSE: NVR) Founded in 1991, headquartered in Reston, VA Serve Ryan Homes, NVHomes and Heartland Homes customers exclusively Only offer home purchase loans (no refis) Funded $6. 3 billion in homes last year Most active in the states of Maryland, Pennsylvania, and Virginia Licensed to lend in 15 states and D. C. with branch office locations in 14 states Also operates NVR Settlement Services NVR Mortgage Finance, Inc. is a wholly-owned subsidiary of parent company NVR, Inc. , a home builder based out of Reston, Virginia. The lender got its start in the early 1990s, while the home builder’s roots stretch back to the mid-1900s. They operate three distinct brands, including Heartland Homes, NVHomes, and Ryan Homes. At last glance, they were the fourth largest home builder in the United States, behind PulteGroup, Lennar, and D....

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### Use of VantageScore May Boost Annual Mortgage Volume by $1 Trillion

- Published: 2023-10-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/use-of-vantagescore-may-boost-annual-mortgage-volume-by-1-trillion/
- Categories: Mortgage News

How does an additional $1 trillion in annual home loan origination volume sound? At the moment, it sounds incredible if you’re in the mortgage industry and struggling to drum up business. Volume has plummeted over the past year thanks to sky-high mortgage rates and a lack of for-sale inventory. But that could change if interest rates creep back down and inventory begins to rise again. Even if conditions don’t improve all that much, FICO score competitor VantageScore believes the implementation of their credit scoring model could help tremendously. FICO Scores Are the Only Game in Town, But That Will Soon Change At the moment, mortgage lenders rely solely on FICO scores to determine a borrower’s creditworthiness. These scores range from 300 to 850, with scores below 620 considered subprime. Come 2024, a new credit score provider will join the fray, at least for loans backed by Fannie Mae and Freddie Mac. The Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, announced earlier this year that the implementation of the new credit score models is expected to roll out over two phases in 2024 and 2025. In the third quarter, they anticipate the delivery and disclosure of additional credit scores provided by VantageScore. And the replacement of FICO legacy scores with the new 10T model. By the fourth quarter of 2025, this will include the incorporation of the new scores into pricing, capital, and other processes. Along with that, they are transitioning from requiring three credit reports (known as...

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### KBHS Home Loans Review: Mortgage Rate Specials for Those Who Buy a KB Home

- Published: 2023-10-25
- Modified: 2024-07-08
- URL: https://www.thetruthaboutmortgage.com/kbhs-home-loans-review/
- Categories: Mortgage Tips

Today we’ll check out another home builder’s in-house mortgage lender, this time KB Home’s “KBHS Home Loans. ” As the name suggests, they are the affiliated lender for home builder KB Home, a SoCal-based company that has been around since the 1950s. KB Home has a big home building presence in its home state, along with nearby Arizona and Nevada, Texas, and Florida. To facilitate the sale of their homes, they lean on KBHS Home Loans to streamline the financing process. What’s perhaps more interesting is that they are backed by another lender, Guaranteed Rate, which is a top-10 lender nationally. KBHS Home Loans Is the In-House Mortgage Lender for KB Homes In-house mortgage lender for parent company KB Homes Founded in 1957, headquartered in Los Angeles, CA Parent company is publicly traded (NYSE: KBH) Licensed to lend in 10 states nationwide Funded nearly $3. 5 billion in home loans last year Most active in California, Florida, and Texas Also have an affiliated insurance agency and title company KBHS Home Loans is the in-house mortgage lender for parent company KB Homes. They primarily offer home purchase loans to the buyers of their newly-built homes located throughout the country. The Southern California based home builder has been around since 1957, having previously been named after founders Eli Broad and Donald Kaufman as the “Kaufman and Broad Building Company. ” One of their claims to fame is the creation of the “Townehouse” design, intended to woo consumers who would typically rent instead...

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### Are Adjustable-Rate Mortgages Going to Replace Mortgage Rate Buydowns?

- Published: 2023-10-25
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-adjustable-rate-mortgages-going-to-replace-mortgage-rate-buydowns/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Lately, mortgage rate buydowns have been all the rage as a means to reduce home buying costs. This could come in the form a temporary or permanent rate buydown. These reduce the mortgage rate for the first couple years or for the entire loan term, respectively. And in doing so, make a home purchase a bit more palatable at today’s still-high asking prices. But is the market about to shift to adjustable-rate mortgages instead? Home Builders Have Been Selling Homes with Big Rate Buydowns to Make the Math Work As mentioned, mortgage rate buydowns have been quite popular over the last couple years. Prior to early 2022, they were absolutely nonexistent because there wasn’t a need. After all, the 30-year fixed averaged about 3% in January 2022. But things changed in a hurry when the Fed halted QE, started QT, and began raising the fed funds rate feverishly. Nearly two years later, we’ve got a 30-year fixed mortgage rate close to 8%, or even above that level depending on individual loan attributes. As rates have skyrocketed, so too has the prevalence of rate buydowns, whether permanent or temporary. There are several reasons why home builders won't lower their prices. And instead look to special financing instead. The most common temporary buydown is the 2-1 buydown, which features an interest rate 2% below the note rate in year one and 1% below the note in year two. Then it reverts to the full note rate. For example, you could receive a...

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### Pulte Mortgage Review: Gain Access to Unique Financing Specials If You Use the Builder's Lender

- Published: 2023-10-24
- Modified: 2024-09-20
- URL: https://www.thetruthaboutmortgage.com/pulte-mortgage-review/
- Categories: Mortgage Tips

One of the nation’s largest home builders, PulteGroup, also operates its own financing division called “Pulte Mortgage. ” This is a common setup employed by large builders that look to control the process from start to completion. It allows them to streamline operations and move their homes in a timely fashion, without relying on third parties that might cause delays. Their "one-stop shopping" experience allows them to work hand-in-hand with the builder to coordinate the processing of your loan with the construction of your new home. Read on to learn more about their lending process, rates and fees, loan programs, and customer reviews. Pulte Mortgage Is the Home Lending Division of Its Parent Company Captive mortgage lender for the PulteGroup Offers home purchase loans for its new home buyer clients Founded in 1972, headquartered in Englewood, Colorado Parent company is third largest home builder in the country Publicly traded company (NYSE:PHM) Funded over $7 billion in home loans last year Licensed to do business in 28 states Most active in Arizona, California, Florida, North Carolina, and Texas Also operates a title insurance and homeowners insurance agency Company hours are Monday - Friday: 7:00 am - 6:00 pm MT Pulte Mortgage is the home lending division of its parent company PulteGroup, a top-3 home builder in the United States. Only Lennar and D. R. Horton are bigger than them. The home builder’s roots stretch back to 1950 when then 18-year-old William “Bill” Pulte built a five-room bungalow near Detroit, Michigan. The...

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### Higher Mortgage Rates Hurt Sales Volume, Not Home Prices

- Published: 2023-10-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/higher-mortgage-rates-hurt-sales-volume-not-home-prices/
- Categories: Home Buying, Housing Market, Mortgage Rates

For those of you still wondering why home prices haven’t plummeted, despite significantly higher mortgage rates, it’s because there isn’t a negative correlation. A lot of people seem to think that home prices and mortgage rates have an inverse relationship, but it simply isn’t true. Just look at history and you’ll see that it’s perfectly normal for home prices and interest rates to rise. Or for both rates and prices to fall in tandem. Ultimately, there isn’t a strong correlation either way. However, home sales certainly slow down when the cost of financing rises, as we’ve seen this year. Why Home Prices Go Up In Spite of Higher Mortgage Rates First off, let’s look at the current dynamic in the housing market. Both mortgage rates and home prices have risen considerably over the past year and change. The 30-year fixed has climbed from around 3% to start 2022 to 7. 63% today, per Freddie Mac weekly survey data. Despite this more than doubling in interest rates, home prices increased 4. 6% from July 2022 to July 2023, per the FHFA’s latest seasonally adjusted monthly House Price Index (HPI). This is higher than the annual growth rate since 1991, which seems like a head-scratcher. How could home prices outperform with mortgage rates surging? Well, higher mortgage rates generally indicate that the economy is hot, which it most certainly has been over the past year and change. More jobs and increased wages, coupled with a low interest rate environment, increased the money...

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### It’s Not a Good Time to Buy a Home and Everyone Knows It

- Published: 2023-10-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/its-not-a-good-time-to-buy-a-home-and-everyone-knows-it/
- Categories: Home Buying, Housing Market

As if you needed more evidence that it’s not a good time to buy a home. The latest piece comes from the WSJ, which revealed that renting is 50% more expensive than buying. This comes on top of a recent Fannie Mae survey that said home buyer sentiment matched an all-time survey low, with only 16% indicating it was a good time. The culprit continues to be mortgage rates, which surpassed 8% last week and continue to erode affordability. So is it better to hold off and keep renting or continue to house hunt? It’s Not Always a Good Time to Purchase a Home First off, it’s not always a good time to purchase a home, or condo for that matter. Ultimately, there are better times and worse times, at least if we’re framing the question in terms of investment returns. There’s also the sheer matter of affordability, which could jeopardize the transaction long-term if the buyer isn’t able to keep up with payments. That’s essentially what transpired in the early 2000s, when home buyers with no business buying homes went through with the transaction regardless. Often, this involved some creative financing and perhaps some stated income underwriting to get to the finish line. In the end, while they qualified for the loan and closed on the purchase, they often didn’t make it past the first few mortgage payments before they fell behind. Today, the situation is different because many of those questionable loan types, like stated income loans and...

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### An Alternative to Paying the Mortgage with a Credit Card

- Published: 2023-10-20
- Modified: 2025-02-13
- URL: https://www.thetruthaboutmortgage.com/an-alternative-to-paying-the-mortgage-with-a-credit-card/
- Categories: Mortgage Tips

This week, I read an article in the WSJ about paying the mortgage with a credit card. Either things are really bad in the economy, or things are really bad at the WSJ. Or they're about to be. Regardless, it’s not a great strategy to put the mortgage on plastic, which is why most card issuers don’t allow it. Ultimately, they don’t want you paying your debt with other debt, especially secured with unsecured. But there might be a way to still keep your cash flow without putting the mortgage payment on a card. Take Advantage of the Many 0% APR Credit Cards Out There to Shift Your Spending When you think about making this payment or that payment, it all basically comes from the same place. Your bank account. So you can indirectly keep your cash flowing while paying the mortgage via traditional means if you shift other spending. To achieve this, you just need to offset other purchases. This can be achieved by pushing those other expenses to a 0% APR credit card. Many of these credit cards offer interest-free financing for anywhere from 12 to 18 months at the moment. This buys you time and allows those other expenses, which are totally allowed (and expected) to be paid with a credit card, to funnel to your 0% APR card. For example, say you’ve got a $2,500 monthly mortgage payment and another $2,000 in monthly expenses. We’ll call it gas, groceries, utilities, and other necessities, along with some...

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### Is It Time to Start Talking About 9% Mortgage Rates?

- Published: 2023-10-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/9-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

If you thought 8% mortgage rates were bad, what about 9% mortgage rates? What was once unthinkable is now not so hard to believe, with 30-year fixed mortgage rates climbing ever higher. At last glance, the 30-year was priced at 7. 63%, per Freddie Mac’s lagging weekly survey. But other estimates have been higher, including MND’s daily index that put the 30-year at a ripe 8. 03%. And today I even saw someone calling for 12% mortgage rates by Q2 2024. Yikes! Are 9% Mortgage Rates Next? I’ve already written about 7% mortgage rates and 8% mortgage rates for that matter, at the time wondering if and when they’d arrive. Now here I am writing about 9% mortgage rates, which is worrisome given those past fears coming to fruition. However, that doesn’t necessarily mean we keep going higher from here, nor do we climb another 1% higher. If you look at mortgage rates over the past year, they’ve gone up, but not by an enormous amount. Take Freddie Mac’s weekly survey data, which pegged the 30-year fixed at 6. 48% to begin 2023. Today, they said the 30-year fixed averaged 7. 63%, which represents an increase of 1. 15%. Yes, it’s higher. And yes, it’s further eroding home buyer affordability and hurting housing demand. But an increase of just over 1% over more than 10 months isn’t massive movement. Consider the year 2022, when the 30-year kicked off January at 3. 22% and ended with a bang at 6. 42%...

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### DHI Mortgage Review: The Nation's Largest Home Builder Has Its Own Mortgage Lender

- Published: 2023-10-19
- Modified: 2025-03-21
- URL: https://www.thetruthaboutmortgage.com/dhi-mortgage-review/
- Categories: Mortgage Tips

The nation’s largest home builder, D. R. Horton, also has its own affiliated mortgage lender known as “DHI Mortgage. ” Recently, new home sales have surged in popularity due to the mortgage rate lock-in effect. Essentially, existing homeowners aren’t selling their properties because they’ve got ultra-low fixed interest rates on their home loans. At the same time, mortgage rates have surged higher, resulting in big financing incentives from home builders to move their newly-built home inventory. Let’s take a hard look at what DHI Mortgage has to offer and whether an in-house lender is the way to go. DHI Mortgage Offers Purchase Loans and Refis Full service mortgage lender offering home purchase loans and refis Founded in 1997, headquartered in Austin, Texas Parent company D. R. Horton is the nation’s largest home builder Publicly traded company (NYSE: DHI) Also operate DHI Title and D. R. Horton Home Insurance Agency Aim to be a one-stop shop for newly-built home buyers Funded roughly $22 billion in home loans during 2023 (latest data available) Most active in the states of Texas, Florida, and California Licensed to do business in 34 states DHI Mortgage is a full-service mortgage lender owned by parent company D. R. Horton. They were founded in 1997 and are headquartered in Austin, Texas. D. R. Horton is the largest home builder in the United States, slightly bigger than competitor Lennar, which also has a captive mortgage company called Lennar Mortgage. The home builder got its start back in 1978 when...

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### An 8% Mortgage Rate?! Use These Mortgage Charts to Easily Compare Monthly Payments Fast

- Published: 2023-10-18
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/use-this-mortgage-payment-chart-to-easily-compare-rates/
- Categories: Mortgage Rates, Mortgage Tips

One of the things prospective home buyers and existing homeowners seem to care most about is mortgage rates. And for good reason - the interest rate you receive on your home loan determines what you'll pay each month, sometimes for as long as the next 30 years. That's 360 months until the year 2054! The rate you receive can also completely make or break your home purchase, or sway the decision to refinance a mortgage. As such, I decided it would be prudent (and helpful) to create a “mortgage rate chart” that displays the difference in monthly mortgage payment across a variety of interest rates and loan amounts. This is especially important now that mortgage rates have bounced off record lows and are nearing 8%, the highest levels since the year 2000. 30-Year Mortgage Rates Chart Click to enlarge Use the 30-year mortgage rates chart above to quickly ballpark monthly principal and interest payments You can easily see different monthly P&I payments at various interest rates and loan amounts And if it's worth paying discount points at closing for an even lower rate While the chart is handy for estimates, don't forget to include the taxes and insurance! My original mortgage rate chart above highlights monthly payments at different rates for 30-year mortgages, with loan amounts ranging from $100,000 to $1 million. I went with a bottom of 3. 5%, seeing that mortgage interest rates were around that level when I created the chart, and generally don't seem to go...

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### What Is Escrow?

- Published: 2023-10-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-escrow/
- Categories: Home Buying, Mortgage Tips

If you have ever purchased a home and applied for a mortgage, you’ve likely come across the term “escrow. ” Contrary to Portlandia’s definition, the “the Egyptian god of waiting 30 days,” escrow refers to a third party that holds and distributes funds on behalf of two parties in a transaction. In the case of a home purchase, an escrow company may hold the earnest money deposit and distribute sales proceeds on behalf of a buyer and seller. The escrow company is deemed a safe and trusted intermediary, and also a neutral one, which facilities the flow of monies and documents during the home buying process. At loan closing, an escrow officer will also prepare a closing statement that itemizes all the costs and credits associated with the transaction. How Escrow Works When Buying a Home Once you agree to purchase a property from a seller and sign the required documents, you (likely your real estate agent) will select an escrow company to handle the transaction. When all parties agree to the terms of the transaction, you will be “in escrow. ” This typically involves ironing out details of the sale, such as purchase price and any contingencies (financing, appraisal, inspection), and providing an earnest money deposit as a sign of good faith. The earnest money deposit is often 3% of the purchase price, which should be sent to escrow within three days of offer acceptance. It shows the home seller you’re serious about buying their property and that you’ve...

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### 8% Mortgage Rates Look Imminent, But Could That Be Their Peak?

- Published: 2023-10-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/8-mortgage-rates-look-imminent-but-could-that-be-their-peak/
- Categories: Mortgage News, Mortgage Rates

On a day when mortgage rates are officially close to hitting 8%, I decided to write a post about why they might be a lot lower in 2024. Call me a contrarian. Or an optimist. Or perhaps just an individual that is looking at data and drawing some conclusions. While the trend for mortgage rates lately has undoubtedly been higher, higher, higher, we could be close to hitting a peak. I know, I've said that before... so much for the mortgage rate plunge. But maybe we just need to cross that psychological 8% threshold before things can turnaround. Sometimes you need to see/experience the worst before a recovery can take place. Here Come the 8% Mortgage Rates... The threat of 8% mortgage rates might last longer than the 8% mortgage rates themselves, assuming they actually materialize. This isn’t a new threat. I wrote all the way back in September 2022 to watch out for 8% mortgage rates. At that time, we inched closer to those levels before rates pulled back. More recently, Shark Tank’s Mr. Wonderful called for the same, arguing that the Fed wasn’t messing around when it came to its inflation fight. And now it appears he might be right, with the 30-year fixed averaging 7. 92%, at least by MND’s daily survey. But despite higher and higher mortgage rates over the past month and a half, the Fed has become more and more dovish. There have countless comments of late from Fed speakers essentially signaling a pause...

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### Now You Can Use ADU Income to Qualify for an FHA Loan

- Published: 2023-10-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/adu-income-to-qualify-for-an-fha-loan/
- Categories: Mortgage News

The U. S. Department of Housing and Urban Development (HUD) announced today that lenders will now be able to count income from ADUs when underwriting FHA loans. Doing so may allow many more home buyers to qualify for a mortgage, even if the ADU doesn’t yet exist! The new guidelines are part of the Biden-Harris Administration’s Housing Supply Action Plan, which aims to increase access to homeownership by addressing affordable housing challenges. It also speaks to the immense affordability challenges in today’s housing market, driven by a severe lack of available for-sale inventory and much higher mortgage rates. Ideally, the growing popularity of ADUs addresses these concerns by increasing the housing stock and easing mortgage qualification. New ADU Rule Aims to Ease Affordability Woes and Increase Housing Stock The new FHA rules regarding accessory dwelling units (ADUs) will help more borrowers qualify for a home loan when purchasing a property with an ADU. They will also make it easier to add an ADU to an existing structure, or construct new homes with ADUs, because it's being extended to the FHA 203k loan and FHA construction loan. The revised FHA policy allows lenders to count income (rent) from these small housing units that are built inside, attached to, or on the same property as a primary residence. Additionally, the presence of these housing units will effectively increase the supply of affordable housing and help families create generational wealth via homeownership. Per the FHA, an ADU is “a single habitable living unit...

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### Lennar Mortgage Review: Known for Offering Big Mortgage Rate Buydowns

- Published: 2023-10-16
- Modified: 2025-03-15
- URL: https://www.thetruthaboutmortgage.com/lennar-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out “Lennar Mortgage,” which is the financing division of parent company Lennar Corp. If you weren’t aware, Lennar is one of the nation’s largest home builders, and is also nearly 70-years old. Like many large builders, they have an in-house mortgage company that facilitates their new home sales. Instead of outsourcing home loan lending to a third-party company, they’re able to provide the customer with a streamlined process from end to end. Read on to learn more about their history and what types of loan offerings they have available, including special incentives you won’t find elsewhere. Lennar Mortgage Is for New Construction Home Buyers The home loan division of parent company Lennar Corp. Lennar is the nation’s second largest home builder, founded in 1954 Formerly known as Eagle Home Mortgage before a name change in 2020 Headquartered in Miami, FL, founded in 1981 Currently have building operations in 26 states nationally Primarily utilized by home buyers who purchase a Lennar property Funded over $17 billion in home loans in 2023 (top-20 lender nationally) Known for offering big mortgage rate buydowns As noted, Lennar Mortgage is the financing unit of its parent company, Lennar Corp. , the second largest home builder in the United States. They only trail D. R. Horton, which also has an in-house lender by the name of DHI Mortgage. While their parent company is nearly 70 years old, Lennar Mortgage is a lot younger. In fact, they were acquired by Lennar back in 1999,...

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### You Can Now Search for Homes for Sale by School District on Zillow

- Published: 2023-10-12
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/you-can-now-search-for-homes-for-sale-by-school-district-on-zillow/
- Categories: Home Buying, Housing Market, Mortgage News

It’s common for home buyers to purchase a property in a certain school district. This ensures their children can attend a specific school if they’ve got their eye on one in particular. Heck, even those without kids might favor a certain home because it resides in a highly-sought after district. Now Zillow has made it easier for prospective home buyers to find properties in attendance zones or school districts simply by using the search bar. When using the company’s mobile app, you've got the option to search by school, just as you would city or neighborhood. Search by School on Zillow to Find a Home in Your Desired District The latest update to the Zillow app allows home shoppers to search by school attendance zone or school district. Simply open the app and navigate to the search bar. Instead of typing in a certain city or neighborhood, type the name of a school you like. From there, Zillow will automatically display the attendance zone boundaries on the associated map in the app. You’ll be able to see properties that are available for sale (or rent) within the attendance zone selected. And if you search for open enrollment, or for a charter or private school without an assigned boundary, Zillow will display homes within a 5-mile radius surrounding the school. The new search-by-school feature also allows home shoppers to receive instant or daily alerts when new for-sale or for-rent homes within their preferred school district or attendance zone come online. That...

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### Why Did Mortgage Rates Plunge This Week?

- Published: 2023-10-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-did-mortgage-rates-plunge-this-week/
- Categories: Mortgage News, Mortgage Rates

If you’ve been keeping track lately, you might be wondering why mortgage rates plunged this week. Last week was a totally different story, with a hotter-than-expected jobs report almost enough to push the 30-year fixed across the daunting 8% threshold. But then the unexpected happened over the weekend, as is often the case with geopolitical events. In times of uncertainty, bonds are typically a safe haven, and when demand for them rises, their associated yields (or interest rates) fall. This, coupled with some more dovish talk from Fed speakers, might explain the recent pullback in rates. How Much Have Mortgage Rates Plunged? First off, the word “plunge” might be a strong one given how much mortgage rates have climbed over the past 18 months. While mortgage rates have indeed fallen all week, they remain well above recent lows. And even much higher than levels seen this summer. If we want to use MND’s widely cited daily rate survey as the measure, the 30-year fixed now stands at 7. 60%. That’s down from 7. 81% on Friday October 6th. So basically mortgage rates have improved by about 20 basis points, or perhaps . 25% depending on the lender. It also reduced the year-over-year change in rates from 0. 77% to 0. 46%, providing a glimmer of hope that the worst could be behind us. And better yet, perhaps mortgage rates have peaked. While that remains to be seen, it’s been hard to get any meaningful relief lately. Typically, any pullback or...

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### How to Supercharge the Savings of a Mortgage Rate Buydown

- Published: 2023-10-06
- Modified: 2024-03-07
- URL: https://www.thetruthaboutmortgage.com/how-to-supercharge-the-savings-of-a-mortgage-rate-buydown/
- Categories: Mortgage Rates, Mortgage Tips

These days, a lot of home buyers are using mortgage rate buydowns to make the deal work. They are particularly prevalent on new home purchases, with builders offering massive incentives that push rates down as low as the 3-4% range. This can make buying a home more palatable at a time when affordability has rarely been worse, thanks in no small part to 7% mortgage rates. But while a lower mortgage rate means you’ll pay less interest and enjoy a lower payment, why stop there? There’s a simple way to make your mortgage rate buydown go even further, and shed years off your loan. Making the Old, Higher Payment After a Refinance (Or in This Case a Rate Buydown) If you have the means, you can save even more money on mortgage interest beyond what a buydown provides. Let me provide an example of refinance savings to highlight how the same could be done with a rate buydown. A common strategy used in the past (when mortgage rates were low! ) was to apply for a rate and term refinance and continue making the old, higher mortgage payment. So if a hypothetical homeowner had a 6% mortgage rate, and refinanced to 4%, they would still make the old mortgage payment as if it were 6%. And the difference between the lower monthly payment and the old, higher payment would be applied to the principal balance. For example, let’s assume the homeowner had a $500,000 loan amount and a 6% mortgage...

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### What Are Caps on Adjustable-Rate Mortgages?

- Published: 2023-10-05
- Modified: 2025-02-04
- URL: https://www.thetruthaboutmortgage.com/adjustable-rate-mortgage-caps/
- Categories: Mortgage Rates, Mortgage Tips

The other day I wrote about how adjustable-rate mortgages might soon make a comeback, given how high fixed mortgage rates have become. Now that the popular 30-year fixed is priced in the 7-8% range, some home buyers might be looking at alternative products. This may include the 5-year or 7-year ARM, both of which provide a fixed interest rate for a lengthy period of time before becoming adjustable. Given how much mortgage rates have increased in such a short time span, these could be viewed as short-term solutions until a refinance makes sense again in the future. But if for whatever reason you keep your ARM once it becomes adjustable, it’s important to understand how it works. Adjustable-Rate Mortgage Caps Limit Rate Movement Today we’re going to talk about caps on adjustable-rate mortgages, which limit how much the rate can move once it becomes a variable rate loan. As noted, many ARMs are hybrids, which means they offer a fixed-rate period initially before becoming adjustable. Two of the most popular ARM option are the 5/1 (or 5/6 ARM) and the 7/1 (or 7/6 ARM). They are fixed for 60 months and 84 months, respectively, before becoming adjustable for the remainder of the loan term. That loan term is the usual 30 years, so there are still 23-25 years left once it becomes adjustable. If there’s a 1 after the 5 or 7, it means the loan is annually adjustable. So it can adjust just once per year. If there’s a...

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### Are Adjustable-Rate Mortgages Finally a Good Deal?

- Published: 2023-10-04
- Modified: 2025-02-04
- URL: https://www.thetruthaboutmortgage.com/are-adjustable-rate-mortgages-finally-a-good-deal/
- Categories: Mortgage Rates, Mortgage Tips

If you visit most bank/lender websites and navigate to their home loans section, you’ll likely only see fixed-rate mortgages advertised. This made perfect sense over the past several years because interest rates on popular mortgage products like the 30-year fixed were at record lows. There was basically no need to look beyond it given the ultra-low rate and the security of a fixed interest for the entire loan term. But that was then, and this now. Today, the 30-year fixed mortgage is hardly a deal, with many priced in the 7-8% range (or higher). That begs the question; are adjustable-rate mortgages finally worth considering? Are ARMs Worth Considering Again Now That 30-Year Fixed Mortgage Rates Are Nearing 8%? In recent years, the adjustable-rate mortgage became a bit of a niche product. Last year, about 75% of the home loans funded featured a fixed interest rate, per HMDA data. And nearly 60% were 30-year fixed-rate mortgages, which are far and away the most popular loan choice. As noted, low fixed rates meant there wasn’t much need for anything else, barring the ultra-wealthy who may have taken out ARMs at rates as low as 1%. But for most homeowners, a 30-year fixed, or perhaps 15-year fixed, was all they really needed. And now homeowners who took out these loans in 2021 get to enjoy another 28 years of fixed rate goodness at rates as low as 2-3%. In case you haven’t heard, this is known as the mortgage rate lock-in effect, where...

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### Mortgage Rates and Home Prices Can Fall Together

- Published: 2023-10-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-and-home-prices-can-fall-together/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

If you don’t believe mortgage rates and home prices can fall together, just look at what home prices have done in the face of 7% mortgage rates. Despite the 30-year fixed surging from sub-3% levels to near-8% levels in less than two years, home prices hit fresh all-time highs. So why is it so difficult to imagine the opposite scenario, where both interest rates and property values fall in tandem? It seems the human mind wants there to be an inverse relationship between rates and prices when there often is not. The good news is it’s possible that both rates and prices moderate from here, ushering in a better level of housing affordability. Home Prices and Mortgage Rates Don’t Have Much of a Relationship The Urban Institute wrote an article last year about the relationship between home prices and interest rates when mortgage rates were rapidly ascending. They noted that since 1976, there has been “a positive but weak relationship” between the two. In other words, higher mortgage rates are often accompanied by higher home price appreciation, though this tendency isn’t robust. Still, it defies the logic many housing bears and everyday humans possess, where they assume higher mortgage rates must equate to lower home prices. After all, if it becomes more expensive to purchase a home, the price must come down. That’s their argument at least. But when you look at other necessary items (shelter also being a necessity), people don’t stop buying them because the cost goes up....

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### What Happens to Mortgage Rates During a Government Shutdown?

- Published: 2023-09-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-happens-to-mortgage-rates-during-a-government-shutdown/
- Categories: Mortgage News, Mortgage Rates

It’s looking more likely that there will be a government shutdown beginning October 1st, which begs the question, what happens to mortgage rates? Do they go up even more, do they fall, or do they do nothing at all? At first glance, you might think that they’d rise because of the uncertainty involved with a shutdown. After all, if no one is quite sure of the outcome, or duration, banks and lenders might price their rates defensively. That way they don’t get burned if rates shoot higher. But history seems to tell a different story. Bond Yields Tend to Fall During Government Shutdowns As a quick refresher, mortgage rates track 10-year bond yields pretty consistently. So if the 10-year yield falls, long-term 30-year fixed rates often fall as well. Conversely, if 10-year yields rise, which they have quite a bit lately, mortgage rates also increase. The 10-year yield began 2022 at around 1. 80 and is around 4. 60 today. Since that time, the 30-year fixed has climbed from roughly 3% to 7. 5%. So there’s a pretty strong correlation between the two, though the spread between them has widened over the past couple years as well. Since mortgage bonds are inherently riskier than government bonds, there’s a premium, or spread that must be paid to investors. You used to be able to price the 30-year fixed mortgage at about 170 basis points above the 10-year yield. Today it might be closer to 275 bps or even more. Anyway, the...

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### What to Do If Your Adjustable-Rate Mortgage Is About to Adjust Higher

- Published: 2023-09-28
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-to-do-if-your-adjustable-rate-mortgage-is-about-to-adjust/
- Categories: Mortgage Tips, Refinance

Recently, a friend of mine with an adjustable-rate mortgage told me his rate was set to adjust significantly higher. His current loan, a 7/1 ARM, has an interest rate of 3. 25%, but that’s only good for the first 84 months. After that, the loan becomes annually adjustable, and the rate is determined by the index and margin. In case you hadn’t noticed, 30-year fixed mortgage rates have skyrocketed over the past 18 months, climbing from around 3% to 7. 5% today. At the same time, mortgage indexes have also surged from near-zero to over 5%, meaning the loan will adjust much higher if kept long enough. First Look at Your Paperwork and Check the Caps When you took out your adjustable-rate mortgage (ARM) or any home loan for that matter, you were given a Closing Disclosure (CD). It lists all the crucial details of your loan, including the interest rate, loan amount, monthly payment, loan type, and whether or not it can adjust. If it’s an ARM, it will indicate that the monthly payment can increase after closing. It will also detail when it can increase and by how much. There will be a section on page 4 called the “Adjustable Interest Rate (AIR) Table” that provides additional information. This is probably the first place you should look if you’re unsure of when your ARM is set to adjust, and how much it might rise when it does. You’ll also find the mortgage index it’s tied to, along with...

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### How to Compare HELOCs From One Lender to the Next

- Published: 2023-09-26
- Modified: 2025-01-14
- URL: https://www.thetruthaboutmortgage.com/how-to-compare-helocs/
- Categories: Mortgage Tips

Over the past year or so, home equity lines of credit (HELOCs) have become a lot more popular. As a quick refresher, HELOCs are typically taken out as second mortgages in order to tap equity. Importantly, this means the first mortgage is left intact, so the borrower gets to keep their low rate while also gaining access to cash in their property. If we consider that most existing homeowners have 30-year fixed-rate mortgages with interest rates below 4%, this approach begins to make a lot of sense. The question is how do you compare HELOC rates? Is it the same as comparing mortgage rates? Not quite, though there are some similarities. Why Are HELOCs Gaining in Popularity? As noted, HELOCs (and home equity loans for that matter) have become increasingly popular in recent years. Volume of home equity lines of credit and closed-end home equity loans surged 50% in 2022 compared to two years earlier, according to the MBA’s Home Equity Lending Study. It’s no surprise given the trajectory of mortgage rates, which hovered around 3% at the start of 2022, and are now closer to 7. 5%. Yes, you read that right. The 30-year fixed has more than doubled in less than two years, and might keep increasing (hopefully not). At the same time, homeowners are sitting on a ton of equity because home prices have surged since before the pandemic and beyond. This has created an odd situation where homeowners are equity rich, but not interested in tapping...

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### Frost Bank Re-Enters Mortgage Biz with a Zero Down Home Loan

- Published: 2023-09-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/frost-bank-re-enters-mortgage-biz-with-a-zero-down-home-loan/
- Categories: Home Buying, Mortgage News

Frost Bank, long absent from the mortgage industry, is back in the biz and rolling out a zero down home loan for its customers. The Texas-based depository, which also just became the new sponsor of the San Antonio Spurs arena, calls their new offering the “Progress Mortgage. ” It is intended to help both low- and moderate-income borrowers realize the dream of homeownership. Aside from not needing a down payment, private mortgage insurance also isn’t required, and you can receive up to $4,000 in closing costs. Read on to learn more about this product and their companion home equity loan. Progress Mortgage Offers 100% Financing on a Home Purchase After sitting out of the mortgage industry for more than 20 years, Frost Bank has relaunched its home loan business in the state of Texas. While the bank is 155 years old, they exited the mortgage space in the early 2000s before getting back into the biz earlier this year. Some may think that’s unusual, given the tough housing market conditions (and high mortgage rates), but that hasn’t stopped them. And they’re coming to market with some pretty aggressive options to help home buyers land a property despite mounting affordability woes. Their so-called “Progress Mortgage” offers 100% financing, meaning home buyers don’t need a down payment to qualify. On top of that, private mortgage insurance (PMI) also isn’t required, despite the lack of a down payment. Typically it’s compulsory if you have a loan-to-value ratio (LTV) above 80%. Not the case...

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### Home Prices Least Affordable in Over Three Decades

- Published: 2023-09-25
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/home-prices-least-affordable-in-over-three-decades/
- Categories: Home Buying, Housing Market, Mortgage News

If you think home prices are too expensive, you wouldn’t be the only one. A new analysis from First American revealed that housing affordability is the lowest it has been in more than three decades. In other words, it hasn't been this expensive to purchase a home since the 20th century. The title and settlement company’s Real House Price Index (RHPI) determines house-buying power using median household income, mortgage rates, and home prices. And they found that real house prices, adjusted for these factors, were up nearly 17 percent year-over-year in July. Blame Higher Mortgage Rates and Home Prices for a Lack of Affordability As for why housing affordability continues to erode, it’s a combination of factors. The first and most obvious issue is markedly higher mortgage rates, with the 30-year fixed mortgage now priced above 7%, assuming discount points aren’t paid. Per Freddie Mac, rates on this most-popular loan program are up about 1% from year-ago levels. First American pegs the annual change at a higher 1. 4 percentage point increase. And if we zoom out a bit more, this key interest rate was in the 3% range to start out 2022. So interest rates alone have wreaked havoc on housing affordability and home buying power. Just consider a loan amount of $400,000 at a 3% rate versus 7% rate. We’re talking about a monthly principal and interest payment of $1,686 vs. $2,661. That’s nearly $1,000 based on the interest rate increase alone. Then you have to factor in...

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### Are High Mortgage Rates Here to Stay?

- Published: 2023-09-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-high-mortgage-rates-here-to-stay/
- Categories: Mortgage News, Mortgage Rates

Today was a rough day for mortgage rates as the market digested the Fed’s latest outlook, which confirmed its inflation fight is far from over. While they didn’t raise their own fed funds rate yesterday, they did leave the door open for another hike in the future, assuming economic data warrants it. Their overall stance actually didn’t change, but their so-called “dot plot” revealed that more of the Federal Reserve’s policymakers expect another rate hike this year. Granted, it appears only one more quarter percent (0. 25%) hike is in the cards at this juncture. So while we might be going higher, it might only be a tiny bit higher. And after that, there may be more certainty for mortgage rates. Higher Mortgage Rates for Longer, However... After the Fed’s announcement, everyone seemed to adopt a simple takeaway: “higher for longer. ” In other words, most don’t expect the Fed to pivot and begin loosening monetary policy anytime soon. There had been some hope that we were at the terminal rate, where the Fed stops hiking. But maybe not just yet. As it stands, the Fed has raised their own fed funds rate 11 times since early 2022, and mortgage rates have risen along with those hikes. While the Fed doesn’t control mortgage rates, its policy decisions can affect the direction of long-term interest rates, such as those tied to 30-year fixed mortgages. Simply put, they don't set the rate on your 30-year fixed, but what they say or do...

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### What Is Cash to Close?

- Published: 2023-09-21
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/what-is-cash-to-close/
- Categories: Home Buying, Mortgage Tips

When you take out a mortgage, whether it’s a refinance or a home purchase, you may come across the phrase “cash to close. ” Virtually all mortgages require some financial contribution from the borrower to fund the loan. It might be down payment funds, it might be lender fees, or it might be prepaid charges like property taxes and homeowners insurance. There’s a good chance it’ll be a combination of these things, which will need to be paid at closing via a verified account. Let’s talk more about the meaning of cash to close, how it’s calculated, and how it’s paid. Cash to Close on a Home Loan Is More Than Just Closing Costs If you look at your paperwork, you should see a list of closing costs associated with your home loan. You can see estimates of these costs on both your initial Loan Estimate (LE) and also on your Closing Disclosure (CD). And when it’s about time to close your loan, on the settlement statement prepared by your escrow officer or real estate attorney. On these documents, you should see things like the loan origination fee, underwriting and processing fees, and other lender fees. Additionally, there will likely be a charge for an appraisal, along with a charge for title insurance, homeowners insurance, and escrow services. Under that escrow/title umbrella, more fees will be listed, such as courier fees, wire fees, notary fees, loan tie in fees, settlement fees, and on, and on. There will also be recording...

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### Former Ginnie Mae Boss Makes the Case for a Zero Down FHA Loan

- Published: 2023-09-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/former-ginnie-mae-boss-makes-the-case-for-a-zero-down-fha-loan/
- Categories: Housing Market, Mortgage News

Past Ginnie Mae president Ted Tozer has argued that the FHA should lower or completely eliminate its current 3. 5% down payment requirement. He discussed the controversial take during a Community Home Lenders of America Roundtable in Washington, D. C. earlier this week, per Inside Mortgage Finance. This isn’t the first time he’s floated the idea of turning the FHA home loan program into a zero-down-payment program. In the past while arguing this same position, he noted that the Bush administration even proposed such a change all the way back in 2004. The question is does this invite more risk at a time when home prices and mortgage rates are already out of reach for most? Most FHA Loan Borrowers Need a Minimum 3. 5% Down Payment At the moment, FHA loan borrowers need to scrounge up 3. 5% of the purchase price when buying a home, assuming they have a 580 FICO score. Those with scores between 500 and 579 need at least a 10% down payment. While this is seemingly a pretty low bar, it still acts as a roadblock for many prospective home buyers, especially low-income borrowers with little savings. According to a semi-recent Federal Reserve study, the average American household had about $42,000 in savings. But if you break it down by age, those under 35 only had $11,250 and those 35 to 44 only about $28,000. A home purchase, even with a small down payment, could easily wipe out these accrued savings. And remember that...

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### Why Are There No Homes for Sale?

- Published: 2023-09-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-there-no-homes-for-sale/
- Categories: Home Buying, Housing Market, Mortgage News

At last glance, 30-year fixed mortgage rates were sitting above 7%. Despite this, there are virtually no homes for sale. One would assume that after such a massive interest rate spike, demand would flounder and supply would flood the market. Yet here we are, looking at a housing market that has barely any for-sale inventory available. And when you remove the new home inventory (from home builders) from the equation, it’s even worse. Let’s explore what’s going on and what it might take to see listings return to the market. Why There Are No Homes for Sale Right Now? The housing market is highly unusual at the moment, and has been for quite some time. In fact, since the pandemic it’s never really been normal. The housing market came to a halt in early 2020 as the world stopped, but then took off like a rocket. If you recall, the 30-year fixed spent the entire second half of 2020 in the sub-3% range, fueling voracious demand from buyers. And as Zillow pointed out, the age demographics had already lined up nicely for a surge of demand anyway. Around that time, some 45 million Americans were expected to hit the typical first-time home buyer age of 34. When you combined the demographics, the record low mortgage rates, a pandemic (which allowed for increased mobility), and already limited inventory, it didn’t take much to create a frenzy. At the same time, you had existing homeowners buying up second homes on the cheap,...

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### Who Are All the People Involved in the Home Loan Process?

- Published: 2023-09-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/who-are-all-the-people-involved-in-the-home-loan-process/
- Categories: Home Buying, Mortgage Tips

One interesting aspect of the home loan process is the sheer number of individuals you’ll work with along the way. You don’t just speak to a salesperson and call it a day. Lots of people are involved in what is a very complex transaction. Aside from salespeople, there are loan underwriters, processors, appraisers, escrow officers, real estate attorneys, and more. Let’s discuss the roles these people hold to help you better understand what it takes to get a mortgage. Remember, you’re asking to borrow a large sum of money, so it’s going to take time and energy (and lots of people) to get to the finish line. The Sales Rep/Loan Officer/Mortgage Broker The first step in the home loan process typically involves a sales person, which can be a banker at your local branch or credit union, a loan officer, or a mortgage broker. If we’re talking about a purchase, this may come before/during your home search or after you’ve found your property with the assistance of a real estate agent. If it’s a mortgage refinance, you’d simply jump right to this step to rework the details of your existing home loan if you wanted a rate and term refinance or a cash out refi. You might be referred to an individual/company, or you might do your own discovery to find a suitable partner. Either way, always look beyond the referral you were given. Your real estate agent might know a great lender, but you your own research as well....

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### Guaranteed Rate Launches a 5 Minute Approval for Mortgages

- Published: 2023-09-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-5-minute-approval/
- Categories: Mortgage News

How fast is fast enough? Ask Guaranteed Rate, which just launched “5 Minute Approval” for mortgage applications. This new “innovation” from the Chicago-based mortgage lender allows borrowers to get approved for a home loan in just five minutes (or less). Interestingly, it comes not long after their Same Day Mortgage, which apparently wasn’t quick enough for some. It might also be a sign of the times, with mortgage application volume at its lowest levels since the 1990s. As the name suggests, customers can get approved for a home loan in about five minutes and possibly close in just 10 days. How Does This New 5 Minute Mortgage Approval Work? Those who are in a really big rush to get a mortgage can now take advantage of Guaranteed Rate’s so-called 5 Minute Approval. As noted, the company only just launched Same Day Mortgage back in March, but apparently they had their sights set on faster. And faster is exactly what this is. How it works appears relatively simple. You visit their website, access the secure portal, sign the initial application package, then upload any requested documents. This can apparently be done without any human interaction as well, and is about three minutes faster than Rocket Mortgage’s 8-minute full approval launched back in 2015. To date, Guaranteed Rate has “successfully approved” more than 100 loans within 5 minutes via their pilot program. It’s unclear how much is needed from the borrower as they didn’t provide the details, but that obviously seems lightning...

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### Roam Assumable Mortgage Platform Allows Home Buyers to Snag Mortgage Rates as Low as 2%

- Published: 2023-09-13
- Modified: 2025-03-15
- URL: https://www.thetruthaboutmortgage.com/roam-home-review-new-assumable-mortgage-platform/
- Categories: Home Buying, Mortgage News, Mortgage Rates

A new startup called “Roam” has launched a service to make assuming a mortgage painless. The company is backed by some prominent real estate figures, including Opendoor co-founder Eric Wu and former Fannie Mae CEO Tim Mayopoulos. The goal is to help more home buyers take advantage of the many low-rate mortgages in existence via a loan assumption. This includes FHA loans and VA loans, both of which are assumable by home buyers. Roam acts as a hands-on guide for buyers and sellers to ensure the process goes smoothly in exchange for a 1% fee. How Roam Makes It Easy to Assume a Mortgage While many home loans are assumable, including all government-backed loans (FHA/VA/USDA), the process isn’t so straightforward. Roam notes that the loan assumption process is “opaque and time-consuming,” and often requires buyers to fill out forms with paper and pen and fax them to the lender or loan servicer. There’ also uncertainty for the home seller, who might not be sure if they’re still liable for the loan post-assumption. To alleviate some of these pain points and ensure the process is done correctly, Roam manages all the operational details on behalf of the buyer, seller, and real estate agents. They don't approve the loans, but act as a facilitator and provide guidance/support throughout the process. In addition, Roam makes it easier to find homes for sale that feature an assumable mortgage. Once you sign up via their website, they’ll compile a set of for-sale listings that feature...

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### The Silver Lining of High Mortgage Rates

- Published: 2023-09-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-silver-lining-of-high-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

I don’t think it would be much of a stretch to assume nobody likes high mortgage rates. They make it more difficult for prospective home buyers to get to the finish line, especially with lofty asking prices. And they’ve led to countless mortgage layoffs and job losses in a number of related industries. Sure, investors might earn more interest on loans with higher mortgage rates, but only if the loans are held onto to. There’s a good chance they’ll be paid off sooner rather than later, making them a little less enticing. But there is one silver lining to these stubbornly high mortgage rates. There Will Be a Mortgage Refinance Boom in the Near Future The longer mortgage rates remain elevated, the larger the number of high-rate home loans in existence. It’s pretty straightforward. If lenders keep doling out new loans, they’ll undoubtedly have high interest rates. If you look at the chart above from Black Knight, the average interest rate on outstanding mortgages is around 3. 94%, but is inching higher as time goes on. As more high-rate mortgages are originated, this average rate will climb, thereby replenishing the very dry refinance pool. At last glance, the popular 30-year fixed mortgage is going for over 7%, up from the 2-3% range in 2021 and early 2022. Mortgage rates are now close to their 21st century highs, with the 30-year fixed reaching 8. 64% in May 2000. Hopefully we don’t go that high, but anything is possible these days. Even...

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### Homeowners Can Now See How Much They’ll Make Renting a Room on Airbnb

- Published: 2023-09-08
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/homeowners-can-now-see-how-much-theyll-make-renting-a-room-on-airbnb/
- Categories: Housing Market, Mortgage News

If you peruse real estate listings on Realtor. com, you might come across a new Airbnb integration. This week, the two companies announced a collaboration that lets homeowners see how much they could fetch to rent out a room, or the entire house. It comes at a time when short-term rentals, or STRs for short, are somewhat under-fire given their immense growth. The Airbnb story also happens to coincide with a residential housing shortage, with some critics blaming STRs on the lack of supply. In any event, if you’re interested in seeing your Airbnb earnings estimates, you’ll need to add your property to Realtor’s My Home dashboard first. How to Find Your Airbnb Host Estimate on Realtor. com To get started, you’ll need to head over to the My Home dashboard on Realtor. com and add your property if you haven’t already. This will also entail creating an account on Realtor. com if you don't have one. It’s fairly simple and seems to only require an email and password. From there, you’ll see a variety of information pertaining to the property added, including its RealEstimate, which is the site’s take on a Zestimate. You’ll also see a tab titled “Host or rent,” which will contain your Airbnb host estimate. It provides both an entire home estimate and a room estimate. A sample of the entire home estimate can be seen in the screenshot above. The single room estimate can be seen below. It defaults to a 7 nights out of...

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### Fannie Mae Chief Economist Calls Current Housing Market Unusual, Doesn’t Expect It to Change Anytime Soon

- Published: 2023-09-08
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-chief-economist-calls-current-housing-market-unusual/
- Categories: Housing Market, Mortgage News

It’s time to check in on the state of the housing market. At last glance, mortgage rates were still above 7%, though they did see a little bit of relief in the past week. Meanwhile, housing supply continues to be heavily constrained, keeping home prices near all-time highs in most of the country. This has proved to be a boon for home builders, as they have no competition from existing supply. But it seems the home builders, and perhaps those with 2-3% 30-year fixed mortgage rates, are the only real winners right now. Home Purchase Sentiment Has Been Flat with High Rates and High Prices Fannie Mae’s latest monthly Home Purchase Sentiment Index (HPSI), which gauges the housing market’s temperature, was mostly unchanged from July. A total of six components make up the HPSI, including buying conditions, selling conditions, home price outlook, mortgage rate outlook, job loss concern, and change in household income. The percentage of respondents who said it is a good time to buy a home was unchanged at a very low 18%. Meanwhile, the percentage who said it is a bad time to buy stood at 82%. So nothing changed there. As a result, the net share of those who say it is a good time to buy remained unchanged month over month. When it came to selling a home, 66% of respondents (up from 64%) said it is a good time to unload a property. And just 34% said it’s a bad time to sell, down...

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### The Typical Home Sold in the Past Three Months Went for $200,000 More Than the Seller Paid

- Published: 2023-09-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/typical-home-sold-for-200000-more-than-seller-paid/
- Categories: Home Buying, Housing Market, Mortgage News

Lately, there’s been a lot of talk about a lack of affordability, even a potential housing bubble. And it comes as no surprise, given the massive shock of a near-tripling of mortgage rates over just a year and a half. The 30-year fixed could be had in the low 3s, maybe even high 2s back in early 2022, and today is closer to 7%. At the same time, home prices haven’t come down, despite a slowing rate of appreciation. Together, this has brought the housing market to its knees and pushed many prospective buyers onto the sidelines. But those who sell are still reaping massive profits. Home Buying Is the Least Affordable Since 1984 Remember those 1980s mortgage rates that were in the double-digits? Well, today’s mortgage rates are nowhere close. However, due to sky-high home prices and elevated interest rates, home buying is the least affordable it has been since 1984. That’s right, it hasn’t been this bad in about 40 years, which illustrates just how challenging this housing market has become. Per Black Knight, it now requires 38. 3% of the median household income to make a monthly mortgage payment on an average-priced home. Using Freddie Mac’s 7. 23% average for a conforming 30-year fixed mortgage as of August 24th, the monthly principal and interest payment climbed to $2,423. And this assumes the buyer comes in with a 20% down payment, when in reality many borrowers can only muster 3-5%. To the point of it being a bubble,...

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### One Really Simple Way to Offset a Higher Mortgage Rate

- Published: 2023-09-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/one-really-simple-way-to-offset-a-higher-mortgage-rate/
- Categories: Mortgage Rates, Mortgage Tips

We all know mortgage interest rates have increased tremendously. While there were periods of relief here and there, the trajectory since early 2022 has been decidedly higher. How much higher remains to be seen, but there’s a good chance the rate you receive on a mortgage today won’t be as low as it was a year ago, or perhaps even a month ago. Simply put, the 30-year fixed is no longer being offered at an absurd 3. 5%, thanks to surging inflation and the end of the Fed's mortgage-backed securities (MBS) buying spree. Today, you might be facing an interest rate of 7% or even higher, depending on the loan attributes, your FICO score, and so on. And while it might be hard to accept, there is something you can do to limit the damage of that higher rate. Just Pay More Toward Your Mortgage Each Month There’s no magic formula here or hoops to jump through If you have a higher interest rate than you’d like just pay more This is a simple way to pay your home loan down faster and lessen the blow The more you pay, the lower your effective mortgage rate It’s pretty straightforward. If you want your high-rate mortgage to cost you less, pay more each month. While the interest rate might be set in stone (barring a refinance), you’re generally allowed to make any payment you’d like each month, so long as it’s enough to satisfy the minimum payment. So if your monthly...

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### Shark Tank’s Kevin O’Leary Predicts 8% Mortgage Rates

- Published: 2023-08-31
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/shark-tanks-kevin-oleary-predicts-8-mortgage-rates/
- Categories: Mortgage News, Mortgage Rates

A week ago, it seemed like we were on the fast track to 8% mortgage rates. But then something spectacular happened, nearly a week’s worth of economic data pushed rates back toward 6%. However, that hasn’t stopped some folks like Shark Tank’s Kevin O’Leary from warning the worst is yet to come. In an interview last Friday, he warned of a minimum of two additional rate hikes from the Fed, which he believes would push mortgage rates above 8%. So is he right, or is the economic data we saw this week proof that the existing hikes are beginning to work? Is Mr. Wonderful Right About Higher Mortgage Rates? As noted, Kevin O’Leary, or Mr. Wonderful as he’s known as Shark Tank, believes mortgage rates are going even higher than current levels. He told Fox News this last Friday, when the 30-year fixed was closer to 7. 50% and looking to move higher. But now that we have another four days of data at our fingerprints, the 30-year fixed appears to be trending lower. In fact, we could hit the high 6% range tomorrow if a favorable jobs report is delivered, which would make sense given the other reports seen lately. It’s certainly no guarantee, but it’s a real possibility. On the other side of the coin, a stronger-than-expected jobs report could unravel all the rate improvements we’ve seen this week in quick order. O’Leary’s argument is that Jerome Powell and the rest of the Fed isn’t messing around when...

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### Why Are Lower Job Openings Good for Mortgage Rates?

- Published: 2023-08-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-lower-job-openings-good-for-mortgage-rates/
- Categories: Mortgage News, Mortgage Rates

This morning, the Job Openings and Labor Turnover Survey (JOLTS report) was released by the Labor Department. It revealed that the labor market wasn’t running as hot as it was previously, leading to a nice drop in the 10-year treasury bond yield. As a result, long-term mortgage rates, which track bonds like the 10-year, should also see some much needed relief. But why does seemingly bad economic news benefit consumer mortgage rates? Well, when you’re trying to fight inflation, which hurts bonds, any sign of a slowing economy is generally good news. JOLTS Report Reveals Cooler Labor Market Conditions As noted, this morning’s JOLTS report came in cooler than expected, prompting a sizable drop in treasury yields. With inflation and unemployment taking centerstage of late, reports like this have become a lot more important. Specifically, job openings dropped 338,000 to a total of 8. 827 million as of the last day of July. This is the lowest level of openings since March 2021, and well below the forecast of 9. 465 million job openings, per economists polled by Reuters. The report is essentially a barometer of labor demand, with fewer openings indicating less need from employers. At the same time, fewer openings mean it's more difficult to find work, which could lead to higher unemployment. Meanwhile, the so-called quits rate fell to 2. 3% from 2. 4% a month earlier, with totals quits decreasing 253,000 to 3. 5 million, the lowest level since February 2021. The quits are a proxy...

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### Zillow Home Loans Launches a 1% Down Mortgage

- Published: 2023-08-24
- Modified: 2023-11-15
- URL: https://www.thetruthaboutmortgage.com/zillow-home-loans-1-down-mortgage/
- Categories: Home Buying, Mortgage News

Today, Zillow Home Loans announced its “1% Down Payment” loan program, making them the latest lender to join the near-zero down fray. The move comes as mortgage rates hit 20-year highs, with the 30-year fixed now being quoted in the 7% range for many borrowers. Of course, this program simply addresses the down payment burden, but any little bit helps at the moment. Initially, the new offering will be available to applicants purchasing a home in the state of Arizona only. But the company does have plans to expand to other states if the pilot goes well. How Zillow’s 1% Down Payment Loan Program Works Zillow notes that most of the country is in the midst of an affordability crisis, thanks to a combination of high asking prices and equally high mortgage rates. At the same time, renters are grappling with asking rents that are 3. 6% higher than they were a year ago, making it difficult to set aside funds for a down payment. This means 64% of first-time home buyers are putting down less than 20% when purchasing a property, and 25% are only able to muster 5% or less. Many others don’t even have the necessary funds to bring in a minimum contribution, which could delay their home purchase. Looking at a hypothetical $275,000 purchase in Phoenix, Arizona, it would take only 11 months for someone saving 5% of their income (earning 80% of area median income) to save 1% down payment. Meanwhile, someone who needed a...

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### What Will It Take for Mortgage Rates to Fall Again?

- Published: 2023-08-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-will-it-take-for-mortgage-rates-to-fall-again/
- Categories: Mortgage Rates, Mortgage Tips

It’s been a rough month or so for mortgage rates. If we zoom out even further, it’s been a horrendous 18 months, with the 30-year fixed as low as 3% in the spring of 2022. Today, you might be looking at an interest rate in the 7% range, or even the 8s if you have a particularly challenging scenario. This has eroded affordability and ground the housing market to a halt, driven mainly by the Fed’s ongoing inflation fight. So what will it take for mortgage rates to fall again? And how soon can we expect meaningful downward movement? Will Mortgage Rates Go Back to 3%? First things first, it’s doubtful mortgage rates go back to 3%. The 30-year fixed hit a record low of 2. 65% in January 2021, per Freddie Mac. The blue line above is the 30-year fixed, the green line the 15-year fixed. The chances of rates returning to those ridiculously low levels seems unlikely, though you should never say never. Anything is possible, though if we do get back there, it’s probably not going to happen anytime soon. Ultimately, the Federal Reserve engineered those record low mortgage rates by purchasing trillions in mortgage-backed securities (MBS) and lowering its own short-term fed funds rate to near-zero. The process is known as Quantitative Easing, or QE for short, and took place for much of the past decade. Unfortunately, this accommodative rate environment was artificial, and eventually led to massive inflation, perhaps because it ran for too long....

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### It’s Mortgage Principal, Not Principle

- Published: 2023-08-22
- Modified: 2025-03-05
- URL: https://www.thetruthaboutmortgage.com/its-mortgage-principal-not-principle/
- Categories: Mortgage Tips

Principal vs. Principle Attention loan officers, mortgage brokers, real estate agents, and so on The words "principal" and "principle" are two very different words They are constantly used incorrectly by those working in the housing industry Even by major mortgage companies and journalists that should know better! Allow me to get testy about grammar for a minute (moment). I know I know, it’s lame to be a member of the grammar police and go after folks for using a word incorrectly. I’m sure I use words incorrectly all the time. In fact, maybe I should have used a synonym of incorrectly that second time around to mix things up. But in this particular case, we’re talking about two completely different words that sound exactly the same but have entirely different meanings. And they often get confused in the mortgage world, with the word “principle” typically used in place of the correct “principal. ” The scary part is that mortgage professionals and high-ranking journalists make this mistake all the time, often when attempting to convey an important message about personal finances! Perhaps that's why I have a bone to pick. What Is Mortgage Principal? The word principal means "first" or "primary" But it has a different meaning when it comes to money It is defined as the original amount invested or loaned In other words, it's your loan amount if we're talking about a mortgage Well, the word principal generally means “first. ” That’s why the head of a school is...

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### Why Are Mortgage Rates Still Going Up If the Fed Is Done Hiking?

- Published: 2023-08-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-still-going-up-if-the-fed-is-done-hiking/
- Categories: Mortgage News, Mortgage Rates

While Fed rate hike forecasts indicate the worst is behind us, mortgage rates are still going up. In fact, they hit a new 52-week high this morning, surpassing the brief highs seen back in October. That puts the 30-year fixed at its highest level in more than 20 years, averaging around 7. 5%. This will likely grind the housing market to a halt, which was already grappling with affordability woes prior to this most recent leg up in rates. The question is why are mortgage rates still increasing if long-term signals indicate that relief is in sight? The 30-Year Fixed Mortgage Is Now Priced Close to 7. 5% Depending on the data you rely on, the popular 30-year fixed is now averaging roughly 7. 5%, up from around 6% to start the year. If we go back to the start of 2022, this rate was closer to 3. 5%, which is a shocking 115% increase in little over a year. And while mortgage rates in the 1980s were significantly higher, it’s the speed of the increase that has crushed the housing market. Additionally, the divide between outstanding mortgage rates held by existing homeowners and prevailing market rates has created a mortgage rate lock-in effect. In short, the higher mortgage rates go, the less incentive there is to sell your home, assuming you need to buy a replacement. Aside from it being extremely unattractive to trade a 3% mortgage for a rate of 7% or higher, it can be out of...

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### Options Other Than Refinancing Your Mortgage

- Published: 2023-08-17
- Modified: 2024-10-08
- URL: https://www.thetruthaboutmortgage.com/options-other-than-refinancing-your-mortgage/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

With 30-year mortgage rates now above 7%, a refinance likely isn’t in the cards for most homeowners. In fact, the total number of refinance candidates has plummeted as interest rates have more than doubled. Previously, around 18 million homeowners stood to benefit from a refinance. Today, it might be less than 100,000, per Black Knight. Either way, it’s clear that refinancing has fallen out of fashion big time. The math just doesn’t make sense for most. The question is what are your options other than refinancing, assuming you want a lower rate or cash out? Why a Mortgage Refinance Doesn't Make Sense Right Now Yesterday, the Mortgage Bankers Association (MBA) reported that mortgage rates hit their highest levels since 2001, matching those seen briefly in October 2022. They noted that refinance applications were off two percent from a week earlier and 35% from the same week a year ago. If you look at the graph above, you can see why. The number of refinance candidates has fallen off a cliff. Meanwhile, Freddie Mac said nearly two-thirds of all mortgages have an interest rate below 4%. As such, refinancing the mortgage just doesn't work for the majority of homeowners out there. Simply put, trading in a fixed interest rate below 4% for a rate above 7% isn't very logical, even if you really need cash. In fact, during the first half of 2023, nearly nine out of 10 conventional loan refinance originations were cash out refinances. Ultimately, if you're looking for...

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### Why Are Mortgage Rates So High?

- Published: 2023-08-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-so-high/
- Categories: Mortgage Rates, Mortgage Tips

At last glance, the 30-year fixed mortgage was back above 7%, depending on the data source. Prior to late July and early August, the popular loan product could be had for closer to 6. 5%. Or even in the high 5s if paying points. And forecasts from prominent economists pointed to rates making their way back to the 5s, or even the 4s by next year. Then rates suddenly reserved course and continued their upward climb, challenging the high levels seen last November. The question is, why are mortgage rates so high? And why aren’t they coming down if the Fed is done hiking and inflation is abating? Blame the Resilient Economy for High Mortgage Rates As a quick refresher, good economic news tends to lead to higher interest rates. And bad economic news typically results in lower interest rates. The general logic is a hot economy requires higher borrowing costs to slow spending, otherwise you get inflation. Meanwhile, a cool economy may require a rate cut to spur more lending and get consumers spending. Unfortunately, the economy continues to defy expectations, in spite of the many Fed rate cuts already in the books. Since March of 2022, the Fed has raised their key fed funds rate 11 times, from near-zero to a range of 5. 25-5. 50%. This was deemed necessary to battle inflation, which had spiraled out of control, causing the prices of everything, including single-family homes, to skyrocket. While the Fed has more or less signaled that...

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### 3 Reasons Why You Need to Compare Mortgage Brokers Too

- Published: 2023-08-04
- Modified: 2025-02-07
- URL: https://www.thetruthaboutmortgage.com/compare-mortgage-brokers/
- Categories: Mortgage Tips

While the most advantageous reason to use a mortgage broker might be their ability to shop your rate with multiple lenders, you still need to put in the time to comparison shop. There are three main reasons I can think of offhand to explain this argument. At the same time, don’t forget to compare banks vs. brokers too if you want to truly exhaust all your options. Remember, gathering several mortgage quotes is a proven method to land a lower interest rate on your home loan, backed up by real studies. Yes, it takes more legwork, but the return on investment can be enormous when you look at the fraction of time involved to the potential money saved. 1. They Are Individuals with Different Skill Sets and Personalities Mortgage brokers are individuals just like real estate agents This means they have various experience levels and unique personalities You’ll want to choose one that is both competent and easy to work with Who takes the time to explain how everything works and answers your questions Let's talk about why you should compare mortgage brokers, even if they work with multiple lender partners. First off, mortgage brokers are often just individuals with their own small business (though larger shops exist as well). This means they have unique personalities and hold different skill sets, with some more experienced than others. They could also have different work hours, availability, and so on. Some may utilize assistants, while others may prefer to work with you...

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### Today’s Housing Market Risk Factors: Is Real Estate in Trouble?

- Published: 2023-08-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/todays-housing-market-risk-factors/
- Categories: Housing Market, Mortgage News

With mortgage rates exceeding 7% again and home prices reaching new heights, some critics are sounding the alarm. The argument is that we’ve got an unhealthy housing market, in which the typical American can’t afford a median-priced home. And when payments are out of reach, it’s just a matter of time before things correct. It is, after all, unsustainable. Some are even arguing that it’s 2008 (or whatever early 2000s year you want to use) all over again. But is the housing market really on the brink of another crash, or is housing simply unaffordable for new entrants? What Could Cause the Next Housing Crash? Over the past few years, I’ve been compiling a list of housing market risk factors. Just ideas that pop in my head about what could cause the next housing crash. I’m going to discuss them to see what kind of threat they pose to the stability of the housing market. This is what my list looks like at the moment: Single-family home investors selling all at once Climate-related issues Spike in mortgage rates Overbuilding (home builders going too far) Crypto bust (bitcoin, NFTs, etc. ) Forbearance ending (COVID-related job losses) Mass unemployment (recession) Contentious presidential election Mom and pop landlords in over heads Airbnb and STR saturation (especially in vacation markets) Increase in overextended homeowners (high DTIs, HELOCs, etc. ) Student loans turned back on (coupled with high outstanding debt) Buy now, pay later (lot of kicking the can down the road) The Spike in...

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### Zillow and Redfin Join Forces to Push More New Construction Home Sales

- Published: 2023-08-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/zillow-and-redfin-join-forces-to-push-more-new-construction-home-sales/
- Categories: Home Buying, Housing Market, Mortgage News

In a clear sign of the times, Zillow has announced a partnership to syndicate new-construction listings on Redfin. This means home shoppers will see more new builds than they did in the past, at a time when existing housing supply has rarely been lower. It also means home builders will gain even more exposure, further boosting their already-high market share. Once launched, Redfin will source non-MLS new-construction listings exclusively from their competitor Zillow. And any new-construction listings that are available through an MLS will continue to be discoverable on the Redfin platform. Zillow and Redfin Linkup a Boon to Home Builders Zillow apparently has the largest selection of new-construction communities of all real estate U. S. websites. This seems to be due to their existing partnerships with home builders, whereby they advertise their properties on Zillow. To broaden their reach, these listings are slated to be syndicated to Redfin starting in the fourth quarter of 2023. And Redfin users will get to take advantage of new features designed specifically to discover new-construction communities and connect with home builders. Powered by Zillow's Community pages, they’ll list all available homes for sale within the community, along with their amenities. Shoppers will be able to view move-in ready homes, nearly complete homes, and even lots. Those interested will find a direct link to the home builder's website, along with pertinent contact information and sales center hours. New Home Sales Up Big Year-Over-Year The U. S. Census Bureau recently reported that sales of newly...

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### The Hidden Danger of a Higher Mortgage Rate

- Published: 2023-08-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-hidden-danger-of-a-higher-mortgage-rate/
- Categories: Mortgage Rates, Mortgage Tips

Everyone knows mortgage rates aren’t as low as they used to be. Understatement of the decade there. But this doesn’t just equate to a higher monthly payment. There are other negatives associated with a higher mortgage rate, some which may be overlooked. Today, I want to talk about loan amortization and how it differs between low and high mortgage rates. With the 30-year fixed closer to 7% these days, it’s going to take a lot longer to pay down your principal balance. And that could have unintended consequences. Higher Mortgage Rate = Slower Paydown As noted, mortgage rates are no longer a screaming bargain. In fact, they’re historically kind of high now, at least if you consider the last couple decades. At last glance, the popular 30-year fixed mortgage averaged 6. 81%, according to the latest weekly survey from Freddie Mac. For some borrowers, a rate in the 7s isn’t out of the question, depending on down payment, FICO score, and other pricing adjustments. A little more than a year ago, you could get a 30-year fixed closer to 3. 5%. And despite this rate jump, home prices haven’t budged in most places. In fact, they’ve reached new heights nationally, defying affordability constraints and the many Fed rate hikes that have taken place since. Unfortunately, this means today’s home buyers are facing significantly higher mortgage payments. But beyond that, they’re also facing much slower paydowns. Simply put, the higher your interest rate, the longer it takes to pay down principal....

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### Big Jump in Homeowners Saying They’ll Sell in the Next Three Years

- Published: 2023-07-31
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/big-jump-in-homeowners-saying-theyll-sell-in-the-next-three-years/
- Categories: Housing Market, Mortgage News

Has residential housing supply finally bottomed? Are we finally going to see more single-family homes hit the market, after years of slim pickings? Perhaps, if a new survey from Zillow turns out to be reality, and not just, well, a survey. A new finding from Zillow Group’s Quarterly Survey of Homeowner Intentions and Preferences (QSHIP) revealed a big jump in home selling intent. While surprising, given the current mortgage rate lock-in narrative, it could help alleviate a housing market desperate for new listings. Are Homeowners Finally Gearing Up to Sell? The survey in question found that 23% of homeowners surveyed in June 2023 expressed a willingness to sell their homes. This includes both those who say they are listing their home for sale or at least considering selling in the next three years. While the number is a relatively low 23%, it’s up from 19% in the first quarter and 15% a year ago. It was as low as 14% in the first quarter of 2021 and never higher than 19% since that time. If we look at it from the percentage standpoint, that’s a near-65% increase in selling sentiment. Granted, it’s been a few weird years (and I’d like to see data from pre-COVID years), but it’s still encouraging if you’re a prospective home buyer. Among the 23% who said selling was on the horizon, four in 10 said they are considering listing their property in the next year. And for mortgage holders who have a mortgage rate above...

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### Zillow Says Homeowners Twice as Likely to Sell If Their Mortgage Rate Is Above 5%

- Published: 2023-07-31
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/zillow-says-homeowners-twice-as-likely-to-sell-if-their-mortgage-rate-is-above-5/
- Categories: Housing Market, Mortgage News, Mortgage Rates

More news on the mortgage rate lock-in effect, this time from Zestimate creator Zillow. The company conducted a survey and found that homeowners with a mortgage rate above 5% are nearly twice as likely to sell. This appears to be the “rate-lock tipping point,” where it essentially no longer matters to give up your mortgage rate. On the other side of the coin, you have the homeowners with sub-5% rates that are essentially locked-in to their properties for fear of losing their low payments. The latter group explains why housing inventory continues to be at historically low levels, arguably keeping home prices elevated despite affordability issues. Low Locked-In Mortgage Rates Affect Housing Supply By analyzing data from the ZG Population Science Quarterly Survey of Homeowner Intentions and Preferences, Zillow discovered that low locked-in mortgage rates affect housing supply. A homeowner’s reluctance to sell “results in a shortage of housing options, resale supply, homeowner mobility, and places upward pressure on housing prices. ” Specifically, they learned that mortgage holders with interest rates above 5% are about twice as likely to have plans to sell their home over the next three years versus those with lower rates. As you can see from the graphic above, this ratio is 38% vs. 21%, illustrating just how important a low rate mortgage is to existing homeowners. And of the homeowners who reported plans to sell, 47% of homeowners with a mortgage rate above 5% have already listed their property for sale. Meanwhile, just 20% of...

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### Nearly Half of Homeowners with a Mortgage Are Equity Rich

- Published: 2023-07-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/nearly-half-of-homeowners-with-a-mortgage-are-equity-rich/
- Categories: Housing Market, Mortgage News

While bulls and bears continue to argue the health of the housing market, a new report revealed that most existing homeowners are in a really good spot. The second-quarter 2023 U. S. Home Equity & Underwater Report from ATTOM found that 49% of mortgaged residential properties in the United States were considered “equity-rich. ” The term is defined as a property owner having at least 50 percent equity in their property, or a loan-to-value ratio (LTV) of 50% or less. This percentage of equity rich homeowners increased from 47% in the first quarter and is now at its highest point in at least four years. Compare this to the year 2012, when nearly 30% of homeowners with mortgages were seriously underwater. Home Price Reversal Boosts Equity Numbers in Second Quarter ATTOM noted that homeowner equity improved during the second quarter as prices for single-family homes and condos increased nationwide. This bucked the market slowdown that had run taken place in late 2022, when 30-year fixed mortgage rates rose above 7%. The company added that the median home value was up 10% in the second quarter, reaching a new all-time high of $350,000, after slipping 7% during the prior three quarters. At the same time, the number of seriously underwater borrowers continued to fall, and accounted for less than three percent of mortgaged homes in the U. S. during the quarter. That’s just one out of 36, defined as a homeowner who owes at least 25% more than the estimated market...

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### Guaranteed Rate OneDown: The Latest 1% Down Mortgage + $1,000 Toward Lender Fees

- Published: 2023-07-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-onedown/
- Categories: Mortgage News

Another day, another affordable home loan program launches, this time “OneDown” from Guaranteed Rate. As the name implies, you only need to put 1% down when purchasing a home, which is about as close to zero as it gets. If you’re wondering why lenders are offering such mortgages, it comes down to affordability, or a lack thereof. Home prices remain at or near all-time lows, despite some pullback a few months back. And mortgage rates remain stubbornly high, with the 30-year fixed close to 7%. Guaranteed Rate OneDown: Their 1% Down Home Purchase Loan If you’re in the market to buy a home, despite those pesky high interest rates (and home prices), you might be feeling a little stretched. To alleviate some of that burden, Guaranteed Rate has joined other lenders in launching a 1% down mortgage, which they call OneDown. As you may or not know, Fannie Mae and Freddie Mac offer loans with just 3% down, such as HomeReady and Home Possible. But apparently that is still too much for some buyers, so Guaranteed Rate is chipping in an additional two percent contribution towards that down payment. They will provide 2% or up to $2,000 (whichever is lower), meaning you’ll probably get the full $2,000 in most cases unless you’re buying a sub-$100,000 home? I don’t think those exist anymore. On top of that, OneDown also provides borrowers with a $1,000 contribution toward their lender fees, such as underwriting, processing, origination fee, etc. So you can reduce your...

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### Homebuyer Assistance Programs: What's Available These Days and Who Qualifies?

- Published: 2023-07-25
- Modified: 2025-03-26
- URL: https://www.thetruthaboutmortgage.com/homebuyer-assistance-programs/
- Categories: Home Buying, Mortgage Tips

It’s no secret that homes just aren’t as affordable as they used to be. An unwelcome combination of significantly higher mortgage rates coupled with ever-higher asking prices has put a major dent in affordability. In May, the monthly mortgage payment on a median-priced home ($401,100) was over $2,000, up from around $1,000 back in 2020, according to the National Association of Realtors. And that assumes a 20% down payment, something that just isn’t a reality for many home buyers these days. The good news is there are lots of creative financing options out there, whether it's from a state housing agency or even a national lender. What Is Homebuyer Assistance? In short, homebuyer assistance is a special program or series of programs offered by a local municipality, state, or private lender that reduces borrowing costs and promotes homeownership. This can come via down payment assistance, closing cost assistance, reduced interest rates and mortgage insurance premiums, or a combination of these and other programs. Collectively, it makes homeownership more attainable, especially for first-time home buyers and/or those with low-to-moderate income. As noted, there are countless homebuyer assistance programs available, many of which are offered at the state or municipality level. For example, the California Housing Finance Agency, or CalHFA for short, offers a series of homebuyer assistance programs. The same goes for every other state in the nation. Programs are also offered for certain cities or underserved areas throughout the nation. At the city level, one example is LA’s Home Ownership...

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### The National Average Mortgage Rate Lock-In Effect Is Worth $55,000

- Published: 2023-07-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-national-average-mortgage-rate-lock-in-effect-is-worth-55000/
- Categories: Mortgage News, Mortgage Rates

You may have heard the phrase mortgage rate lock-in effect lately. As a quick refresher, it’s a homeowner's unwillingness to give up an ultra-low mortgage rate for a much higher one. Or simply the inability to give up their low rate, as qualifying for a home purchase at today’s much higher rates would be an impossibility. Regardless, there is now a value assigned to this so-called mortgage rate lock-in effect, with Freddie Mac putting the average at about $55,000. This means an existing homeowner needs a big incentive to sell, unless they want to forgo that value. How Valuable Is Your Low Mortgage Rate? Freddie Mac reported that six out of 10 borrowers now have a mortgage rate at or below 4%. And that the mortgage rate lock-in effect is a benefit to homeowners who hold fixed-rate mortgages. Now everyone knows a low mortgage rate can save you money, thanks to a lower monthly payment. But it also carries value, which can ebb and flow based on prevailing market rates. Never has this been truer than the last year and change. Simply put, mortgage rates more than doubled from their record low levels in 2021. As a result, those who locked in low rates around that time now hold something extremely valuable. For perspective, the 30-year fixed hit its all-time low of 2. 65% in early January 2021, per Freddie Mac. Last week, it averaged a significantly higher 6. 78%, which is a more than 150% increase. Aside from creating...

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### Carrington Mortgage Launches a 40-Year Mortgage to Tackle Affordability Concerns

- Published: 2023-07-20
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/carrington-mortgage-launches-a-40-year-mortgage/
- Categories: Home Buying, Mortgage News

It’s been a tough year for the mortgage industry, with origination volume down substantially from the boom years of 2020 and 2021. Even 2022 was a pretty good year relative to what we’ve seen so far in 2023, with the harsh reality of near-7% mortgage rates firmly setting in. Aside from the more than doubling of mortgage rates virtually eliminating refinance demand, it’s also making it more expensive to purchase a home. After all, a $500,000 loan amount at 7% vs. 3% is a difference of roughly $1,200 per month. Because of this eroding affordability, mortgage lenders are getting increasingly creative with financing, the latest being Carrington Mortgage Services. Carrington Mortgage Services Add 40-Year Home Loans to Its Lineup This week, Carrington Mortgage Services’ launched a new home loan product aimed at affordability: the 40-year mortgage. The Anaheim-based lender, which operates in the retail, wholesale, and correspondent channels, believes it will provide several advantages. The main one being a lower monthly payment due to the longer amortization period. The other being the ability to qualify borrowers at the lower payment, thereby reducing their DTI ratio and potentially allowing them to afford more home. Because loan terms beyond 30 years were banned under the far-reaching Qualified Mortgage (QM) rule, this type of loan will be considered non-QM. But it's available across the company’s four non-QM suites, including Flexible Advantage, Flexible Advantage Plus, Prime Advantage, and Investor Advantage. Additionally, it is an option for both home purchase transactions and refinances, including Full...

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### Wondering Where Home Prices Go Next? Look at Inventory, Not Mortgage Rates

- Published: 2023-07-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/wondering-where-home-prices-go-next-look-at-inventory-not-mortgage-rates/
- Categories: Housing Market, Mortgage News

There’s been a lot of speculation that home prices would crash as mortgage rates surged. The argument was especially convincing after the 30-year fixed climbed from around 3% to over 7% in less than a year. This was unprecedented movement, even if mortgage rates remain below those crazy double-digits from the 1980s. Sure, they are still low historically, at around 6/7%, but the doubling in less than 12 months is what you need to pay attention to. Going from 12% to 15% isn’t fun either, but it’s not as much of a payment shock percentage-wise. Do Higher Mortgage Rates Mean Lower Housing Prices? At first glance, you’d think that mortgage rates and home prices have an inverse relationship. In that if one variable goes up, the other must come down. And vice versa. So if mortgage rates shoot higher, home prices must tumble lower. But here we are, looking at new all-time highs for home prices while the 30-year fixed averages nearly 7%. How is it possible that both home prices and mortgage rates rose in tandem? Well, for one, history reveals that they aren’t negatively correlated. In other words, they can rise together, or fall at the same time. As to why, remember how mortgage rates are determined. Much of their direction is based on the health of the economy. At the moment, the economy is strong, if not too strong, which is why the Fed began tightening the screws and raising its own fed funds rate in the...

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### U.S. Bank Access Home Loan Offers Up to $12,500 in Down Payment Assistance and a $5K Lender Credit

- Published: 2023-07-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/u-s-bank-access-home-loan/
- Categories: Mortgage News

The mortgage deals keep coming, the latest being the new "U. S. Bank Access Home Loan," which comes with up to $12,500 in down payment assistance and a lender credit up to $5,000. This particular loan is geared toward home buyers in markets where the minority population is more than 50%. However, borrowers do not need to be a first-time home buyers to qualify, though income limits do apply. At the moment, it’s being piloted in select cities nationwide, including Las Vegas, Los Angeles, Little Rock, Milwaukee, and St. Louis. Read on to learn more about this program, which allows FICO scores as low as 640. How the U. S. Bank Access Home Loan Works Between steep home prices and high mortgage rates, home buying has gotten expensive and out of reach for many. To help alleviate that, Minneapolis, MN-based U. S. Bank has committed $100 million to the new Access Home Loan program over the next five years. As stated, the goal of the loan is to increase access to homeownership for minority families. It also aligns with the company’s initiative focused on advancing Black homeownership. Specifically, this means residing in a market where the minority population is more than 50%, per census tract data. Additionally, the borrower’s income must be equal to or below the HUD Area Median Income in the area where they wish to purchase a property. However, it’s still possible to qualify for this loan if your earnings are above the median income, assuming the...

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### Why Are Home Prices Not Dropping?

- Published: 2023-07-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-home-prices-not-dropping/
- Categories: Housing Market, Mortgage Rates

Late last year, Zillow said home prices needed to come down about 25% to become affordable again. Around that same time, mortgage rates hit their highest point in 20 years, with the 30-year fixed surging above 7%. That led many to draw the conclusion that relief was in sight, at least if you were a prospective home buyer. And indeed, home prices did fall shortly after, coming down 3. 3% in March, per Redfin, the largest year-over-year decline since 2012. But that was then, and this is now. In May, home prices hit a new all-time record high. What on Earth is going on? After a Brief Pause, Home Prices Are Reaccelerating The pandemic-fueled housing market is the stuff of legends. Just look at this chart from the FHFA, which oversees Fannie Mae and Freddie Mac. Home prices had already surpassed the prior housing bubble peak before COVID-19 reared its ugly head. But just look how much higher they climbed from 2020 onward. This explosive growth worried the Fed, which was also dealing with out-of-control inflation. And led to Federal Reserve Chairman Jerome Powell calling for a housing market “reset,” which he believed could be accomplished via countless interest rate increases. As noted, it did indeed lead to a massive spike in mortgage rates, with the 30-year fixed more than doubling from the low-3% range to over 7% by late 2022. Eventually, that did dampen home prices, with some reporting it as the second largest home price correction of the...

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### Top Mortgage Lenders in Nevada

- Published: 2023-07-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-nevada/
- Categories: Mortgage Tips

It’s time to check out the top mortgage lenders in Nevada based on their total loan volume. Last year, more than 600 mortgage companies funded nearly $33 billion in The Silver State, down from roughly $68 billion a year earlier. But as always, there can only be one #1, and those honors went to a company you’ve likely heard of. Yes, Rocket Mortgage was the top lender in the state, and by a very wide margin. Just like they were in 2021. Read on to see which other companies made the top 10 lists. Top Mortgage Lenders in Nevada (Overall) Ranking Company Name 2022 Loan Volume 1. Rocket Mortgage $1. 8 billion 2. UWM $1. 6 billion 3. Guild Mortgage $1. 5 billion 4. loanDepot $1. 2 billion 5. U. S. Bank $788 million 6. Wells Fargo $772 million 7. Zions Bancorp $662 million 8. Bank of America $578 million 9. DHI Mortgage $558 million 10. Lennar Mortgage $514 million Detroit-based Rocket Mortgage funded $1. 8 billion in home loans in the state of Nevada in 2022, per HMDA data from Richey May. That was a two hundred million more than necessary to beat out second place United Wholesale Mortgage, its crosstown rival. UWM works exclusively with mortgage brokers via the wholesale lending channel. Guild Mortgage, which hails out of San Diego, took third with a slightly smaller $1. 2 billion in origination volume. In fourth was nonbank loanDepot with $1. 2 billion, followed by U. S. Bank’s $788 million....

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### Will Mortgage Rates Go Down in 2023?

- Published: 2023-06-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/will-mortgage-rates-go-down-in-2023/
- Categories: Mortgage Rates, Mortgage Tips

Well, were about halfway through the year and mortgage rates seem to have settled in around the high 6% range. While averages vary based on the source, Freddie Mac last posted a rate of 6. 67% for the popular 30-year fixed. This rate began the year 2023 around 6. 50% and has yo-yoed a bit since, falling as low as 6. 09% and climbing as high as 6. 79%. So it appears mortgage rates have become somewhat range-bound, hovering around double what they were in early 2022 (3. 25%). The question is when will they drop again? Or could they even rise higher from here? New Forecasts Put Mortgage Rates Back in the 5s by 2024 First the good news. Several economic forecasts predict that 30-year fixed mortgage rates will return to the 5s. The bad news is this might not happen until the second half of 2024. In other words, another full year of rates in the high 6s could be in store. Fannie Mae’s June 2023 Housing Forecast expects the 30-year fixed to peak at 6. 6% in the third quarter of 2023, then fall to 6. 3% in Q4. Thereafter, rates are forecast to trickle down to 6. 1% in Q1 2024, 5. 9% a quarter later, and eventually 5. 6% by year-end. So that’s something to be excited about if you’re in search of a lower mortgage rate. Similarly, Goldman Sachs pegs the 30-year fixed at 5. 9% in 2024, with a little bit of relief...

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### Top Mortgage Lenders in Florida

- Published: 2023-06-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-florida/
- Categories: Mortgage Tips

Now it’s time to take a look at the top mortgage lenders in Florida based on 2022 volume. The Sunshine State is the biggest mortgage market outside of California, with about a 8% share of the national market. In 2022, roughly $228 billion in home loans were originated there during what was a bittersweet year for mortgage lenders. For comparison sake, lenders closed about $350 billion a year earlier. Let’s take a look at which lenders dominated the state, broken down by different categories. As I always say, biggest doesn’t necessarily mean best, but it’s good to know who the players are. Top Mortgage Lenders in Florida (Overall) Ranking Company Name 2022 Loan Volume 1. UWM $15. 3 billion 2. Rocket Mortgage $11. 3 billion 3. Chase $5. 4 billion 4. Wells Fargo $5. 0 billion 5. Bank of America $4. 9 billion 6. loanDepot $4. 5 billion 7. Truist $3. 8 billion 8. CrossCountry Mortgage $3. 8 billion 9. DHI Mortgage $3. 7 billion 10. Caliber Home Loans $3. 6 billion Pontiac, Michigan-based United Wholesale Mortgage (UWM) was the top mortgage lender in the state of Florida last year, per HMDA data visualized by Richey May. They easily beat out Rocket Mortgage by about $4 billion, the latter of which has been #1 nationally for a while now. UWM funded roughly $15. 3 billion in home loans, while Rocket (formerly known as Quicken Loans) managed to fund $11. 3 billion, which represents a 7% and 5% market share in...

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### Guild Mortgage Launches 1% Down Home Loan Combined with a Temporary Rate Buydown

- Published: 2023-06-13
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/guild-mortgage-launches-1-down-combined-with-a-temporary-buydown/
- Categories: Home Buying, Mortgage News

In the past few months, 1% down payment mortgages have returned with a vengeance. We’ve already seen Rocket Mortgage ONE+ and a similar product from rival United Wholesale Mortgage. And even a zero down FHA loan from Movement Mortgage. The programs have emerged as both home prices and mortgage rates remain stubbornly high. Now San Diego-based Guild Mortgage has gone a step further by combining a 1% down loan with a temporary buydown. If this isn’t enough to persuade a borrower to purchase a home, who knows what is? Guild Mortgage 1% Down Payment Advantage The new “1% Down Payment Advantage” program from Guild Mortgage allows borrowers to finance up to 99% of a home purchase. On top of that, the company will lower your mortgage rate for the first year by 1% as well. This is known as a temporary buydown, in which funds are placed in a buydown escrow account and dispersed during the first 12 months. As a result, the home buyer enjoys a lower monthly payment for the first year, and only needs a 1% down payment. The down payment piece works by combining a 3% down conforming loan and a 2% non-repayable grant offered by Guild, putting the loan-to-value (LTV) ratio at 97%. The maximum amount of said grant is $5,000, meaning a maximum purchase price of $250,000 to get the full 2%. A minimum FICO score of 620 is required and area median income limits apply (80% or less AMI) . Additionally, it has...

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### Chase Offering $200 If It Can’t Meet or Beat Your Mortgage Offer

- Published: 2023-06-08
- Modified: 2023-07-25
- URL: https://www.thetruthaboutmortgage.com/chase-offering-200-if-it-cant-meet-or-beat-your-mortgage-offer/
- Categories: Mortgage News

The mortgage space is unique from a lot of other businesses in that the customer isn’t always right. And special offers are typically few and far between. This is mostly because of the complexities involved with closing a home loan. For example, it’s pretty easy to find a promo code when booking a hotel, or snag a sign-up bonus for opening a credit card. But when it comes to a home loan, you typically aren’t offered much other than perhaps speedy service, or a money-back guarantee if things go wrong and it’s entirely their fault. Price-matching is also pretty hard to come by, though Chase has just launched such a deal. Get $200 If Chase Can’t Match or Do Better In honor of National Homeownership Month, Chase has rolled out some new offerings in their home loan department. This includes homebuyer education resources, a Closing Guarantee, and as mentioned, a price-matching pilot program. The way it works is fairly straightforward – Chase will give home buyers $200 if they can’t match or beat a competing loan offer. To be eligible, you need to complete an initial purchase loan application with Chase by September 30th, 2023. And you must provide an official Loan Estimate (LE) from another licensed lender that includes the same loan term, purpose, product, and loan type. Assuming Chase can’t match or beat it, they’ll provide you with $200 within 30 days of withdrawal of the Chase application. At the moment, this is only available to customers purchasing...

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### Navy Federal No-Refi Rate Drop: Lower Your Mortgage Rate for Just $250

- Published: 2023-06-07
- Modified: 2024-11-04
- URL: https://www.thetruthaboutmortgage.com/navy-federal-no-refi-rate-drop/
- Categories: Mortgage News, Mortgage Rates

Lately, there’s been a lot of talk about buying now and refinancing later, once mortgage rates drop. Of course, that’s if mortgage rates do indeed fall at some point in the near-future. There’s no guarantee they will, but if inflation does settle down, we could see a return to more reasonable interest rates before long. And that would support the marry the house, date the rate supporters, who believe it’s better to buy now while rates are high. After all, if rates drop again, competition to buy a home could heat up fast. Enter the Navy Federal No-Refi Rate Drop While there’s logic to buying now and refinancing later, it still involves a pesky mortgage refinance. And even if rates are lower, there are downsides to refinancing. For one, it’s time-consuming and paperwork-intensive. There are also closing costs involved, stress, and of course you need to qualify for the thing. That's never a guarantee if your situation changes. Or if home prices fall, etc. To alleviate some of this concern, select lenders have been offering to waive fees on subsequent refinances if you use them for a home purchase loan. But this still requires the borrower to go through the entire home loan process a second time. Not fun. That's where Navy Federal Credit Union's  “No-Refi Rate Drop” comes in. They've taken both the big cost and hassle out of it. As the name implies, you can refinance your high-interest rate mortgage into a lower-rate mortgage without refinancing. That way...

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### Top Illinois Mortgage Lenders

- Published: 2023-06-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-illinois-mortgage-lenders/
- Categories: Mortgage Tips

There was a new top mortgage lender in Illinois in 2022, per the latest HMDA data. And it was Chicago's very own Guaranteed Rate, which was able to knock JPMorgan Chase off its perch. The company funded a strong $5. 6 billion in the Land of Lincoln, beating out other national brands and hometown lenders. They grabbed a 6. 5% market share in the process, despite volume being down considerably from a year earlier. Read on to learn more about the biggest mortgage lenders in the state of Illinois. Top Illinois Mortgage Lenders (Overall) Ranking Company Name 2022 Loan Volume 1. Guaranteed Rate $5. 6 billion 2. Chase $5. 4 billion 3. U. S. Bank $2. 9 billion 4. Wells Fargo $2. 7 billion 5. Huntington Bank $2. 5 billion 6. Rocket Mortgage $2. 3 billion 7. UWM $2. 2 billion 8. Fifth Third Bank $1. 5 billion 9. loanDepot $1. 5 billion 10. Pennymac $1. 3 billion As mentioned, Guaranteed Rate led the pack with nearly $6 billion in home loan origination volume in 2022, per Richey May’s HMDA data. That was just enough to overtake Chase, which is the nation's fourth largest mortgage lender overall. Unfortunately, volume was nearly half what it was in 2021, when Guaranteed Rate mustered $10. 6 billion in home loan origination. Coming in a distant third was Minneapolis-based depository U. S. Bank with $2. 9 billion. In fourth was Wells Fargo with $2. 7 billion. Despite their controversies, they continue to be the...

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### Why Are Mortgage Rates Different?

- Published: 2023-06-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-different/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage rate Q&A: “Why are mortgage rates different? ” Why is the sky blue? Why are clouds white? Why won't your neighbor trim their tree branches? These are all good questions, and ones that often puzzle even the most savvy of human beings. First things first, take a look at how mortgage rates are determined to better understand how banks and mortgage lenders come up with interest rates to begin with. From there, you'll need to consider why mortgage rates are different for consumer A vs. consumer B, and from lender to lender. No One Size Fits All for Mortgage Rates Mortgages are kind of like snowflakes in that no two are exactly the same (OK, not really) The subject property and the borrower will always have somewhat unique characteristics This means the risk on the underlying loan will vary and so too will the interest rate received Lenders also price their mortgages differently so even identical scenarios can result in variable pricing Mortgages are complicated business, and there certainly isn't a one-size-fits-all approach in this industry. First off, there are thousands of different banks, lenders, and credit unions that offer home loans, some of them entirely unique and proprietary. These companies compete with one another to offer the lowest rate and/or the best customer service. The well-known names might offer higher rates in exchange for their perceived trust and familiarity. Meanwhile, the smaller guys might offer rock-bottom rates to simply stay in contention with the big players. A big...

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### CFPB: Choosing a Cheaper Mortgage Lender Could Save You $100 a Month

- Published: 2023-05-25
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/cfpb-mortgage-rates-range-by-a-half-percent-among-lenders/
- Categories: Mortgage News, Mortgage Rates

You’ve heard it a million times, but I’ll say it again. It pays to shop around for your mortgage. Freddie Mac told us a while back, and now the Consumer Financial Protection Bureau (CFPB) has echoed the same. And it’s not a trivial amount of savings. The bureau found that price dispersion for mortgages is often 50 basis points (. 50%) of the APR. When looking at a median loan amount of about $300,000, we’re talking a difference of roughly $100 per month. That’s $1,200 annually in extra costs (or savings) and $6,000 through the first five years of the loan term. Mortgage Lenders Offer the Same Exact Products at Different Prices Similar to just about any other business, mortgage lenders offer the same products for different prices (why are mortgage rates different? ). Home loans aside, a lot of companies sell the exact same product. That’s why there are comparison websites or Google shopping. You enter a product and you’re presented with various prices, shipping costs, and so on. Throw in a coupon code or pricing special and one company could be offering quite the bargain relative to the rest. While mortgages are a little more unique, as you’re working with a team of individuals to close your loan, the underlying product is generally the same, a 30-year fixed mortgage. Most home buyers and even existing homeowners who refinance choose a 30-year fixed-rate loan. This means you’re getting the same product regardless of where you get it from. The...

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### Why Are Mortgage Rate Spreads So High Right Now?

- Published: 2023-05-24
- Modified: 2025-01-02
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgage-rate-spreads-so-high-right-now/
- Categories: Mortgage News, Mortgage Rates

If you haven’t heard, the 30-year fixed has once again surpassed 7%, at least by some accounts. After settling in around 6. 5% in early May, mortgage rates have steadily risen over the past couple weeks. At the same time, the spread between the 30-year fixed and 10-year Treasury yield has widened to levels way above historical norms. There’s always a premium on mortgages versus government bonds because the latter is guaranteed to be paid back. But the gap between the two is now nearly double the average, which begs the question, why? The Relationship Between Mortgages and the 10-Year Treasury First things first, let’s discuss why 30-year mortgages and 10-year Treasuries even have a relationship to begin with. Without getting too convoluted here, mortgage-backed securities (MBS) and 10-year Treasuries share common investors. After home loans fund, they are typically bundled as mortgage-backed securities (MBS) and resold. While these mortgages often have 30-year loan terms, which is triple the length of time of a 10-year bond, they are often paid off a lot quicker. This is due to a variety of factors, whether it’s a mortgage refinance, a home sale, or simply paying off the mortgage early. Long story short, the average mortgage only lasts about a decade, making it a pretty good match duration-wise for the 10-year Treasury. However, investors demand a premium for taking on the risk of a mortgage-backed security vs. a government bond, as seen in the FRED graph above. The red line is the 10-year...

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### Movement Mortgage Launches Zero Down FHA Loan

- Published: 2023-05-23
- Modified: 2023-09-21
- URL: https://www.thetruthaboutmortgage.com/movement-mortgage-launches-zero-down-fha-loan/
- Categories: Mortgage News

As housing affordability wanes, mortgage lenders have gotten increasingly creative to help borrowers qualify. The latest innovative product is “Movement Boost,” a zero-down FHA loan offered by South Carolina-based Movement Mortgage. Instead of requiring a minimum 3. 5% down payment, home buyers can take out a repayable second mortgage that covers those funds and closing costs if needed. This means a home buyer doesn’t need any cash to close in some cases, which often proves to be a roadblock. Read on to learn more about the new loan program. How Movement Boost Works Movement Boost takes the standard FHA loan and supercharges it by removing the 3. 5% down payment requirement. Instead, borrowers wind up with a first and second mortgage, the latter covering the down payment and up to 1. 5% in closing costs if necessary. The first mortgage is set at 96. 5% of the purchase price, with the remaining 3. 5% funded via a repayable second lien. This second lien features a mortgage rate 2% above that of the first mortgage. And the loan term is 10 years. For example, if you purchased a $300,000 home, you’d take out a first mortgage at $289,500. You’d typically need $10,500 to make the minimum down payment of 3. 5%. But with Movement Boost, that $10,500 could be financed via a second mortgage. Additionally, you could tack on another 1. 5% ($4,500) for closing costs. Let’s pretend the interest rate on the first mortgage is set at 6. 5%. That...

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### Rocket Mortgage ONE+: The Latest 1% Down Home Loan Program

- Published: 2023-05-22
- Modified: 2024-10-31
- URL: https://www.thetruthaboutmortgage.com/rocket-mortgage-one/
- Categories: Mortgage News

Rocket Mortgage is the latest company to offer a 1% down payment mortgage to address ongoing affordability concerns. The new program, coined “ONE+,” offers a 2% grant from the Detroit-based lender to supplement the borrower’s 1% down payment. Additionally, it offers private mortgage insurance at no cost that would typically be compulsory with such a small down payment. Together, this could enable more prospective home buyers to cross the finish line in what has proven to be a challenging environment. It’s available for both first-time home buyers and repeat buyers, as long as they meet income and property requirements. How Rocket Mortgage ONE+ Works In a nutshell, it’s a 3% down mortgage backed by Fannie Mae, where Rocket Mortgage provides 2% in the form of a grant. This means the home buyer only needs to come up with 1% of the purchase price to qualify for the loan, but they close with 3% equity. For example, a $300,000 home purchase would require a down payment of $9,000 if putting down 3%. If you used ONE+, you could come in with just $3,000, with Rocket providing the remaining $6,000. That would leave you with a loan amount of $291,000, as if you had come with the full 3%, which is the minimum required for a conforming loan. To sweeten the deal even further, ONE+ “completely eliminates” private mortgage insurance, which is required for loans above 80% loan-to-value (LTV). This lack of a mortgage insurance premium can provide additional savings, as it’s...

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### What Is the Mortgage Rate Lock-In Effect?

- Published: 2023-05-18
- Modified: 2025-03-05
- URL: https://www.thetruthaboutmortgage.com/what-is-the-mortgage-rate-lock-in-effect/
- Categories: Mortgage Rates, Mortgage Tips

Those looking to buy a home, along with existing owners, may have come across the term “mortgage rate lock-in effect” lately. It’s a relatively new phrase that came about thanks to the ultra-low mortgage rates that were available in 2020-2022. During those years, it was entirely possible to snag a 30-year fixed in the 2-3% range. In fact, some lucky homeowners might have even got their hands on a mortgage rate that starts with 1. Here’s the problem – now that rates have doubled, many of these homeowners don’t want to give up their low rate. Or perhaps worse, can’t. Mortgage Rate Lock-In Effect 101 The "mortgage rate lock-in effect" was caused by ultra-low fixed mortgage rates (2-3% from 2020-2021) quickly rising to 7%+ in 2022-2023 Has made existing homeowners reluctant to sell their properties because it would mean giving up a very low rate in exchange for a much higher one Also known as “golden handcuffs”— a bittersweet scenario where homeowners are stuck in their homes because of their low mortgage rates Homeowners are disincentivized to move because they face much higher rates if they purchase a replacement property For example, a $500,000 home with a 2. 75% rate ($1,632. 96/month) vs. a $475,000 home at 6. 5% ($2,401. 86/month) increases payments by 47% ($770 more per month! ) Critics of lock-in argue that life events (job changes, family needs) will prompt moves regardless of interest rates And the value of a low-rate mortgage diminishes over time as payments...

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### Top Mortgage Lenders in California

- Published: 2023-05-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-california/
- Categories: Mortgage Tips

Thanks to new data, it's time to take a fresh look at the top mortgage lenders in California in 2022. The Golden State is by far the biggest market for home loans, accounting for something like 16% of the overall market. Nowhere else even comes close, including heavyweights like Florida and Texas, with about 8% market share. Or New York with about 5%. As you might expect, the big household names make this list, and many are also on the top-10 list nationwide. Let’s take a look at who topped the rankings, and break it down by home purchase financing and mortgage refinancing. Top 10 Mortgage Lenders in California (Overall) Ranking Company Name 2022 Loan Volume 1. UWM $34. 9 billion 2. Wells Fargo $30. 4 billion 3. First Republic Bank $27. 0 billion 4. Chase $25. 1 billion 5. Rocket Mortgage $24. 1 billion 6. Bank of America $18. 4 billion 7. U. S. Bank $13. 9 billion 8. loanDepot $11. 5 billion 9. Citi $9. 5 billion 10. Union Bank $9. 5 billion In 2021, Rocket Mortgage, formerly known as Quicken Loans, was the top mortgage lender in California, according to HMDA data from Richey May. But in 2022, United Wholesale Mortgage (or UWM for short) took the top spot with $34. 9 billion funded. That isn't a huge surprise as they have also been the top mortgage lender nationally for a couple quarters now as well. The Pontiac, Michigan-based company managed to grab a 6. 5% market...

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### Temporary vs. Permanent Mortgage Buydowns: Which to Choose and Why

- Published: 2023-05-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/temporary-vs-permanent-mortgage-buydowns/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Mortgage rates aren’t so low these days. In fact, they’ve basically doubled since early 2022. While this clearly isn’t great news for aspiring home buyers or those looking to refinance, it has opened the doors to some creative solutions. Lately, the temporary buydown has taken center stage after being a very niche product. And many home buyers are opting to pay discount points at closing to lower their rate. The question is do you want to permanently buy down your rate, or only do so temporarily? Temporary vs. Permanent Mortgage Buydowns First, you need to know the difference between a temporary buydown and a permanent buydown. Permanent Buydown (Paying Points at Closing for a Reduced Rate for the Life of the Loan) The permanent buydown involves paying discount points at closing to lower your mortgage rate for the life of the loan. For example, say you’ve got a $500,000 loan amount and are offered a rate of 6. 5% on a 30-year fixed mortgage with no points. That would result in a monthly principal and interest payment of $3,160. 34. You’re not too impressed because you’ve seen advertised rates in the 5% range and so you inquire about that. The loan officer or broker explains that you can get a rate of 5. 75% if you’re willing to pay two discount points at closing. You’d owe $10,000 at closing to buy down the mortgage rate but you’d have that rate locked in for all 30 years. The payment would drop...

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### Top Mortgage Lenders in 2022: Rocket Squeaks Past UWM for #1 Spot

- Published: 2023-05-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-2022/
- Categories: Mortgage News

Last year, Rocket Mortgage was the top mortgage lender in the nation, per the latest HMDA data. While that wasn’t a big surprise, as they’ve topped the leaderboard for several years now, it was a lot closer than in years’ past. The Detroit-based nonbank lender narrowly beat out its crosstown rival United Wholesale Mortgage by only roughly $100 million. A year earlier, the gap between first and second place was more than $100 billion! So it’s possible there might be a new #1 mortgage lender in 2023. Read on to see who else topped the lists. Top Mortgage Lenders of 2022 (Overall) Ranking Company Name 2022 Loan Volume 1. Rocket Mortgage $128. 9 billion 2. United Wholesale Mortgage $128. 8 billion 3. Wells Fargo $124. 8 billion 4. Chase $99. 1 billion 5. Pennymac $71. 7 billion 6. U. S. Bank $67. 5 billion 7. Bank of America $56. 4 billion 8. loanDepot $52. 9 billion 9. Truist $48. 4 billion 10. AmeriHome Mortgage $47. 5 billion As mentioned, Rocket Mortgage came in first again in 2022 with $128. 9 billion in home loans funded, per HMDA data from Richey May. That was just enough to beat out Pontiac, Michigan-based UWM, which funded a very close $128. 8 billion. And UWM did it by relying solely on mortgage broker partners, whereas Rocket originates loans via the retail and wholesale channel. Coming in a close third was Wells Fargo with $124. 8 billion, which recently announced plans to pull back on...

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### 27 States Oppose New Fannie/Freddie Mortgage Fees That Appear to Punish High FICO Score Borrowers

- Published: 2023-05-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/27-states-oppose-new-fannie-freddie-mortgage-fees/
- Categories: Mortgage News, Mortgage Rates

Those new mortgage fees you’ve probably heard about are causing quite a stir. So much so that Pennsylvania State Treasurer Stacy Garrity sent a letter to the FHFA and President Joe Biden today pleading for their elimination. And the letter is backed by another 32 fiscal officers from 26 other states, all of whom oppose the new mortgage pricing. In a nutshell, they believe it’s unfair that high-FICO score borrowers are essentially subsidizing low-FICO score borrowers by having to pay more than they used to. It’s a big deal because the new pricing applies to mortgages backed by Fannie Mae and Freddie Mac, which account for about 60% of the residential mortgage market. First Some Background on Fannie, Freddie, and the FHFA As noted, Fannie Mae and Freddie Mac back the majority of mortgages that exist today. They are easily the most common type of home loan available. Such loans are known as conforming mortgages because they adhere to the underwriting guidelines of Fannie or Freddie. They are overseen by the Federal Housing Finance Agency (FHFA), which only came into existence in 2008. Since then, the pair have been in conservatorship (thanks to the massive housing crisis) and are essentially quasi-government entities. One of the FHFA's jobs is to set a single-family pricing framework for mortgages backed by Fannie and Freddie. All conforming mortgages, other than some low-income options like HomeReady, are subject to loan-level price adjustments, known as LLPAs. These fees are charged for things like credit score, loan-to-value...

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### Nearly Half of Home Loan Applicants Paid Mortgage Points in 2022

- Published: 2023-04-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/nearly-half-of-home-loan-applicants-paid-mortgage-points-in-2022/
- Categories: Mortgage News, Mortgage Rates

A new analysis from Zillow revealed that nearly half of mortgage applicants opted to pay points when taking out a home loan last year. These optional costs allow homeowners to buy down their interest rate at closing. Doing so lowers their monthly mortgage payment for the duration of the loan term. And it saves them money on interest via a lower mortgage rate, meaning more of each payment goes toward principal. But are points actually a good deal for homeowners? And do they make sense when interest rates are high? A Lot More Homeowners Are Paying Mortgage Points These Days Zillow Home Loan’s analysis, which used data from the Home Mortgage Disclosure Act (HMDA), found that roughly 45% of conventional primary home borrowers paid mortgage discount points in 2022. As noted, these points allow borrowers to obtain a lower mortgage rate. They are a form of prepaid interest. The result in a reduced monthly mortgage payment and a lower interest expense during the loan term. What’s interesting is a lot more homeowners are paying these points than in prior years. For example, when mortgage rates were at or near record lows, far fewer applicants paid points. To put it in perspective, just 29. 6% of borrowers paid points in 2021, 28. 4% in 2020, and 27. 3% in 2019. As for why, it’s probably because the mortgage rate offered was so low that there was little need to pay points. And probably little desire. Zillow notes that buying points is...

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### Fannie Mae Is Predicting Much Lower Mortgage Rates by Year End

- Published: 2023-04-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-is-predicting-much-lower-mortgage-rates-by-year-end/
- Categories: Mortgage News, Mortgage Rates

In its latest housing forecast, Fannie Mae has become much more optimistic with regard to mortgage rates. We’re talking 30-year fixed rates nearly 0. 75% lower by the end of 2023 than in their previous forecast. And mortgage rates that could flirt with the high-4% range by the end of 2024. This would be welcome news to both existing homeowners and those still looking to buy. Let’s dig into the details. A 30-Year Fixed at 5. 7% by the End of 2023 Now does a 30-year fixed priced below 5. 75% sound? A year ago, it probably sounded horrible. Today, it sounds not half-bad. That’s Fannie Mae’s latest prediction from their April 2023 Housing Forecast released Friday. And it’s down significantly from their report released a month earlier, due to an “economy that decelerated meaningfully toward the end of the first quarter of 2023. ” If the Fed’s rate hikes are working and the economy does indeed fall into a recession, as Fannie Mae expects at the beginning of the second half of the year, interest rates should also ease. Here’s a comparison of their mortgage rate forecast from April and March for the popular 30-year fixed-rate mortgage, which is currently priced around 6. 40%, per Freddie Mac. Fannie Mae April 2023 Mortgage Rate Forecast Q1: 6. 4% (actual) Q2: 6. 1% Q3: 5. 9% Q4: 5. 7% Fannie Mae March 2023 Mortgage Rate Forecast Q1: 6. 4% (actual) Q2: 6. 6% Q3: 6. 6% Q4: 6. 4% Fannie Mae...

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### Mortgage Rate Shopping: 10 Quick Tips to Score a Better Deal on Your Home Loan

- Published: 2023-04-20
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rate-shopping-10-tips-to-get-a-better-deal/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

It's time to talk mortgage rate shopping, which has become an absolute must in 2023. Simply put, you've got to be more proactive to get your hands on a low rate today than you did a year ago. Aside from rates doubling from around 3% last year to 6%+ today, there's a lot of rate dispersion right now. Because of all the interest rate volatility, you could see rates 1% apart for the same exact product. Fortunately, there are a number of ways to score a better deal on your home loan, though a little bit of legwork on your behalf is definitely required. After all, you're not buying a TV. How to Get the Best Mortgage Rate If you’re not willing to put in the work, you might be disappointed with the mortgage rate you receive. But if you are up for the challenge, the savings can make the relatively little time you put in well worth it. The biggest takeaway is to shop around, since you can’t really determine if a mortgage rate is any good without comparing it to other quotes. Many prospective and existing homeowners simply gather one quote, typically from a friend or real estate agent’s reference, and then kick themselves later for not seeing what else is out there. At the moment, there's a wide range of rates on offer for the same exact loan programs. This means one bank might advertise a rate of 6. 5% on a 30-year fixed, while another pitches...

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### Home Prices Just Experienced the Biggest Annual Decline Since 2012

- Published: 2023-04-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/home-prices-just-experienced-the-biggest-annual-decline-since-2012/
- Categories: Housing Market, Mortgage News

March was a rough month for home prices. The median U. S. home price fell a sizable 3. 3% in March to $400,528, the largest year-over-year decrease in more than a decade. That was on top of the 1. 2% decline in February, which was the first annual decline in prices since 2012, per Redfin. At the same time, pending home sales fell to their lowest level since the beginning of the COVID-19 pandemic. And while supply continues to be an issue, there is also a lack of buyers too thanks to much higher mortgage rates. Home Price Drop Worst Since Mortgage Crisis Bottom The 3. 3% drop in home prices from March 2022 to March 2023 was the worst annual performance since 2012, according to Redfin. The median price also experienced a 3. 6% month-to-month drop from February. If you recall, home prices bottomed in 2012 after the Global Financial Crisis (GFC) ravaged property values in preceding years. Back then, the decline in home prices was led by subprime mortgages and stated income underwriting. Today, the decline might simply be a symptom of eroded affordability. It’s an important distinction because it could dictate what happens next. Most pundits have blamed the recent reversal in home prices on affordability, with the average rate on the popular 30-year fixed the main culprit. It has risen from the high-2% range to nearly 7% in the span of 12 months, wreaking havoc on prospective buyers’ pocketbooks. But if you ignore that piece, there...

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### We Need 5.5% Mortgage Rates (or Lower) to Attract Home Buyers

- Published: 2023-04-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/we-need-5-5-mortgage-rates-to-attract-home-buyers/
- Categories: Home Buying, Mortgage News, Mortgage Rates

A new survey from John Burns Research & Consulting found that 5. 5% is the “magic mortgage rate. ” By magic, they mean the threshold for a home buyer before they balk at a purchase. Looked at another way, if mortgage rates were 5. 5% or lower, most prospective home buyers would proceed with the transaction. At last glance, the average rate on a 30-year fixed was 6. 27%, according to Freddie Mac. This means we’re pretty close to mortgage rates no longer being a roadblock for new home buyers. 5. 5% Mortgage Rates Are Within Reach As noted, the 30-year fixed is averaging around 6. 25% at present. While this might sound high, rates have fallen for five consecutive weeks, per Freddie Mac. You can thank the short-lived banking crisis and some favorable economic reports (with regard to inflation) for that. Still, they’re a far cry from the 2-3% rates on offer back in 2020 and 2021. But because it’s been a while now, rates are only up about 1% from a year ago. The 30-year fixed averaged 5. 00% at this time in 2022, not a huge jump. And rates exceeded 7% back in October. So as it stands, mortgage rates aren’t terrible. And older generations will argue that they’re historically low. Or point you to mortgage rates in the 1980s. Regardless of all that, it appears today’s home buyer is OK with a 5. 5% mortgage rate. But anything beyond that might be a deal breaker. 71%...

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### Nation's Top Mortgage Lender Launches a 1% Down Payment Home Loan

- Published: 2023-04-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/nations-top-mortgage-lender-launches-a-1-down-payment-home-loan/
- Categories: Mortgage News

The nation’s leading mortgage lender, United Wholesale Mortgage, has re-launched the 1% down payment home loan. It comes at a time when housing affordability continues to be pressured by high asking prices and equally high mortgage rates. While it may be seen as a boon to prospective buyers, it will surely have its critics as well. Like other low-down payment programs, it targets those with lower incomes who would otherwise struggle to qualify for a home purchase. It’s reminiscent of the frothy days in the early 2000s, when creative financing allowed high home prices to persist. The Return of Conventional 1% Down Home loans backed by Fannie Mae and Freddie Mac, known as conforming loans, typically require a 3% minimum down payment. But the re-launch of this loan program, known as “Conventional 1% Down,” requires just a 1% down payment from the borrower. For example, a $200,000 home purchase would require just $2,000 from the buyer. And UWM would chip in the other 2%, $4,000 in this example, to put the loan-to-value (LTV) ratio at the minimum 97%. This would technically make the loan a 3% down mortgage set at 97% LTV, thereby qualifying for backing by Fannie Mae or Freddie Mac. It would also lessen the burden of coming up with a down payment, often a roadblock for home buyers. Proponents will argue that it allows would-be buyers to get into a home sooner, instead of waiting to save for a larger down payment. Those against it will argue...

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### Zillow Now Lets Users Filter Homes by Monthly Payment

- Published: 2023-04-10
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/zillow-now-lets-users-filter-homes-by-monthly-payment/
- Categories: Home Buying, Housing Market, Mortgage News

Due to ongoing mortgage rate volatility, Zillow has launched a new feature that lets users search by monthly payment. Traditionally, Zillow users would enter a maximum purchase price to view homes in their price range. But over the past year, monthly mortgage costs increased by more than $431, and even saw swings of $100+ per month. This meant a certain price range may have fallen out of affordability along the way, complicating the user’s home search. Instead of entering a static list price filter, the company’s new filter lets shoppers search for homes by a range of all-in monthly mortgage costs. Shop for Homes by Total Housing Cost Instead of Purchase Price Zillow’s new filter will show you a list of homes within a range of all-in monthly costs. For example, between $2,500 and $3,000. This includes the principal and interest tied to the mortgage interest rate, along with estimates for homeowners insurance, property taxes, and HOA fees (if applicable). Often, these costs are either overlooked or completely ignored. And as I’ve mentioned in the past, these expenses can alter the affordability picture in a hurry. If you ignore some of these items, you might be surprised to find out that your maximum purchase price is actually a lot lower. And you won’t want to waste your time or that of the seller’s. This is further compounded by ever-changing mortgage rates, which can change daily. Zillow noted that last year's doubling in mortgage rates (from around 3% to 6%+) increased...

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### Homepoint Exits Mortgage Origination, Sells Wholesale Division to The Loan Store

- Published: 2023-04-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/homepoint-exits-mortgage-origination-sells-wholesale-division-to-the-loan-store/
- Categories: Mortgage News

More mortgage M&A activity today. Homepoint announced this morning that it has entered into a definitive agreement to sell the company’s wholesale origination unit to The Loan Store, Inc. As a result, the Ann Arbor-based mortgage lender will no longer be a direct participant in the loan origination space. However, Homepoint will continue to manage its mortgage servicing rights (MSR) portfolio, which it expects “to generate significant returns and cash flow over time. ” Prior to this move, Homepoint was the third largest wholesale mortgage lender in the country, behind just United Wholesale Mortgage and Rocket Mortgage TPO. Homepoint Was a Top-10 Mortgage Lender Homepoint saw explosive growth since its founding in 2015 via the acquisition of Maverick Funding. It took them less than a decade to grow out a 2,000+ employee workforce and become a top-10 mortgage lender. In 2021, the company originated an impressive $96 billion in home loans, landing them in ninth place overall. However, due to difficult market conditions, namely a doubling in mortgage rates, profitability became an issue, leading to a series of layoffs nationwide. Prior to this announcement, the company operated solely in the wholesale channel via mortgage brokers, meaning they will no longer have a place in the mortgage origination business. In the past, they also operated a correspondent and retail division before shrinking operations. Today, Homepoint made what they felt was the “best decision for our company to continue to deliver value to Home Point shareholders. ” But due to the sale,...

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### Home Prices Are Still Too High, But Will They Actually Come Down?

- Published: 2023-04-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/home-prices-are-still-too-high-but-will-they-actually-come-down/
- Categories: Housing Market, Mortgage News

The housing market has been stubbornly frustrating for prospective home buyers. Not only have mortgage rates doubled over the past year, but home prices remain highly elevated, despite some minor improvements. Sure, you might hear that the housing market is crashing, or that we’re in a home price correction. But that doesn’t mean a whole lot when you zoom out and look at home prices over the past couple years. What’s worse is despite abysmal affordability, home prices may not even come down. Home Prices Are Up 5. 3% From a Year Ago While there have been declines in certain overheated metros nationwide, home prices are up 5. 3% nationwide from January 2022 to January 2023. This is according to the latest Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). And they rose 0. 2% in January from a month earlier after registering a 0. 1% monthly price decline in December 2022. If we drill in a bit more, looking at the nine census divisions, seasonally adjusted monthly home prices from December 2022 to January 2023 showed a wider range. Home prices were off 0. 6% in the Pacific division and up 2. 0% in the New England division. On a 12-month basis, prices were -1. 5% in the Pacific division and +9. 6% in the South Atlantic division. As I always say, real estate is local, and this is especially true these days with some markets in different stages than others. But just look at...

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### Moon Mortgage Launches a Crypto Mortgage to Materialize Digital Wealth

- Published: 2023-04-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/moon-mortgage-crypto-mortgage/
- Categories: Mortgage News

Crypto lending platform Moon Mortgage has launched its own “crypto mortgage. ” The move is designed to “help crypto investors materialize their digital wealth,” without the need to sell. So if you’re a bitcoin hodler who wants to get a taste of real assets without giving up on the ultimate goal, this product could be for you. It follows in the footsteps of Figure’s crypto mortgage (same name), which was launched back in March 2022. The difference with this product is the minimum loan amount is a hefty $1 million. Read on to learn more. How the Moon Mortgage Crypto Mortgage Works Similar to Figure’s offering, you pledge your crypto assets as collateral for a home purchase. Moon Mortgage then places a traditional lien against the property and the borrower pays a “competitive rate. ” It’s unclear what those interest rates are like or what kind of loan term and payments are required. They say a good rule of thumb is to post 100% collateral, so if you need a $1 million mortgage, you’ll need to provide $1 million in crypto. But future products may have different collateral requirements, so stay tuned. In terms of liquidation risk, Moon Mortgage says it won’t liquidate your holdings unless they drop by a “pre-agreed to value” during the underwriting process. You can use their crypto mortgage on either an owner-occupied home or an investment property. At the moment, their crypto mortgage product is available to home buyers in the states of Colorado, Florida,...

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### Rocket Mortgage Launches BUY+: Get a 1.5% Credit When Using a Rocket Homes Partner Agent

- Published: 2023-04-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/rocket-mortgage-buy-plus/
- Categories: Mortgage News

Rocket Mortgage has rolled out a new program called "BUY+" that offers a credit of up to $10,000 when you use a Rocket Homes Partner Real Estate Agent to find a home. Prospective home buyers who use a real estate agent that participates in Rocket Homes' Partner Network receive a 1. 5% credit that can be applied toward closing costs. For example, someone putting down 5% on a $500,000 home purchase would get a credit of $7,125. This could be used to offset closing costs and keep out-of-pocket costs to a minimum. Sister company Rocket Homes is also offering rebates when you a sell a home via their network. How Rocket Mortgage BUY+ Works As noted, those who use Rocket Mortgage to obtain their home loan and a Rocket Homes Partner Real Estate Agent will receive a 1. 5% lender credit. This credit is based on the loan amount. As seen in the example above, 1. 5% of $475,000 would be $7,125. The lender credit cannot exceed $10,000, so those with loan amounts above ~$667,000 would be maxed. The funds can be used toward various closing costs, such as the appraisal fee, title insurance, discount points, and so on. If there happens to be any credit left over, it will be applied to the principal balance of your loan. The aim of the program is to make it easier for prospective home buyers to get to the closing table, with a smaller cash burden required. Even those who use an...

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### SoFi Mortgage Review: Pricing Perks and an Online Application But No FHA or VA Loans

- Published: 2023-04-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/sofi-mortgage-review/
- Categories: Mortgage Tips

Today we’ll do a deep dive into SoFi, short for Social Finance, which offers mortgages, personal loans, student loan refinancing, and even a credit card. Their overall goal is to “help people get their money right,” but we’ll focus on the mortgage part for the purposes of this review. Chances are you’ve heard of the company, perhaps because SoFi Stadium is the home of both the LA Rams and LA Chargers. Or maybe they refinanced your student loan at some point in the past. The San Francisco-based online bank is also making a bigger push into the home loan space. So if you’re a prospective home buyer or existing owner, you may want to add them to your list of lenders to consider. SoFi Mortgage Is Geared Toward Younger Homeowners Retail direct-to-consumer bank and mortgage lender Offers home purchase financing and mortgage refinancing Founded in 2011, headquartered in San Francisco, CA Licensed to do business in 49 states and the District of Columbia Funded roughly $3 billion in home loans during 2021 Also offers student loan refinancing, personal loans, insurance, and banking services Publicly traded company (NASDAQ: SOFI) Offers an on-time closing guarantee and waived fees on refinances Do not currently offer FHA, VA or USDA home loans Social Finance Inc. , or SoFi for short, was founded in 2011 by a group of students from Stanford Graduate School of Business. They initially offered student loans and later expanded into personal loans, mortgages, credit cards, checking and savings accounts, and...

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### Top Adjustable-Rate Mortgage Lenders

- Published: 2023-03-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-adjustable-rate-mortgage-lenders/
- Categories: Mortgage Tips

With fixed-rate mortgages no longer on sale, I thought it’d be useful to take a look at the top adjustable-rate mortgage lenders nationwide. These are the companies that originated the most ARMs on a loan volume basis for the most recent year data is available. In 2021, some $611 billion in ARMs were funded by over 3,000 mortgage companies. So it clearly wasn't a niche product. But 10 companies stood above the rest. And guess what? They’re all banks! Read on to see the top 10 lists for more details. Top Adjustable-Rate Mortgage Lenders in the U. S. Ranking Company Name 2021 Loan Volume 1. Chase $41. 8 billion 2. Bank of America $33. 5 billion 3. First Republic Bank $23. 8 billion 4. Wells Fargo $21. 1 billion 5. U. S. Bank $18. 0 billion 6. PNC Bank $11. 7 billion 7. Charles Schwab Bank $11. 6 billion 8. Citizens Bank $11. 0 billion 9. Union Bank $10. 1 billion 10. Citibank $10. 0 billion Coming in first place was JPMorgan Chase with nearly $42 billion in adjustable-rate mortgages (ARMs) funded in 2021, per HMDA data from Richey May. That was more than enough to take the top spot, with second place Bank of America mustering $33. 5 billion in ARMs. In third was First Republic Bank (yes that bank) with $23. 8 billion funded, making them a huge ARM loan player as well. And if the recent fallout is permanent, it will create a sizable gap in the...

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### Rocket Visa Signature Card: Rewards Can Be Used Toward Down Payment on a Home or an Existing Mortgage Balance

- Published: 2023-03-28
- Modified: 2023-03-29
- URL: https://www.thetruthaboutmortgage.com/rocket-visa-signature-card/
- Categories: Mortgage News

The nation’s largest mortgage lender has launched a credit card, known as the “Rocket Visa Signature Card. ” It allows cardholders to earn 5% back toward a down payment on a home, or 2% toward their principal balance at Rocket Mortgage. There is a $95 annual fee, which is waived for existing Rocket Mortgage servicing clients (if they hold your mortgage). To celebrate the launch, the card offers a $200 statement credit to those who spend $3,000 in the first 90 days from approval. Is this something worth looking at, or are consumers better off with a general purpose card instead? Rocket Visa Signature Card Earns Rewards That Can Be Used for a Down Payment The new Rocket Visa Signature Card is a credit card that has the prospective home buyer or existing homeowner in mind. Each dollar spent using the metallic card earns 5 Rocket Rewards points, and there is no limit on how many points you can earn. These points can be redeemed for closing costs, down payment, mortgage principal, or simply cash back via a statement credit. If you use Rocket Mortgage for your home loan needs, 25,000 Rocket Rewards are worth $250, which is the full 5% cash back value. So for every $5,000 spent using the card, you’d get $250 off your Rocket Mortgage closing costs. If you spent $50,000 in a year, we’re talking $2,500 that could be applied toward a down payment on a home. Or simply toward closing costs. Tip:The card also...

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### 'California Dream For All' Home Loan Requires Zero Down Payment for Future Appreciation

- Published: 2023-03-27
- Modified: 2024-08-27
- URL: https://www.thetruthaboutmortgage.com/california-dream-for-all-shared-appreciation-loan/
- Categories: Mortgage News

The California Housing Finance Agency has launched a new shared appreciation loan for home buyers. The program, known as the “Dream For All Shared Appreciation Loan,” allows Californians to build wealth via homeownership without a down payment. In lieu of that down payment, they must share a portion of their home’s future appreciation. While that can be a costly tradeoff, it does eliminate the need for a significant amount of money at closing. And by avoiding a larger loan amount or second mortgage, a home purchase can remain affordable. Update:As of 04/07/2023, available funds for the California Dream For All Shared Appreciation Loan program have been reserved. How the Dream For All Shared Appreciation Loan Works In a nutshell, home buyers in the state of California can get their hands on a zero down mortgage, but they must trade a portion of future home price appreciation. So if a prospective buyer doesn’t have a 20% down payment (or even a 5% down payment), they can take out a shared appreciation loan instead. For example, if the purchase price were $500,000 they could obtain a $400,000 first mortgage at 80% loan-to-value (LTV). Then CalHFA would provide a $100,000 DFA (Dream For All) loan that doesn’t require monthly payments. Instead, the shared appreciation loan is paid back only when the property is sold or transferred, or the mortgage refinanced. As a result, the homeowner would have a smaller loan amount ($400,000) and the borrower would avoid costly private mortgage insurance. Shared Appreciation...

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### Why Do Mortgage Rates Go Down When the Fed Raises Rates?

- Published: 2023-03-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-do-mortgage-rates-go-down-when-the-fed-raises-rates/
- Categories: Mortgage Rates, Mortgage Tips

Yesterday, the Federal Reserve raised its benchmark federal funds rate a quarter point (. 25%). As a result, some may have expected consumer mortgage rates to also rise by . 25%. So if the 30-year fixed were priced at 6. 75%, it would climb to 7. 00% due to the Fed’s action. But the opposite occurred. The 30-year fixed actually fell by about a quarter-point, from 6. 75% down to 6. 50%. What gives? How can the two move in opposite directions? Mortgage Rates Can Go Down Even If the Fed Raises Rates As noted, the Federal Reserve raised its federal funds rate. That’s an interest rate they directly control. And it’s what banks charge one another for overnight use of excess reserves. It’s not a consumer interest rate, nor is it a mortgage rate. However, it does play a role in consumer lending, as there’s often a trickle-down effect. Basically, banks and lenders take cues from the Federal Reserve. But the rate change in the Fed announcement might totally counteract the movement of consumer rates such as those on home loans. Why? Because the Fed isn’t just raising or lowering rates when it releases its Federal Open Market Committee (FOMC) statement. It’s also providing context for why its raising or lowering its fed funds rates. And from that context we get movement in mortgage rates. What Happened Yesterday? The Fed Raised Rates and Mortgage Rates Fell In the March 22nd, 2023 FOMC statement, the Federal Reserve increased the target...

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### Median Down Payment on a House Falls to 10%, Compared to 14% a Year Ago

- Published: 2023-03-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/median-down-payment-on-a-house-falls-to-10-down-from-14-a-year-ago/
- Categories: Home Buying, Housing Market, Mortgage News

Down payments are falling as the housing market slows and competition wanes. A new report from Redfin revealed that the median down payment in January 2023 was 10%, down from 13. 6% a year earlier and well off the pandemic-era peak of 17. 5% last May. They are now similar to levels seen between 2015 and early 2021, before the so-called pandemic home buying boom. Simply put, today’s home buyers don’t need to come in with a large down payment to write a winning offer. And buyers are able to utilize low-down payment options like FHA loans and VA loans again. Median Down Payment Falls to $42,375 in January 2023 The median down payment by dollar amount was $42,375 in January, a 10. 3% decline from a year ago. Driving the decline is a lack of bidding wars, less competition, higher borrowing costs (aka mortgage rates), and lower home prices. Collectively, this has pushed down payments more in line with levels seen prior to the COVID-19-fueled buyer’s market. Thanks to much higher mortgage rates, home prices have fallen back to earth. That lower sales price results in a lower down payment. Home buyers also have less cash to put down because of higher anticipated monthly housing costs. And some buyers are using that money to fund a mortgage rate buydown, assuming the seller or lender doesn’t cover it. We’ve also seen a big bounce in FHA loan lending, which had sunk to around a 10% market share last summer. It...

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### Top Mortgage Lenders in Oklahoma

- Published: 2023-03-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-oklahoma/
- Categories: Mortgage Tips

It’s time to check out the top mortgage lenders in Oklahoma based on closed loan volume. These are the companies that funded the largest dollar amount of home loans in the Sooner State. Over 700 mortgage companies funded roughly $33 billion in home loans in the state during 2021. In terms of who took first place, it was very close, with two companies funding nearly the same exact amount. But only one can hold the crown. Read on to see who snagged the top spot, along with those landing in the top-10. Top Mortgage Lenders in Oklahoma (Overall) Ranking Company Name 2021 Loan Volume 1. U. S. Bank $1. 7 billion 2. Rocket Mortgage $1. 7 billion 3. First United Bank $1. 3 billion 4. Arvest Bank $1. 1 billion 5. Wells Fargo $1. 1 billion 6. Associated Mortgage $925 million 7. AmeriHome Mortgage $892 million 8. Cornerstone Home Lending $878 million 9. Pennymac $853 million 10. Gateway Mortgage $840 million As noted, things were extremely tight at the top, but U. S. Bank edged out Rocket Mortgage for the #1 spot. Both companies originated roughly $1. 7 billion in home loans in Oklahoma in 2021, per HMDA data from Richey May. But U. S. Bank did that little bit more. However, Rocket closed more loans, about 9,500 versus 8,800. Taking third was Durant, Oklahoma’s own First United Bank with $1. 3 billion funded, followed by Arvest Bank and Wells Fargo, each with about $1. 1 billion. The bottom half...

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### Top Mortgage Lenders in Louisiana

- Published: 2023-03-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-louisiana/
- Categories: Mortgage Tips

Today we’ll check out who the top mortgage lenders in Louisiana were based on the most recent year’s loan volume. In 2021, more than 600 banks and lenders originated nearly $39 billion in home loans in the Pelican State, per HMDA data. It was a good year for most lenders, but one company managed to outpace the rest of the pack quite easily. And it was a hometown bank headquartered in the state, not a big national lender. Read on to see who it was and to view the complete list of the largest mortgage lenders in Louisiana. Top Mortgage Lenders in Louisiana (Overall) Ranking Company Name 2021 Loan Volume 1. GMFS $2. 7 billion 2. Rocket Mortgage $1. 8 billion 3. Pennymac $1. 5 billion 4. Freedom Mortgage $1. 2 billion 5. UWM $1. 1 billion 6. AmeriHome Mortgage $1. 0 billion 7. First Horizon Bank $978 million 8. Homepoint $933 million 9. Hancock Whitney $932 million 10. Assurance Financial $890 million Just like in 2020, GMFS Mortgage was the top mortgage lender in Louisiana with $2. 7 billion funded, per HMDA data from Richey May. The Baton Rouge-based lender was founded in 1999 and only operates in 12 states, mostly in the South. They were trailed by overall #1 Rocket Mortgage with $1. 8 billion, and SoCal-based Pennymac in third with $1. 5 billion. Fourth and fifth went to Freedom Mortgage and United Wholesale Mortgage (UWM) with $1. 2 billion and $1. 1 billion, respectively. The rest of...

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### Mortgage Rates Are Very Volatile Right Now. Here’s What to Watch For

- Published: 2023-03-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-are-very-volatile-right-now-heres-what-to-watch-for/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage rates fell. Then mortgage rates rose. Then mortgage rates fell again. What the heck is going on out there? Bank runs, bank failures, no more Fed rate hikes? It’s called uncertainty, which leads to volatility in everything from stocks to bonds and mortgage rates. So if you’re not sure what’s going on, join the club. No one quite knows, which is why you’re going to be seeing a lot of movement in all directions. And for that reason, you need to be on top of your game if you’re even remotely thinking about taking out a home loan. Keep an Eye on the Stock Market and 10-Year Bond Yield Mortgage rates can be pretty complex, but there a few simple things to look at to predict their direction. Generally, if the stock market is falling, so are mortgage rates. The two tend to move in tandem. The thinking is bad news and/or economic uncertainty brings down stocks and mortgage rates. Conversely, bond prices go up as investors seek so-called “safe haven” bonds. That pushes down the associated yield. A good bellwether bond yield to keep an eye on is the 10-year treasury because it has a similar maturity to a home loan (paid off in a decade or so). It was priced around 4%, but since this bank failure business got started, has fallen closer to 3. 5%. To my point about ups and downs, it went from 4% to 3. 75% to 3. 5%, then back to around...

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### What Happens to My Mortgage If My Bank Fails?

- Published: 2023-03-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-happens-to-my-mortgage-if-my-bank-fails/
- Categories: Mortgage Tips

Mortgage Q&A: “What happens to my mortgage if my bank fails? ” It's happening again - banks are failing. The latest being Signature Bank and Silicon Valley Bank, the third and second largest failures on record, respectively. Washington Mutual's mortgage-driven failure in 2008 still stands as the largest bank failure in U. S. history. But will it retain its crown? Prior to this latest, unexpected drama, a bank hadn't failed for nearly 900 days, which was a good run (no pun intended). Back in 2009-2010, banks were failing at a pretty steady clip (at least one every week, sometimes several). At that time, many homeowners pondered what would happen if their bank failed. And some may have gotten excited at the thought of their mortgage being instantly extinguished. After all, it seems everyone else got bailed out. Why not homeowners? Not so fast... it doesn't work that way. It'd be nice though, right? It Starts with a Bank Run If the bank that owns/holds your mortgage fails (or is at risk of failing) There might be a bank run on deposits and eventually an FDIC take over But don't expect your home loan to be paid off in the process Or for the entire loan balance to immediately become due in full Some folks already know what happens when a bank fails, especially if they had uninsured deposits and scrambled down to their local branch for an old-timey bank run. It's crisis-mode and largely bad news. And potentially lost money...

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### Here's an Argument for the Wait to Buy a Home Crowd

- Published: 2023-03-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/heres-an-argument-for-the-wait-to-buy-a-home-crowd/
- Categories: Home Buying, Housing Market, Mortgage Rates, Mortgage Tips

A lot of folks have pondered the buy now or buy later question when it comes to a home purchase. The waiters are waiting for home prices to fall, knowing affordability is historically low. The non-waiters either can’t wait or don’t want to wait because they expect competition to heat up once things turn around. Or they simply bought not knowing prices had peaked. But is it possible to get the best of both worlds? Can you buy a home for less and refinance to a lower rate later? Let’s look at the math to see how this would pan out. Those Who Didn’t Wait to Buy a Home I’m going to use the Austin, Texas metro for this exercise. Prices there are apparently down about 13% from their 2022 peak. Let’s assume someone bought a home there during the “peak” for $600,000 and put down 20%. That’s a down payment of $120,000 and a loan amount of $480,000. We’ll assume they got a 30-year fixed set at 3. 75%. The monthly principal and interest payment is $2,222. 95. Pretty low payment, but they visit Redfin/Zillow and find that their property is now valued at around $525,000. Ouch. Thanks to their 20% down payment they aren’t in a negative equity position. But their LTV is now over 90%, at least on paper. They’re basically not going anywhere, but they’ve got that awesome 3. 75% fixed-rate mortgage for the next three decades. Those Who Waited to Buy but Missed the Mortgage...

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### Mortgage Rates vs. Bank Failures

- Published: 2023-03-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-bank-failures/
- Categories: Mortgage News, Mortgage Rates

You’ve heard about, you know about it. Last week, Silicon Valley Bank was the target of a bank run, prompting the FDIC to take over the troubled company on March 10th. It was the first bank failure since October 2020, and was quickly followed by another failure, NYC-based Signature Bank. That prompted the Federal Reserve to create the Bank Term Funding Program (BTFP) over the weekend. It offers loans to banks, credit unions, etc. for up to one year, using U. S. Treasuries, agency debt, and mortgage-backed securities as collateral, valuing the assets at par. The move is intended to backstop these institutions and calm financial markets. But what will happen to mortgage rates? Silicon Valley Bank Was First Bank Failure in 870 Days Before the Silicon Valley Bank (SVB) failure, we had gone a cool 870 days without a bank failure. My guess is prior to last week, the term “bank failure” wasn’t a big search term, nor was it a concern on anyone’s radar. Instead, we were all fixated on inflation and the Fed’s many rate hikes to tackle said inflation. Somewhat ironically, those very rate hikes are what did in SVB. The company held a bunch of long-term debt like mortgage-backed securities, which had lost a ton of value due to rising rates. This time it wasn’t subprime mortgage debt, but rather agency-backed 30-year fixed mortgage debt. It wasn’t toxic on the surface, but because mortgage rates had risen from sub-3% to around 7% in just over...

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### Veterans United Home Loans Review: Is the Nation's Largest VA Lender a Good Choice?

- Published: 2023-03-09
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/veterans-united-home-loans-review/
- Categories: Mortgage Tips

If you’re an active duty or veteran homeowner (or aspiring home buyer), chances are you’ve heard of Veterans United Home Loans. They are the largest VA home purchase lender in the nation. And have been since 2016 (seven consecutive years). Their specialty is providing financing to veterans looking to buy homes. And about 75% of their overall business consisted of purchase loans. In 2022, the Missouri-based lender also took the overall lead in the VA lending category. So chances are they’re pretty knowledgeable when it comes to helping military members buy homes. Read on to learn more. Veterans United Home Loans Fast Facts Direct-to-consumer mortgage lender Founded in 2002, headquartered in Columbia, Missouri A DBA of Mortgage Research Center, LLC Focuses primarily on VA loans but offers FHA and conventional too Licensed to do business in all 50 states and D. C. The #1 VA lender nationally in 2022 Funded $26. 5 billion in VA loans last year 30th largest home loan lender overall Has physical branches in 17 states As noted, Veterans United Home Loans is a juggernaut in the VA lending world, having ascended to the top of the pile in 2022, per HMDA data. Last year, the company funded more than $31 billion in home loans, with about 95% of it VA loans. They also doled out nearly $2 billion in conventional loans, FHA loans, and even some USDA loans. But they’re clearly best known for being a VA loan lender. Veterans United acts as a direct-to-consumer...

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### Guaranteed Rate Same Day Mortgage: Get a Home Loan Approval in 1 Business Day

- Published: 2023-03-08
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-brings-back-same-day-mortgage-underwriting/
- Categories: Mortgage News

Back in the good old days, pre-mortgage crisis, you could get a fully-underwritten mortgage approval the same day. In fact, you could get approved for a mortgage by early afternoon if you submitted a complete loan package that same morning. In 2004-2007, this was basically the norm. Then things slowed down a lot. And the process changed considerably. Gone were the same-day approvals and in their place came long waiting periods. We’re talking weeks to simply get approved for a mortgage. Instead of quickly being given a conditional loan approval that required many items to be delivered after the fact, lenders began collecting lots of documentation upfront to get a squeaky-clean loan package from the start. The logic was sound – why rush out an approval if it turns out the borrower isn’t truly qualified once all the numbers are verified? It could prove to be a big waste of the mortgage underwriter’s time. Conversely, making a buyer wait weeks to show a seller they’re qualified to buy their home is also problematic. Guaranteed Rate Same Day Mortgage Chicago-based lender has launched a new expedited underwriting initiative Known as Guaranteed Rate Same Day Mortgage Can generate a "final approval" in just 1 business day Home buyers who provide requested docs within 8 hours also eligible for a $250 lender credit It seems things are shifting back to speed again in the mortgage industry. Surely nothing to do with applications being at their lowest point since 1995. Jokes aside, the move...

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### 94% of Homeowners Who Refinanced Recently Raised Their Mortgage Rate a Lot in the Process

- Published: 2023-03-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/94-of-homeowners-who-refinanced-recently-raised-their-mortgage-rate-a-lot-in-the-process/
- Categories: Mortgage News, Refinance

Typically, borrowers refinance their home loans to take advantage of lower mortgage rates. But recently, the average refinance has resulted in an interest rate 2. 4% higher than the rate prior to the transaction. As to why, it’s mostly because the only homeowners refinancing these days are doing so to tap equity. The last time we saw a similar phenomenon was in 2018, when roughly 70% of refinances involved an interest rate increase. Back then, borrowers saw an average rate increase of 0. 4%. What’s going on? Rate and Term Refinancing Hits an All-Time Low A new report from Black Knight revealed that 96% of the 216,000 mortgage refinances completed in the fourth quarter of 2022 were cash-out loans, the highest quarterly share on record. Meanwhile, there were less than 10,000 rate and term refinances, the lowest on record. Prior to Q4 2022, the lowest quarterly total was 76,000 in 2018. The average has been 650,000 per quarter going back 15 years. And in the first quarter of 2021 alone, there were 1. 8 million rate/term refis, 190 times the Q4 2022 total. For all of 2022, 1. 98 million cash out refinances were completed, accounting for more than 80% of all refinances for the year. In other words, the refinance market has been dominated by cash out refinances, which makes total sense. With mortgage rates close to 7%, there’s very little reason to refinance unless you’re tapping home equity. The only other reason, other than say removing someone from...

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### Today’s Homeowners Can’t Afford to Sell

- Published: 2023-03-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/todays-homeowners-cant-afford-to-sell/
- Categories: Housing Market, Mortgage News, Mortgage Rates

The housing bears have ratcheted up their rhetoric lately, calling for an impeding crash. It’s not a crazy notion with home prices clearly unaffordable and mortgage rates no longer anywhere near 3%. But generally, a crash or bubble is preceded by creative financing of some sort. Back in 2006, it was zero down mortgages, stated income loans, option ARMs, and other much worse things. Today, the culprit is a higher-priced 30-year fixed mortgage, which isn’t all that creative. Home Sellers Can’t Afford to Sell Right Now The housing market is super weird at the moment. Even if homeowners want to sell, they often can’t. Or have little desire to due to the strange mortgage rate environment. In short, most existing owners have mortgage rates at or below 5%, per recent HMDA data. And most hold 30-year fixed-rate mortgages. Some refer to these home loans as “golden handcuffs” because they trap homeowners, but also offer something of value. The issue is these homeowners can’t move because you can’t take your mortgage with you (mortgage disruptors are you listening? ). Let’s consider a homeowner who purchased a property in 2018 for $500,000 and then refinanced in 2021 when the 30-year fixed was sub-3%. We’ll pretend their property is now valued at $700,000, and their loan amount is just over $360,000. Their monthly principal and interest payment is about $1,550. What a steal. Now consider they’re looking to move up to a larger home to accommodate a growing family. The asking price is...

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### Why You Might Still See 5% Mortgage Rates

- Published: 2023-03-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-you-might-still-be-seeing-5-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

It’s been tough sledding for mortgage rates over the past month. They were actually on a roll to start off 2023, falling for the entire month of January before things took a nasty turn. Without getting too long-winded here, strong economic data pushed rates back toward decade highs. The culprits were a CPI report and a jobs report, both of which came in hotter than expected. Those basically derailed the argument that inflation had peaked. Still, you might come across 5% mortgage rates when the news is telling you they’re 7%. Why? How It’s Still Possible to Offer 5% Mortgage Rates The latest weekly survey from Fannie Mae put the 30-year fixed at 6. 65%, it’s highest level of 2023. And its highest level since November 2022. Prior to that, 30-year fixed mortgage rates didn’t exceed 7% since April 2002. Yes, it was a good 20-year run folks. In early February of this year, rates were back below 6%, albeit just barely, but it was still a sign that we had possibly turned a corner. Then there was the January jobs report, followed by the CPI report in mid-February, which turned rates on their head. All that progress from November was gone in a flash. Today, you’re probably seeing headlines that say mortgage rates are back at 7% (and above). But if you do comparison shopping on mortgage websites, you might still come across rates in the 5% range? How? The answer is simple; discount points. If You Pay More...

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### Mortgage Rates vs. Home Prices: Is There Really an Inverse Relationship?

- Published: 2023-03-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/home-prices-vs-mortgage-rates/
- Categories: Housing Market, Mortgage Matchups, Mortgage Rates, Mortgage Tips

Mortgage Q&A: "Mortgage rates vs. home prices. " Today, we’ll look at the impact of home prices and mortgage rates on your decision to buy a property, along with the relationship they share. Obviously, both are very important not only in terms of whether you should buy (from an investment standpoint), but also with regard to how much house you can afford. The general logic is that mortgage rates and home prices have an inverse relationship, in that if one goes up, the other goes down. And vice versa. But is this actually true? Or are there situations where both can rise together, making real estate even more expensive than it already is? Mortgage Rates Are No Longer on Sale What's more important (beneficial) to a prospective home buyer? A super low mortgage interest rate they can lock in for 30 years... Or a cheaper home purchase price at the outset? Let's do the math and find out! At the moment, mortgage rates are more than twice as high as they were a year ago. The popular 30-year fixed-rate mortgage averaging 6. 50% last week, according to the latest data from Freddie Mac. This has stopped the housing market in its tracks, and there are fears they could rise even higher over the next year and beyond. Meanwhile, home prices remain close to all-time highs on a nominal basis, but perhaps not in real terms, though most folks feel they’re quite high, and perhaps even unsustainable. This is made clear...

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### FHA vs. Conventional Loan: These Charts Can Help You Determine Which Is Cheaper

> An in-depth look at two of the most popular mortgage options available today, the FHA loan and the conventional loan.

- Published: 2023-03-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fha-loan-vs-conventional-loan/
- Categories: Mortgage Matchups, Mortgage Tips

It's time for another edition of mortgage match-ups: "FHA vs. conventional loan. " Our latest bout pits FHA loans against conventional loans, both of which are extremely popular loan options for home buyers these days. In short, conventional loans are non-government mortgages, typically backed by Fannie Mae or Freddie Mac. Whereas FHA loans are government-backed mortgages that are insured by the Federal Housing Administration (FHA). Both can be a good choice depending on your credit profile and homeownership goals, but there are key differences. Let's discuss the pros and cons of both loan programs to determine if and when one might be the better choice. FHA and Conventional Loans Both Offer a Great Low Down Payment Option It's possible to get an FHA loan with a 3. 5% down payment and a 580 FICO score Or a conventional loan with just 3% down payment and a 620 FICO score FHA lending is more flexible in terms of credit score but requires a little bit more down Be sure to consider the cost of mortgage insurance when comparing the two loan programs First off, whether you go FHA or conventional, know that the down payment requirement is minimal. You need just 3. 5% down for FHA loans and only 3% for conventional. So you don't need much in your bank account to get approved for either type of loan. The main selling point of an FHA loan is the 3. 5% minimum down payment requirement coupled with a low credit score...

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### Better's 'Equity Unlocker' Allows Amazon Employees to Buy Homes with Company Stock

- Published: 2023-02-28
- Modified: 2023-02-28
- URL: https://www.thetruthaboutmortgage.com/better-equity-unlocker/
- Categories: Mortgage News

Better Mortgage has launched a new product called “Equity Unlocker” to help Amazon employees purchase homes. The innovative loan program allows borrowers to pledge vested equity as collateral in lieu of a traditional down payment. This means home buyers can come to the closing table with a $0 down payment, yet borrow like they put 20% down. Because many Amazon employees receive a good chunk of their overall compensation in stock, it gives them an opportunity to buy a home without selling shares. Better Equity Unlocker is now available in the states of Florida, New York, and Washington for current (and former) Amazon employees with vested equity in Amazon. What Is Equity Unlocker? Equity Unlocker from Better Mortgage allows Amazon employees to pledge vested company shares toward a down payment on a home. Instead of having to sell their stock (potentially at an inopportune time), they can pledge shares at a 50% advance rate. For example, $200,000 in vested Amazon stock would be worth a $100,000 down payment. And unlike some other products like margin loans, the terms of the loan won’t change if the value of the stock does. The Amazon shares are valued at the time of the home appraisal and the the rate and term of the mortgage can be locked based on that. This means no surprises if the shares change value in the future, along with the certainty of a 30-year fixed loan. However, Better will apparently charge a premium for mortgages with employee-pledged stock....

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### Top VA Loan Lenders in 2022: Veterans United #1 Thanks to Large Home Purchase Share

- Published: 2023-02-27
- Modified: 2025-03-24
- URL: https://www.thetruthaboutmortgage.com/top-va-loan-lenders/
- Categories: Mortgage News

If you’re curious who the top VA loan lenders were last year, wonder no longer. The biggest was Veterans United Home Loans. The Columbia, Missouri-based lender wrested the lead away from Freedom Mortgage, a direct lender out of Boca Raton, Florida that had topped the list for two years prior. United Wholesale Mortgage took second, followed by Rocket Mortgage, though both were behind by a large margin. Dropping to fourth was Freedom Mortgage, followed by Navy Federal FCU rounding out the top five. Read on to see the rest of the largest VA loan lenders in the country. Top VA Loan Lenders in 2022 Ranking Company Name 2022 VA Loan Volume 1. Veterans United $26. 5 billion 2. UWM $18. 0 billion 3. Rocket Mortgage $16. 7 billion 4. Freedom Mortgage $14. 0 billion 5. Navy Federal $13. 0 billion 6. Pennymac $9. 1 billion 7. loanDepot $7. 9 billion 8. USAA $6. 1 billion 9. Caliber Home Loans $4. 7 billion 10. Fairway Independent $4. 7 billion As noted, Veterans United Home Loans was the #1 VA loan lender in the country in 2022, per statistics from the VA for fiscal year 2022. The company originated over $26. 5 billion in VA loans, which was easily more than the rest of the bunch. In fact, the home purchase specialist held a near-$10 billion cushion above second place UWM. But the numbers pale in comparison to 2021, when Freedom originated a staggering $59. 6 billion in VA loans. Interestingly, Veterans...

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### VA Funding Fee Being Reduced for Home Purchases and Cash Out Refis

- Published: 2023-02-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/va-funding-fee-being-reduced-for-home-purchases-and-cash-out-refis/
- Categories: Mortgage News

In an effort to make mortgage costs a little more bearable, the U. S. Department of Veterans Affairs (VA) is lowering the VA funding fee. This applies to VA loans used for a home purchase or new construction, and even cash out refinances, which likely aren’t being utilized at the moment with interest rates as high as they are. The one-time fee is paid to lower the cost of VA loans for U. S. taxpayers since the VA home loan program doesn’t require monthly mortgage insurance. It can be paid at closing all at once or rolled into the loan and paid off over time by financing it. For loans closed on or after April 7th, 2023, the VA funding fee is being reduced by 15 to 30 basis points (. 15% to . 30%). New VA Funding Fees for 2023 Pictured above is the new VA funding fee chart that applies to VA loans closed on or after April 7th, 2023 and prior to November 14th, 2031, announced in VA circular 26-23-06. As you can see, those who put down less than 5% on a VA-backed home purchase will pay a funding fee of 2. 15%. It’s based on the loan amount, which is often the purchase price since VA loans do not require a down payment. The new fee is 15 basis points less than the current fee of 2. 30% for a home purchase with less than 5% down. On a $300,000 home purchase with nothing down...

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### Is It Worth Using a Mortgage Lender Now for the Promise of Waived Fees in the Future?

- Published: 2023-02-24
- Modified: 2023-02-24
- URL: https://www.thetruthaboutmortgage.com/is-it-worth-using-a-mortgage-lender-now-for-the-promise-of-waived-fees-in-the-future/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

These days, mortgage rates aren’t as cheap as they used to be. And that is the understatement of the century. The 30-year fixed is currently priced around 7%, more than double the ~3% rate offered in early 2022. That has mortgage lenders scrambling to separate themselves from the crowd amid a shrinking pool of eligible borrowers. We’ve seen the temporary buydown gain steam lately, where the interest rate is reduced the first year or two, typically paid by the home seller or lender. Another common tactic is to waive lender fees on subsequent transactions, with the expectation mortgage rates will get better. But is it a good deal? Use a Mortgage Lender Now That Promises No Fees Later? Some mortgage lenders are offering no lender fees when you use them a second time. Think of it as a sort of "mortgage loyalty program. " For example, pick them as your lender today and you’ll be offered the chance to refinance in the future sans the typical fees. This means they’ll waive whatever fees they charge, such as a loan origination fee, underwriting and processing fees, and so on. Generally, third-party fees such as title insurance, credit report, and home appraisal will still be charged. However, this could amount to thousands in savings depending on the loan amount. On a $500,000 mortgage, a 1% loan origination fee alone is $5,000. Throw in a couple thousand more for underwriting/processing and your savings are pretty significant. This is the pitch some lenders are...

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### Can Free and Clear Homeowners Save the Housing Market?

- Published: 2023-02-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/can-free-and-clear-homeowners-save-the-housing-market/
- Categories: Housing Market, Mortgage Rates

The housing market is in trouble. The latest blow being mortgage rates returning to 7%. But the ongoing issue has been a severe lack of inventory, which differs greatly from conditions around the time of the Great Recession. And the higher mortgage rates go, the worse the inventory situation gets. This is because existing homeowners are disincentivized to sell and lose their low rates. At last glance, 84% of all outstanding mortgages had a mortgage rate at or below 5%, per 2022 HMDA data. And 63% had a rate at or below 4%. Simply put, these homeowners don’t want to give up their low rate and replace it with a new 30-year fixed priced near 7%. The Housing Market Is Hurting Due to a Lack of Inventory As noted, the current state of the housing market is a lot different than the one seen back in 2008. At that time, there were way too many existing homes on the market. And countless new housing developments littering the country. In fact, there were so many homes that many projects were halted before they finished. I vividly remember driving around the outskirts of Los Angeles and Phoenix, documenting the many new subdivisions that were desperately attempting to unload inventory. There were so many vacant homes that it seemed nearly impossible for them to sell, ever. Meanwhile, disgruntled owners who were often the only ones living on a particular street would post warnings to would-be buyers. One owner literally had a sign posted...

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### Annual Mortgage Insurance Premium on FHA Loans Reduced 30 Basis Points

- Published: 2023-02-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/annual-mortgage-insurance-premium-on-fha-loans-reduced-30-basis-points/
- Categories: Mortgage Tips

In an effort to make homeownership more affordable, the U. S. Department of Housing and Urban Development (HUD) is reducing fees on FHA loans. Specifically, HUD in conjunction with the Biden-Harris Administration will slash the annual mortgage insurance premium (MIP) by 30 basis points. The move is expected to save the average homeowner about $800, or roughly $67 per month, and even more for those with larger loan amounts. Collectively, it should translate to an estimated $600 million in savings over the next year alone, and “many billions over the next decade. ” New pricing applies to forward mortgages endorsed on or after March 20th, 2023. FHA Annual Mortgage Insurance Premium Drops to 0. 55% for Most Home Loans The FHA MIP reduction announced today is the first improvement in pricing in about eight years. It lowers the annual insurance cost on most FHA loans from 0. 85% to 0. 55%. I say most because that pricing applies to loan-to-value (LTV) ratios of 95%+ with mortgage terms greater than 15 years. Many FHA borrowers put down 3. 5% and take out 30-year fixed mortgages, so this is the most common insurance pricing. On a $450,000 loan, the monthly insurance premium will drop from roughly $319 to $206 per month. That’s a savings of about $113, or $1,356 annually. It’s significant enough to make borrowers rethink the FHA vs. conventional loan argument. If you’re a prospective home buyer, be sure to carefully compare the total payment on both types of loans....

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### Why Are Mortgage Rates Going Up Again?

- Published: 2023-02-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgage-rates-going-up-again/
- Categories: Mortgage News, Mortgage Rates

It feels like déjà vu. Mortgage rates are going up again. What gives? I thought they peaked. Not so fast. The Fed warned us time and time again that this inflation fight wasn’t going to be easy. Or short. And it appears they might be right, based on the latest economic reports released in the past week. Simply put, the economy is too strong and inflation remains a major problem. This explains why mortgage rates are headed back toward 7%! Mortgage Rates Don’t Like Inflation In early 2022, mortgage rates took off like a bottle rocket. The 30-year fixed averaged 3. 22% during the first week of January, per Freddie Mac. Rates then increased nearly every week of the year, hitting a staggering 7. 08% in early November, before coming back down slightly. The issue was (and is) inflation, which had spiraled out of control, forcing the Fed to begin aggressively raising its fed funds rate. Long story short, the economy was overheated and prices were out of control. And only higher rates could potentially shrink the outsized money supply. Concurrently, the Fed halted its purchases of mortgage-backed securities (MBS) and Treasuries, which was known as QE. The absence of a huge buyer of MBS, coupled with a defensive appetite from remaining buyers, meant much higher mortgage rates. No one could have imagined mortgage rates doubling in less than a year, but they did. It was the first time in history. Consumer Prices Are Too Expensive and the Labor Market...

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### 10 Things You Should Do Before Applying for a Mortgage

- Published: 2023-02-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/10-things-you-should-do-before-applying-for-a-mortgage/
- Categories: Mortgage Tips

I recently wrote that you should look for a mortgage before searching for a property to buy because unless you have lots of cash, you’re going to need a loan. Now let’s talk about what you should do before you apply for a mortgage to avoid common setbacks that could, well, set you back. Preparation is paramount when it comes to getting a home loan. And you don't get a second chance to make a first impression. Get these details right the first time around and your mortgage experience should be a lot smoother. 1. Rent a Place First While it might sound like a no-brainer, renting before you buy a home or condo is a smart move for several different reasons. For one, it’ll show you firsthand what goes into homeownership. If things break or go wrong while renting, you can typically call the property management company or landlord for help. Once it’s your own place, you’ll be fixing it yourself or paying out of your own pocket for a professional to assist you. Additionally, if you rent first you'll have a lower chance of payment shock, which is when monthly housing payments jump exponentially. Mortgage lenders like applicants who have shown in the past that they can handle large housing payments to ensure they don’t default for that very reason. So renting will make you both a more knowledgeable homeowner and a better candidate for a mortgage. That being said, it's perfectly acceptable to live at your parents'...

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### What Time of Year Are Mortgage Rates Lowest? Here's What The Data Says

- Published: 2023-02-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/when-are-mortgage-rates-lowest/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: "What time of year are mortgage rates lowest? " We're all looking for an angle, especially if it’ll save us some money. Whether it’s a stock market trend, a home price trend, or a mortgage rate trend, someone always claims to have unlocked the code. Unfortunately, it’s usually all nonsense, or predicated on the belief that what happened in the past will occur again in the future. Sometimes history repeats itself, sometimes it doesn’t. We probably only hear about the times when it does because it makes the individual behind it sound like a genius. Now if you're wondering if there is a "best time of year to get a mortgage," the answer is there could be. And certainly better (and worse) times than others. What Time of Year Are Mortgage Rates the Lowest? In reality, it’s very difficult to predict anything, even the weather, so when it comes to complex stuff like mortgage interest rates, success rates probably move a lot lower. That being said, I set out to see if there were any mortgage rate trends we could glean from available data, using Freddie Mac’s historical mortgage rates that go back to 1971. With 50 years of data at our fingertips, you would think some trends would appear, right? Were mortgage rates lower in certain months, higher during others, or is it all just random? Let’s find out. For the record, I looked at monthly averages for the 30-year fixed-rate mortgage over the past three decades...

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### Why the “It’s the 2008 Housing Crisis All Over Again” Argument Falls Short

- Published: 2023-01-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-the-its-the-2008-housing-crisis-all-over-again-argument-falls-short/
- Categories: Housing Market, Mortgage News

There’s been a lot of buzz lately regarding another 2008 housing crisis unfolding in 2023. I’m hearing the phrases underwater mortgage and foreclosure again after more than a decade. To be sure, the housing market has cooled significantly since early 2022. There’s no denying that. You can mostly thank a 6% 30-year fixed-rate mortgage for that. Roughly double the 3% rate you could snag a year prior. But this alone doesn’t mean we’re about to repeat history. Goldman Sachs Forecasts 2008 Style Home Price Drops in Four Cities The latest nugget portending some kind of massive real estate market crash comes via Goldman Sachs. The investment bank warned that four cities could see price declines of 25% from their 2022 peaks. Those unfortunate names include Austin, Phoenix, San Diego, and San Jose. All four have been hot places to buy in recent years. And it’s pretty much for this reason that they’re expected to see sharp declines. These markets are overheated. Simply put, home prices got too high and with mortgage rates no longer going for 3%, there has been an affordability crisis. Properties are now sitting on the market and sellers are being forced to lower their listing prices. A 6. 5% Mortgage Rate By the End of 2023? Of course, it should be noted that Goldman’s “revised forecast” calls for a 6. 5% 30-year fixed mortgage for year-end 2023. It’s unclear when their report was released, but the 30-year fixed has already trended lower since the beginning of...

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### There Is No Free Mortgage

- Published: 2023-01-26
- Modified: 2023-01-26
- URL: https://www.thetruthaboutmortgage.com/there-is-no-free-mortgage/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

You’ve heard the term “no free lunch. ” Well, the same is true of home loans. There is no “free mortgage. ” Sure, banks and lenders will offer deals that make it look that way. They’ll give you a mortgage without closing costs. Or without points. But that doesn’t mean it’s free. At the end of the day, everything has a cost. It’s simply how you pay for it that changes. And in the mortgage world, you’ve got options. You can accept a higher mortgage rate and pay nothing out-of-pocket. Or save each month via a lower interest rate instead. Zero Origination Fee Doesn’t Mean Free Mortgage First things first. A zero origination fee doesn’t mean your mortgage is free. It just means the bank, lender, or mortgage broker isn’t charging an origination fee. An origination fee is an upfront fee that is charged to the borrower to provide compensation to the originator. Some mortgage companies charge it, others don’t. However, those that do not can still (and likely will) earn a commission a different way. Remember, nobody is taking time out of their day to help you get a mortgage without making money. That would be nice, but that’s just not how life works. And why shouldn’t someone get paid? If they’re helping you apply for and fund your home loan, they should be compensated. It's actually hard work. Lender-Paid Compensation on Mortgages Many mortgage brokers get paid via lender-paid compensation. This means the lender pays them instead of...

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### Better Mortgage Review: They Promise Speed But at What Price?

- Published: 2023-01-25
- Modified: 2025-02-05
- URL: https://www.thetruthaboutmortgage.com/better-mortgage-review/
- Categories: Mortgage Tips

One of the first "fintech" mortgage lenders that came into existence in recent years was Better Mortgage. Launched in 2014, they managed to fund more than $100 billion in home loans and at one point cracked the top-25 list nationally, despite being a very young company. However, like any other company, they've also had challenges, including the infamous mass firing of employees during a Zoom call back in 2021. They've also made a lot of changes over the years, going from a no fee, commission-free loan officer arrangement to quite the opposite. But they may still be worth a look if you're looking for speed and convenience, especially if their mortgage rates best their competitors. Jump to Better Mortgage Review topics: - How to Apply with Better Mortgage - Better One Day Mortgage - Loan Programs Offered by Better Mortgage - Better Mortgage Lender Fees - Better Mortgage Rates - Better Price Guarantee - Where Better Mortgage Is Licensed - Better Mortgage Reviews - Better Mortgage Pros and Cons - Better Mortgage vs. Rocket Mortgage Better Mortgage Used to Be a Top-25 Lender Direct-to-consumer mortgage lender Founded in 2014, headquartered in New York City Offers home purchase loans, mortgage refinances, and HELOCs Claims to offer a 100% online loan process that is mostly paperless Currently licensed in 50 states and the District of Columbia Funded $2 billion in home loans in 2023 Also operates a settlement company and insurance agency First a little history. The company was born out of...

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### How the Fed Could Benefit from Lower Mortgage Rates

- Published: 2023-01-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-the-fed-could-benefit-from-lower-mortgage-rates/
- Categories: Housing Market, Mortgage News, Mortgage Rates

The Fed has played a major role in consumer mortgage rates over the past decade and change. Back in 2008, they began purchasing hundreds of billions in mortgage-backed securities (MBS). This was known as quantitative easing, or QE for short. The goal was to drive interest rates lower and increase the money supply. Doing so would boost economic activity, aka lending, and help us out of the Great Recession. But there were consequences to such a plan – namely something called inflation. The Fed also knew it couldn’t hold onto these assets forever, but how would they unload without riling the markets? Quantitative Easing Led to Raging Inflation The Fed conducted four rounds of quantitative easing, which involved buying both MBS and U. S. treasuries. The final round of QE extended all the way into 2020 as the COVID-19 pandemic dislocated the world economy. In the process, mortgage rates hit all-time record lows. The 30-year fixed dipped as low as 2. 65% during the week ending January 7th, 2021, per Freddie Mac. And the 15-year fixed fell to 2. 10% on July 29th, 2021. These low rates were unprecedented. They were so cheap that they set off a housing market frenzy, with home prices rising nearly 50% from late 2019 to mid-2022. Clearly this was unhealthy growth, and a symptom of easy money. Fed Finally Takes Action to Cool the Housing Market The Fed realized that they had an inflation problem. They also realized housing demand had gotten completely out...

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### What Is the Easiest Type of Mortgage to Get?

- Published: 2023-01-23
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-the-easiest-type-of-mortgage-to-get/
- Categories: Mortgage Tips

Mortgage Q&A: “What is the easiest type of mortgage to get? ” Relative to other types of loans, it can be difficult to get approved for a mortgage. After all, mortgage lenders typically require a tri-merge credit report, steady income and employment, and assets in the bank. They don’t just take your word for it like they might on a credit card application. All of those items must be documented to ensure you’re a creditworthy borrower capable of financing a piece of real estate. Easiest Types of Mortgages to Get, Ranked 1. FHA loan (lowest combination of credit score and down payment) 2. Conforming loan (lower min. down payment but need 620 FICO) 3. VA loan (zero down and no min. FICO but must be active duty/veteran) 4. USDA loan (zero down, no min. FICO but must be rural location and there are income limits) 5. Jumbo loan (usually need 10%+ down payment, 680+ FICO, and asset reserves) FHA loans are the easiest mortgage to get because of the 3. 5% down payment and 580 minimum FICO score required. Conforming loans are a close second, despite a lower 3% minimum down payment, due to the higher 620 minimum FICO score required. Both USDA and VA loans don’t require a down payment and technically don’t have a minimum FICO requirement, but are more specialized products. Thus not as easy. Jumbo loans are typically the hardest to get because they are larger (loan amounts) and aren’t backed by Fannie/Freddie or the government....

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### Top Mortgage Lenders in DC

- Published: 2023-01-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-dc/
- Categories: Mortgage Tips

Now it’s time to check out the top mortgage lenders in DC, the capital of the United States. In 2021, nearly 800 mortgage companies originated roughly $139 billion in home loans in The District. That was one of the bigger totals for a state, even though the District of Columbia isn't actually a state Anyway, there can be only one... top mortgage lender to rule the rest. And as you may have guessed, it was Rocket Mortgage. Some local companies made the top-10 lists as well. Read on to see who. Top Mortgage Lenders in DC (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $8. 4 billion 2. Pennymac $6. 4 billion 3. Freedom Mortgage $5. 5 billion 4. Truist $5. 4 billion 5. Wells Fargo $5. 1 billion 6. loanDepot $4. 7 billion 7. Mr. Cooper $3. 3 billion 8. McLean Mortgage $3. 1 billion 9. Intercoastal Mortgage $3. 1 billion 10. UWM $3. 1 billion In 2021, Rocket Mortgage led the District of Columbia with a solid $8. 4 billion funded, per HMDA data from Richey May. They were trailed by Los Angeles-based Pennymac with $6. 4 billion, which is a top correspondent lender. In third was Freedom Mortgage with a close $5. 4 billion, followed by Truist with $5. 1 billion and Wells Fargo with $4. 7 billion. The bottom half of the top 10 included loanDepot, Mr. Cooper, McLean Mortgage, Intercoastal Mortgage, and United Wholesale Mortgage. Both McLean Mortgage and Intercoastal Mortgage can be...

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### Why You May Want a 780+ FICO Score When Applying for a Mortgage

- Published: 2023-01-19
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/780-fico-score-mortgage/
- Categories: Mortgage News, Mortgage Rates

It used to be that a 720 FICO score was all you needed to ensure you qualified for the lowest rate on a mortgage. At least credit-wise. In other words, anything higher than a 720 FICO didn’t really matter, beyond bragging rights, and perhaps a safety cushion if your score dipped a bit prior to application. Then came the arrival of the 740 FICO threshold, making it slightly more difficult to qualify for the best rate when applying for a home loan. Now, Fannie Mae and Freddie Mac are upping the ante, and perhaps rubbing salt in the wounds of anyone interested in getting a mortgage. They have unveiled not one, but two new FICO thresholds for most conforming mortgages. A 760+ bracket and a 780+ bracket. A 780 FICO Score Matters for Mortgages Now In case you’re not aware, mortgage lenders have pricing adjustments for all types of loan attributes. This can include property type, occupancy, loan type, loan-to-value ratio (LTV), credit score, and many others. Perhaps the biggest factor in loan pricing is the borrower’s credit score, as it plays a major role in potential default rates. Simply put, a borrower with a higher FICO score is entitled to better loan pricing on the basis that they’re a lower default risk. The opposite is also true. As noted, you only needed a 720 FICO score to qualify for the best pricing on a conforming mortgage back in the day. Then came the 740 tier, which made things a...

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### Mortgage Co-Borrower vs. Co-Signer

- Published: 2023-01-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-co-borrower-vs-co-signer/
- Categories: Home Buying, Mortgage Tips

Today we’ll discuss the key differences between a mortgage co-borrower and a mortgage co-signer. While the two phrases sound pretty similar, and are sometimes used interchangeably, there are important distinctions that you should be aware of it considering either. In either case, the presence of an additional borrower or co-signer is likely there to help you more easily qualify for a home loan. Instead of relying on your income, assets, and credit alone, you can enlist help from your spouse or a family member. This may allow you to qualify for a larger loan amount, snag a lower interest rate, or even win a bidding war via a stronger offer. What Is a Mortgage Co-Borrower? A mortgage co-borrower is an individual who applies for a home loan alongside the main borrower. Typically, this would be a spouse that will also be living in the subject property. To that end, they share financial responsibility and ownership, and are both listed on title. For example, a married couple may decide to purchase a home. They apply together as co-borrowers. Doing so allows them to pool together their income, assets, and credit history. Ideally, it makes them collectively stronger in the eyes of the lender and the home seller. This could mean the difference between an approved or rejected loa application, and even a winning vs. losing bid on a property. Just imagine a home seller who is deciding between two competing bids with their real estate agent. Do they go with the...

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### Top Mortgage Lenders in Georgia

- Published: 2023-01-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-georgia/
- Categories: Mortgage Tips

It’s time to check out the top mortgage lenders in Georgia based on their 2021 loan volume. These mortgage companies outranked more than one thousand other lenders to take the top honors. Overall, about $160 billion in home loans was funded in The Peach State last year, making it one of the bigger states volume-wise nationwide. And taking the #1 spot was Rocket Mortgage, also the nation’s largest mortgage lender. Read on to see which other companies ranked in the top 10. Top Mortgage Lenders in Georgia (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $12. 2 billion 2. Pennymac $6. 6 billion 3. Wells Fargo $5. 3 billion 4. Truist $4. 7 billion 5. UWM $4. 7 billion 6. Ameris Bank $4. 0 billion 7. Newrez $3. 9 billion 8. Freedom Mortgage $3. 8 billion 9. AmeriHome Mortgage $3. 5 billion 10. Fairway Independent $3. 1 billion Detroit-based Rocket Mortgage, the nation’s biggest mortgage lender, originated an impressive $12. 2 billion in home loans in Georgia last year. That was nearly double their nearest competitor, Pennymac, per HMDA data from advisory company Richey May. SoCal based Pennymac funded about $6. 6 billion in the state last year, and only about a third of it came via the retail channel. They mostly dole out loans via the correspondent lending channel (via smaller banks and credit unions), and through mortgage brokers in the wholesale channel. In other words, your loan may have been originated by a different company, but...

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### A 1% Decrease in Mortgage Rates Is Worth an 11% Drop in Home Prices

- Published: 2023-01-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/a-1-decrease-in-mortgage-rates-is-worth-an-11-drop-in-home-prices/
- Categories: Home Buying, Housing Market, Mortgage Rates, Mortgage Tips

A recent podcast from First American economists discussed the current state of the housing market. The subject was the rebalancing of the housing market, which has been out of whack for a while now. Over the past several years, it’s been decidedly slanted toward home sellers, who have enjoyed bidding wars and above-asking offers. As 2023 gets underway, it appears to finally be shifting in the opposite direction, in favor of the home buyer. But there’s still the question of affordability, and what exactly will happen with mortgage rates and home prices. 1% Drop in Mortgage Rates = 11% Drop in Home Prices One interesting thing that stood out was the following line: “Today, a one percentage point decline in mortgage rates has the same impact on affordability as an 11% decline in house prices. ” The argument of home prices vs. mortgage rates has been around for years. Most believe it’s a seesaw. If one goes up, the other must go down, often by an equal amount. But data says otherwise. In reality, both can move in tandem. For example, it’s possible for both home prices and interest rates to rise if the economy is doing well. Assuming wages are increasing and the average American is making more, it’s supports home price growth. But the year 2022 was unlike any other year in history with regard to mortgage rates. We didn't see a typical increase in rates, we saw an unprecedented rise in rates. 2022 Was a Very Strange...

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### What Are Seller Concessions?

- Published: 2023-01-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-are-seller-concessions/
- Categories: Home Buying, Housing Market, Mortgage Tips

Now that the housing market is turning in favor of home buyers, the phrase “seller concessions” might become a lot more common. Over the past decade, home sellers have had the upper hand, often unloading their properties above list price. In many cases, home buyers were forced to enter bidding wars, assuming they were lucky enough to get the opportunity. But now that mortgage rates have doubled, and home prices are on a downward trajectory, the situation is quite the opposite. If you’re a prospective home buyer, you need to know what seller concessions are and how they work. How Seller Concessions Work A seller concession is a financial contribution from a home seller that reduces a home buyer’s closing costs. One of the biggest hurdles prospective home buyers face, other than DTI constraints, is having the necessary funds (assets) to close on a home purchase. Seller concessions lessen that burden, making it easier to qualify for a home loan and acquire a property. The funds are typically generated via a slightly higher contract price, which reduces the buyer’s out-of-pocket expenses. However, this means the borrower will wind up with a larger loan amount, and finance those costs over time via a higher monthly mortgage payment. For example, if a buyer offers $360,000 for a property with $10,000 in seller concessions, the seller may say, “Sure, it’s all yours for $370,000. ” You’re not really getting money for free since the purchase price rises by the amount requested. But it...

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### Nearly Half of Homeowners Regret Their Adjustable-Rate Mortgage

- Published: 2023-01-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/nearly-half-of-homeowners-regret-their-adjustable-rate-mortgage/
- Categories: Mortgage News

A new survey from U. S. News & World Report found that nearly half of homeowners with adjustable-rate mortgages regret the decision. This is based on a nationwide survey of more than 1,200 respondents that took place between December 14th and 20th, 2022, via a company called PureSpectrum. Only respondents with an adjustable-rate mortgage (ARM) were included in the study. Perhaps the biggest takeaway was that 43% of the survey respondents regret choosing an ARM. As for why, the most common response “was that their interest rate adjusted to a higher rate than expected. ” Homeowners Took Out Adjustable-Rate Mortgages Because They Wanted a Lower Payment The survey also asked these homeowners why they opted for an adjustable-rate mortgage versus a more popular option, such as the 30-year fixed mortgage. As expected, the top response was to obtain “a lower monthly payment. ” This is basically the sole reason anyone would consider an ARM. If it doesn’t save you money via a lower interest rate, there’s essentially no point in choosing one over the safety and stability of a fixed-rate product. Interestingly, another 37% of respondents said they believe interest rates will be lower once their rate adjusts. That’s a timely take because mortgage rates have doubled over the past year, and there’s a decent expectation that they fall back down to earth this year. In fact, my 2023 mortgage rate predictions post has the 30-year fixed falling to the low-5% range by the second half of the year. So...

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### Wells Fargo to Exit Correspondent, Shrink Mortgage Business, Focus on Bank Clients and Minority Borrowers

- Published: 2023-01-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-to-exit-correspondent-lending-shrink-mortgage-business/
- Categories: Mortgage News

Despite long being the #1 mortgage lender in the country, Wells Fargo has announced plans to shrink its mortgage business. The San Francisco-based bank said it will exit its correspondent lending business, while focusing more on bank customers and minority communities. Additionally, the company will reduce the size of its loan servicing portfolio, in which it collects monthly payments from homeowners. As a result, the company will significantly reduce its mortgage footprint, which had been the largest prior to the rise of Rocket Mortgage. In the fourth quarter of 2017, Quicken Loans unseated Wells Fargo and basically never looked back. They changed their name to Rocket Mortgage in May 2021. Wells Fargo Exits Correspondent Lending First things first, Wells Fargo is exiting the correspondent mortgage lending business, which is basically the resale of their loan products by third-party companies like credit unions. These smaller entities “originate, underwrite and close mortgage loans before selling them to Wells Fargo Funding,” their website states. Per HMDA data from Richey May, Wells Fargo funded roughly $228. 6 billion in home loans in 2021(most recent year available). Of that total, about $69 billion, or 30%, was via the correspondent lending channel. It shows another $11 billion, or five percent, originated via the wholesale lending channel, which is reserved for mortgage broker partners. But Wells Fargo had exited wholesale lending back in 2012, so it’s unclear if that number is accurate. In any case, they were the second largest mortgage lender in the United States in...

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### Why Mortgage Lenders Are Requiring Upfront Points

- Published: 2023-01-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-do-mortgage-lenders-charge-points/
- Categories: Mortgage Rates, Mortgage Tips

There’s been a recent phenomenon where mortgage lenders are requiring borrowers to pay upfront points when obtaining a home loan. This runs counter to the typical experience where you can easily acquire a no cost home loan with no points or closing costs required. As to why this is happening, it’s basically because the mortgage market has been so volatile lately. Simply put, it’s difficult to determine the value of a mortgage loan because it’s unclear where mortgage rates go next. To mitigate that unknown, many lenders are charging points to ensure some profits are being captured upfront. Why Do Mortgage Lenders Charge Points? Mortgage lenders charge points to collect profit upfront as opposed to over time via regular monthly interest payments. Or to offer lower-than-market interest rates to entice mortgage rate shoppers to go with them instead of someone else. This money is obtained from the borrower via a loan origination fee or via discount points, the latter being a form of prepaid interest. Instead of waiting to collect interest each month once the loan is closed, they can collect some money upfront. In exchange, you should get a lower mortgage rate versus the borrower who doesn't pay points. Collecting more now means less has to be paid later (via a higher interest rate) to account for the unknown, such as prepayment. Of course, many lenders sell their loans to investors shortly after closing, but the same principle applies. If you opt to pay little or nothing at closing,...

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### 2023 Mortgage Rate Predictions: All Eyes on Inflation

- Published: 2022-12-28
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/2023-mortgage-rate-predictions/
- Categories: Mortgage News, Mortgage Rates

Another year has nearly passed, which means it’s time for the 2023 mortgage rate predictions. I think we can all agree that the 2022 predictions were the worst on record. After all, mortgage rates had never doubled in a year before. Just about everyone (or in fact, everyone) got 2022 totally wrong, though you can’t blame them. The year 2022 was the worst on record for mortgage rates, with the 30-year fixed rising from the high 2% range to beyond 7%. Hopefully the year 2023 will be more favorable in terms of mortgage rates, though you can never be 100% sure. MBA 2023 Mortgage Rate Predictions First quarter 2023: 6. 2% Second quarter 2023: 5. 6% Third quarter 2023: 5. 4% Fourth quarter 2023: 5. 2% As always, we start with the Mortgage Bankers Association (MBA), using their monthly Mortgage Finance Forecast from late December (12/19/22). Last year, they were way off, but then again, so was everybody else. Perhaps they’ll do a little better in 2023. To their credit, they were the only group that predicted a 4% 30-year fixed by the end of 2022, whereas other forecasters stayed in the high 3% range. For the first quarter of 2023, they expect the 30-year fixed to average a much higher 6. 2%, which is basically close to where rates stand today. A year ago, the MBA predicted a 3. 2% 30-year fixed, to provide some context for how much higher rates are today. And while 6. 2% sounds pretty...

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### Top Mortgage Lenders in Kentucky

- Published: 2022-12-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-kentucky/
- Categories: Mortgage Tips

It’s time to find out who the top mortgage lenders in Kentucky are, based on total loan volume. More than 750 banks, direct lenders, and credit unions originated home loans in the state of Kentucky last year. Altogether, this group funded more than $40 billion in mortgages, though only one can claim to be #1. As is the case with many other states in the nation, Rocket Mortgage led the way in The Bluegrass State. Keep reading to see which other mortgage companies made the top-10 list. Top Mortgage Lenders in Kentucky (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $2. 2 billion 2. Wells Fargo $1. 2 billion 3. Freedom Mortgage $1. 1 billion 4. U. S. Bank $1. 1 billion 5. UWM $1. 0 billion 6. Homepoint $1. 0 billion 7. Fifth Third Bank $952 million 8. Chase $938 million 9. Pennymac $885 million 10. AmeriHome Mortgage $844 million Rocket Mortgage snagged the top spot in Kentucky with $2. 2 billion in home loans funded in 2021, per HMDA data compiled by Richey May. That was about a billion more than second place Wells Fargo, which managed about $1. 2 billion in origination volume last year. Coming in third was Boca Raton-based Freedom Mortgage with $1. 1 billion, narrowly beating out U. S. Bank’s similar total. In fifth was United Wholesale Mortgage with $1 billion, a company that relies solely on mortgage brokers to generate business. The rest of the top 10 included Homepoint, Fifth Third...

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### Mortgage Broker Magnate Ishbia to Buy the Phoenix Suns and Mercury

- Published: 2022-12-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/uwm-ishbia-to-buy-the-phoenix-suns-and-mercury/
- Categories: Mortgage News

In a rather surprising move, United Wholesale Mortgage president and CEO Mat Ishbia is set to acquire the Phoenix Suns and Phoenix Mercury. The deal is reportedly valued at somewhere near $4 billion, per sources who spoke to ESPN. The sale would be a record high for an NBA franchise, well above the then NBA-record of $2. 35 billion for the Brooklyn Nets back in 2019 to Joe Tsai. It comes at an interesting time, with mortgage volume down markedly from a year ago thanks to significantly higher mortgage rates. But it could be a way for Ishbia to diversify his assets and not be fully reliant on mortgage lending. Ishbia to Purchase the Phoenix Suns for Around $4 Billion As noted, Ishbia will reportedly acquire the Phoenix Suns and WNBA franchise Phoenix Mercury for around $4 billion, per ESPN. And while he might be best known as the owner of United Wholesale Mortgage, the largest wholesale mortgage lender in the country, he has a lot of basketball ties. For one, he was a walk-on at Michigan State, one of the best college basketball programs in the nation. Additionally, he was part of the Spartans’ 2000 National Championship winning team, though his playing time was very limited. Back in the summer of 2021, he inked a “name, image and likeness” (NIL) deal for UWM with Michigan State, offering $500 per month to MSU athletes during the 2021-2022 season. Prior to that, UWM made a deal with the Detroit Pistons to...

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### Top Mortgage Lenders in Connecticut

- Published: 2022-12-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-connecticut/
- Categories: Mortgage Tips

Let’s talk about the top mortgage lenders in Connecticut, based on their total loan volume. Nearly 700 companies originated home loans in The Constitution State during 2021, with overall funding volume exceeding $58 billion. But one company beat out the competition, though not by a significantly wide margin. Yes, it was the nation’s top lender, Rocket Mortgage, which you may have already guessed. Read on to which other banks and mortgage lenders made the leaderboard in Connecticut. Top Mortgage Lenders in Connecticut (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $3. 2 billion 2. Chase $2. 9 billion 3. Wells Fargo $2. 3 billion 4. Citizens Bank $2. 1 billion 5. Bank of America $1. 8 billion 6. loanDepot $1. 7 billion 7. U. S. Bank $1. 7 billion 8. Total Mortgage $1. 4 billion 9. Webster Bank $1. 3 billion 10. UWM $1. 2 billion As noted, the #1 spot went to Rocket Mortgage, which funded $3. 2 billion in Connecticut in 2021, per HMDA data from Richey May. That wasn’t a huge surprise, as they are also the top mortgage lender in the country overall. In second was NYC-based Chase Bank, which came close with $2. 9 billion funded. It then dropped off a bit with San Francisco-based Wells Fargo funding $2. 3 billion. Two more banks rounded out the top five, including Citizens Bank and Bank of America. Citizens Bank is basically a local institution as they are headquartered in nearby Providence, Rhode Island. The...

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### Cash Out Refinance Fees Are Going Up in Early 2023

- Published: 2022-12-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/cash-out-refinance-fees-are-going-up-in-early-2023/
- Categories: Mortgage News, Mortgage Rates, Refinance

While most homeowners probably don’t have a refinance on their radar (due to the big jump in interest rates), take note that fees for cash out refis are going up in about a month. Back in October, Fannie Mae and Freddie Mac announced new loan-level pricing adjustments (LLPAs) for cash out refinances. The move was intended to help the Federal Housing Finance Agency (FHFA) better support “core mission borrowers,” aka promoting affordable housing. That same announcement included the elimination of upfront fees on HomeReady and Home Possible loans, and for first-time home buyers with limited incomes. Those fee reductions went into effect December 1st, but the increased cash out fees don’t go live until February 1st, 2023. Cash Out Refinance Fees More Than Doubling in Some Cases There aren’t a ton of reasons to refinance at the moment, given the doubling in mortgage rates from the start of 2022 until now. But those in need of cash might consider a cash out refinance depending on the circumstances. Unfortunately, these transactions are set to get even more expensive come February 1st, 2023. The FHFA, which oversees both Fannie Mae and Freddie Mac (roughly 80% of the mortgage market), said it has “targeted increases to the upfront fees for most cash-out refinance loans. ” As you can see from the chart above, LLPAs will be more than doubling in some cases on cash out refinances. For example, a borrower with 740 FICO score and an 80% loan-to-value (LTV) ratio will see the...

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### Top Mortgage Lenders in Hawaii

- Published: 2022-12-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-hawaii/
- Categories: Mortgage Tips

Today we’ll check out the top mortgage lenders in Hawaii based on total loan volume. These companies closed the most home loans in The Aloha State last year, beating out nearly 300 others that do business there. In general, there are fewer mortgage companies operating in the state of Hawaii, so you tend to see only the bigger household names along with local banks and credit unions. Still, one company managed to originate a lot more than the competition, making them the go-to spot for a mortgage in Hawaii. Read on to see which bank or mortgage company ranked #1 in Hawaii. Top Mortgage Lenders in Hawaii (Overall) Ranking Company Name 2021 Loan Volume 1. Bank of Hawaii $3. 0 billion 2. loanDepot $2. 0 billion 3. First Hawaiian Bank $1. 9 billion 4. Freedom Mortgage $1. 8 billion 5. American Savings Bank (HI) $1. 6 billion 6. Rocket Mortgage $1. 4 billion 7. UWM $1. 4 billion 8. Central Pacific Bank (HI) $1. 3 billion 9. Guaranteed Rate $1. 2 billion 10. Homepoint $1. 0 billion Coming in first was Honolulu’s own Bank of Hawaii, which funded $3 billion in mortgages during 2021, per Richey May. That was a full billion more than second place SoCal-based loanDepot, which originated a respectable $2 billion there. In third was another Hawaiian institution, First Hawaiian Bank, also Honolulu based, with a close $1. 9 billion. Taking the fourth spot was Boca Raton, Florida-based Freedom Mortgage with $1. 8 billion, followed by Honolulu-based...

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### Top Mortgage Lenders in Idaho

- Published: 2022-12-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-idaho/
- Categories: Mortgage Tips

Let’s take a look at the top mortgage lenders in Idaho, based on annual loan origination volume. The Gem State was one of the hotter housing markets last year, seeing an influx of buyers from other states nationwide. That, plus rising home prices, led to over $42 billion in home loan origination volume there last year. And while some 500+ mortgage companies took part, only one could claim the top spot. Interestingly, the #1 mortgage lender in Idaho is homegrown. Read on to find out who it is. Top Mortgage Lenders in Idaho (Overall) Ranking Company Name 2021 Loan Volume 1. Idaho Central CU $4. 2 billion 2. Rocket Mortgage $2. 4 billion 3. U. S. Bank $1. 3 billion 4. Fairway Independent $1. 2 billion 5. UWM $1. 1 billion 6. Wells Fargo $1. 1 billion 7. Academy Mortgage $1. 0 billion 8. Guild Mortgage $911 million 9. Glacier Bank $843 million 10. Willamette Valley Bank $834 million Even if you’re headquartered in a particular state, it’s difficult to beat out the national mortgage brands. But Idaho Central Credit Union did just that, originating $4. 2 billion in home loans in the state of Idaho in 2021, per HMDA data from Richey May. That was more than enough to take out top ranked Rocket Mortgage, which only mustered $2. 4 billion. Pretty impressive feat, and a testament to how much Idahoans like their own local lender. It’s also one of the few credit unions (if only) to rank #1...

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### 2023 Mortgage and Real Estate Predictions

- Published: 2022-12-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/2023-mortgage-and-real-estate-predictions/
- Categories: Housing Market, Mortgage News

It's nearly 2023, which means it's time for a fresh batch of mortgage and real estate predictions for the new year. My assumption is everyone wants 2022 to come to an end as quickly as possible, as it hasn't been kind to anyone. Much higher mortgage rates have completely derailed the housing market, leading to lots of layoffs and closures across the industry. And there remains a lot of uncertainty about what next year will bring, though I'm somewhat optimistic. Read on to see what I think 2023 has in store for the housing market and the mortgage industry. 1. Mortgage rates will move lower in 2023 Let’s start with the elephant in the room; mortgage rates. They’ve been the story of 2022, without question. Sadly, because they increased at an unprecedented clip and derailed the hot housing market’s decade-long bull run. Of course, this was by design as the Fed believed the U. S. housing market was in bubble territory and unsustainable. However, I believe interest rates overshot the mark and are due to see some relief in 2023. The 30-year fixed has already fallen from its 2022-highs, and could continue to drop back in the 5% range and even the high-4% range. So that’s something to look forward to. See my 2023 mortgage rate predictions for more details on that. 2. The housing market won’t crash in 2023 Related to lower mortgage rates is the health of the housing market. Ultimately, the housing market only really stalled because...

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### Top Mortgage Lenders in Alabama

- Published: 2022-12-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-alabama/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Alabama, based on their most recent year’s loan volume. This is a list of the largest mortgage lenders in the state, not necessarily the top-rated ones (though those two things can coexist). Despite being a less populated state, more than 800 lenders still managed to fund more than $51 billion in home loans there. But like the other 49 states, one company managed to beat out the competition, and by a wide margin at that. Read on to see which companies topped the list in the state of Alabama last year. Top Mortgage Lenders in Alabama (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $3. 0 billion 2. Pennymac $2. 0 billion 3. Regions Bank $2. 0 billion 4. Freedom Mortgage $1. 5 billion 5. Fairway Independent $1. 5 billion 6. Wells Fargo $1. 5 billion 7. Trustmark $1. 3 billion 8. UWM $1. 2 billion 9. Renasant Bank $1. 2 billion 10. Homepoint $1. 1 billion If you had to guess which mortgage company did the most lending in Alabama, you’d probably guess right. That’s because the nation’s top mortgage lender overall was also the biggest lender in Bama. Yes, I’m talking about Rocket Mortgage, which funded $3 billion, according to HMDA data from Richey May. That was 150% more than their closest competitor, Pennymac, which came in second with $2 billion. Birmingham, Alabama-based Regions Bank snagged third with a similar $2 billion, a positive development...

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### The Beauty of High Mortgage Rates

- Published: 2022-12-01
- Modified: 2022-12-01
- URL: https://www.thetruthaboutmortgage.com/the-beauty-of-high-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

High mortgage rates are bad. They reduce affordability, lead to fewer home sales, and can cause lots of industry-related job losses. The year 2022 has probably been the worst on record as far as mortgage rates go, with the 30-year fixed climbing from sub-3% levels to over 7%. This single-handedly shocked the housing market, leading to big price reductions, thousands of mortgage layoffs and related closures, and a quick shift from a seller’s market to a buyer’s market. But there could be a silver lining to a near tripling of mortgage rates in the span of less than a year. And that’s if and when they begin to really improve, they’ll feel a lot lower than they actually are. Your Brain Will Soon Think a 5% Mortgage Rate Is Pretty Good Because we’ve seen 30-year fixed mortgage rates exceed 7%, and even flirt with the idea of 8%, anything lower will feel like a huge relief. It’s human nature. Once you’ve experienced worse, anything better will feel a lot better, even if it's still worse than before. I think it’s safe to say that we won’t see a 3% 30-year fixed mortgage rate being offered anytime soon. Those days have come and gone. However, recent developments have pointed to the potential for substantially lower mortgage rates. While there’s been a lot of pain in 2022, the 30-year fixed has enjoyed nearly a month of declines lately. It all got started back on November 10th, when the CPI report showed a...

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### How to Shop for a Mortgage

- Published: 2022-11-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-to-shop-for-a-mortgage/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage basics: “How to shop for a mortgage. ” Every now and then I focus on mortgage 101 because it seems the obvious stuff isn’t always so obvious. While you would think that shopping for just about anything is relatively straightforward, it’s often not. This is especially true of mortgages, which come with added confusion and potential pitfalls. Let’s discuss how best to shop for a home loan to obtain the best interest rate with the lowest fees. Oh, and ensure you wind up with a competent lender. First Off, Make Sure You Actually Shop! It’s cliché, but it’s true, and bears repeating. Very few consumers shop around for their mortgage. And it can cost them, a lot. In fact, yet another survey, the latest from Zillow Home Loans, revealed that prospective home buyers spend more time researching their next car purchase or vacation than their mortgage. This despite the fact that the mortgage will be paid for the next 30 years in some cases, and weigh heavily on their pocketbook. These individuals also indicated that they spend about the same amount of time researching TVs to buy as they do mortgage lenders. I guess people watch a lot of TV, so it is pretty important to get a quality set. Jokes aside, this is a problem if you want to save money. Why? Because there are real studies that prove that shopping around is the key to saving money on your mortgage. Of course, Zillow’s survey also found that...

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### 2023 Conforming Loan Limits Rise to $726,200

- Published: 2022-11-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/2023-conforming-loan-limits/
- Categories: Mortgage News

A dollar ain’t worth what it used to be; just take a look at the newly released 2023 conforming loan limits. Yes, they will exceed $1 million in high-cost areas beginning next year, which is a testament to just how much property values have risen lately. Of course, the year-over-year change actually pales in comparison to the jump seen a year earlier. This is due to a slowdown in home prices, which was somewhat captured by the Federal Housing Finance Agency’s (FHFA) third quarter report. For one-unit properties, the national baseline will rise to $726,200, an increase of $79,000 from $647,200 in 2022. ​ 2023 Baseline Conforming Loan Limit Rises to $726,200 • One-unit property: $726,200 • Two-unit property: $929,850 • Three-unit property: $1,123,900 • Four-unit property: $1,396,800 The FHFA determines the conforming loan limit each year, basing it on the average U. S. home value over the past four quarters. They utilize their own Federal Housing Finance Agency House Price Index (FHFA HPI®) to determine how much home prices have risen in the preceding 12 months. This captures home price movement from the third quarter of 2021 to the third quarter of 2022. Their latest HPI found that property values had risen 12. 21% over the past four quarters, which allowed them to raise the conforming loan limit by the same amount. As such, home buyers and those looking to refinance will be able to get a mortgage backed by Fannie Mae or Freddie Mac (conforming loan) as large...

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### Mortgage Rates vs. CPI: Less Inflation = Lower Rates

- Published: 2022-11-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-cpi/
- Categories: Mortgage News, Mortgage Rates

While it seemed mortgage rates just couldn't catch a break, a positive CPI report has led to a huge rally. This is one of the bright sides to a decidedly negative environment, where if and when good news finally does materialize, it can make a big impact. That good news was a Consumer Price Index (CPI) report that showed inflation slowing in October from September. As such, bond prices rallied and corresponding yields fell, allowing interest rates on long-term mortgages to improve. Long story short, 30-year fixed mortgage rates are back below 7%, and even in the mid-6% range after moving above 7. 25% earlier this month. Why Does CPI Matter to Mortgage Rates? There are a number of factors that help determine the price and direction of long-term mortgage rates like the popular 30-year fixed. But a big one is inflation, which at the moment has taken center stage. Mortgage rate watchers and the Fed have been fixated on inflation lately. It is, after all, why mortgage rates more than doubled from around 3. 25% to start the year to around 7% this week. In short, the Fed began purchasing hundreds of billions in mortgage-backed securities and treasuries to lower interest rates and spur more lending, known as Quantitative Easing (QE). This allowed mortgage rates to drop to record lows as the Fed bought up as much as lenders could churn out (they created constant demand). However, in doing so they increased the money supply and that led to...

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### UWM Becomes Top Mortgage Lender in the Nation

- Published: 2022-11-04
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/uwm-becomes-top-mortgage-lender-in-the-nation/
- Categories: Mortgage News

Similar to how Rocket Mortgage overtook Wells Fargo, United Wholesale Mortgage (UWM) has now risen above Rocket to become the nation’s top mortgage lender overall. During the third quarter, the Pontiac, Michigan-based wholesale lender originated some $33. 5 billion in home loans, up from $29. 9 billion in the second quarter. While it was a big year-over-year decline from $63 billion in the third quarter, it was still enough to claim the top spot. It’s even more impressive given the fact that UWM works solely with mortgage brokers via the wholesale lending channel. They don’t operate in the retail, consumer-facing space, which also tells you mortgage brokers are back in a major way. How UWM Unseated Rocket Mortgage to Take #1 Spot UWM, which refers to itself as the historic #1 wholesale and #1 purchase mortgage originator in America, finally took the top spot for total origination volume. As noted, their $33. 5 billion funded in the third quarter of 2022 was more than enough to unseat Detroit-based Rocket’s $25. 6 billion. In fact, their loan volume was nearly 31% higher than Rocket’s during the three months ended September 30th, 2022. It was also much higher than former #1 Wells Fargo, which mustered just $21. 5 billion during the quarter, with nearly half of their volume coming via the correspondent channel. Meanwhile, Chase only managed $15. 2 billion, illustrating the big banks diminishing share of the total mortgage market. How UWM was able to originate so much more than other...

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### loanDepot Digital HELOC Launched: Paperless Process and Funding in as Little as 7 Days

- Published: 2022-11-03
- Modified: 2025-02-12
- URL: https://www.thetruthaboutmortgage.com/loandepot-digital-heloc/
- Categories: Mortgage News, Refinance

Direct lender loanDepot has launched a so-called “Digital HELOC” to help homeowners tap into their massive amounts of home equity. The Southern California-based company cited the fact that the average homeowner now has roughly $300,000 in home equity, per a CoreLogic report from September. While they might not have as much today, thanks to recent pressure on home prices, millions of Americans do have home equity that is ripe to be tapped. This is especially true if they need cash and hold a low fixed-rate mortgage in the 2-4% range. With first mortgage rates now above 7%, a second mortgage such as HELOC could make a lot more sense than a refinance. How the loanDepot Digital HELOC Works As the name suggests, the Digital HELOC from loanDepot is a paperless, 100% digital application process for a home equity line of credit (HELOC). Instead of requiring meetings, phone calls, and trips to the bank, the company says you can apply for their HELOC from the comfort of your couch. Potential customers can obtain no-obligation quotes without impacting their credit scores, and go from quote to close in as little as seven days. Once you submit an application, a hard inquiry to one or more of the consumer reporting agencies will land on your credit report. And like a first mortgage, the company will still need to perform income, asset, and employment verification. But thanks to new technology, much of this can be done paperlessly and digitally, by linking accounts and plugging...

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### Top Mortgage Lenders in Wisconsin

- Published: 2022-11-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-wisconsin/
- Categories: Mortgage Tips

Now we’ll rank the top mortgage lenders in Wisconsin, based on the most recent year’s completed loan volume. These are the largest lenders in The Badger State based on available HMDA data for 2021. Collectively, more than 800 lenders funded $70 billion there during the year. Interestingly, it appears that Wisconsinites are big on using their own local companies instead of larger, national brands. At least when it comes to home loans, as the top three mortgage companies are all headquartered in the state. Read on to see which company led the way in mortgage origination last year in Wisconsin. Top Mortgage Lenders in Wisconsin (Overall) Ranking Company Name 2021 Loan Volume 1. Summit CU $2. 7 billion 2. Associated Bank $2. 4 billion 3. UW Credit Union $2. 4 billion 4. Rocket Mortgage $2. 3 billion 5. Wells Fargo $2. 0 billion 6. Chase $1. 9 billion 7. U. S. Bank $1. 8 billion 8. Landmark CU $1. 8 billion 9. Fairway Independent $1. 7 billion 10. Johnson Bank $1. 6 billion As noted, a Wisconsin-based lender topped the charts in 2021, per HMDA data from Richey May. It was none other than Madison-based Summit Credit Union, which funded $2. 7 billion in the state of Wisconsin last year. In second was Green Bay-based Associated Bank with a close $2. 4 billion, followed by Madison-based University of Wisconsin Credit Union (UW Credit Union) with $2. 4 billion. This is interesting for a few reasons – one being that the...

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### Rocket Rewards Loyalty Program Launched by Rocket Mortgage

- Published: 2022-11-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/rocket-rewards-loyalty-program/
- Categories: Mortgage News

The nation’s number one lender, Rocket Mortgage, has launched a new loyalty program called “Rocket Rewards. ” Similar to other loyalty programs, consumers can earn rewards for completing certain activities. And those points can be redeemed for closing cost credits if and when they become Rocket Mortgage clients. To get started, those who create a free Rocket account and visit the rewards page will receive a 7,500-point welcome bonus. Existing Rocket account holders can also snag the 7,500 points when they complete their first rewards activity. How Rocket Rewards Works The Rocket Rewards program is a new initiative by Rocket Mortgage to engage potential customers who might apply for a home loan in the future. Members of the Rocket Rewards program can earn points by reading educational articles or watching videos in the Rocket Mortgage learning center. Points can also be banked simply by using a mortgage calculator on their website, and you can apparently earn points up to 10 times for each calculator. The Your Activities page will show you what’s available, whether it’s an article or a calculator, working on a loan application, or something else. As noted, new members can earn 7,500 just for signing up and visiting the rewards page. Those points are good for $75 in closing cost credit, which can offset closing costs on your loan. Over time, you can accrue more and more points to potentially save hundreds off your closing costs. There is no cost to join, and once you create a...

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### How Mortgage Interest Works

- Published: 2022-10-31
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/how-mortgage-interest-works/
- Categories: Mortgage Rates, Mortgage Tips

A friend of mine asked me over the weekend how mortgage interest works? His coworker had posed a similar question to him, and he was passing it on to me. At first, I didn’t know how to answer the question as it was fairly broad. I said what do you mean by that? He said, if you have a rate of 3% and a loan amount of $1 million, does that equate to $30,000 in interest? Wishful thinking, right? I explained that mortgage rates should be viewed as annual interest rates. Long story short, you pay a lot more than the interest rate on the loan because that rate of interest is paid annually for 30 years in most cases. Look at Mortgage Rates as Annual Interest Charges A better way to understand how mortgage interest works is to consider the mortgage rate on an annual basis. So if your 30-year fixed mortgage rate is 5% and your loan amount is $500,000, you’d pay roughly $25,000 in interest the first year. Note that I said the first year and roughly. The reason it’s a rough estimate is because the loan amount isn’t fixed. Each month, you pay a portion of interest and a portion of principal. As such, your outstanding loan balance falls with each payment. This means less interest is due on subsequent monthly payments, and because mortgages are amortized (same payment amount each month), the composition of the payment changes. As each payment is made, less interest is...

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### Who Cares What Mortgage Rates Were in the 1980s?

- Published: 2022-10-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-in-the-1980s/
- Categories: Mortgage Rates, Mortgage Tips

Month after month, and week after week, articles continue to focus on mortgage rates in the 1980s, to seemingly paint a picture that rates are still historically low. And it’s pretty much always the same narrative – be happy with your 6%, 7%, and maybe 8% mortgage rate today because there was a time when it was a lot worse. It runs parallel to the stories of having to walk to school uphill both ways, in the snow, without shoes or a jacket. Suck it up, stop complaining. Today’s mortgage rates aren’t that high! That’s the message. It also doubles as a sales pitch to remind you that a 7% mortgage rate isn’t bad, and could be much higher, so don’t look a gift horse in the mouth. Why Do 1980s Mortgage Rates Matter Today? There’s an article from CNN that talks about mortgage rates in the 1980s, complete with the “Think mortgage rates are high now? ” headline. It goes on to talk about how baby boomers dealt with interest rates as high as 19% in late 1981 when they peaked. The 30-year fixed averaged around 9% in early 1978, before climbing to 10% later that year, 13% in 1979, and near 15% in 1980. Mortgage rates then hit an all-time high in October 1981, averaging a staggering 18. 45%, per Freddie Mac data. The chart above from FRED illustrates this movement. But guess what? Earlier generations not only dealt with them, but were delighted to close with a...

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### FICO 10 T and VantageScore 4.0 Approved for Fannie Mae and Freddie Mac Mortgages

- Published: 2022-10-25
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fico-10-t-and-vantagescore-4-0-approved-for-fannie-mae-and-freddie-mac-mortgages/
- Categories: Credit Scores, Mortgage News

Two new credit scores will be used if and when you apply for a mortgage backed by Fannie Mae or Freddie Mac in the near future. On October 24th, 2022, the Federal Housing Finance Agency (FHFA) announced the validation and approval of both "FICO 10 T" and "VantageScore 4. 0. " These new credit scoring models will replace legacy credit scores that the Enterprises have relied upon for almost 20 years. The FHFA notes that they “improve accuracy” through the capture of new payment histories including rent, utility, and telecom payments. They also ignore paid off collections, and reduce the impact of unpaid medical debt, meaning credit scores of prospective home buyers might rise. What Are FICO 10 T and VantageScore 4. 0? In short, FICO 10 T and VantageScore 4. 0 are the latest credit score models available. FICO 10 T is issued by FICO (formerly Fair Isaac), while VantageScore 4. 0 is the latest iteration of the credit score model developed jointly by the three main credit bureaus, Equifax, Experian, and TransUnion. These newer scoring models include payment history for things like rent, utilities, and cell phone payments. Often, consumers with “thin credit files” don’t have enough history to generate a traditional credit score. Generally, this is referred to as having fewer than five accounts, typically because the individual doesn’t have credit cards, auto loans, or mortgages on their credit report. This creates a catch-22 situation where the applicant is unable to get approved for a new loan...

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### Home Prices Need to Fall 25%, But They Probably Won’t

- Published: 2022-10-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/home-prices-need-to-fall-25-but-they-probably-wont/
- Categories: Housing Market, Mortgage News

A new report from Zillow revealed that home prices need to come down by about 25% to become affordable again. But chances are they won’t, despite a lot of sensationalist media calling for a housing crash. At the end of the day, home prices have gotten inflated, but limited supply and homeowner lock-in effect, combined with mostly healthy mortgages should limit downside movement. Additionally, if and when mortgage rates do come back down to more reasonable levels, affordability can also improve. So a combination of factors could rebalance the housing market without an outright crash. Typical Home Purchase Now Requires 30% of Household Income Per Zillow, it now requires 30. 2% of income to afford a mortgage on a typical U. S. home, which they say is “well above the norm. ” That’s also beyond the 30% threshold for a household to be considered “cost burdened,” and significantly higher than the 22. 8% average seen from 2005–2021. While high home prices are partially to blame, the real tipping point of late has been mortgage rates, which have increased about 400 basis points since the start of 2022. Yes, a 30-year fixed mortgage is pricing around 7. 25% today versus 3. 25% back in January, as crazy as that appears. Zillow adds that the typical monthly mortgage payment is now about $1,850, up 75. 5% (or $800) from a year ago. On more expensive properties throughout the nation, we’re talking thousands more per month to pay the mortgage. This has shocked...

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### Top Mortgage Lenders in Missouri

- Published: 2022-10-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-missouri/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Missouri, based on loan volume. This means the biggest mortgage companies that operate in the The Show-Me State, but aren’t necessarily headquartered there. Nearly 900 different companies originated home loans there in 2021, funding more than $72 billion in the process. But there can only be one #1 lender, and surprisingly it wasn’t the nation’s largest. Instead, it was U. S. Bank, which calls Minneapolis, Minnesota home. Read on to see the rest. Top Mortgage Lenders in Missouri (Overall) Ranking Company Name 2021 Loan Volume 1. U. S. Bank $3. 6 billion 2. Rocket Mortgage $2. 9 billion 3. Wells Fargo $2. 8 billion 4. Flat Branch Home Loans $2. 3 billion 5. USA Mortgage $2. 3 billion 6. Pennymac $2. 0 billion 7. Guild Mortgage $1. 9 billion 8. Freedom Mortgage $1. 7 billion 9. AmeriHome Mortgage $1. 7 billion 10. Central Bank $1. 6 billion U. S. Bank funded $3. 6 billion in home loans in the state of Missouri last year, per Richey May’s HMDA data. That was more than enough to beat out the top lender in the United States, Rocket Mortgage. Detroit-based Rocket only managed $2. 9 billion in loan volume, which illustrates the strength of U. S. Bank in the state. In third was another depository, San Francisco-based Wells Fargo, which funded $2. 8 billion despite their mortgage controversies. Fourth place went to homegrown lender Flat Branch Home Loans (Columbia, MO) with $2....

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### The Case for Sub-5% Mortgage Rates by 2023

- Published: 2022-10-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-case-for-sub-5-mortgage-rates-by-2023/
- Categories: Housing Market, Mortgage Rates, Mortgage Tips

While mortgage rates have a good chance of getting worse before they get better, hope might be on the horizon. The long and the short of it is that mortgage rates go up as inflation goes up, which explains some of the recent increase. The other driver was the end of the Fed’s mortgage-backed securities (MBS) purchase program, known as Quantitative Easing (QE). As inflation began to surge, and the Fed dropped out as a buyer of MBS, mortgage rates skyrocketed from below 3% to around 7% today. However, if and when inflation falls back to more typical levels, mortgage rates could quickly follow suit. A Sub-5% 30-Year Fixed in the Next Six Months? While it appears to be a very bold prediction, Barry Habib recently said “we think there’s a high probability that mortgage rates come back below five percent within the next six months. ” His interview on Mauldin Economics was posted on October 14th, meaning mortgage rates could be back in the high 4% range by mid-April. It sounds crazy, given the current trajectory. After all, NAR chief economist Lawrence Yun just said mortgage rates could test 8. 5% next. And they’re currently over 7% for a standard, vanilla loan scenario, so to think they could drop back to below 5% in short order sounds like a long shot. But Habib eats, breathes, and sleeps mortgage rates and is the brains behind MBS Highway, which provides in-depth market insights on a daily basis. So if one person...

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### Buy a House Before Mortgage Rates Come Back Down?

- Published: 2022-10-18
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/buy-a-house-before-mortgage-rates-come-back-down/
- Categories: Home Buying, Housing Market, Mortgage Rates

There is a plausible scenario where mortgage rates continue higher for a short period and then eventually correct. Possibly as soon as next year. At the moment, 30-year fixed mortgage rates stand at about 7%, thanks to ongoing inflation concerns and action by the Federal Reserve to cool the housing market. But this battle might be relatively short-lived, with rates returning to more reasonable levels by early or mid-2023. If and when that happens, the housing market could wake up from its newfound slumber and return to frenzied buying again. While that’s just a thought, it makes the argument to buy a home before that happens somewhat appealing. High Mortgage Rates Have Frozen Demand Now that mortgage rates are well above levels seen earlier this year, demand for residential real estate has cooled significantly. We’ve already seen appreciation slow, that is, lower year-over-year gains in home prices. And we’re also seeing outright monthly declines now in some markets. The Fed is taking credit for this housing slowdown, which they believe had grown too hot in recent months/years. It’s hard to disagree. By raising the fed funds rate from near zero to about 3%, they’ve effectively pumped the brakes on low interest rates for consumers. That, they argue, should dampen demand, which had been fueling the housing frenzy, not so much a lack of housing supply. With demand now in check, there is more of an equilibrium in the housing market. The seller’s market has finally come to an end. And...

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### Top Mortgage Lenders in Indiana

- Published: 2022-10-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-indiana/
- Categories: Mortgage Tips

Now let’s talk about the top mortgage lenders in Indiana, based on their most recent year’s loan volume. In 2021, nearly 900 mortgage companies funded about $73 billion in home loans there, with the average loan amount about $199,000. But two lenders stood above the rest, and made the race for first place a very close one. However, the nation’s top lender, Rocket Mortgage, managed to hold off a much smaller competitor, just barely. Read on to see which other mortgage companies were some of the largest in Indiana. Top Mortgage Lenders in Indiana (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $3. 5 billion 2. Ruoff Mortgage $3. 4 billion 3. Caliber Home Loans $2. 4 billion 4. Chase $2. 1 billion 5. Freedom Mortgage $1. 9 billion 6. 3Rivers FCU $1. 9 billion 7. Huntington Bank $1. 5 billion 8. Wells Fargo $1. 3 billion 9. Fifth Third Bank $1. 3 billion 10. Newrez $1. 3 billion Last year, Rocket Mortgage funded $3. 5 billion in home loans in the state of Indiana, per HMDA data from Richey May. That was just enough to hold off second place Ruoff Mortgage, which put up a very good fight with $3. 4 billion funded. The company is based in Fort Wayne, IN, and did their best to take the top spot in their home state. In third was Coppell, TX-based Caliber Home Loans with an admirable $2. 4 billion, followed by Chase with $2. 1 billion and Freedom...

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### Are Mortgage Rates Going to 8.5% Next?

- Published: 2022-10-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-rates-going-to-8-5-next/
- Categories: Mortgage News, Mortgage Rates

The year 2022 has been absolutely dreadful with respect to mortgage rates. We’ve seen the popular 30-year fixed rise from sub-3% levels to around 7% in the matter of about 10 months. And despite that unprecedented increase, the worse may be yet to come. That’s if you buy into the latest remarks from National Association of Realtors (NAR) chief economist Lawrence Yun. His belief isn’t based on a gut feeling, but rather a technical analysis. Next Stop 8. 5% for the 30-Year Fixed? If you thought a 7% mortgage rate was bad, how about an 8% mortgage rate? Or worse, an 8. 5% mortgage rate. While the thought of fixed mortgage rates that high sounded impossible a few months ago, now it’s not so far out there. During a presentation last week at the National Association of Real Estate Investors in Atlanta, Yun spoke of rates breaking through the 7% threshold. At last glance, they are still technically below 7%, assuming we use the highly-cited Freddie Mac mortgage rate survey as our gauge. That pinned the 30-year fixed at 6. 92% during the latest week ending October 13th, though data often lags reality. Because the survey collects mortgage rate data from loan originators between Monday and Wednesday, any rate increases midweek or beyond aren’t factored in until the following week, assuming they hold. Anyway, that means the additional bad news of the hot CPI report wasn’t included, which pushed mortgage rates above 7% later in the week. That, according to...

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### Top Mortgage Lenders in South Carolina

- Published: 2022-10-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-south-carolina/
- Categories: Mortgage Tips

It’s time to check out the top mortgage lenders in South Carolina, based on who did the most business. Last year, more than 1,000 mortgage companies collectively funded more than $80 billion in home loans in the state. But one particular company did a lot more business than the rest, and also happens to be the top mortgage lender in the U. S. Yes, I’m referring to Rocket Mortgage (formerly Quicken Loans), nearly doubling the volume of their nearest competitor. Read on to see which other companies dominated the mortgage biz in The Palmetto State. Top Mortgage Lenders in South Carolina (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $5. 0 billion 2. Wells Fargo $2. 8 billion 3. Pennymac $2. 5 billion 4. Freedom Mortgage $2. 2 billion 5. Truist $2. 1 billion 6. SouthState Bank $1. 9 billion 7. Movement Mortgage $1. 9 billion 8. Guild Mortgage $1. 6 billion 9. UWM $1. 5 billion 10. Newrez $1. 5 billion Coming in first both in South Carolina (and nationally) was none other than Rocket Mortgage with $5. 0 billion funded in 2021, per HMDA data from Richey May. As noted, that was nearly double second placed-Wells Fargo, which managed just $2. 8 billion during the year. In a somewhat close third was Pennymac, a mostly correspondent lender that originated $2. 5 billion. Fourth went to Boca Raton-based Freedom Mortgage with $2. 2 billion, while Charlotte-based Truist took fifth with $2. 1 billion. Another Florida-based bank, SouthState...

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### Now You Can Get a Mortgage at Walmart

- Published: 2022-10-12
- Modified: 2022-11-01
- URL: https://www.thetruthaboutmortgage.com/walmart-mortgage/
- Categories: Mortgage News

It’s official, you can get a mortgage at Walmart now. So next time you’re grocery shopping, or picking up other essentials, you can apply for a home loan as well. There was talk of a “Walmart Mortgage” years ago, as there was an Amazon Mortgage. Back then, it seemed every major company, whether in the financial space or not, was pondering the idea of offering home loans. But it seems only Walmart has made good on it, at a most unusual time. The First Walmart Mortgage Location Has Launched On Friday, the very first Walmart-based in-store branch Lenders One location opened in Newton, New Jersey. To unpack that real quick, Lenders One is a national cooperative of mortgage and real estate companies owned by publicly-traded Altisource. Lenders One consists of more than 250 mortgage companies, including banks, credit unions, independent mortgage bankers, and real estate/home builder-affiliated firms. The companies apparently originate anywhere between $50 million to $25 billion per year. So a third-party company (that consists of many smaller companies) has opened up shop inside a Walmart location. This particular Lenders One company is Family First Funding, LLC, which was founded in 2011. They are based in Toms River, NJ, which is about 100 miles away from the Walmart. In that sense, a locally operated mortgage company has opened a branch within Walmart. This is somewhat similar to the arrangement independent mortgage companies had via the Costco Mortgage program. However, the Costco program merely provided a list of preferred lenders...

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### Top Mortgage Lenders in Minnesota

- Published: 2022-10-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-minnesota/
- Categories: Mortgage Tips

Let’s check out the top mortgage lenders in Minnesota based on the most recent year’s loan volume. Around 750 mortgage companies originated roughly $91 billion in home loans in The North Star State last year. But only one company bested the rest – and they’re actually headquartered in Minnesota! Yes, I’m referring to U. S. Bank, which is located in Minneapolis, MN. Read on to see which other mortgage lenders were active in the Land of 10,000 Lakes. Top Mortgage Lenders in Minnesota (Overall) Ranking Company Name 2021 Loan Volume 1. U. S. Bank $6. 4 billion 2. Wells Fargo $4. 8 billion 3. Bell Bank $4. 4 billion 4. Rocket Mortgage $3. 9 billion 5. UWM $2. 7 billion 6. Summit Mortgage $2. 6 billion 7. Pennymac $2. 2 billion 8. CrossCountry Mortgage $2. 1 billion 9. Chase $1. 7 billion 10. loanDepot $1. 6 billion As mentioned, U. S. Bank took the top spot in its home state with $6. 4 billion in home loans funded during 2021, per HMDA data from Richey May. That was more than enough to beat out its closest rival, Wells Fargo, which originated $4. 8 billion in the state. A third bank, Bell Bank, out of nearby Fargo, North Dakota, took third place with $4. 4 billion in home loan volume. It’s rare these days to see a depository bank lead in the mortgage world, and even more uncommon to see the top three all big banks. Nowadays, it is nonbanks like...

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### What Is Inflation Buster from Rocket Mortgage?

- Published: 2022-10-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-inflation-buster-from-rocket-mortgage/
- Categories: Mortgage News

I was watching some football this weekend and happened upon an ad for “Inflation Buster” from Rocket Mortgage. I’m always intrigued when I see a mortgage advertisement because it gives me an opportunity to analyze the thing and share it with readers. Knowing the mortgage industry is so inventive, it’s fun to see what they cook up to combat today’s higher mortgage rates. The current climate has been very difficult for both prospective home buyers and mortgage lenders, but this is when creativity tends to flourish. Let’s see what this new program is all about to determine if it’s a good option for you. What Is Inflation Buster? How Does It Work? The nation’s top mortgage lender, Rocket Mortgage, launched “Inflation Buster” in mid-September to combat high mortgage rates. In case you haven’t heard, the 30-year fixed is averaging close to 7% these days, up from around 3% to start the year. This has clearly wreaked havoc on both home buyers and mortgage lenders. It has made affordability a problem for many and pushed home prices lower. To offset some of that pain, Rocket Mortgage is providing customers with a little relief during year one of their new mortgage. In short, the company is offering a buydown mortgage that lowers the interest rate for the first 12 months by 1%. Each month during the first year of the loan term, the borrower makes a reduced mortgage payment based on that lower interest rate. Similar to other mortgage buydowns, a special...

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### The Truth About Falling Home Prices

- Published: 2022-10-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-truth-about-falling-home-prices/
- Categories: Foreclosure, Housing Market, Mortgage News

Real estate doom and gloom articles are going to ramp up big time in coming months, if they haven’t already. You’re going to hear that the second biggest housing crash since the Great Depression is upon us. It’ll all be super scary and negative and panic-inducing. You’ll be led to believe that it’s 2008 all over again. Except, it’s not. Nor will it be. Interestingly, this latest housing downturn, or "correction," was manufactured by the Fed. The same Fed that basically orchestrated the housing frenzy that preceded it. The good news is it’ll likely be short-lived and really nothing like the Great Recession. Why Are Home Prices Falling? First, let’s talk about why home prices are beginning to stall, and gasp, even go down. Long story short, home price appreciation was absolutely out of control over the past couple years since the pandemic got underway. We’re talking a 50% increase in prices. A combination of limited supply, cheap money (i. e. record low mortgage rates), and the sheer desire to own property propelled home prices to new heights. Not only did home prices hit all-time highs, but monthly and annual gains hit records as well. We were seeing consistent double-digit gains in property values, which we all know simply can’t be sustainable over time. The Fed saw this happening and basically decided to pump the brakes. They discovered that recent home price gains were driven by excess demand, not just short supply. As such, they knew that raising their own...

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### Top Reverse Mortgage Lenders

- Published: 2022-10-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-reverse-mortgage-lenders/
- Categories: Mortgage Tips

If you’re a senior, you might be wondering who the top reverse mortgage lenders in the nation are. Unlike the traditional home loan market, the reverse mortgage industry is dominated by a small handful of companies. Typically, these lenders specialize in reverse mortgage lending, as opposed to simply offering the loans alongside other options. As a quick refresher, a reverse mortgage loan allows homeowners 62 and older (55 in some cases) to access cash in their property without monthly payments. In 2021, reverse lenders originated 59,000 loans, a 36% increase from the 43,000 the year prior. Read on to see who made the top-10 list last year. Top Reverse Mortgage Lenders Ranking Company Name 2021 Loan Count 1. AAG 18,407 (31. 3% share) 2. FOA Reverse 10,575 (18% share) 3. Reverse Mortgage Funding 6,177 (10. 5% share) 4. PHH Mortgage 4,319 (7. 3% share) 5. Mutual of Omaha 4,101 (7% share) 6. Longbridge Financial 3,636 (6. 2% share) 7. Cornerstone First 3,296 (5. 6% share) 8. Open Mortgage 2,444 (4. 2% share) 9. HighTechLending 1,144 (1. 9% share) 10. Nationwide Equities 705 (1. 2% share) Last year, the top reverse mortgage lender in the country was American Advisors Group, or AAG for short. The company originated more than 18,000 reverse mortgages in 2021, per HMDA data from the Consumer Financial Protection Bureau (CFPB). While that might not sound like a lot of loans, it represented a staggering 31. 3% market share. So one company grabbed nearly a third of the...

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### Marry the House, Date the Rate. What?

- Published: 2022-10-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/marry-the-house-date-the-rate/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Lately, I’ve been seeing the old “marry the house, date the rate” adage thrown around a lot. The idea is relatively straightforward. You buy a home you really want, regardless of available financing terms. And the mortgage rate you receive, even if high today, isn’t your forever rate because you can always refinance down the road. But is it truly that simple? And does the whole thing hinge on interest rates being more favorable in the future? What if you want to divorce the house? But you’re too afraid to leave that low rate behind? Marry the House. Like for Forever? Let’s dissect the term by breaking it down into its two sections. First, we’ll discuss the “marry the house” piece. A lot of folks buy a particular piece of property because they fall in love with it. It's typically emotional. There’s also a presumption that many people buy a forever home that they plan to keep, well, forever. Simply put, they plan to stay in the property for the long haul, and as such are essentially marrying the thing. After all, a marriage is expected to persist, not just last a year or two. In reality, we know this isn’t the case, but the intention is there, despite what may transpire after the wedding day. At last glance, the average tenure for an American homeowner was 13. 2 years, per the National Association of Realtors (NAR). This was for the year 2021, a slight dip from 13. 5 in...

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### Crowdfunded Zero Down Mortgage Launched as Housing Market Peaks

- Published: 2022-10-05
- Modified: 2022-10-05
- URL: https://www.thetruthaboutmortgage.com/crowdfunded-zero-down-mortgage-launched/
- Categories: Housing Market, Mortgage News

A credit union out of Cheyenne, Wyoming has launched a crowdfunded, zero down mortgage loan for its customers. It comes at a time when still sky-high home prices and extremely elevated mortgage rates are severely eroding affordability. During challenging times like these, it’s not uncommon for unique programs like this to surface. We’ve also seen the return of buydown loans that reduce interest rates for the first year or two of the loan term. What makes this new offering more interesting is that other customers can get in on the action and earn higher yields on their deposits. The No Money Down Mortgage at Blue First it was Bank of America’s zero down mortgage, and now it’s “The No Money Down Mortgage at Blue. ” Yes, I’m referring to a new pilot program that offers zero down mortgages from Cheyenne, WY-based Blue Federal Credit Union. While not quite as large as BofA, they still describe their new zero-down product as a “game-changing” mortgage. Blue says it has a “twofold plan” to deal with rising home prices and the inability to save for a 20% down payment. They say first-time home buyers can obtain 100% financing on a purchase (no down payment) without being subject to the pesky private mortgage insurance (PMI). PMI is typically required for loans above 80% loan-to-value (LTV). Of course, as I always say, if it’s not being charged, it’s likely just baked into the interest rate in a different way. Anyway, that could theoretically keep monthly...

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### Top Mortgage Lenders in Tennessee

- Published: 2022-10-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-tennessee/
- Categories: Mortgage Tips

Today we’ll take a hard look at the top mortgage lenders in Tennessee by loan volume. Last year, nearly 1,200 mortgage companies battled it out for first place, but only one could claim the top spot. Collectively, these lenders funded about $102 billion in mortgages in The Volunteer State, which was likely an annual record. Despite being located a couple states due north of Tennessee, Rocket Mortgage was the top lender in the state. Read on to see who else made the top 10 list. Top Mortgage Lenders in Tennessee (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $5. 6 billion 2. Pennymac $3. 6 billion 3. U. S. Bank $2. 7 billion 4. Wells Fargo $2. 6 billion 5. Mortgage Investors Group $2. 6 billion 6. Pinnacle Bank $2. 3 billion 7. FirstBank $2. 2 billion 8. AmeriHome Mortgage $2. 2 billion 9. Freedom Mortgage $2. 2 billion 10. loanDepot $2. 1 billion Rocket Mortgage came in first with $5. 6 billion in home loan volume in the state of Tennessee during 2021, per HMDA data from Richey May. The Detroit-based company had no problem beating out the competition, with second place Pennymac only able to muster $3. 6 billion in annual loan volume. They were trailed by U. S. Bank with $2. 7 billion and Wells Fargo with $2. 6 billion funded. In fifth was Knoxville, Tennessee’s own Mortgage Investors Group (MIG) with $2. 6 billion. The rest of the top 10 included Nashville-based Pinnacle Bank...

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### Your Credit Score Alone Can Make or Break Your HELOC Rate

- Published: 2022-09-29
- Modified: 2023-10-13
- URL: https://www.thetruthaboutmortgage.com/heloc-credit-score/
- Categories: Mortgage Rates, Mortgage Tips

You’ve probably heard that maintaining an excellent credit score is very important when it comes to getting a mortgage. Not only will it help ensure you qualify for a mortgage, a tip-top score will also make you eligible for the lowest mortgage rates available. Yes, you’ll need to document income, assets, and employment as well, but your credit score can have the biggest impact on pricing. The same is true for HELOC rates, which are tied to the prime rate (currently 6. 25%) and a credit risk-based margin. The margin you receive is heavily impacted by credit score. So if you plan to apply for a HELOC, better make sure your FICO scores are as high as can be. How the Lender Determines Your HELOC Rate I was looking at a rate sheet the other day for home equity lines of credit. Similar to rate sheets for closed-end first mortgages, there are pricing adjustments. But because HELOCs are tied to the prime rate, which is essentially controlled by the Fed, individual banks provide varying margins to come up with your fully-indexed rate. The margin is the risk-based piece of the equation that relates to your default risk. In short, the prime rate plus your margin equals your HELOC rate. For example, if your margin were 1% and prime were 6. 25%, your rate would be 7. 25%. If and when the Fed lowers or raises the fed funds rate, the prime rate will follow suit by the same amount. Since...

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### Why Homeowners Aren’t Selling

- Published: 2022-09-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-homeowners-arent-selling/
- Categories: Home Buying, Housing Market, Mortgage News

With all the talk of a housing market crash, there’s not a lot of data to support it. Sure, home price gains have moderated significantly after recording massive gains, but they’re still up year-over-year. In fact, the median existing-home price was $389,500 in August, a 7. 7% increase from a year earlier, per the National Association of Realtors. That marked 126 consecutive months of year-over-year increases, the longest streak on record. At the same time, the median sales price has fallen for two months in a row, signaling a potential top of the market. Still, most homeowners are staying put. Most Homeowners Aren’t Going Anywhere While it’s starting to feel more like a buyer’s market, given the more-than-doubling in mortgage rates since the start of the year, it’s certainly not a full-blown one. While the higher mortgage rates may have seriously dented demand, there's still the issue of short supply. Per the same existing-homes report from NAR from August, unsold inventory fell to 1. 28 million units as of the end of August. That represented just a 3. 2-month supply at the current monthly sales pace, and bucked the trend of five successive monthly increases in supply. Additionally, existing home sales fell 0. 4% from July to a seasonally adjusted annual rate of 4. 80 million in August. On a year-over-year basis, sales plummeted 19. 9% from their 5. 99 million pace during the same period in 2021. In other words, homeowners aren’t selling. But why? With home prices still...

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### Top Mortgage Lenders in Ohio

- Published: 2022-09-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-ohio/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Ohio. Last year, nearly 1,000 mortgage companies originated about $113 billion in home loans there. But one company dominated the rest by a fairly large margin. Surprisingly, it wasn’t the nation’s top mortgage lender, but rather a depository bank. Read on to see who took the top spot and what other companies did a lot of business in The Buckeye State. Top Mortgage Lenders in Ohio (Overall) Ranking Company Name 2021 Loan Volume 1. Huntington Bank $7. 8 billion 2. Rocket Mortgage $6. 4 billion 3. Union Savings Bank $4. 1 billion 4. Fifth Third Bank $3. 9 billion 5. Chase $3. 2 billion 6. U. S. Bank $3. 0 billion 7. Wells Fargo $2. 4 billion 8. Third Federal $2. 3 billion 9. Freedom Mortgage $2. 1 billion 10. Union Home Mortgage $2. 1 billion The top mortgage lender in Ohio last year was Huntington Bank, a company founded all the way back in 1866. In 2021, the Columbus, Ohio-based company funded $7. 8 billion in home loans, per HMDA data from Richey May. That was more than enough to hold off Rocket Mortgage’s $6. 4 billion, the nation’s top overall mortgage lender. In third was Cincinnati, Ohio-based Union Savings Bank with $4. 1 billion funded, followed by fellow Cincinnati-based bank Fifth Third with $3. 9 billion in loan volume. Rounding out the top five was JPMorgan Chase with $3. 2 billion funded. Chase was the only entry...

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### Watch Out for 8% Mortgage Rates

- Published: 2022-09-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/8-percent-mortgage-rates/
- Categories: Mortgage News, Mortgage Rates

Now that interest rates have resumed their upward climb, do we have to worry about 8% mortgage rates next? Back in July, I questioned if 7% mortgage rates were on the horizon, given the steady rise seen at that time. While rates hadn’t officially hit 6% then, by Freddie Mac’s measure at least, they were in that range and seemingly heading higher. But shortly after they got a much-needed reprieve and began drifting back to the lower 5s and even the high 4% range. That was then and this is now – today, a 30-year fixed might be priced at 6. 5% or worse. And 7% might not be unheard of either. Could 8% be in play next? What Are Mortgage Rates Currently? It Depends Who You Ask As noted, mortgage rates officially surpassed 6% during the week ending September 15th, per Freddie Mac. They run the most highly cited mortgage rate survey in the nation, and thus are seen as the official scorekeeper. According to Freddie, the 30-year fixed averaged 6. 02% last week, the first time it crossed the 6% threshold since late 2008. Of course, we know the 30-year fixed was in the 6% range at times during early summer, even if it wasn’t reflected in the survey. Regardless, mortgage rates have surged even higher since last week, and the Freddie survey will likely show a big jump, potentially something close to 6. 25% or higher. Here’s the thing though. These average rates are for prime borrowers...

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### Top Mortgage Lenders in Oregon

- Published: 2022-09-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-oregon/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Oregon, based on total loan volume. Nearly 700 different mortgage companies duked it out last year in a bid to take first place in Oregon, originating about $91 billion in home loans in the process. And like many other states in the nation, a certain Rocket Mortgage topped the rankings in The Beaver State. That doesn’t come as much of a surprise given their dominance throughout the country, and their national #1 ranking. Read on to see who else made the top 10 lists for home purchase lending and mortgage refinancing. Top Mortgage Lenders in Oregon (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $4. 6 billion 2. UWM $3. 5 billion 3. Guild Mortgage $3. 2 billion 4. Umpqua Bank $3. 2 billion 5. U. S. Bank $3. 1 billion 6. Caliber Home Loans $3. 0 billion 7. Chase $2. 8 billion 8. OnPoint Community CU $2. 7 billion 9. Wells Fargo $2. 5 billion 10. loanDepot $2. 1 billion As stated, Detroit-based Rocket Mortgage took the top spot in Oregon with $4. 6 funded in 2021, per HMDA stats from Richey May. Their crosstown rival United Wholesale Mortgage (UWM) was on their tail with $3. 5 billion in second place. Third went to San Diego, California-based Guild Mortgage with a close $3. 2 billion funded during the year. In fourth we finally see a hometown lender represented, Portland-based Umpqua Bank and their $3. 2 in...

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### Top Mortgage Lenders in Utah

- Published: 2022-09-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-utah/
- Categories: Mortgage Tips

If you’re curious who the top mortgage lenders in Utah are, I’ve got some answers. Last year, more than 500 lenders in The Beehive State originated nearly $100 billion in home loans. But one mortgage company far exceeded the others, so much so that it wasn’t even close. Interestingly, this company isn’t headquartered in the state of Utah, nor does it operate retail locations. I’m talking about United Wholesale Mortgage, or UWM for short. Read on to see who else ranked in the top 10. Top Mortgage Lenders in Utah (Overall) Ranking Company Name 2021 Loan Volume 1. UWM $9. 3 billion 2. Rocket Mortgage $4. 5 billion 3. Intercap Lending $3. 6 billion 4. Mountain America CU $2. 9 billion 5. First Colony Mortgage $2. 9 billion 6. Homepoint $2. 7 billion 7. America First CU $2. 4 billion 8. Academy Mortgage $2. 2 billion 9. SecurityNational $2. 1 billion 10. Wells Fargo $2. 1 billion Yep, a wholesale mortgage lender topped the rankings in the state of Utah, originating about $9. 3 billion there in 2021, per HMDA data from Richey May. As such, we might say that a legion of mortgage brokers is #1, as wholesale lenders rely on these intermediaries to generate all their business. What’s surprising is the margin above second place Rocket Mortgage, which funded just $4. 5 billion there. This meant UWM doubled the volume of its nearest competitor, who also happens to be the top lender nationwide. In third was Draper, Utah-based...

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### Housing Crash Imminent?  The National LTV Is Below 30%

- Published: 2022-09-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/housing-crash-imminent-the-national-ltv-is-below-30/
- Categories: Housing Market, Mortgage News

The topic du jour lately has been a housing market on the edge of disaster. But no one can quite agree whether it’s an affordability crisis, home price normalization, a housing correction, or an even-worse impending housing crash. The takeaway is that home price gains are cooling, and could in fact begin falling as well, after some record years of appreciation. This isn’t a huge shock, given the fact that the 30-year fixed basically doubled since the start of the year. It doesn’t take a genius to figure out that the combination of sky-high home prices and much higher financing costs will dent demand. But is a housing crash really coming? The National Loan-to-Value Ratio (LTV) Is a Ridiculously Low 29. 5% As I’ve pointed out for a while, pundits and casual observers love to compare now to 2006-2008, when the housing market last crashed. After all, why not just say history is repeating itself, and look to the most recent example to make your argument. But there are stark differences between now and then, which I’ve shared on several occasions recently. For example, back then most home buyers (and existing homeowners) had a loan-to-value ratio (LTV) of 100% or more. Yes, or more. Because many homeowners also elected to take out pay option ARMs, which allowed negative amortization. That is, borrowing more than the home was worth. We all seem to remember what happened next, since a lot of folks are now calling for the same widespread destruction. But...

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### Top Mortgage Lenders in Michigan

- Published: 2022-09-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-michigan/
- Categories: Mortgage Tips

Let’s check out the top mortgage lenders in Michigan based on the most recent year’s loan volume. The state of Michigan is an interesting one because it’s home to two of the top three mortgage lenders in the country. The lenders in question are none other than Rocket Mortgage, and wholesaler United Wholesale Mortgage (UWM). Seeing that they dominate the entire nation, you’d expect them to rule their home state as well. Read on to see if that’s the case, or if some other hometown (or non-hometown) companies gave them a run for their money. Top Mortgage Lenders in Michigan (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $12. 0 billion 2. UWM $7. 9 billion 3. Lake Michigan CU $4. 8 billion 4. Huntington Bank $3. 8 billion 5. Chase $3. 5 billion 6. Fifth Third Bank $2. 3 billion 7. Flagstar Bank $2. 1 billion 8. Wells Fargo $1. 8 billion 9. Mortgage 1 Inc. $1. 7 billion 10. Caliber Home Loans $1. 7 billion Suspense aside, Rocket Mortgage did indeed beat out the rest of the competition in their home state last year. It would have seemed unlikely not to given their #1 ranking nationwide. Still, you never know. The Detroit-based mortgage behemoth funded a whopping $12 billion in home loans in Michigan in 2021, per HMDA data from Richey May. That was more than enough to trounce their cross-town rival UWM, which happens to be located in Pontiac. UWM, which works solely with mortgage...

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### Top Mortgage Lenders in Maryland

- Published: 2022-09-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-maryland/
- Categories: Mortgage Tips

Today we’ll have a look at the top mortgage lenders in Maryland based on their annual loan volume. Like other states in the nation, it wasn’t a big shock that America’s largest lender also topped the charts in Maryland. Yes, I’m referring to Rocket Mortgage, which had no problem beating out another 750 or so banks, mortgage lenders, and credit unions to take the #1 spot. Collectively, these mortgage companies originated about $140 billion in home loans in the Old Line State last year. Read on to see who else ranked in the top 10, including some local names. Top Mortgage Lenders in Maryland (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $8. 7 billion 2. Pennymac $6. 0 billion 3. Truist Financial $5. 7 billion 4. Freedom Mortgage $5. 1 billion 5. Wells Fargo $4. 1 billion 6. First Home Mortgage $3. 9 billion 7. Mr. Cooper $3. 6 billion 8. U. S. Bank $3. 5 billion 9. UWM $3. 1 billion 10. Caliber Home Loans $2. 9 billion As stated, Rocket Mortgage led the way in Maryland with an admirable $8. 7 billion in home loan volume in 2021, per HMDA data courtesy of Richey May. That was more than enough to beat out second place Pennymac’s $6 billion. Many consumers may not even recognize Pennymac as they do a lot of business via the correspondent channel. This means their product is resold by smaller companies, whether it’s a local credit union or bank. In third...

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### Bank of America Launches a Zero Down Mortgage

- Published: 2022-09-01
- Modified: 2023-07-25
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-zero-down-mortgage/
- Categories: Mortgage News

This week, Bank of America unveiled a zero down mortgage option as part of their Community Homeownership Commitment. In short, they want to help more “modest-income” and first-time home buyers achieve the American Dream of homeownership. Specifically, they said they’re targeting “certain Black/African American and/or Hispanic-Latino neighborhoods” throughout the country. To accomplish this goal, they’ve rolled out some enhancements to their existing Affordable Loan Solution. This includes both closing cost assistance and down payment help, along with more liberal underwriting guidelines, to tackle affordability constraints. BofA’s Community Affordable Loan Solution Combines a 3% down mortgage With an up to 3% down payment grant ($10,000 maximum) And up to $7,500 in closing cost assistance Borrowers can come to the closing table with basically no money No minimum credit score or mortgage insurance requried Applies to properties in select markets nationwide Borrowers must complete homebuyer education Property must be owner-occupied Must take out a fixed-rate mortgage Can be a conventional, FHA, or VA loan The new loan program is coined the “Community Affordable Loan Solution,” an enhanced version of their 3% down Affordable Loan Solution. It is in addition to the bank’s $15 billion Community Homeownership Commitment, which is a goal to help 60,000 individuals/families purchase affordable homes by the year 2025. Thus far, Bank of America has already helped 36,000+ become homeowners, with more than $9. 5 billion in low down payment loans and over $350 million in non-repayable down payment and/or closing cost grants. And two-thirds of these loans and...

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### Home Equity Loans 101: Everything You Need to Know

- Published: 2022-08-31
- Modified: 2025-01-14
- URL: https://www.thetruthaboutmortgage.com/home-equity-loan/
- Categories: Mortgage Tips

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...

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### Top Mortgage Lenders in Pennsylvania

- Published: 2022-08-30
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-pennsylvania/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Pennsylvania based on their annual loan volume. The state of Pennsylvania is unique in that it borders both the Midwest and the Northeast. This means consumers might gravitate toward a big NYC-based bank or a smaller, independent mortgage lender located closer to say Ohio. Despite these regional nuances, the nation’s top mortgage lender also grabbed the top spot in The Keystone State. Read on to see who the other big mortgage players are in Pennsylvania. Top Mortgage Lenders in Pennsylvania (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $7. 9 billion 2. Wells Fargo $7. 3 billion 3. Citizens Bank $5. 0 billion 4. Allied Mortgage Group $4. 1 billion 5. Pennymac $3. 2 billion 6. CrossCountry Mortgage $3. 0 billion 7. AmeriHome Mortgage $3. 0 billion 8. PNC Bank $2. 9 billion 9. Newrez $2. 9 billion 10. Freedom Mortgage $2. 6 billion You guessed it. The top mortgage lender in Pennsylvania was none other than Rocket Mortgage, which incidentally is also the nation’s #1 lender. The Detroit-based company originated $7. 9 billion in home loans last year, per HMDA data from Richey May. That was enough to beat out second place Wells Fargo, which came close with $7. 3 billion funded during the year. In third place was Providence, Rhode Island-based Citizens Bank with $5 billion in home loan volume. Allied Mortgage Group grabbed fourth with $3. 2 billion, while big correspondent lender Pennymac took...

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### The Temporary Buydown: How to Get a Lower Rate the First Couple Years on Your Mortgage

- Published: 2022-08-25
- Modified: 2025-03-12
- URL: https://www.thetruthaboutmortgage.com/buydown-mortgage/
- Categories: Home Buying, Mortgage Rates, Mortgage Tips

Today we’re going to talk about a “temporary buydown,” the latest effort by the mortgage industry to provide much-needed payment relief to borrowers. In recent months, mortgage rates effectively doubled, straining affordability and cooling the hot housing market. These higher rates have also had a big impact on the mortgage industry, which is typically reliant on low rates to fuel its important mortgage refinance business. Mortgage lenders understand the impact these higher rates have had on borrowers and prospective home buyers, so there’s a good chance you’ll see more of these offers pop up soon. Let’s discuss how these buydown mortgages work, if they can save you money, and the general pros and cons. What Is a Temporary Buydown Mortgage? In short, a temporary buydown is a home loan that features a reduced interest rate for a temporary period of time, whether it’s one, two, or three years. The interest rate may be 2% lower in year one, 1% lower in year two, and then the standard note rate thereafter. An upfront cost covers these lower monthly payments, with the required funds set aside in a buydown account. Each month during the temporary buydown period, the borrower makes a reduced monthly payment, with the additional amount released from the buydown account to cover the difference. This makes monthly payments more affordable during the beginning of the loan term. Typically, borrowers opt for these buydowns because they expect their income to increase in the near future. Or the buydown is offered...

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### Top Mortgage Lenders in the State of Massachusetts

- Published: 2022-08-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-massachusetts/
- Categories: Mortgage Tips

Now let’s check out the top mortgage lenders in Massachusetts, based on loan volume. In 2021, roughly $164 billion in home loans were originated in The Bay State, making it one of the more productive states in the nation. As to who led the way, it wasn’t the nation’s number one mortgage lender, Rocket Mortgage. It was Chicago-based Guaranteed Rate, which outmuscled the competition despite being only the 13th largest mortgage lender nationwide. Read on to see who else topped the mortgage lending charts in Massachusetts. Top Mortgage Lenders in Massachusetts (Overall) Ranking Company Name 2021 Loan Volume 1. Guaranteed Rate $7. 9 billion 2. Rocket Mortgage $7. 2 billion 3. Chase $6. 1 billion 4. Leader Bank $5. 9 billion 5. Citizens Bank $5. 2 billion 6. U. S. Bank $4. 7 billion 7. Fairway Independent $3. 7 billion 8. UWM $3. 6 billion 9. Bank of America $3. 5 billion 10. Newrez $3. 5 billion Taking the top spot overall was Chicago, Illinois-based direct lender Guaranteed Rate with $7. 9 billion funded, per HMDA data from Richey May. That was more than enough (although it was close) to beat out Rocket Mortgage, which came in second with $7. 2 billion. New York City-based JPMorgan Chase took third with $6. 1 billion funded, decent but perhaps it could have been better given their proximate location. A pair of banks, Leader Bank and Citizens Bank, took fourth and fifth with $5. 9 billion and $5. 2 billion, respectively. The rest...

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### 4.5% Mortgage Rates in 2023?  That’s the Latest Estimate from Fannie Mae

- Published: 2022-08-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/4-5-mortgage-rates-in-2023/
- Categories: Housing Market, Mortgage Rates

Might 2023 be good to mortgage rates? If you believe the latest Housing Forecast from Fannie Mae, then yes. Most everyone knows 2022 has wreaked absolute havoc on mortgage rates, with the 30-year fixed up more than 225 basis points from a year earlier. This, combined with rising home prices, has eroding affordability to the point of being at its worst since prior to the previous housing boom (and eventual bust). But lately mortgage rates have seen some relief after pushing 6%, and they could even fall back into the 4s next year. That would be huge for the flagging mortgage industry, and also a boon to home builders attempting to unload new inventory. Mortgage Rates Might See Some Relief in 2023 In Fannie Mae’s previous Housing Forecast (for July), they expected the 30-year fixed to average 5. 1% in 2023, which actually doesn’t sound too bad. But their latest release has rates down to 4. 5% for 2023, with rates drifting from 5. 1% in the third quarter of 2022 to 4. 4% in the second half of 2023. Assuming that comes to fruition, the mortgage industry, along with home buyers and the home builders, could see some serious relief. After all, many builders have had to cut prices or scale back on building altogether, while prospective buyers have pulled out of purchase contracts. If mortgage rates fall back to the mid-4% range, there’d likely be a surge of demand and an uptick in home sales once again. It...

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### Orchard Mortgage Review: A Tech-Enabled Mortgage Broker That Wants to Transform the Stale Home Buying Process

- Published: 2022-08-23
- Modified: 2024-08-09
- URL: https://www.thetruthaboutmortgage.com/orchard-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out “Orchard Mortgage,” formerly known as Orchard Home Loans. The direct lender is backed by its parent company Orchard (previously Perch), a tech-enabled real estate brokerage that offers iBuying and cash-backed offers. One of their more popular services allows you to buy before you sell, similar to companies like HomeLight, Knock, and UpEquity. But they offer a complete end-to-end solution, including the mortgage, making them a potential one-stop shop. They also appear to offer low mortgage rates, which when combined with the latest tech, could make them worth considering. Orchard Mortgage Fast Facts Direct-to-consumer mortgage lender (online mortgage brokerage) Founded in 2020, headquartered in New York City Offers home purchase loans, refinances, and all-cash offers Its loan officers do not work for commissions Currently licensed do business in 24 states nationwide Acquired San Diego-based Loan Monkey in early 2022 Formerly known as Orchard Home Loans (rebranded in August 2022) Orchard Mortgage is a direct-to-consumer mortgage lender that got started in 2020. They appear to operate as a mortgage broker, meaning they work as a liaison between borrowers and third-party wholesale lenders. This gives them the ability to shop mortgage rates on your behalf to find the best deal out there. The company is headquartered in New York City and was formerly known as Orchard Home Loans. In early 2022, the company acquired Loan Monkey and rebranded its loan division as Orchard Mortgage. Aside from offering mortgages to home buyers and existing homeowners, the parent company offers Buy...

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### Could a 50-Year Fixed Mortgage Finally Solve the Affordability Crisis?

- Published: 2022-08-22
- Modified: 2025-03-24
- URL: https://www.thetruthaboutmortgage.com/50-year-mortgage/
- Categories: Mortgage Rates, Mortgage Tips

With mortgage rates nearly double what they used to be, you might wonder if an alternative product like a "50-year mortgage" could improve affordability. Yes, I said 50 years, that’s not a typo. A full 20 years longer than the typical 30-year loan term most of us are used to. It's not just a pipedream. Last week, a mortgage lender in the UK received a license to offer fixed-rate mortgages with loan terms as long as 50 years. While there’s no sign of a 50-year mortgage stateside, could it be a strategy to lessen the blow of higher mortgage rates? And also make it possible to buy a more expensive home than what your budget allows? Let’s find out. What Is a 50-Year Mortgage? First things first, let’s define this thing. A 50-year fixed mortgage is a home loan with a 50-year loan term and an interest rate that never changes. This is essentially no different than a 30-year fixed mortgage, other than those extra two decades to pay the thing off. Simply put, someone who took out a 50-year mortgage at age 25 wouldn’t pay it off until they were 75, assuming it was held to term. While that sounds ridiculous (and is), most mortgages aren’t kept to term, or anywhere near it. So theoretically, a home buyer could take out a 50-year mortgage, then refinance into a shorter-term mortgage after a few years. If they didn’t, that mortgage debt would be with them for a long, long time,...

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### Top Mortgage Lenders in North Carolina

- Published: 2022-08-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-north-carolina/
- Categories: Mortgage Tips

Despite being a big banking hub, the top mortgage lenders in North Carolina are mostly nonbanks. In fact, just three of the top 10 are depository banks, with one credit union and the rest nonbank direct lenders. However, several of the top lenders in the state also happen to be headquartered in North Carolina. Those names include Bank of America, Truist Financial, and State Employees’ Credit Union. Read on to see who topped the list in 2021 for mortgage lending overall. Top Mortgage Lenders in North Carolina (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $11. 5 billion 2. Wells Fargo $8. 1 billion 3. State Employees CU $7. 3 billion 4. Truist $6. 3 billion 5. Movement Mortgage $5. 3 billion 6. Pennymac $4. 7 billion 7. Freedom Mortgage $4. 0 billion 8. UWM $3. 5 billion 9. loanDepot $3. 1 billion 10. Bank of America $2. 8 billion Yep, you probably guessed right. Rocket Mortgage was the top mortgage lender in North Carolina last year with $11. 5 billion funded, per HMDA data from Richey May. In second was San Francisco-based bank Wells Fargo with $8. 1 billion, followed by Raleigh based-State Employees’ Credit Union with $7. 3 billion. Next up was Charlotte-based Truist Financial with $6. 3 billion, formerly two companies (BB&T and SunTrust Bank). Completing the top five was Movement Mortgage with $5. 3 billion, a South Carolina-based direct lender. The rest of the best included Pennymac, Freedom Mortgage, United Wholesale Mortgage (UWM), loanDepot,...

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### A Severe Housing Downturn Is Now Possible

- Published: 2022-08-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/a-severe-housing-downturn-is-now-possible/
- Categories: Housing Market, Mortgage News

Sound the alarm. A severe housing downturn may now be in the cards in the United States. That is, if you believe the latest commentary from credit rating agency Fitch Ratings. To be clear, they actually said “the likelihood of a severe downturn in US housing has increased. ” They still believe such a scenario is not probable, and instead we’ll see a more moderate pullback in the housing space. That mostly affects home builders, who are already struggling, though it could lead to a decline in home prices. Real Estate Crash vs. Correction vs. Housing Recession There’s been a lot of negativity in the housing market lately, as I said there would be a while back. We have entered a negative news cycle regarding real estate, mortgage rates, and the economy at large. Back in June, economist Mark Zandi of Moody’s, another credit rating agency, said we were in a housing correction. What he meant by that was that we finally arrived at the tail end of the housing boom. In other words, the good days were over. This was mostly led by a doubling in mortgage rates, creating an affordability crisis that stalled home price gains. Still, many market watchers believe home prices will continue to rise, at least nominally. Once factored for inflation, they might be flat or technically lower. And of course, certain markets will be impacted more than others, namely those that saw unsustainable run-ups over the past several years. Also this week, the National...

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### The Top Refinance Companies By Loan Volume Last Year

- Published: 2022-08-17
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-refinance-companies/
- Categories: Mortgage Tips

Now it’s time to take a look at the top refinance companies in the country, based on who closed the most loans last year. As you may have guessed, Rocket Mortgage (formerly known as Quicken Loans) led the way by a mile. And by a mile, I mean $100+ billion over their nearest competitor, United Wholesale Mortgage. It’s no surprise really seeing that they were the top mortgage lender overall in 2021 as well. Read on to see which other mortgage companies made the top 10. Top Refinance Companies (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $275. 7 billion 2. UWM $139. 6 billion 3. Wells Fargo $126. 0 billion 4. Chase $113. 6 billion 5. loanDepot $97. 7 billion 6. Freedom Mortgage $94. 1 billion 7. Pennymac $71. 4 billion 8. Homepoint $66. 4 billion 9. Mr. Cooper $65. 0 billion 10. Newrez $58. 2 billion As mentioned, Detroit-based mega lender Rocket Mortgage easily took first place in the refinance category with $275. 7 billion funded in 2021, per Richey May's HMDA data. There are two main types of mortgage refinances: the rate and term refinance (used to lower your rate and/or change your loan type/term) and the cash out refinance, utilized to tap equity. Rocket shined in both categories as scores of homeowners sought both lower mortgage rates and cash. Their total was nearly double second place United Wholesale Mortgage (UWM), a company that works exclusively with mortgage brokers. In third was Wells Fargo with...

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### Top Mortgage Lenders in New Jersey

- Published: 2022-08-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-new-jersey/
- Categories: Mortgage Tips

Today we’ll do a deep dive into the top mortgage lenders in New Jersey. Using HMDA data, we can see which companies originated the most home loans in the state last year. I break this down by both home purchase loans and refinance loans to determine who specializes in what. After all, the home buying experience can differ quite a bit from the mortgage refinance process, the latter of which is reserved for existing homeowners. As you may have guessed, Rocket Mortgage topped the list in 2021. Read on to see the others in the top-10. Top Mortgage Lenders in New Jersey (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $9. 9 billion 2. Wells Fargo $8. 9 billion 3. Chase $6. 8 billion 4. loanDepot $6. 2 billion 5. NJ Lenders Corp. $4. 5 billion 6. Newrez $4. 3 billion 7. UWM $4. 2 billion 8. Pennymac $3. 6 billion 9. Bank of America $3. 5 billion 10. Guaranteed Rate $3. 3 billion Detroit-based Rocket Mortgage funded $9. 9 billion in home loans in New Jersey in 2021, per HMDA data from Richey May. That was a full billion more than second place Wells Fargo, which mustered $8. 9 billion in the Garden State last year. Nearby New York-based Chase grabbed third, but was well behind the two leaders with $6. 8 billion in home loan origination volume. Far away, SoCal-based loanDepot took fourth place with $6. 2 billion, beating out hometown lender NJ Lenders Corp. ,...

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### Half of Americans Don’t Even Know What a Mortgage Is?

- Published: 2022-08-15
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/half-of-americans-dont-even-know-what-a-mortgage-is/
- Categories: Mortgage News

A new shock poll (I just wanted to utter that phrase) found that half of Americans don’t even know what the word “mortgage” means. The findings are based on a survey of 2,000 Americans on behalf of mortgage lender PrimeLending, conducted by OnePoll. Perhaps more amazingly, 73% of those polled were homeowners, yet many still couldn’t identify the correct definition of a mortgage. Regarding that definition, it was presented as “An agreement between you and a money lender that allows them to take your property if you can’t repay your loan. ” This was the correct choice from a list of other options, which weren’t revealed in the study details. At least I couldn't find them anywhere. Why Do We Call It a Mortgage Anyway? That got me to thinking. Why do we need a special name for a home loan anyway? Why can’t we just call it a home loan? Well, if we did, I’d need a new name for this blog... but we don’t give special names to other types of consumer loans. There isn’t a special French word (uttered by Americans) for auto loan or personal loan. And for those wondering, yes, the word mortgage is of French origin. It essentially means death pledge, in that the loan is terminated when paid in full or repossessed by the lender if not paid as agreed. Perhaps it has to do with the legal aspects of a mortgage and homeownership, which carry big consequences, as noted. You can lose...

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### Top Mortgage Lenders in Virginia

- Published: 2022-08-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-virginia/
- Categories: Mortgage Tips

Now we’ll check out the top mortgage lenders in Virginia, which like many other states, was led by Rocket Mortgage. The nation’s #1 overall mortgage lender had little trouble beating out the rest of the competition in the state of Virginia. This isn’t always the case, but Rocket tends to “win” around 20 states nationally, and the Old Dominion was one of them in 2021. Wells Fargo had been the top lender in the state in 2020, but could only muster third place last year. Read on to see which other mortgage companies did the most business in Virginia. Top Mortgage Lenders in Virginia (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $11. 6 billion 2. Pennymac $9. 3 billion 3. Wells Fargo $8. 6 billion 4. Freedom Mortgage $7. 6 billion 5. Truist Financial $7. 3 billion 6. loanDepot $5. 5 billion 7. UWM $4. 1 billion 8. AmeriHome $4. 1 billion 9. Mr. Cooper $4. 0 billion 10. Navy FCU $3. 8 billion As noted, Rocket Mortgage led the way with $11. 6 billion funded, per HMDA data from business intelligence company Richey May. That was more than enough to beat out second place Pennymac, which originated $9. 3 billion in home loans. Much of Pennymac’s business comes via the correspondent channel, meaning their loan products are resold via smaller banks and credit unions. Interestingly, the company was founded by a handful of ex-Countrywide employees after it went belly up. In third place was former #1...

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### Why Is the Housing Market Cooling? And Should We Worry About a Bubble Bursting?

- Published: 2022-08-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-is-the-housing-market-cooling/
- Categories: Housing Market

The housing market is cooling. There’s really no debate. Things are slowing down. You can mostly thank a doubling in mortgage rates and high home prices for that. However, talks of a more severe housing bubble might be overstated. Sure, it’s easy to compare today to 2007 or 2008, if you don’t take time to dig down into the details. After all, home prices are lofty, the stock market is shaky, and the economy is looking as uncertain as ever. But let’s talk about why things aren’t the same as they were 15 years ago. Yes, Home Prices Are Too High First things first, home prices are too high. Similar to pretty much every other asset, whether it’s a tech stock or bitcoin, home prices overshot the mark. This was arguably driven by the easy money days of the past decade, exacerbated by a pandemic and a frenzy to own real estate, especially in the suburbs and exurbs. For example, everyone wanted lots of space all of a sudden, far from urban centers. This ran counter to the trend of moving into cities and ditching cars for pedestrian-friendly, urban hubs. The reason was COVID-19, which has now mostly abated, making those who purchased in far out places question the decision. Certain cities saw massive inflows, like Boise, Idaho, which are now expected to see the biggest declines. We’ve also had a massive supply/demand imbalance, with far too few homes available to satisfy the appetite of prospective home buyers. Together, this...

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### Top Mortgage Lenders in Colorado

- Published: 2022-08-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-colorado/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Colorado. Interestingly, the top lender in the state isn’t a direct lender or a depository bank. In fact, aspiring home buyers and existing homeowners can’t even work with this company directly. Instead, they’ll need to work with an intermediary to access the loan programs offered by this behemoth of a mortgage company. This company was also the top mortgage lender in the state of Arizona, giving them a strong foothold in the Mountain West region of the United States. Top Mortgage Lenders in Colorado (Overall) Ranking Company Name 2021 Loan Volume 1. UWM $11. 7 billion 2. Rocket Mortgage $9. 5 billion 3. Chase $8. 5 billion 4. Wells Fargo $4. 6 billion 5. U. S. Bank $4. 6 billion 6. Homepoint $4. 5 billion 7. Fairway Independent $4. 2 billion 8. American Financing $4. 1 billion 9. Pennymac $4. 0 billion 10. loanDepot $3. 9 billion As alluded to, the top Colorado mortgage lender last year was actually a wholesale lender that works with mortgage brokers. This runs counter to the more traditional retail lending channel offered by big banks and household lenders like Rocket Mortgage. Yet somehow United Wholesale Mortgage (UWM) managed to beat the competition quite easily with $11. 7 billion in loan origination volume, per HMDA data from Richey May. That was more than enough to take out national #1 overall Rocket Mortgage’s $9. 5 billion, and JPMorgan Chase’s $8. 5 billion. In order to...

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### Top Mortgage Lenders in New York

- Published: 2022-08-08
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-new-york/
- Categories: Mortgage Tips

Now let’s take a look at the top mortgage lenders in New York, based on overall loan volume produced last year. The state of New York is unique in that many of the top lenders are depository banks that actually hold the loans on their books. Or at least offer checking and savings accounts to customers alongside mortgage offerings. This counters the recent rise of nonbanks dominating the mortgage space, which has worried some market watchers. Anyway, topping the list in 2021 (most recent year available) was JPMorgan Chase, which happens to be headquartered in New York City. Top Mortgage Lenders in New York (Overall) Ranking Company Name 2021 Loan Volume 1. Chase $20. 9 billion 2. Wells Fargo $19. 1 billion 3. Rocket Mortgage $11. 2 billion 4. Citibank $9. 1 billion 5. Bank of America $7. 5 billion 6. Citizens Bank $7. 0 billion 7. loanDepot $6. 1 billion 8. UWM $5. 8 billion 9. First Republic Bank $4. 8 billion 10. TD Bank $4. 1 billion Overall, the state of New York accounted for about 4% of the nation's home loan volume in 2021, per HMDA data presented by Richey May. And it’s not often the top mortgage lender in a particular state is also a native of the state, but this happens to be true in the case of New York. Chase grabbed the top spot with $20. 9 billion in home loan origination volume during the year, about 10% of their national total. It was...

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### Mortgage Rate Predictions for the Rest of the Year (2022)

- Published: 2022-08-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rate-predictions-for-the-rest-of-the-year-2022/
- Categories: Mortgage Rates, Mortgage Tips

With all the seesaw movement in the first eight months of 2022, I wanted to throw out some mortgage rate predictions for the rest of the year. Note that these are just my predictions, and subject to being completely wrong. Or with any luck, maybe right, as I’m feeling slightly optimistic. The 30-year fixed averaged 5. 30% in the latest week, per Freddie Mac’s most recent weekly survey. It was down from 5. 54% a week earlier (a large amount over seven days) as the Fed indicated the worst of its own rate rises might be behind us. There’s also talk of a looming (or present) recession, which generally leads to lower interest rates. Mortgage Rates Could Fall Back Into the 4% Range Later This Year While the first half of 2022 was the worst (or one of the worst) on record for mortgage rates, the second half could be pretty good. I say pretty good because it’s hard (basically impossible) to erase all the increases seen during the first six months. After all, 30-year fixed mortgage rates essentially doubled before beginning to fall significantly in the latest week. So it’s going to take a lot, too much really, for rates to return to those levels. And I’m not going to tell you how high rates were in the 1980s versus now! No one cares. All that matters is present day. Now some good news. While there have been some ebbs and flows in 2022, the recent downward movement has...

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### Arvest Central Mortgage Review: the Top Mortgage Lender in the State of Arkansas

- Published: 2022-07-29
- Modified: 2024-10-16
- URL: https://www.thetruthaboutmortgage.com/arvest-central-mortgage-review/
- Categories: Mortgage Tips

If you reside in Arkansas or a nearby state, chances are you’ve heard of Arvest Central Mortgage. Or perhaps you already have a checking or savings account with their parent company Arvest Bank, the oldest in the state. You may have also heard that the bank is owned by the Walton family, which incidentally owns Walmart. If that’s not enough for you, the company happens to be the largest mortgage lender in the state of Arkansas too. So it’s clear they’ve got quite the pedigree. Read on to learn more about them. Arvest Central Mortgage Fast Facts Founded in 1997, headquartered in Little Rock, AR Operated by the largest and oldest bank in Arkansas Parent company owned by the Walton family (of Walmart fame) The #1 mortgage lender in the state of Arkansas (based on HMDA loan volume) Also very active in Oklahoma and Missouri Funded nearly $6 billion in home loans last year Licensed in 45 states and the District of Columbia Arvest Central Mortgage is a direct-to-consumer retail mortgage lender with a network of physical branches in Arkansas, Kansas, Oklahoma, and Missouri. They are a division of Arvest Bank, the oldest and largest bank in the state of Arkansas. As mentioned, they are majority-owned by the Walton family, which also owns mega retailer Walmart. At the moment, they lend in every state nationwide other than Delaware, Rhode Island, Maryland, New Hampshire and New York. Last year, the company funded a solid $5. 6 billion in home loans, with...

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### Top Mortgage Lenders in Washington State

- Published: 2022-07-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-washington-state/
- Categories: Mortgage Tips

If you reside in the Pacific Northwest, you might wonder who the top mortgage lenders in Washington State are. Yes, I’m referring to the state of Washington, not the nation's capital, the District of Columbia. Last year, the Evergreen State accounted for about 4% of all home loans, per HMDA data for 2021. This made it one of the more active of the 50 states, only bettered by the likes of California, Florida, New York, Texas. As to which company did the most home loan lending in the state, it was none other than nonbank Caliber Home Loans. Top Mortgage Lenders in Washington State (Overall) Ranking Company Name 2021 Loan Volume 1. Caliber Home Loans $12. 2 billion 2. Rocket Mortgage $11. 8 billion 3. Wells Fargo $8. 3 billion 4. Chase $8. 0 billion 5. Fairway Independent $7. 1 billion 6. loanDepot $6. 8 billion 7. UWM $6. 3 billion 8. BECU $5. 2 billion 9. Guild Mortgage $4. 9 billion 10. KeyBank $4. 9 billion Caliber Home Loans seems like an unlikely candidate, but still managed to beat out of the rest of competition, even Rocket Mortgage. The Texas-based mortgage lender funded $12. 2 billion in the state of Washington last year, according to HMDA data from Richey May. This was enough to take out the nation’s number one mortgage lender, Rocket Mortgage, which managed only $11. 8 billion. Coming in third place was San Francisco-based depository Wells Fargo with $8. 3 billion in home loan volume. JP...

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### 40-Year Mortgages: Do They Make Any Sense?

- Published: 2022-07-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/do-40-year-mortgages-make-any-sense/
- Categories: Mortgage Tips

Interested in a 40-Year Fixed Mortgage? If you need even more time to pay off your mortgage Or need to get the monthly payment down to boost affordability A 40-year fixed mortgage could be one alternative to consider But they're harder to come by these days and aren't well-suited for everyone Every now and then, I take a look at a specific mortgage product to determine if it could be a good fit for a prospective (or existing) homeowner. Today, we’ll discuss a formerly popular home loan option, the “40-year mortgage. ” It was all the rage during the prior housing boom in the early 2000s. But also partially to blame for the housing crisis that took place shortly after. Still, with mortgage rates now double what they were to start the year, they could make a resurgence. What Is a 40-Year Mortgage? A 40-year mortgage is a home loan with a loan term that lasts for 40 years. This is 10 years longer than the typical 30-year loan term attached to most mortgages. You may already be thinking, “40 years? I thought mortgages had terms of 30 years? ” Is this a mistake? Well, you’d be mostly right. The majority of mortgages issued today do have terms of 30 years. It's certainly the most common loan term out there. In fact, aside from 30-year fixed mortgages, which clearly last for 30 years, as the name implies, most adjustable-rate mortgages also have terms of 30 years, despite lacking any reference...

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### Top Mortgage Lenders in Arizona

- Published: 2022-07-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-arizona/
- Categories: Mortgage Tips

If you’re curious who the top mortgage lenders in Arizona are, you’ve come to the right place. I’ve compiled several top-10 lists for overall volume, home purchase volume, and refinance volume. Interestingly, a wholesale mortgage lender actually topped the overall list in 2021 (the latest year available). That’s impressive given the fact that wholesale lenders only work with mortgage brokers, as opposed to retail lenders that are consumer-facing. Anyway, the lender in question was United Wholesale Mortgage, or UWM for short, with a solid $12. 1 billion. Read on to find out who the other big players were. Top Mortgage Lenders in Arizona (Overall) Ranking Company Name 2021 Loan Volume 1. United Wholesale Mortgage $12. 1 billion 2. Rocket Mortgage $11. 5 billion 3. Chase $6. 6 billion 4. Fairway Independent $6. 3 billion 5. loanDepot $5. 4 billion 6. Wells Fargo $5. 4 billion 7. Nova Home Loans $4. 8 billion 8. U. S. Bank $4. 8 billion 9. Freedom Mortgage $4. 0 billion 10. Pennymac $3. 8 billion As noted, UWM topped the charts in the Copper State with over $12 billion in home loan volume, beating out its crosstown rival Rocket Mortgage, per HMDA data from Richey May. Rocket mustered an also impressive $11. 5 billion in home loan origination volume, beating out third place Chase’s $6. 6 billion quite easily. Also in the top five were Fairway Independent Mortgage with $6. 3 billion, and loanDepot with $5. 4 billion. The rest of the top-10 also consisted...

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### Does Having A Mortgage Help Your Credit Score? Your Mileage May Vary, Here's Why

- Published: 2022-07-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/does-having-a-mortgage-help-your-credit-score/
- Categories: Credit Scores, Mortgage Tips

Mortgage Q&A: "Does Having A Mortgage Help Your Credit Score? " If you’ve ever pulled your credit report and/or viewed your scores, you may have noticed that the lack of a mortgage could actually be holding you back from credit score perfection. Even if you already have a seemingly great credit score, the credit report “notes” could imply that an installment account like a home loan would further improve your scores. But before you run out and get a mortgage, it’s important to point out that the impact may not be substantial, and you certainly shouldn’t take out of a mortgage for the sake of your credit. That would be plain silly. You Can Raise Your Credit Scores By Improving Your Credit Mix So, why would the presence of a mortgage help your credit scores anyway? You’re taking on all that new debt. Doesn't that make you riskier? What gives? Well, aside from the giant pile of new debt, when you take out a mortgage you essentially tell prospective creditors that you’ve made a very serious financial and lifestyle commitment. Yep, you're a grownup now. And most mortgages have loan terms of 30 years, so you’re not going anywhere fast. With a mortgage, you automatically add stability to your credit profile, which is certainly a good thing. On top of that, mortgages also tend to come in very high dollar-amounts, unlike credit cards or auto loans/leases. Instead of getting a $10,000 credit line, you’re probably looking at a six-figure dollar...

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### Top Mortgage Lenders in Texas

- Published: 2022-07-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-in-texas/
- Categories: Mortgage Tips

Today we’ll take a look at the top mortgage lenders in Texas based on their annual production last year. They say everything is bigger in Texas, and that’s true when it comes to their mortgage lending volume relative to 47 other states. Only California and Florida are bigger when the subject is doling out home loans. And they nearly double New York's output. The Lone Star State accounted for about six percent of national home loan volume, originating roughly $375 billion in 2021. Let’s find out who the top lenders were in the state in a few different categories. Top Mortgage Lenders in Texas (Overall) Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $18. 7 billion 2. Chase $15. 5 billion 3. Wells Fargo $13. 8 billion 4. Pennymac $8. 8 billion 5. Freedom Mortgage $8. 7 billion 6. Lakeview Loan Servicing $8. 6 billion 7. United Wholesale Mortgage $8. 4 billion 8. Amerihome Mortgage $7. 9 billion 9. Homepoint $7. 1 billion 10. Fairway Independent $6. 7 billion Yep, Rocket Mortgage did it again, topping the overall rankings in Texas with $18. 7 billion in home loan volume in 2021, per HMDA data from Richey May. They were also number one in the states of California and Florida, so it’s no surprise they took Texas too. The Detroit-based lender, formerly known as Quicken Loans, led the way in about 20 states nationwide. Coming in second was JP Morgan Chase with $15. 5 billion, a strong showing for a...

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### Will Mortgage Rates Hit 7% Next?

- Published: 2022-07-01
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/seven-percent-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

It seems mortgage rates can’t catch a break in 2022, despite a few pullbacks here and there. However, those moments are often short-lived, and met with new highs not long after. The 30-year fixed started the year in the low 3% range, and has since surpassed 6%, depending on the mortgage lender in question. That has led to industry-wide carnage, including thousands of mortgage layoffs, along with sticker shock for prospective home buyers. The question now is a 7% mortgage rate next? Or have we seen the worst of it? Next Stop for Mortgage Rates 7%? While 30-year fixed mortgage rates haven’t officially hit 6%, if you consider Freddie Mac the source, they sure are close. During the last week, the popular loan program averaged 5. 70%, down from 5. 81% a week earlier. Yes, it was an improvement from last week, but even Freddie Mac chief economist Sam Khater referred to it as a “pause” in the survey press release. In other words, it could just be a brief respite before mortgage rates continue marching higher. Similar to a stock market rally in a bear market, which erases itself the next day, mortgage rates have been trending decidedly higher. So even if good news pops up one day, it’s usually absorbed via the broader negative picture within a day or two. Ultimately, it’s hard to get too excited about any sort of mortgage rate rally at the moment, just like it’s hard to look at your stock portfolio or...

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### What Is a Housing Correction?  And Are We In One Now?

- Published: 2022-06-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-a-housing-correction/
- Categories: Housing Market, Mortgage News

Lately, I’ve been hearing a lot about a “housing correction,” which at first glance looks and sounds kind of bad. Not as bad as say a housing crash, but still pretty bad. The most outspoken economist on the subject lately has been Moody’s Mark Zandi, who says we’re officially in a housing correction. But what does that mean exactly? And is it nationwide or only in select markets where home prices have run rampant? Let’s discuss and take a moment to highlight the difference between a correction and a crash. The Definition of a Housing Correction If you’re at all familiar with the stock market, you’ve likely heard the old stock market correction phrase on numerous occasions. It’s actually a pretty easily defined situation where stocks fall by 10% or more, but no more than 20%. And it typically happens when stocks are overbought, aka overpriced. In unison, investors wake up one day and decide it’s time to sell. The market tanks and everyone panics, which likely exacerbates things even more and eventually creates an oversold environment. This in turn creates a buying opportunity for the non-freaked cohort out to purchase securities on the relative cheap. If stocks exhibit losses of more than 20%, it becomes a market crash. Then the future is a little less clear. Assuming it persists, it’s called a “bear market,” opposite a bull market. That is actually what’s happening currently in the U. S. stock market. Similar to home prices, stocks were on a tear...

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### An Easy Way to Save Even More Money with an Adjustable Rate Mortgage

- Published: 2022-06-28
- Modified: 2022-06-28
- URL: https://www.thetruthaboutmortgage.com/how-to-save-money-with-an-adjustable-rate-mortgage/
- Categories: Mortgage Rates, Mortgage Tips

Because mortgage rates have more than doubled lately, interest in adjustable-rate mortgages has taken off. The popular 30-year fixed, which was priced as low as 2. 65% in early 2021, is now closer to 6%! At the same time, alternative loan products like the 5/1 ARM are now pricing at a sizable discount. For example, the 30-year fixed averaged 5. 81% during the past week, per Freddie Mac, while the 5/1 ARM came in at a much lower 4. 41%. That discount can save you a lot of money on your home loan for the first five years. Here’s how to make that discount even more powerful. ARMs Are Back Because They’re Finally Cheap Again As noted, adjustable-rate mortgages are staging a bit of a comeback. They held a nominal share of the overall mortgage market for years. Simply put, they priced the same or very similar to fixed-rate mortgages, so there was virtually no reason to get one. But in the latest week, they accounted for 10. 6% of total home loan applications, per the most recent report from the Mortgage Bankers Association (MBA). While this is still a small share overall, it’s much higher than the paltry 2-3% share ARMs held for many years when fixed-rate mortgages were silly cheap. Of course, times have changed, and fixed-rate mortgages are no longer anywhere close to their record lows. The 30-year fixed is pricing around 6% and could be headed even higher in coming months. This has caused prospective home...

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### Mortgage Rates vs. Recessions: Do They Go Up or Down During Hard Times?

- Published: 2022-06-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-recessions/
- Categories: Mortgage Rates, Mortgage Tips

It’s time for another mortgage match-up, the latest installment “mortgage rates vs. recessions. ” This is a timely post seeing that mortgage rates have gone absolutely bonkers lately and talks of another recession are heating up. The Fed created a very accommodative monetary policy over the past decade via Quantitative Easing (QE), which pushed mortgage rates to record lows. But that (combined with COVID-19 and war-related supply chain issues) eventually triggered troubling inflation, forcing the Fed to act aggressively the other way, which could result in a recession sometime soon. The question is does a recession portend lower mortgage rates, higher mortgage rates, or nothing at all? Mortgage Rates Typically Fall During Recessions First off, a recession is defined as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months,” per the National Bureau of Economic Research (NBER). In simple terms, this means a receding economy as opposed to a growing economy for a sustained period of time. This could be evidenced by a contraction in the gross domestic product (GDP) over consecutive quarters. Basically, consumers curb spending, companies output less product, layoffs happen, and so on. The dynamic shifts from easy money spenders to stingy savers. As noted, the Fed engineered low interest rates via QE. They purchased hundreds of billions in Treasuries and agency mortgage-backed securities (MBS) to boost liquidity and encourage lending. This turned out to be great for the mortgage industry, as interest rates fell to...

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### AnnieMac Mortgage Review: A New Jersey Mortgage Lender Big on Human Touch

- Published: 2022-06-15
- Modified: 2024-11-19
- URL: https://www.thetruthaboutmortgage.com/anniemac-mortgage-review/
- Categories: Mortgage Tips

If you want a more personal home loan experience, take a look at AnnieMac Home Mortgage. The New Jersey-based lender believes the complex mortgage process needs human interaction. Or better yet, deserves it. This defies the en vogue tech-heavy disruptor model, which is built on the premise that humans are no longer required. So if you’re looking for a little more guidance/service during an important life event, they could be worth checking out. The good news is they also offer all the latest tech to complement that human touch. Read on to learn more. AnnieMac Mortgage Fast Facts Retail, direct-to-consumer mortgage lender Founded in 2010, headquartered in Mount Laurel, NJ Employ approximately 1,000 team members over 100 locations nationwide Currently licensed in 47 states and Washington D. C. Funded roughly $5. 4 billion in home loans last year Most active in their home state of New Jersey Also do a lot of business in Florida, Pennsylvania, and Texas Operate a wholesale channel for mortgage broker partners And online mortgage lender LoFi Direct AnnieMac Home Mortgage, a dba of American Neighborhood Mortgage Acceptance Company, LLC, is a retail, direct-to-consumer mortgage lender. They offer both home purchase financing and mortgage refinance loans to customers throughout the United States. The Mount Laurel, New Jersey-based company only got its start back in 2010 but has already grown into a multi-billion-dollar producer. Last year, the lender managed to fund about $5. 4 billion in home loans, with a roughly 60/40 split of home purchase loans...

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### Paying Extra Today Won’t Lower Your Future Monthly Mortgage Payments

- Published: 2022-06-13
- Modified: 2023-09-05
- URL: https://www.thetruthaboutmortgage.com/paying-more-today-wont-lower-future-monthly-mortgage-payments/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Just about everyone with a home loan ponders the idea of paying a little extra, whether it’s via biweekly mortgage payments, or just once a year after receiving a sizable bonus or tax refund. Whatever the method, you should first consider why you’re thinking about paying your mortgage off early as opposed to putting the money elsewhere. This is a particularly important question to ask in the super-low mortgage rate environment we’ve been enjoying for some time. Simply put, mortgage borrowing has been really cheap, and is probably the least expensive debt you've got, so prioritizing it over other debt may not make sense. For example, if you have student loan or credit card debt, it might be more beneficial to pay that off first. A Mortgage Is an Amortizing Loan with Equal Monthly Payments Most mortgages have a set loan term in which they are paid off in full Fully-amortizing payments consist of a principal and interest portion The monthly payment amount typically doesn't change unless it's an ARM But the portion that goes to principal/interest will adjust over time as your loan is paid off Assuming you decide to make extra mortgage payments, whether significantly larger or just a little more than required, your next monthly payment won’t change due to the previous payment. You will still owe what you owed the month before, regardless of your principal balance being smaller. While this might sound unfair, it all has to do with math and the fact that a...

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### The Average Homeowner Now Has $207,000 in Tappable Equity: The Question Is How Do You Tap It?

- Published: 2022-06-06
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/tappable-equity/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

While prospective home buyers continue to grapple with high mortgage rates and limited supply, existing owners are getting richer. A new report from Black Knight revealed that the average American homeowner is sitting on more than $207,000 in tappable equity. The phrase “tappable equity” means an amount that leaves a 20% equity buffer in place, aka 80% loan-to-value (LTV). This is generally what banks and mortgage lenders will allow homeowners to borrow to ensure they have some skin in the game. The question though is how do you tap into that equity, especially in a rising rate environment? Does a Cash Out Refinance Still Make Sense? Mortgage holders withdrew more than $75 billion in the first quarter of 2022 via cash out refinances The cash out refinance share jumped to 75% during Q1 as rate/term refis waned Early Q2 data suggests higher mortgage rates will dampen demand going forward As noted, American homeowners are sitting on a staggering amount of available home equity. At last glance, it was over $11 trillion, or roughly $207,000 per mortgage holder. That figure is up from $127,000 at the start of the pandemic, and more than 2X the levels seen back in 2006 during the prior market height. Here’s the problem though – mortgage rates have also basically doubled since the start of the pandemic, making a refinance a tough sell. Still, cash out refinance volume doubled over the past 12 months, with such loans accounting for 75% of all refinances in the first...

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### Can You Still Get an Adjustable Rate Mortgage?

- Published: 2022-06-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/can-you-still-get-an-adjustable-rate-mortgage/
- Categories: Mortgage News, Mortgage Rates

Yes, adjustable-rate mortgages are still available, even though your lender may have hidden them from you for the past few years. Ultimately, ARMs just didn’t make sense for most homeowners because fixed mortgage rates were at/near record lows. This made the ARM argument a poor one, as there’d be no reason to take on the risk for little to no reward. As such, banks and mortgage lenders rarely touted these seemingly forgotten mortgages. But with the 30-year fixed now priced above 5% for the first time in a decade, ARMs have returned. Do ARM Mortgages Still Exist? Banks and mortgage lenders funded over $600 billion in ARM loans last year They accounted for roughly 10% of all mortgages originated in 2021 The 30-year fixed was the most popular loan choice with a ~70% share But ARMs are set to surge in popularity now that fixed mortgage rates are much higher They sure do, and you’ll be hearing a lot more about them in coming months and years. Why? Because the popular 30-year fixed is no longer on sale. A year ago, it averaged 2. 99%, per Freddie Mac. This week, it was pricing around 5. 09%, while the soon to be in fashion 5/1 ARM came in at a much lower 4. 04%. During the last several years, ARMs like the 5/1 were priced higher than their fixed-rate counterparts, making them totally useless. But the spread has normalized and widened in recent months as fixed-rate mortgages have surged in price....

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### Flat Branch Home Loans Review: Over 1,000 Years of Mortgage Experience

- Published: 2022-06-01
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/flat-branch-home-loans-review/
- Categories: Mortgage Tips

If you’re looking for a home purchase lending expert in the Midwest, you may want to check out “Flat Branch Home Loans. ” The Columbia, MO-based company is the #1 home purchase lender in the state, beating out the very biggest names in the industry. They’re also the top USDA lender in the states of Missouri, Kansas, and Illinois, as well the eighth largest nationwide. That’s pretty impressive, and could be directly related to their 1,000+ years of combined mortgage experience. So if you’re a prospective home buyer looking for a little extra guidance, they could be a good fit. Flat Branch Home Loans Fast Facts Employee-owned, direct-to-consumer mortgage lender Offers home purchase loans and mortgage refinances Founded in 2005, headquartered in Columbia, MO Funded about $3. 75 billion in home loans last year #1 retail home purchase lender in the state of Missouri Roughly two-thirds of overall business comes from home state Also very active in Illinois, Kansas, and Oklahoma Currently licensed in 30 states nationwide Flat Branch Home Loans is an employee-owned, direct-to-consumer retail mortgage lender located in Columbia, Missouri. They were founded by current president Jim Yankee in 2005, and have since grown to a 700-employee strong company. Their claim to fame is being #1 home purchase lender in the state of Missouri, as well as a big-time USDA loan lender. This makes it obvious that they’re a solid choice for home buyers, though they also do a good deal of mortgage refinancing as well. Last year,...

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### NJ Lenders Corp. Review: The 5th Largest Mortgage Lender in the State of New Jersey

- Published: 2022-05-26
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/nj-lenders-corp-review/
- Categories: Mortgage Tips

With a name like "NJ Lenders Corp. ," there’s no question who they’re focused on; folks in the Garden State! What’s more interesting is the fact that something like 70% of their mortgage loans are derived from previous customer referrals. In other words, they constantly get recommended by friends and neighbors, instead of having to rely solely upon advertising. And when you focus so heavily on one geographical area, you definitely want to get it right. So far, they seem to be accomplishing their goals, as evidenced by their thousands of 5-star reviews. Read on to learn more. NJ Lenders Corp. Fast Facts Retail, direct-to-consumer mortgage lender Offers home purchase loans and refinances Founded in 1991, headquartered in Little Falls, NJ Funded roughly $5. 5 billion in home loans last year More than 80% of business done in home state of New Jersey Also active in New York, Massachusetts, and Florida Currently licensed in 14 states and the District of Columbia NJ Lenders Corp. is a direct-to-consumer mortgage lender with branches in three states, mostly located in New Jersey. They got their start way back in 1991, which if you’re not keeping track is more than 30 years ago. Since that time, they’ve grown from a modest single office into a multi-billion-dollar mortgage originator. They’ve closed more than 100,000 mortgage loans, with loan volume exceeding $40 billion. Last year, they funded a solid $5. 5 billion in home loans, which was probably their biggest annual production on record. Business was...

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### Summit Mortgage Review: If You Want More Than a Call Center Home Loan

- Published: 2022-05-23
- Modified: 2024-10-16
- URL: https://www.thetruthaboutmortgage.com/summit-mortgage-review/
- Categories: Mortgage Tips

If you’re looking for personalized service, instead of a call-center home loan, you might want to check out Summit Mortgage. The privately-owned direct lender was started by husband and wife loan originators Diana and Robert Carter way back in 1992. The goal was to create a business from an originator’s point-of-view, focused on providing an “unparalleled homebuying experience. ” That meant identifying the traditional pain points of getting a home loan and taking steps to avoid them. After all, buying a home is supposed to be an exciting moment, one they believe shouldn’t be overshadowed by a miserable mortgage experience. Summit Mortgage Fast Facts Direct-to-consumer mortgage lender Offers home purchase loans and mortgage refinancing Founded in 1992, headquartered in Plymouth, MN Licensed to do business in 17 states Funded more than $6 billion in home loans last year About two-thirds of last year’s volume was home Summit Mortgage Corp. is a direct-to-consumer mortgage lender that offers home purchase financing and mortgage refinances. The Plymouth, Minnesota-based company got its start way back in 1992, making them one of the older lenders in existence. Last year, they produced more than $6 billion in home loans, with a 67% home purchase share and 33% refinance share. This tells me they have strong relationships with local real estate agents, and the ability to close loans on time. Summit Mortgage is a big-time mortgage lender in their home state of Minnesota, which accounts for about 40% of total production. In fact, they ranked 6th there...

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### What Does It Mean to Be House Poor?

- Published: 2022-05-23
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/what-does-it-mean-to-be-house-poor/
- Categories: Home Buying, Housing Market, Mortgage Tips

If you’re an existing homeowner or an aspiring one, you may have heard the phrase “house poor,” typically uttered by an overextended borrower. It may also serve as a warning to a first-time home buyer from a seasoned homeowner, especially right now with home prices so high. The Definition of House Poor Buying too much house for your budget Even if you technically make enough money to afford it Because a substantial portion of your paycheck goes toward the mortgage each month And other monthly housing expenses like utilities, maintenance, repairs, etc. First, let’s define what it means to be house poor. At first glance, it might sound like someone who lives in a small or meager dwelling, but this isn’t the case. It’s actually quite the opposite – someone who is house poor has likely bitten off more than they can chew, and is spending too much of their income on housing payments. This means they could have purchased a McMansion and don’t have much left over for other recurring costs, or even everyday expenses. It could also mean that they took out a mortgage that was too large for their salary, even if the property is more modest. It’s really dictated by a borrower’s ability to make housing payments each month, not necessarily the grandeur of the home, as budgets will vary by financial situation. For example, a really wealthy individual could buy a multi-million dollar home, but struggle to make mortgage payments because their lifestyle is too...

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### Top Mortgage Lenders by Volume in 2021: Rocket Zooms Highest Once Again with $100 Billion Gap

- Published: 2022-05-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-2021/
- Categories: Mortgage News

Now that the Home Mortgage Disclosure Act (HMDA) data is out, we can check out the top mortgage lenders of 2021. As you may have guessed, Rocket Mortgage took the top spot yet again, beating out its long-time adversary Wells Fargo. Coming in third was Rocket’s crosstown rival United Wholesale Mortgage, which also secured the third position in 2020. Chase remained in 4th for 2021, as it did in 2020, while loanDepot usurped Freedom Mortgage to take fifth. Collectively, residential mortgage lenders had a banner year with more than $4 trillion in loan volume last year. Top Mortgage Lenders Overall in 2021 Ranking Company Name 2021 Loan Volume 1. Rocket Mortgage $342. 7 billion 2. Wells Fargo $228. 6 billion 3. United Wholesale Mortgage $227 billion 4. Chase $205 billion 5. loanDepot $136. 7 billion 6. Pennymac $124. 7 billion 7. U. S. Bank $115. 6 billion 8. Freedom Mortgage $113. 1 billion 9. Homepoint $96. 2 billion 10. Newrez $92. 9 billion Rocket Mortgage mustered a staggering $342. 7 billion in loan volume last year, up from roughly $314 billion a year earlier, per data deconstructed by Richey May. Once again, it was more than enough to hold off depository bank Wells Fargo, which could only come up with $228. 6 billion. The San Francisco-based bank actually saw its production fall year-over-year from $267 billion. But it was just enough to hold off United Wholesale Mortgage ($227B), which works exclusively with mortgage brokers via the wholesale lending channel. Chase...

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### Top USDA Lenders in 2021: Pennymac Blew Away the Competition

- Published: 2022-05-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-usda-lenders/
- Categories: Mortgage News

Today we’ll take a look at the top USDA lenders by loan volume in 2021. In case you need a refresher, USDA loans are reserved for properties located in rural parts of the United States. They are one of the four major home loan types, which includes conventional loans, FHA loans, and VA loans. The mortgage companies on the list below managed to originate more rural home loans than the rest of their peers. While not a huge market relative to the other types of mortgages mentioned, banks and lenders still funded more than $33 billion worth of USDA loans last year. Top USDA Lenders in 2021 Ranking Company Name 2021 Loan Volume 1. Pennymac $5. 4 billion 2. CMG Mortgage $1. 2 billion 3. Newrez $893 million 4. Freedom Mortgage $880 million 5. Planet Home Lending $846 million 6. Fairway Indpt. Mortgage $641 million 7. Caliber Home Loans $575 million 8. U. S. Bank $568 million 9. Amerihome Mortgage $567 million 10. Homepoint $525 million The lenders above beat out about 1,100 other mortgage companies to earn the distinction of top-10 USDA lender, per data parsed by Richey May. The number one spot easily went to Pennymac, which is a big correspondent lender. That means their product may be resold via smaller local banks and credit unions. Still, their $5. 4 billion in USDA loan volume was well above their closest competitor, CMG Financial, which mustered just $1. 2 billion. For the record, Pennymac was also the top FHA...

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### Top FHA Lenders: Pennymac Is #1 Overall, But Is Biggest the Best?

- Published: 2022-05-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/top-fha-lenders/
- Categories: Mortgage Tips

If you’re in need of an FHA loan, you might be curious who the top FHA lenders are. By top, I mean largest. While biggest certainly doesn’t mean best, or cheapest for that matter, it can helpful to know the major players. If nothing else, these companies should at least have a good understanding of the process and a decent track record of closing such loans. This can be especially important if you’re purchasing a home and need a competent lender that will actually get you to the finish line. However, the smaller shops (and even mortgage brokers) could be a perfectly viable option as well, assuming they’re well-versed in FHA lending. Top FHA Loan Lenders (Overall) Ranking Company Name 2021 Loan Volume 1. Pennymac $32. 3 billion 2. Freedom Mortgage $32. 0 billion 3. Rocket Mortgage $27. 8 billion 4. Lakeview Loan Servicing $20. 9 billion 5. Caliber Home Loans $12. 9 billion 6. Newrez $12. 1 billion 7. Amerihome Mortgage $11. 9 billion 8. United Wholesale Mortgage $11. 6 billion 9. Nationstar Mortgage $11. 1 billion 10. U. S. Bank $10. 8 billion Last year, nearly a half-trillion ($475 billion) in FHA loans were originated by a couple thousand banks, credit unions, and independent mortgage lenders. But some companies did a lot more volume than others and dominated the FHA lending space. That brings us to the top-10 list, which is based on HMDA data for 2021 compiled by advisory firm Richey May. The number one spot for...

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### Why You Might Not Want to Get Too Excited (or Nervous) About a Housing Crash

- Published: 2022-05-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-you-might-not-want-to-get-too-excited-or-nervous-about-a-housing-crash/
- Categories: Housing Market, Mortgage News, Mortgage Rates

As mortgage rates continue their ascent toward 6%, more and more folks are talking housing market crash. But high interest rates aren’t really a catalyst for a crash, especially if the high rates aren’t really high. Emphasis on “real,” as in inflation-adjusted. Everything has gone up in price, and wages should also be rising. This means a higher mortgage rate isn’t even a roadblock, or really as bad as it seems. And because rates remain historically low, once you factor inflation, they could still be seen as a screaming deal. High Mortgage Rates Don’t Crash Housing Markets I’ve said it countless times, and I’ll repeat it again. Higher mortgage rates don’t automatically lower home prices. Or lower them at all. If one goes up, the other doesn’t go down. And vice versa. It’s possible both can move in tandem, or opposite one another, based on many other factors. So those who have been watching 30-year fixed mortgage rates absolutely surge from below 3% to nearly 6% must be beside themselves. How could home prices not fall, or at the very least, not continue to rise? This makes no sense. Why would home buyers continue to pay such outrageous prices now that interest rates aren't at record lows? Part of the answer is they want/need shelter, so they’re willing to pay “top dollar” for it. Another reason is it’s still not that expensive once you factor in inflation and growing wages for these home buyers. The other key factor continues to...

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### Sometimes It’s Actually Better to Choose the Higher Mortgage Rate

> It might not make sense (or save you money) to choose a promotional mortgage rate, such as 2.99%. Learn why.

- Published: 2022-05-04
- Modified: 2022-05-04
- URL: https://www.thetruthaboutmortgage.com/sometimes-its-better-to-choose-the-higher-mortgage-rate/
- Categories: Mortgage Rates, Mortgage Tips

With mortgage rates hovering around 5. 5%, there might be the temptation to snag a 30-year fixed at say 4. 875%, or 4. 99% if a lender offers a promotional rate. The same might be true of any home loan product, whether it’s a 5/1 ARM or 15-year fixed. Getting a rate just below a whole number. After all, 4. 99% sounds a lot better than 5. 5%, and makes it feel like you're still receiving something special. But here’s the thing – a rate just below a key threshold may cost a lot more, and not actually deliver the savings you're looking for. It could do little more than make you feel good psychologically, without saving you much money. Or any money at all. A 4. 99% 30-Year Fixed Sounds Pretty Good, Doesn't It? This week, the 30-year fixed rose to 5. 10%, per the latest Freddie Mac survey. In reality, it's closer to 5. 5% at a lot of banks and lenders. And it doesn’t appear to be going down anytime soon. As it stands, we’re only about 50 basis points away from hitting that scary 6% mark, which hasn't been seen since 2008. Meanwhile, rates on the 15-year fixed mortgage are averaging roughly 4. 40%, well above their recent levels around 2%. Because we’re so close to some big psychological thresholds, mortgage lenders might start offering rates below these key levels to entice borrowers. Or to simply make it seem like there are still some decent interest...

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### Are Home Prices Falling? The Devil Is in the Details

- Published: 2022-04-25
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-home-prices-falling/
- Categories: Housing Market, Mortgage News

How’s this for a dramatic headline: “Home prices are falling! ” But before you get too excited, assuming you’re a prospective home buyer, there are some strings. What was almost unthinkable a month or two ago is now apparently becoming reality. A new analysis from Realtor. com found that asking prices are actually down year-over-year in several large metropolitan areas nationwide. Does this mean the seller’s market is finally coming to an end, driven by markedly higher mortgage rates? Let’s find out. Where Home Prices Are Down the Most The Realtor. com data team analyzed year-over-year median list prices in the 100 largest metros nationwide in the month of March. They then limited their list to just one metro per state as a means to ensuring “geographic diversity. ” The result is a top-10 list of metros “where home prices are falling the most. ” The list is as follows: 1. Toledo, Ohio (-18. 7%) 2. Rochester, New York (-17%) 3. Detroit, Michigan (-15. 4%) 4. Pittsburgh, Pennsylvania (-13. 7%) 5. Springfield, Massachusetts (-5. 8%) 6. Tulsa, Oklahoma (-5%) 7. Los Angeles, California (-5%) 8. Memphis, Tennessee (-4. 6%) 9. Chicago, Illinois (-3. 7%) 10. Richmond, Virginia (-3. 4%) As you can see, there is quite a range in listing price drops among the top ten, with a high of -18. 7% in hard-hit Toledo, to a mere 3. 4% drop in Richmond, VA. So what exactly is going on here? Weren’t home prices expected to keep rising, despite significantly...

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### 10-Year Mortgages vs. the 30-Year Fixed: Are They Worth the Small Discount?

- Published: 2022-04-20
- Modified: 2025-03-31
- URL: https://www.thetruthaboutmortgage.com/30-year-vs-10-year-mortgages/
- Categories: Mortgage Matchups

It’s time for another mortgage match-up folks. Today, we’ll look at 10-year mortgages versus the 30-year fixed mortgage to see how these home loans stack up against one another. My guess is the more 30-year fixed mortgage rates rise, the more consumers will be looking into alternative loan products like these. But before we get started, it’s important to note that there are two very different types of 10-year mortgages out there. One is a fixed-rate mortgage that is paid off in just a decade, and the other is an adjustable-rate mortgage, which takes three full decades to pay off. So clearly you need to pay real close attention here to ensure you know what you're getting yourself into. Two Very Different Types of 10-Year Mortgages There are two types of 10-year mortgages available to homeowners today The 10-year ARM (it's fixed for the first 10 years and adjustable for the remaining 20 years of the loan term) And the 10-year fixed-rate mortgage (it features a fixed interest rate for the entire 10-year loan term) Be sure you know what you're actually getting when comparing loan programs There are 10-year fixed mortgages, which have a mortgage term of 10 years. Yep, just a decade and they are paid off in full. Then there are 10-year adjustable-rate mortgages, which have a term of 30 years. Huge difference for a number of reasons. The first type of mortgage is pretty straightforward. It’s similar to a 30-year or 15-year fixed mortgage, only shorter....

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### Now That We’ve Got 5% Mortgage Rates, Is the Seller’s Market Finally Over?

- Published: 2022-04-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/now-that-weve-got-5-mortgage-rates-is-the-sellers-market-finally-over/
- Categories: Housing Market, Mortgage Rates

We’ve got 5% mortgage rates and record high home prices. Does this mean the seller’s market is finally over? You would think so, given the massive increase in monthly housing payments since last year. And the fact that the 30-year fixed now averages 5%, well above the sub-3% range seen six months ago. Surely it’s time for home buyers to receive some concessions (literally and figuratively) in this overheated housing market? Well, despite all that, it appears the housing market is still chugging along just fine, though some new trends are emerging. It’s Never Been More Expensive to Buy a Home as Payments Increase 35% From Last Year A new blog post from Redfin revealed that the median home sale price increased 17% year-over-year to a record high of $389,178 during the four-week period ending April 10th, 2022. At the same time, the median asking price of newly-listed properties jumped 14% year-over-year to $397,747. This is despite the fact that current 30-year fixed-rate mortgage rates are averaging 5%, up from 3. 04% during the same period in 2021. The typical home buyer’s monthly payment is now up 35% from a year ago to an all-time high of $2,288. You’d think home sellers would need to take this into account and stop being so greedy, but so far it’s mostly business as usual. In fact, 58% of homes under contract received an accepted offer within the first two weeks on the market, an all-time high (and up from 55% a year...

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### 7/1 ARM vs. 30-Year Fixed Mortgage: Pros, Cons, and How Much Cheaper Are They?

- Published: 2022-04-13
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/30-year-fixed-vs-7-year-arm/
- Categories: Mortgage Matchups, Mortgage Tips

When shopping for a mortgage, it's very important to pick a suitable loan product for your unique situation. Lately, I've been discussing loan programs beyond the 30-year fixed, now that interest rates on fixed-rate mortgages are no longer favorable. Today, we'll compare two popular loan programs, the “30-year fixed mortgage vs. the 7-year ARM. ” Everyone is familiar with the traditional 30-year fixed – it's a home loan with a 30-year duration and an interest rate that never adjusts the entire loan term. Pretty simple, right? But what about the 7-year ARM, or more specifically, the 7/1 ARM? It's an adjustable-rate mortgage and a fixed-rate mortgage, all rolled into one. Sounds a little bit more complicated... Key Facts About 7-Year ARMs Hybrid home loans that are fixed for 7 years and adjustable for the remaining 23 years Offers an interest rate discount for the risk of future (higher) rate adjustments 7/1 ARM is fixed for seven years and annually adjustable thereafter 7/6 ARM is fixed for seven years and adjusts every six months thereafter Pay attention to the difference in rate to determine if it's worth it vs. a 30-year fixed Plan for the worst seven years from date of loan funding (if rates jump) How the 7/1 ARM Works You get a fixed interest rate for the first seven years of the loan After that the rate becomes annually adjustable for the remaining 23 years of the 30-year loan term Many borrowers don't keep their mortgage/home that long so...

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### Is an Adjustable-Rate Mortgage a Good Short-Term Strategy Until Interest Rates Cool Off?

- Published: 2022-04-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/is-an-adjustable-rate-mortgage-a-good-short-term-strategy-until-interest-rates-cool-off/
- Categories: Mortgage Rates, Mortgage Tips

We know mortgage rates are projected to keep rising, so what’s a cost-effective solution if you need a home loan today? Well, one idea is to look beyond the popular 30-year fixed, which is no longer a screaming bargain. For the past several years, fixed-rate mortgages were often priced the same or even lower than adjustable-rate mortgages. That was somewhat odd, but a product of the Fed buying up billions in mortgage-backed securities tied to 30-year and 15-year fixed-rate maturities. Now that the Fed is done with that, we’ve got a level playing field again, which means an ARM could be worth another look. A 6% 30-Year Fixed Could Be in the Cards This Summer First things first, there’s a lot of upward pressure on the 30-year fixed right now. Despite interest rates already rising from below 3% to 5% in a matter of three months, they could go even higher. The expectation is that the Fed is going to keep aggressively raising its target fed funds rate, which could translate to higher interest rates for consumer loans like mortgages. This could go on for some time as a means to control inflation and cool down an overheated economy. Simply put, mortgage rates could get worse before they get better. But I do expect them to get better within a reasonable timeframe, which I why I recently argued that they could be close to peaking. However, we may still face higher rates through the summer, which is why an ARM...

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### Allow Me to Introduce You to the 5% Mortgage Rate

- Published: 2022-04-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/allow-me-to-introduce-you-to-the-5-mortgage-rate/
- Categories: Mortgage News, Mortgage Rates

For those new to mortgages, the number five might feel a bit foreign. Over the past decade and even longer, rates on the popular 30-year fixed mortgage have always been in the 2-4% range. We were spoiled. Recently though, mortgage rates have jumped due to a variety of factors, including a strong economy, surging inflation, and the end of an accommodative monetary policy. The latest setback is a very aggressive Fed, which has indicated a faster reduction in its bond and mortgage-backed securities (MBS) holdings. We mostly knew that was coming, but not necessarily at the extreme pace signaled in Federal Reserve Governor Lael Brainard's comments. Why Are Mortgage Rates Going Up So Much? Mortgage rates were engineered lower via the Fed's QE monetary policy They purchased billions in agency-backed mortgage-backed securities over recent years The associated interest rates fell significantly, but also greatly increased the money supply, leading to worrisome inflation The Fed has finally acknowledged the need to end this accommodative policy, which is spiking interest rates Since 2008, the Federal Reserve has been buying mortgage-backed securities (MBS) in an effort to lower mortgage rates. It worked, brilliantly, leading to record low mortgage rates never before seen in our lifetimes. During early 2021, the 30-year fixed fell to its lowest level on record, an absurdly cheap 2. 65%, per Freddie Mac. The 15-year fixed also hit an all-time low of 2. 10% during the week ended July 29th, 2021. The good times rolled and mortgage lenders enjoyed record...

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### Have Mortgage Rates Peaked?

- Published: 2022-04-04
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/have-mortgage-rates-peaked/
- Categories: Mortgage Rates, Mortgage Tips

Two weeks ago, I wrote about how mortgage rates jumped, something just about everyone is aware of. But I also attempted to quantify the actual impact in terms of monthly mortgage payment. For the typical home, the principal and interest payment went up about 20%, or $230 per month. Not great news, but not necessarily a deal breaker for well qualified home buyers. The question now is have mortgage rates peaked, or is the worst yet to come? Mortgage Rates Have Rarely Moved This Much Higher, This Fast Drawing on another prior post, I said the cure to high mortgage rates might be high mortgage rates. In other words, the higher they go, the harder it is for them to keep moving higher. And if they go really high, in a short span of time, they might overshoot the mark, and fall back down to earth. This is similar to stock market moves, where the market itself or select securities become oversold, or overbought. Then prices usually rise or fall to reach an equilibrium that traders and the market seem to demand. In the case of mortgage rates, this falling back down to earth moment has yet to happen, but it could be in the cards. After all, rates have moved about 1. 50% higher since the beginning of 2022, a mostly unprecedented event. It’s actually only happened five times since mortgage rate tracking began in the 1970s. And Freddie Mac deputy chief economist Len Kiefer charted those prior movements....

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### Are We Near the Peak of the Current Housing Cycle?

- Published: 2022-03-31
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-we-near-the-peak-of-the-current-housing-cycle/
- Categories: Housing Market, Mortgage News

They say real estate is cyclical, much like the stock market and the wider economy. It ebbs and flows, goes up and down, experiences booms and busts, can make us feel rich one day and poor the next. It doesn’t follow a straight line up or down over time – instead, it can be rather erratic, thanks to, well, us. We speculate, we get emotional, we create all sorts of creative financing to keep the party going, even if it doesn’t fundamentally “make sense. ” And it seems now the state of the housing market is being seriously questioned. So, are we finally peaking? Housing Bubble Chatter Seems Positively Correlated with Higher Mortgage Rates While I continue to argue that home prices and mortgage rates can be negatively correlated, it seems housing bubble fears and higher interest rates share a positive correlation. In other words, with mortgage rates surging, housing bubble anxiety is also beginning to surface just about everywhere. It’s not just a quiet side conversation anymore. Instead, you’re seeing it in the headlines daily, and even the Dallas Fed is weighing in. The researchers and economists at the Federal Reserve Bank of Dallas released a new blog post titled, “Real-Time Market Monitoring Finds Signs of Brewing U. S. Housing Bubble. ” In it, they argue that housing “is in the primary expansionary phase of a bubble when price rises are out of step with market fundamentals. ” But they stop short of calling it a “bubble,” noting that...

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### Are the Housing Bears Being Too Rational?

- Published: 2022-03-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-the-housing-bears-being-too-rational/
- Categories: Housing Market, Mortgage News

Now that 30-year fixed mortgage rates are flirting with 5%, there’s been quite the uptick in housing bubble chatter. The basic reasoning is because interest rates are higher, the balloon that is inflated home prices must certainly pop. On the surface, it’s a seemingly logical argument. The financing cost of a home purchase has gone up substantially, so the price should come down. But the cost of just about everything has gone up, and we’re still buying it, whether it’s bread, toothpaste, toilet paper, gas, you name it. Because we want and need it, similar to shelter! Here I attempt to argue why the rates up, prices down theory might not be correct. And why we could be rushing the eventual downturn. Do Higher Mortgage Rates Really Lower Home Prices? I’ve already written an entire article on the supposed negative correlation between mortgage rates and home prices. But to revisit, the simple argument is that if one goes down the other goes up. And vice versa. For example, if interest rates go up (the cost of financing a home purchase), property values must go down to compensate. In essence, nothing changes, the net price stays the same? You get a lower mortgage rate but a higher home price. A higher mortgage rate but a lower home price? The cost of housing just stays constant no matter what? Once you start to look beyond this apparent obvious correlation, it seems to make a lot less sense, at least to me. My...

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### Figure's Crypto Mortgage: Purchase a Home with Nothing Down While You Continue to HODL

- Published: 2022-03-24
- Modified: 2024-05-23
- URL: https://www.thetruthaboutmortgage.com/figure-crypto-mortgage-review/
- Categories: Mortgage News

For the individual who eschews fiat currency, but still needs a mortgage, look no further than Figure. The company originally came onto the scene by offering a unique HELOC that came with a fixed interest rate. Later, they expanded to mortgage refinances, and in the summer of 2021 announced a merger with Homebridge Financial Services. Now they appear focused on being pioneers of so-called “crypto mortgages,” which as the name suggests are backed by cryptocurrencies like Bitcoin and Ethereum. They’ve got two new products to choose from, both of which allow you to keep your crypto holdings while purchasing a home. Figure’s Crypto Mortgage Their flagship product is known as “Crypto Mortgage,” a unique home loan that lets you borrow against your crypto holdings to purchase a home. Figure allows you to borrow up to 100% of the home price using up to 100% of your available crypto holdings. This is akin to a mortgage lender letting you buy a home with no money down, aka 100% loan-to-value (LTV). The difference is that you pledge your assets as collateral for the loan, and the property also backs it. What makes it even more special is you can take out a loan amount for up to $20 million. So if you’ve got lots of bitcoin, you’re in luck. For the record, the minimum loan amount is $75,000. They say the underwriting is “limited,” and also note that there is no need to sell your crypto, which could trigger a taxable event....

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### Diamond Residential Mortgage Review: No Borrower Is Left Behind Thanks to Their Endless Menu of Loan Programs

- Published: 2022-03-23
- Modified: 2024-07-24
- URL: https://www.thetruthaboutmortgage.com/diamond-residential-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out “Diamond Residential Mortgage Corp. ,” a Midwest mortgage lender that’s named after its founder, not the precious gem. The company is relatively young, having been founded in 2009, but is already a billion-dollar per year originator. What stands out about them is their wide array of available loan programs, including ITIN mortgages, bank statement loans, and reverse mortgages. So if you’re in need of some creative home loan financing, they could be a good alternative to a big bank or household name. And they’ve got stellar reviews from thousands of past customers, meaning you should be in good hands whether you need a plain vanilla mortgage or something less conventional. Diamond Residential Mortgage Fast Facts A Midwestern-based mortgage banker Offers home purchase loans, refinances, and reverse mortgages Founded in 2009, headquartered in Lake Forest, Illinois Currently licensed to do business in 19 states 30 branch locations throughout the United States Funded roughly $1. 2 billion in home loans last year Most active in the states of Illinois and Indiana Diamond Residential Mortgage Corp. describes itself as a Midwestern-based mortgage banker that offers a wide range of solutions not typically available at local banks. They believe everyone deserves to be a homeowner, and are committed to serving the underserved via their many unique loan offerings. The company is headquartered in Lake Forest, Illinois and was founded in 2009 by mortgage veteran Paul Diamond, who has been in the business for over 35 years. DRMC prides itself on...

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### 5/1 ARM vs. 30-Year Fixed: What's the Better Choice and Why?

> A 5/1 ARM can save you a lot of money versus the more expensive 30-year fixed. Learn how and if it could be a good fit for your situation.

- Published: 2022-03-23
- Modified: 2025-03-19
- URL: https://www.thetruthaboutmortgage.com/30-year-fixed-vs-51-arm/
- Categories: Mortgage Matchups

Now that mortgage rates have jumped, it might be time to consider alternatives to the 30-year fixed, such as the once-popular "5/1 ARM. " Everyone has heard of the 30-year fixed-rate mortgage – it’s far and away the most popular type of mortgage loan out there. Why? Because it's the easiest to understand and presents no risk of adjusting during the entire loan term. It's also fairly cheap, or was... It's basically the default home loan option whenever mortgage lenders advertise interest rates, and the pre-selected option when using a mortgage calculator. But what about the 5/1 ARM? What the heck is that slash doing there! ? While it might looks confusing, it's actually pretty straightforward. And can save you money! 5-Year ARM Quick Facts An adjustable-rate mortgage with a fixed interest rate for the first five years Interest rate is variable for the remaining 25 years (features a 30-year loan term) After five years rate can adjust higher based on index + margin (fully-indexed rate) 5/1 ARM means it can adjust once annually beginning in year six 5/6 ARM means it can adjust twice each year starting in year six Rate caps are in place to limit movement but payments could still become unaffordable 5/1 ARM vs. 30-Year Fixed: An Illustration Jump to 5/1 ARM topics: - 5/1 ARM Mortgage Rates - 5/1 ARM Example - 5/1 ARMs Will Likely Adjust Higher - Is a 5/1 ARM a Good Idea? - Pros and Cons of 5/1 ARMs - There's...

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### Mortgage Rates Have Jumped. Just How Bad Is It?

- Published: 2022-03-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-have-jumped-just-how-bad-is-it/
- Categories: Mortgage News, Mortgage Rates

In a word, bad. At least in terms of historic interest rate moves, which have rarely rivaled the massive increases we’ve seen in such a short span. But you have to consider context as well, such as the starting point for mortgage rates before this recent spike higher (near all-time lows). Along with how impactful the increase in monthly payment will be for home buyers and those looking to refinance. One should also consider that just about everything is going up in price (or already has), and that the U. S. dollar isn’t what it was once. Taken together, it may not be all that horrible, though it does depend on individual circumstances, and for home buyers, is clearly another piece of unwelcome news. Let’s Compare Monthly Payments on a Typically Priced Home The typical home is valued at about $332,000, per the Zillow Home Value Index, a 20. 3% increase from a year ago. Meanwhile, the average 30-year fixed mortgage rate is pricing around 4. 75% for vanilla scenarios, aka those with excellent credit, a 20% down payment, and so on. At the start of 2022, the 30-year fixed was priced closer to 3. 25%, so the move higher has been substantial. No one can debate that. But let’s look at how it might affect the average home buyer’s pocketbook, instead of simply freaking out at the difference in rate. We’ll assume our hypothetical home buyer purchases a property for $332,000 and puts down 20%. That leaves them with...

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### Nation’s Largest Wholesale Lender Now Offering Bank Statement Loans

- Published: 2022-03-17
- Modified: 2022-03-24
- URL: https://www.thetruthaboutmortgage.com/uwm-bank-statement-loans/
- Categories: Mortgage News

What year is it? 2006? The nation’s largest wholesale mortgage lender, United Wholesale Mortgage, has just announced the availability of bank statement loans. Does this mean we’re headed down a familiar road of credit loosening, and a subsequent housing crash? At first glance, it’s reminiscent of the easy lending days seen in the early 2000s, though upon closer inspection it might not be. But the timing certainly is interesting, seeing that mortgage rates have surged higher, weighing on lenders’ ability to keep up production. Read on to learn more about what this new stated income loan program is and is not. How Bank Statement Loans Used to Work Before we get into all the details on UWM’s program, we need some context. Back in the day, bank statement loans, or stated income loans, were developed to help home buyers like doctors and business owners more easily navigate the loan process. Instead of requiring them to provide complicated tax returns, banks and lenders were OK with applicants simply stating their income and providing supporting asset documentation. Of course, that proved to be a slippery slope because before long, such programs were available to anyone, even those who simply claimed they did X for a living and made Y. This gave them the rather notorious nickname of “liar’s loan,” as they allowed for quite a bit of freedom in terms of well, honesty. The widespread use of stated income loans in the early 2000s led to the worst housing crisis in modern...

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### Is the Best Cure for High Mortgage Rates, High Mortgage Rates?

- Published: 2022-03-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/is-the-best-cure-for-high-mortgage-rates-high-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

There’s an old adage in the commodities market that says, “the best cure for high prices is, high prices. ” No, it’s not a typo. The logic is basically that an elevated price over time will naturally lead to a decrease in demand. And as we all know, if demand for something falls, prices must come down, otherwise you risk an oversupply. Since the beginning of 2022, mortgage rates have surged to levels not seen since 2019, which as I’ve argued are basically a commodity because they’re not much different from one another. So, is it time for mortgage rates to come down simply because they’ve been up for so long? What Goes Up Must Eventually Come Down, Right? The year 2022 might as well be known as the mortgage rate reckoning. After pundits wrongly predicted rates would rise in 2019, 2020, and 2021, they finally did! And let’s just say they’ve made up for lost time. The popular 30-year fixed ended 2021 at an average of 3. 11%, per Freddie Mac. Today, you would be lucky to get your hands on a 30-year fixed mortgage rate at 4. 5%. Yes, in less than three months, interest rates have basically gone up 50%. Perhaps that’s exactly what they need to finally reverse course though. When a price rises so much, so quickly, it’s surely due for a relief rally, right? Well, I’ve been thinking that for a while, but it’s yet to materialize. While there have been some pullbacks, they’ve...

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### Sun West Mortgage Review: Near Instantaneous Underwriting to Get Your Home Loan Closed Fast

- Published: 2022-03-14
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/sun-west-mortgage-review/
- Categories: Mortgage Tips

Not many mortgage companies have been around since the 1980s, but “Sun West Mortgage” has. However, that doesn’t mean they operate their business like a dinosaur. Quite the contrary. They employ the latest digital technology and offer numerous tools to make your mortgage experience a pleasant one, and also a fast one. The SoCal based lender refers to itself as a “mortgage factory,” in the sense that they’re a well-oiled machine that has been honed to perfection over decades. And their thousands of customer reviews seem to back that up. Read on to learn more about them. Sun West Mortgage Fast Facts Direct-to-consumer retail mortgage lender Offers home purchase loans, refis, and renovation loans Founded in 1980, headquartered in Buena Park, CA Licensed in 48 states, D. C. , Puerto Rico, and the U. S. Virgin Islands Funded more than $11 billion in home loans last year Most active in home state of California (35% of total loan volume) Also operate wholesale and correspondent divisions and LowRates. com Sun West Mortgage Company, Inc. is a direct-to-consumer retail mortgage lender based out of Buena Park, California. They got started all the way back in 1980, and today are a $10 billion+ a year mortgage originator. The company refers to themselves as "minority-owned" and says it focuses on underserved communities. In 2021, their physical branch count surpassed 80, which means you can apply in person or online depending on your preference. They are mostly a refinance lender, with such loans accounting for...

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### What Is a Conventional Mortgage Loan?

- Published: 2022-03-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-a-conventional-mortgage-loan/
- Categories: Mortgage Tips

Mortgage Q&A: “What is a conventional mortgage loan? ” A “conventional loan” simply refers to any residential mortgage loan that isnot insured or guaranteed by the federal government. The word conventional means standard, regular, or normal, which is basically saying that these types of loans are typical and common. And that makes a lot of sense because conventional home loans make up the largest share of mortgages issued in the United States. Their counterpart, government mortgages, account for the rest, albeit a smaller slice of the pie. Conventional loans account for about 85% of the residential mortgage market, with government loans the remaining 15%. What Makes a Loan Conventional? Conventional just means anything that is non-government By that definition it can include many different types of home loans The most common are conforming loans backed by Fannie Mae and Freddie Mac Along with jumbo loans and non-conforming loans that don't meet agency guidelines What makes a loan conventional? Simply put, not being backed by the government. That's it. This means conventional mortgage loans can be both fixed mortgages or adjustable-rate mortgages, including the 30-year fixed, 15-year fixed,  hybrid ARMs. They can also be used to purchase a home or refinance an existing mortgage. Additionally, these types of loans may be conforming or non-conforming loans, with the former meeting the standards set forth by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Same goes for interest-only loans, non-QM loans, 40-year loans, and so on. Basically anything under the sun. The key...

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### Mortgage Investors Group Review: A Leading Southeast Mortgage Lender with Great First-Time Buyer Loan Programs

- Published: 2022-03-08
- Modified: 2024-10-16
- URL: https://www.thetruthaboutmortgage.com/mortgage-investors-group-review/
- Categories: Mortgage Tips

Mortgage Investors Group, or MIG for short, has a familiar story in that they were founded by a small group of loan officers before growing into a billion-dollar independent mortgage bank. What makes them more special is the fact that they’ve been around since 1989, a testament to their staying power in the very unforgiving mortgage industry. That means surviving a few housing booms and busts, yet carrying on and continuing to grow along the way. A couple of their claims to fame include being the Tennessee Housing Development Agency’s (THDA) top lender annually since 2003. And the number one USDA home loan lender in Tennessee every year since 2014. Let’s learn more about them. Mortgage Investors Group Fast Facts Direct-to-consumer retail mortgage lender Offers home purchase loans, refinances, and reverse mortgages Founded in 1989, headquartered in Knoxville, TN Funded about $4 billion in home loans last year The 3rd largest mortgage lender in the state of Tennessee The Tennessee Housing Development Agency’s (THDA) top lender since 2003 The #1 USDA home loan lender in TN since 2014 Mortgage Investors Group is a direct-to-consumer retail mortgage lender based out of Knoxville, Tennessee (pictured above is the Sunsphere from the 1982 World's Fair there). As noted, they got started all the way back in 1989 by co-founders Chuck Tonkin II and Chrissi Rhea, along with five colleagues. Today, the company has grown to 26 branch locations and 450 employees, with more than $20 billion in closed loans since inception. This means...

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### If You Want to Buy a Home, Adjust Your Max Purchase Price Filter a Lot Lower

- Published: 2022-03-08
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/if-you-want-to-buy-a-home-adjust-your-max-purchase-price-filter-a-lot-lower/
- Categories: Housing Market

If you’re a prospective home buyer, you need to prepare for the worst. And by worst, I mean a much higher-than-anticipated asking price. Maybe not everywhere, but in many major metros nationwide, the real estate market remains red hot. And there’s really no sign of abating, even with mortgage rates back above 4% and the uncertainty of a war in Ukraine hanging over our heads. The latest sign that things aren’t slowing down is a report from Redfin that revealed nearly 6,000 homes sold for $100,000 or more above asking. What’s scarier is that data is only through February 15th, at a traditionally slower time of year for the housing market. 2022 Housing Market Comes Out Hot! It’s now safe to say that the 2022 housing market isn’t much different than the 2021 housing market. If you thought things were finally going to take a breather, well, they haven’t, at least not yet. Despite a 30-year fixed mortgage rate that is now above 4% with many banks and mortgage lenders, competition among home buyers remains fierce. A new Redfin analysis found that a staggering 5,897 homes sold for $100,000+ above asking from January 1st to February 15th. For perspective, that’s up from the 2,421 that sold for that premium a year earlier, a sign of the housing market’s strength as we roll into 2022. On a percentage basis, some 1. 8% of homes sold for at least $100,000 above asking, up from 0. 7% during this same period in 2021....

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### Mortgage Rates vs. War: The Silver Lining

- Published: 2022-03-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-war-the-silver-lining/
- Categories: Mortgage Matchups, Mortgage Rates

Sadly, there's another war taking place, this time Russia's invasion of neighboring Ukraine. While it doesn't involve the United States directly, a dispute between Russia and effectively Europe has sent shock waves across the globe. Unfortunately, war, or even just a military strike, is not without its consequences. Aside from the human toll, there’s a good chance world economies will also take a knock. For starters, oil prices have already skyrocketed on supply concerns, as Russia will no longer be a trade partner for most. As a result, gas prices will likely tick higher, meaning businesses will spend more, and consumers will pay more at the pump. But what about mortgage rates? War Means Seeking Shelter When a war breaks out or threatens to break out Most people seek shelter both literally and figuratively For investors that means ditching risky stocks and jumping into bonds Bonds are considered a safe haven during uncertain times like these When a war breaks out, or even fears of a war, investors tend to seek shelter for their assets (too), a safe place to earn a return and avoid a collapse. The obvious place is always bonds, and the number one place to flee from is the stock market. So that’s probably why we saw stocks take a big dive yesterday. Investors take the “flight-to-quality,” exchanging high-risk stocks for relatively low-risk, safe haven assets like gold and Treasury bonds. This phenomenon explains why the 10-Year Treasury yield fell from around 2% late last week...

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### UpEquity Review: They Can Make You an All-Cash Power Buyer in a Hot Housing Market

- Published: 2022-03-01
- Modified: 2024-09-03
- URL: https://www.thetruthaboutmortgage.com/upequity-review/
- Categories: Mortgage Tips

The latest company looking to tackle the buy before you sell quandary goes by the name “UpEquity. ” They’re also making it easier for first-time home buyers to make a successful bid in a competitive market. It all has to do with their “proof of funds” approach to mortgage underwriting. Instead of simply providing a pre-approval, they give you the ability to make real cash offers, even if you need a home loan. Let’s learn more about their various financing programs to see if one could be a good fit. UpEquity Is a Mortgage Lender That Lets You Make Cash Offers Direct-to-consumer tech-enabled mortgage lender Specializes in all-cash offers, refinancing, and iBuying Founded in 2019, headquartered in Austin, Texas Funded roughly a half billion in home loans since inception Currently licensed to do business in 11 states Expected to launch in eight more states this year UpEquity is a direct-to-consumer mortgage lender based in Austin, Texas. They actually describe themselves as a tech-enabled lender, but what sets them apart is their ability to let you make all-cash offers on houses. This goes for first-time home buyers and move-up buyers, the latter who often must juggle a home purchase and home sale at the same time. The company was founded in 2019 by Harvard Business School alum Tim Herman, who like many other folks missed out on his dream home. To rectify that, he and partner Louis Wilson set out to “solve accessibility problems in real estate. ” In other words,...

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### Waterstone Mortgage Review: Home Purchase Loan Experts Who Strive to Close On Time

- Published: 2022-02-22
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/waterstone-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a thorough look at “Waterstone Mortgage,” a residential mortgage lender backed by a billion-dollar depository bank. Despite being the subsidiary of a large publicly-traded company, they still have the feel of a local, independent mortgage lender. The main advantage of that backing is a much bigger lending menu, which gives them the ability to offer unique loan products the other guys can’t. They also pride themselves on being home purchase loan experts, a big plus if you’re attempting to buy in today’s ultra-competitive housing market. But existing homeowners can benefit from their endless product menu too – let’s learn more to see if they could be a good fit for you. Waterstone Mortgage Fast Facts Retail, direct-to-consumer mortgage lender Offers home purchase financing, refinances, and construction loans Founded in 2000, headquartered in Pewaukee, Wisconsin A wholly owned subsidiary of WaterStone Bank SSB Funded roughly $4. 5 billion in home loans last year Nearly 20% of business comes from New Mexico (2nd largest in the state) Also very active in Arizona, Florida, and Wisconsin Licensed in all 50 states and the District of Columbia Waterstone Mortgage is a retail, direct-to-consumer mortgage lender based in Pewaukee, Wisconsin, which is a suburb of Milwaukee. They were founded in the year 2000 as a three-person team, and quickly expanded before being sold to Wauwatosa Savings Bank in 2006. Just two years later, that company changed its name to WaterStone Bank, making them a wholly owned subsidiary. This means they have the...

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### Number Who Say It’s a Good Time to Buy a Home Hits an All-Time Low, However…

- Published: 2022-02-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/number-who-say-its-a-good-time-to-buy-a-home-hits-an-all-time-low-however/
- Categories: Housing Market, Mortgage Rates

You may have heard that home buying sentiment is horrible at the moment, what with home prices and mortgage rates rising in tandem. The continued lack of inventory coupled with rising prices and eroding affordability isn’t making many prospective buyers happy. And it’s apparently the worst for young households, who are having to put their homeownership aspirations on hold at a critical time. This is arguably much worse than the quandary for existing homeowners, who simply can’t make a lateral move too easily. Sure, they can sell for top dollar, but then they’re in a similar boat with other buyers chasing too few "overpriced" homes. The Survey Says... It’s a Horrible Time to Buy a Home! A new survey from mortgage financier Fannie Mae noted that just 25% of respondents said it was a good time to buy a home last month. The January reading was the lowest in the history of Fannie Mae’s National Housing Survey (NHS), which dates back to mid-2010. At the same time, 70% said it was a bad time to buy a home, up from 66% a month earlier. Taken together, the net good time to buy is -45%, down 5 percentage points from a month earlier and 60 percentage points from a year ago. At this time last year, about 52% of respondents still felt it was a good time to buy a home, while only about 37% felt it was a bad time. Since then, the good time and bad time trajectories have...

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### 10 Ways to Get a Bigger Mortgage: With Home Prices On the Rise You May Need One

- Published: 2022-02-03
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/get-a-bigger-mortgage/
- Categories: Home Buying, Mortgage Tips

With home prices on the rise, and only expected to go higher this year, you might be wondering how to get a bigger mortgage. After all, you might need one if the purchase price is above than your original estimate, or if you're short on down payment funds. These days, bidding wars are the norm, and it’s likely you’ll have competition when making an offer on a property. The good news is mortgage rates remain super low, despite some recent headwinds due to inflation concerns. This means you can borrow more for relatively cheap, which is a good thing. And enjoy a low fixed rate for 30 years or longer. 1. Improve Your Credit Scores Want a bigger mortgage? Improve your credit scores so you can qualify for a mortgage at a lower interest rate. A lower rate equates to a smaller monthly payment, which will increase your purchasing power. For example, if your three FICO scores average 660, your rate might be a half point higher than someone with a 740 FICO. That could save you more than $100 per month on a $500,000 home purchase with 20% down. As a result, you’ll be able to borrow more at the lower interest rate. You’ll also save money in the process by paying less interest. You should always aim for high credit scores whether affordability is an issue or not. 2. Shop Around for a Lower Rate To that same end, anything you can do to lower the mortgage rate...

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### Is This Mortgage Company Legit? How to Quickly Vet Your Lender

- Published: 2022-02-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/is-this-mortgage-company-legit/
- Categories: Mortgage Tips

It’s a question I see consumers ask whenever they size up a lender: “Is X mortgage company legit? ” Ultimately, borrowers want to know that the company they’re considering is above board, and not some fly by night operation. After all, a mortgage is a major financial transaction, and not one to leave to chance. The last thing you want is to get paired up with an inept individual or institution that fails to close your home loan. Or worse, takes you for a ride and scams you out of money. Here are some tips to pick a quality lender. Check the Lender’s Online Reviews These days, I write a lot of mortgage reviews to help consumers navigate the literal thousands of options they have. Not all of these mortgage lenders are household names, but that doesn't mean they aren't good companies. In fact, smaller can sometimes be better. One good place to start when determining a mortgage broker or lender’s legitimacy is to check out their reviews. You can find an abundance of information with a few clicks, whether it’s their Google listing, Facebook page, or an outright review site like Trustpilot or Experience. com. Take a few minutes to find their listing on a handful of review sites, and while you’re at it, read some of those reviews. Find the bad reviews and read those even more carefully – it might be a one-off incident related to an employee working for the lender, or it could be a...

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### Loan Factory Review: They Dare You to Compare Rates Elsewhere

- Published: 2022-02-01
- Modified: 2024-09-05
- URL: https://www.thetruthaboutmortgage.com/loan-factory-review/
- Categories: Mortgage Tips

Do you want a low mortgage rate and a good experience to boot while obtaining a home loan? While that basically sounds impossible, a company called “Loan Factory” might be worth looking into. That’s the dual promise they make to prospective clients, and they appear to put their money where their mouth is. They say their rates are on average $1,000 less than their competitors, and instead of hiding them, you can find them right on their website without logging in. What makes them unique from big banks and lenders is the fact that they’re a mortgage broker, which gives them access to lots of different rates. This allows them to shop and negotiate on your behalf so you don’t have to. If that sounds good, read on to learn more. Loan Factory Fast Facts Mortgage broker that offers home purchase and refinance loans Founded in 2006, headquartered in San Jose, CA Licensed to do business in 40 states and the District of Columbia 25 physical branches located throughout the country Have funded $10. 1 billion in home loans since inception Their CEO was the #1 loan originator in 2020 per Scotsman Guide rankings As noted, Loan Factory is a mortgage broker, or middleman between you the homeowner (or home buyer) and a wholesale lender. They work as a liaison to help you secure financing, whether it’s a home purchase loan or a mortgage refinance. The company got their start back in 2006 and are headquartered in San Jose, California....

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### InstaMortgage Review: A Minority-Owned Lender That Aims to Provide Legendary Customer Service

- Published: 2022-01-31
- Modified: 2024-10-24
- URL: https://www.thetruthaboutmortgage.com/instamortgage-review/
- Categories: Mortgage Tips

Today we’ll deep dive into “InstaMortgage,” formerly known as Arcus Lending, a lender that promises low rates, legendary service, and a mortgage at record speed. They’re also big on tech (being located just down the road from Silicon Valley) and offer a smartphone app you can use to close your home loan. What’s unique about them is that they’re minority-owned and immigrant-led, with more than half of their loans going to minorities. The company is helmed by mortgage industry veteran Shashank Shekhar, who aside from running a mortgage company is also an Amazon #1 best-selling author. He prides himself on empowering consumers via financial literacy, and if his company can deliver on their promises, they might be worth looking into if you need a home loan. Let’s learn more. InstaMortgage Fast Facts Direct-to-consumer mortgage lender and mortgage broker Offers home purchase loans and mortgage refinances Founded in 2008, headquartered in San Jose, CA Formerly known as Arcus Lending Currently licensed to do business in 26 states Claim that 80% of their mortgages close 20-70% faster than industry average Committed to diversity, inclusion, and minority homeownership InstaMortgage is a direct-to-consumer mortgage lender (and mortgage broker) located in San Jose, California that offers home purchase financing and mortgage refinances to existing homeowners. The company was started in 2008 around the time of the Great Recession, which even founder Shekhar admits was the worst year for the economy (and perhaps to start a business). Bad timing aside, InstaMortgage recently made it onto the...

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### UWM Offering No-Cost Appraisals on Home Purchase Loans

- Published: 2022-01-28
- Modified: 2022-01-28
- URL: https://www.thetruthaboutmortgage.com/uwm-offering-no-cost-appraisals-on-home-purchase-loans/
- Categories: Mortgage News

In an effort to make loan closings even faster, United Wholesale Mortgage (UWM) is offering an appraisal credit on home purchase loans submitted through March 31st, 2022. Often times, appraisals slow down what’s already a lengthy mortgage process, a critical issue on time-sensitive transactions like home purchases. To motivate their mortgage broker partners, they’re offering a credit for up to $600 if they utilize their “CD at Initial Underwrite” process. This entails verifying a few details related to the property value, property taxes, and homeowners insurance upfront. Doing so allows the lender to release the Closing Disclosure (CD) when the loan is conditionally approved, which can get borrowers to their closing date an average of eight days earlier. How to Qualify for the No-Cost Appraisal As noted, your mortgage broker will need to complete a few steps early on in the loan process to qualify for the no-cost appraisal. There are three categories that require their attention, including the appraisal, taxes, and homeowners insurance. They must upload a document in each category to satisfy these requirements. For the home appraisal, a sales contract is good enough because the sales price is used as the preliminary value. The taxes for the subject property can be verified simply by uploading the MLS listing. And the homeowners insurance piece can be satisfied simply by obtaining a quote from an insurance company with the subject property’s address. Lastly, the loan must be locked as well, meaning no floating allowed if you want to take...

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### Cake Mortgage Review: A Piece of Cake From Start to Finish?

- Published: 2022-01-26
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/cake-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out “Cake Mortgage Corp. ,” which as the name implies wants to make the home loan process a piece of, well, cake. They believe cake isn’t just for birthdays, but for life, aka a full 30 years on your fixed-rate mortgage and beyond. Despite being around for only a few years, Cake has already funded billions in home loans and accrued nearly a thousand excellent reviews from their customers. The story behind the company is driven by the founder’s disdain for predatory lending, which cost his mother her home during the Great Recession. That means you should experience a transparent, hassle-free loan process and hopefully snag a low rate in the process. Cake Mortgage Fast Facts Direct-to-consumer mortgage lender Offers home purchase loans and mortgage refinances Founded in 2018, headquartered in Chatsworth, CA Formerly known as Millennial Home Lending Licensed to do business in 42 states and Washington D. C. Funded more than $3. 5 billion in home loans since inception Cake Mortgage Corp. is a direct-to-consumer mortgage lender based out of Chatsworth, California, which is a suburb of Los Angeles. The company got its start in 2018, but has already funded more than $3. 5 billion in home loans. Cake was launched by David Abelyan, a former top producer at PennyMac who decided to branch off on his own after witnessing what he viewed as “absurd fees” being charged to a veteran. He originally started Millennial Home Lending in September 2018 with just one other employee,...

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### The Mortgage Refinance Process: Complete Step-by-Step Guide and Timeline

- Published: 2022-01-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-refinance-process-steps/
- Categories: Mortgage Tips, Refinance

Most homeowners know what a mortgage refinance is, but aren’t necessarily familiar with the process and many steps that take place along the way. If you’ve never refinanced your mortgage, or haven’t in a while, it can be beneficial to refresh your memory so you know what to expect. Whether you’re looking to refinance your home loan for a lower rate and/or cash out, the process is mostly the same. Expect the entire thing to take anywhere from 30-60 days depending on your particular loan scenario and how busy lenders are when you apply. Let’s break it down from start to finish. Note that stuff can happen concurrently or slightly differently depending on the company you work with. Step 1. Prepare your finances and check your credit (3-6 months) Before you even speak to anyone, you need to get your house in order. This means setting aside liquid assets in a verifiable account and making sure they’re seasoned for at least two months, preferably three. It also means getting a copy of your credit report (Credit Karma or another free service) and knowing your credit scores. Again, lots of free options like your bank or credit card company. Along these same lines, stop spending on all your credit cards as much as possible if income is tight and qualifying could be close. Reducing credit card spending could also improve your FICO scores, as could paying off credit cards in advance. To make things really simple, you may want to go...

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### How Many Homes Should I Look at Before I Buy? One Could Be Enough But More Is Definitely Better

- Published: 2022-01-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-many-homes-should-i-look-at-before-i-buy/
- Categories: Home Buying, Housing Market, Mortgage Tips

These days, prospective home buyers are spending a lot more time looking at homes virtually rather than in person. This was a trend before COVID-19 reared its ugly head, and one that has only been exacerbated by the pandemic. Ultimately, much of the home buying process can be conducted online, just like anything else these days. However, you probably still want to see the property in person because you’re buying a house, not a burrito. The question is, how many homes should you look at before making an offer? The Typical Home Buyer ‘Views’ Eight Properties First, let’s talk about what the norm is based on some data from the National Association of Realtors. The real estate agent group recently noted that home buyers viewed a median eight homes before purchasing a property last year. This was down from 12 homes between the years 2009 and 2011, when the market was cold, and slightly less than the nine homes viewed during the prior housing boom from 2004 to 2006. Further back in the 80s and 90s, the median was closer to 12 homes as well. While eight might not seem like a lot, it’s actually even less in the real world. By real world, I mean not on your smartphone. Of those eight properties, three were viewed online-only, meaning the buyer didn’t actually check them out in person. They viewed those properties by way of virtual tour or virtual open house. So when it comes down to it, the typical...

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### What Is Prepaid Interest? Here's Why You Need to Pay the Mortgage Lender Ahead of Time

- Published: 2022-01-18
- Modified: 2024-10-14
- URL: https://www.thetruthaboutmortgage.com/what-is-prepaid-interest/
- Categories: Mortgage Tips, Refinance

As the name implies, "prepaid interest" is money you owe to a bank or mortgage lender that is paid in advance of when it is actually due. In terms of why it needs to be paid before the due date, there are several reasons, though it mostly boils down to the fact that mortgages are paid in arrears. This means mortgage payments are due after the month ends, because interest must accrue (over time) before it can be paid. This differs from rent, which is paid in advance of the month in which you occupy a rental unit. If buying a home or refinancing an existing mortgage, prepaid interest will often be listed as a line item along with your other closing costs. Let’s learn why. Prepaid Interest on a Home Purchase Mortgages are generally due on the first of the month, though there is also typically a grace period to pay until the 15th. Additionally, mortgage lenders don’t accept partial payments, so an entire month’s payment must be paid each month. When you purchase a home, there’s a good chance you’ll close on a random day of the month, say the 10th or the 15th, or the 24th. This means your mortgage will accrue interest for an odd number of days during that initial month. Instead of asking you to pay that odd amount of interest as your first mortgage payment, you simply take care of it at closing. By take care of it, I mean pay it in...

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### What Mortgage Term Is Best? Why It Could Pay to Look Beyond the 30-Year Fixed

> Before you set out to snag the lowest rate on your purchase mortgage or refinance, you’ll need to decide on (or at least narrow down) a mortgage term.

- Published: 2022-01-12
- Modified: 2023-09-22
- URL: https://www.thetruthaboutmortgage.com/what-mortgage-term-is-best/
- Categories: Mortgage Tips

Mortgage Q&A: “What mortgage term is best? ” Before you set out to snag the lowest rate on your home purchase loan or mortgage refinance, you’ll need to decide on (or at least narrow down) a mortgage term. I'm referring to the amount of time it will take to pay off your home loan in full. The "mortgage term" is essentially the duration of your mortgage, whether you actually keep it for that length of time or not. Let's talk about why it matters and what factors may sway your decision in this department. Choosing an Appropriate Mortgage Term One thing you'll need to decide on when taking out a mortgage is the "loan term" This is the duration of the home loan, which can generally range from 10 to 30 years It's how long it will take to pay off the mortgage in full based on regular monthly principal and interest payments Your choice can greatly impact how much interest is paid to the bank over time First off, your mortgage payments and the amount of interest you pay will be determined, in large part, by the term of your mortgage. For example, a 15-year mortgage is paid off in half the amount of time as a 30-year mortgage, so the monthly mortgage payment will be much higher. It won’t be double the amount of the 30-year because you’ll pay less interest over a shorter period of time, but it’ll be significantly higher. Generally, you're looking at a mortgage...

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### Do You Need 20% Down to Buy a House? Why This Old Rule No Longer Applies

- Published: 2022-01-10
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/do-you-need-20-down-to-buy-a-house/
- Categories: Home Buying, Housing Market, Mortgage Tips

It’s been some time since I’ve done mortgage Q&A, so without further delay, let’s explore the following question: “Do you need 20% down to buy a house? ” If you chat with anyone older than 50 (maybe 60), they’ll probably tell you that you need to (or should) put 20% down if you want to buy a house. For them, it's the normal, or should I say traditional, down payment needed to secure a mortgage. And while it might be conventional wisdom when it comes to home buying, it’s not necessarily the reality anymore. In fact, the median down payment is just 12%, per the National Association of Realtors (NAR) 2021 Home Buyer and Seller Generational Trends report. Despite this, a lot of people still seem to think you need 20% down to purchase a home. You Don't Need a 20% Down Payment... A few years back, the NAR 2017 Aspiring Home Buyers Profile report found that 39% of non-owners believed they needed more than 20% for a mortgage down payment on a home purchase. And 26% assumed they needed to put down 15-20%, while 22% said they needed a down payment of 10-14% in order to buy. None of those answers are true. A 2020 study from NAR also had a whopping 35% of respondents going with the 16% to 20% down payment tier, easily the number one answer. In reality, you may not even need a down payment if you take out a certain type of home loan,...

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### Why You May Want to Act Fast If Taking Out a Mortgage on a Second Home or Expensive Property

- Published: 2022-01-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/new-fees-for-high-balance-loans-and-second-home-loans/
- Categories: Mortgage News, Mortgage Rates

If you own a second home or hold a high balance loan amount, you may want to refinance sooner rather than later. That’s assuming you were thinking of refinancing. The same goes for those planning to purchase a second home or take out a mortgage with a high balance, which is a loan amount above the baseline conforming limit. The conforming limit for 2022 is $647,200, so if your loan amount will be north of that, take note. Fannie Mae and Freddie Mac are raising loan-level price adjustments (LLPAs) for both types of transactions come April 1st. Depending on the details of your loan scenario, this could drastically increase your closing costs and/or mortgage rate. Second Home Mortgages and High Balance Loans Going Up in Price In an effort to bolster its support for affordable housing and sustain equitable access to homeownership, the Federal Housing Finance Agency (FHFA) will be raising (LLPAs) for certain transactions. These LLPAs get passed onto consumers in the form of either more expensive closing costs or higher mortgage rates. As noted, they pertain to the financing of second homes, whether a purchase or refinance, and high-balance loans, those which exceed the conforming limit. The idea here is that these types of home loans go toward more affluent individuals. And they also create more risk for Fannie Mae and Freddie Mac, which are backed by taxpayers. After all, large loan amounts and vacation properties are more likely to default and/or create larger losses for the Enterprises....

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### 2022 Real Estate and Mortgage Predictions

- Published: 2021-12-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2022-real-estate-predictions/
- Categories: Housing Market, Mortgage Tips

It's almost mid-December, which means it is time for another round of mortgage and real estate predictions for the upcoming year. I think it's safe to say that 2021 has been another stellar year for both the mortgage industry and the housing market. But it's going to be hard to top or even match what we've experienced this year in terms of mortgage origination volume and home price gains. However, the party might not be over yet, with additional home price gains on the horizon due to similar factors in play. Let's see what 2022 might have in store as we once again look into the crystal ball. 1. Mortgage rates will go up, but only slightly. Experts have been calling this for years to no avail. We have been told year in and year out that the low mortgage rates are leaving the station. But year after year, they remain. In 2022, I do expect them to rise somewhat, but not by a meaningful amount. Sure, your 30-year fixed rate may go from 3% to 3. 5%, but that’s not a huge jump. And any 30-year fixed in the 3s is generally very favorable. It will put pressure on prospective home buyers who also have to grapple with rising home prices and a lack of inventory. And it will certainly dent mortgage refinance demand, as most existing homeowners have already locked in a lower rate. However, as I said in my 2022 mortgage rate predictions post, there will likely...

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### Strong Home Mortgage Review: A Veteran-Owned Mortgage Lender That's Part of the Costco Program

- Published: 2021-12-08
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/strong-home-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a good look at a newer veteran-owned mortgage lender by the name of Strong Home Mortgage. As the name implies, they want to put you in a strong position, whether you’re a first-time home buyer looking to make a good impression with a seller, or an existing homeowner who wants better terms on your mortgage. Despite being a young company, their former-military founders have a combined 36 years of mortgage experience and counting. They also pride themselves on providing mortgage financial literacy to their customers via their many social channels to empower their clients. So far it all seems to be working as they’ve got excellent customer reviews across the internet and recently received a top-10 award from LendingTree. Let’s learn more. Strong Home Mortgage Fast Facts Veteran-owned mortgage lender that offers home purchase and refinance loans Founded in 2017, headquartered in Manassas, Virginia Licensed to do business in 46 states and the District of Columbia Offer a $6,000 On-Time Closing Guarantee for home buyers A Costco mortgage program preferred lender Strong Home Mortgage is a direct-to-consumer mortgage lender with a small handful of physical branches scattered across the country. This means you’ll more than likely work with them remotely to close your home loan. The company was founded by veterans in 2017, who also have a ton of mortgage experience from prior positions. The current CEO is VMI graduate Roger Jones, and the president Mike Peoples, a former U. S. Army Ranger. One notable fact about...

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### 2022 Mortgage Rate Predictions: Is This the Year They Finally Hit 4%?

- Published: 2021-12-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2022-mortgage-rate-predictions/
- Categories: Mortgage Rates

Well, just like that it’s December again, which means it’s time for the 2022 mortgage rate predictions. This past year was filled with ups and downs (literally) when it came to mortgage rates, with plenty of surprises and unexpected turns along the way. I expect 2022 to be no different, seeing that COVID is still very much an unresolved issue. At the same time, the Fed has pumped the brakes on its purchases of mortgage-backed securities, while also signaling an end to its easy money, low rate days. So perhaps 2022 will be an ongoing tug-o-war between the Fed and COVID when it comes to the direction of rates. This could mean periods of low rates and not-as-low rates. MBA 2022 Mortgage Rate Predictions First quarter 2022: 3. 3% Second quarter 2022: 3. 5% Third quarter 2022: 3. 7% Fourth quarter 2022: 4. 0% First up is the Mortgage Bankers Association (MBA) and their monthly Mortgage Finance Forecast from late November. They predict a 30-year fixed mortgage at 3. 3% in the first quarter of 2022, which isn’t far off from today’s levels, depending on the mortgage lender in question. It then rises 20 basis points to 3. 5% in the second quarter of 2022, and another 20 bps to 3. 7% in the third quarter. The shocker is their call for a 4% 30-year fixed mortgage rate by the fourth quarter of 2022. That’s bold, though not out of the realm of possibilities. They see rates going even higher...

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### NASB Home Loans Review: NerdWallet Ranked Them Best Mortgage Lender Overall

- Published: 2021-12-06
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/nasb-home-loans-review/
- Categories: Mortgage Tips

Today we’ll review a Missouri-based community bank that’s big on home loans, North American Savings Bank, or NASB Home Loans for short. The company got started all the way back in 1927, navigated World War II and the Great Depression, and now holds billions in customer assets. They were once known as the North American Savings Association, or NASA for short, but that probably led to some confusion. While NASB offers a wide range of home loan options, they appear to specialize in VA lending and mortgage refinancing. Let’s learn more about them to see if they could be a good choice for your mortgage needs. North American Savings Bank Fast Facts Community bank that offers mortgages and checking/savings accounts Founded in 1927, headquartered in Kansas City, MO Funded $5. 6 billion in home loans last year Specializes in VA loans and mortgage refinances for existing homeowners Most active in the state of California (13% of overall loan volume) Licensed to do business in all 50 states and the District of Columbia A Costco mortgage lender partner As noted, North American Savings Bank is a community bank that takes in deposits (checking/savings accounts) and lends out money (home loans). They operate brick-and-mortar branches in Missouri but also work with their many customers remotely because they’re licensed nationally. Last year, the company funded a whopping $5. 6 billion in home loans, with about $750 million of that coming from the state of California. NASB is also quite active in their home...

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### Mortgage Network Review: One of the Largest Independent Mortgage Lenders in New England

- Published: 2021-12-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-network-review/
- Categories: Mortgage Tips

If you live in New England, or more specifically Massachusetts, there’s a very good chance you’ve heard of Mortgage Network, Inc. They refer to themselves as one the largest independent mortgage lenders on the East Coast, funding billions in home loans annually. And the company does so with shining customer reviews, claiming that more than 98% of customers would refer them to friends or family. Mortgage Network prides itself on raising the bar when it comes to customer service, while also offering its clients the latest “proprietary, award-winning technology. ” Read on to learn more about them to determine if they could be a good choice for your home loan needs. Mortgage Network Inc. Fast Facts Retail direct mortgage lender that offers home purchase loans and refinances Founded in 1988, headquartered in Danvers, Massachusetts Currently licensed in 26 states and the District of Columbia Funded $4 billion in home loans last year Nearly 60% of total volume comes from home state of MA Mortgage Network is a retail, direct-to-consumer mortgage lender located in Danvers, Massachusetts, which is located north of Boston. This means you can work with them over the phone, online, or in-person if you live close to one of their many branches. They have about 40 physical branches located throughout the East Coast from as far north as Portland, Maine to as far south as Ft. Lauderdale, Florida. The company was founded all the way back in 1988 by Robert McInnes and claims to be one of the...

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### 2022 FHA Loan Limits: Floor Rises to $420,680, Ceiling to $970,800

- Published: 2021-12-01
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2022-fha-loan-limits/
- Categories: Mortgage News

Similar to the FHFA, the U. S. Department of Housing and Urban Development (HUD) announces maximum loan limits each year for FHA loans. Today, they unveiled the 2022 FHA loan limits, which like the 2022 conforming loan limits, will be significantly higher than the limits in effect this year. This is thanks to continued home price appreciation, and the fact that the calculation of the FHA loan limits is driven by the conforming loan limit itself. To come up with the FHA loan limits, HUD uses a percentage of the national conforming limit to set both a floor and a ceiling. In cities like Los Angeles, home buyers can enjoy the higher ceiling loan limit, while many less expensive cities nationwide are set at the floor. There are also limits in between these two thresholds. FHA Low-Cost Area Loan Limits (The Floor) One-unit property: $420,680 Two-unit property: $538,650 Three-unit property: $651,050 Four-unit property: $809,150 To calculate the FHA loan limit floor, HUD uses 65 percent of the national conforming limit, which will be $647,200 for a one-unit property in 2022. That puts it at $420,680, up from $356,362 in 2021. That’s a big 18% increase, and enough to make many more home buyers eligible for FHA financing nationwide. It’ll be even higher for multi-unit properties, such as duplex or triplex. If you put down the minimum 3. 5% on a home purchase, you'll now be able to purchase a property for as much as $435,000. FHA High-Cost Area Loan Limits...

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### 2022 Conforming Loan Limit Jumps to $647,200

- Published: 2021-11-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2022-conforming-loan-limits/
- Categories: Mortgage News

This morning, the 2022 conforming loan limits were officially announced by the FHFA, with the baseline limit hitting a whopping $647,200. Prior to this announcement, some mortgage lenders had already upped their maximum loan amounts in anticipation. Both PennyMac and United Wholesale Mortgage increased loan limits to $625,000 back in early October, knowing they'd be safe in doing so due to massive home price gains. This is great news for prospective home buyers (and existing homeowners) who have loan amounts that slightly exceed the current 2021 loan limit. In short, conforming loans backed by Fannie Mae and Freddie Mac tend to price lower than jumbo loans, and can be easier to qualify for. 2022 Conforming Loan Limit Up Nearly $100k From Last Year One-unit property: $647,200 Two-unit property: $828,700 Three-unit property: $1,001,650 Four-unit property: $1,244,850 Thanks to surging property values, it’s now possible to get a conforming loan amount up to $647,200 on a one-unit property. This is a major increase from the 2021 conforming loan limit of $548,250. In fact, it’s an 18% jump, which is a reflection of the red-hot housing market. As a result, a home buyer could purchase a home for $809,000, put 20% down, and avoid the jumbo loan realm. And an existing homeowner looking to refinance a mortgage could save some more money by slipping below the conforming limit. And on multi-unit properties, the loan limits are even higher, from $828,700 up to $1,244,850. This might mean lower mortgage rates for more homeowners, which...

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### Mortgage Rates vs. Omicron

- Published: 2021-11-29
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-omicron/
- Categories: Mortgage Matchups, Mortgage Rates

Last week, the World Health Organization (WHO) designated Omicron, formally known as B. 1. 1. 529, a variant of concern. This news rocked financial markets nationwide amid concerns of another series of lockdowns, travel restrictions, and so on. In short, there’s renewed fear that we’re not out of the woods on COVID, as some seemed to think prior to this bombshell. Of course, this is all just preliminary information, and researchers in South Africa and elsewhere are conducting studies to determine if it presents additional risks to the world. If you’re in the market to buy a home or refinance your mortgage, you might be wondering what it means for mortgage rates. Let’s discuss. Mortgage Rates Tend to Drop When There Are Unknowns While mortgage rates and COVID don’t have a long-term relationship, given COVID’s recent emergence, one thing is clear. Interest rates often move lower when there is uncertainty in the air, no matter what’s behind it. Prior to this announcement from the WHO, there was a general belief that we had seen the worst of COVID, and thus the economy could get back on its merry upward trajectory. This news has thrown a wrench is that idea, and as such safe havens like Treasuries have rallied. Meanwhile, their yields have plummeted, with the bellwether 10-year bond yield falling about 20 basis points (. 20%) from around 1. 68 to 1. 47, before recovering somewhat. It now stands at about 1. 52, as investors digest this Omicron news and...

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### Lendevity Review: A SoCal Mortgage Broker That Charges $0 Broker Fees and Offers a Loyalty Program

- Published: 2021-11-18
- Modified: 2024-10-16
- URL: https://www.thetruthaboutmortgage.com/lendevity-review/
- Categories: Mortgage Tips

Today we’ll check out a Southern California-based mortgage broker named “Lendevity,” which has been earning rave reviews lately. Their name is actually a combination of lend and longevity, their way of saying they’ll be by your side throughout the loan process and beyond. The company says it takes an “advisory approach” to better understand your financing needs and create a custom solution that fits your goals. They do so using the latest technology, charge $0 lender fees, and aim to close loans in three weeks or less. And they’ve got a loyalty program to boot if you come back to them a second time. Let’s learn more. Lendevity Fast Facts Online mortgage broker that offers home purchase and refinance loans Founded in 2018, headquartered in Woodland Hills, CA Licensed to do business in five states (AZ, CA, CO, OR, WA) Charge $0 lender fees on most loans Offer a loyalty program for repeat customers that waives 3rd party fees As noted, Lendevity is a mortgage broker, meaning they connect consumers with their wholesale lender partners. This gives them the ability to shop your loan so you don’t have to in order to find the best price. They may also have access to unique loan programs the bigger banks might not offer. The company is located in Woodland Hills, California and was founded in 2018. Despite being rather young, they’ve got consistently excellent reviews. At the moment, they are licensed to do business in just five states, including Arizona, California, Colorado,...

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### What Will Cause the Next Housing Crash?

- Published: 2021-11-17
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/what-will-cause-the-next-housing-crash/
- Categories: Housing Market, Mortgage News

I think I finally know what’s going to cause the next major financial collapse. Crypto. Ignore the fact that the word “cry” is part of the word. For the record, I don’t have anything against crypto, I just believe it’s a classic case of something climbing too high, too fast. Don't believe me? Look at silly meme coins like Doge and Shiba Inu coin, which rallied because Elon Musk recently acquired a Shiba Inu puppy. Over time, the crypto industry could resemble something like the Internet, but similar to the Internet, growing pains will accompany its upward trajectory. And because more and more investors are piling into cryptocurrencies, it’s just a matter of time before it all comes crashing down. The question is will it take housing with it? Staples Center Becomes Crypto. com Arena In the latest piece of ominous news, the long-named Staples Center will become known as Crypto. com Arena in a 20-year deal. Apparently, Crypto. com shelled out more than $700 million for the naming rights, which makes it one of the most expensive deals in sports history. The arena’s new logo will debut on Christmas day when the Los Angeles Lakers host the Brooklyn Nets. And all of Staples Center signage is expected to be replaced with the new brand by around June 2022. When I saw the news, it just kind of hit me that this whole crypto thing is getting out of control. Even my wife shared the news, and the tone was...

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### Another Reason You Can’t Find a Home to Buy: Investors

- Published: 2021-11-16
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/cant-find-home-to-buy/
- Categories: Housing Market

Don’t be fooled by Zillow’s recent iBuying exit. The housing market is alive and well, despite some expected seasonal slowing. Sure, November and December are traditionally soft months in terms of home buying and selling, and asking prices often trickle lower as well. But it’s typically a short-lived period that springs back to life in the early months of the year, assuming the underlying drivers are there (demand, limited supply, low interest rates, etc. ). Speaking of, 2022 is expected to be another big year for real estate, with one of the latest projections calling for a further 16% rise in home prices. One thing supporting this perhaps lofty estimate is the fact that investors are dominating the housing market like never before. Investor Share of Home Purchases Hits a Record in the Third Quarter As if it wasn’t hard enough to find a home to buy, now you’ve got to compete with investors from all angles. We’re talking mom-and-pop investors, institutional investors (the ones that buy up hundreds or thousands of homes), and even Airbnb folks, who buy properties and turn them into short-term rentals, perhaps for eternity. If you thought they were losing their appetite, think again. Redfin recently noted that investors purchased a record $63. 6 billion worth of homes in the third quarter. This was up from a revised $58. 8 billion in the second quarter and nearly double the $35. 7 billion seen a year earlier. They bought a record 90,215 homes during the past...

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### FHA-to-Conventional Refinance: How to Drop Mortgage Insurance Once and For All

- Published: 2021-11-09
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/an-fha-to-conventional-refinance-may-allow-you-to-ditch-mip/
- Categories: Mortgage Tips, Refinance

While refinance applications seem to be slowing, there are still some good reasons to refinance your mortgage, even if interest rates aren’t currently at their best. First off, let me preface this with the fact that mortgage rates are spectacular. Yes, the 30-year fixed used to be in the mid-2% range, but a rate of around 3% was relatively unheard of until recently (and is still available today). Unfortunately, the recent increase in rates has dented refinance applications as the pool of eligible borrowers (those who stand to benefit) begins to dry up. Last week, the Mortgage Bankers Association (MBA) noted that refis slid another 4%, pushing the refi share of total mortgage activity down to just below 62%. Most industry participants saw this coming, which explains the recent trend of mortgage companies cozying up with real estate agents. But there are still opportunities for homeowners and mortgage lenders to pick up the refi slack. Refinancing Out of the FHA and Into Conventional Mortgage insurance must be paid for life on most FHA loans (unless you put 10% down) This is the case regardless of how much you've paid down your mortgage Often the only way to drop MI completely is to refinance out of the FHA loan program entirely Fortunately this is easy to do and a common reason why homeowners refinance their mortgages Even if rates are a bit higher than they once were, one opportunity that may remain is refinancing an FHA loan into a conventional loan...

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### Lakeview Loan Servicing Review: A Top Mortgage Lender and Loan Servicer Rolled Into One

> Lakeview Loan Servicing is the nation's fourth largest loan servicer and also a home loan lender that provides purchase and refinance loans.

- Published: 2021-11-08
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/lakeview-mortgage-review/
- Categories: Mortgage Tips

Today we’ll explore one of the nation’s largest loan servicers that happens to be a major mortgage lender as well, “Lakeview Loan Servicing. ” As their name implies, they service mortgage loans, meaning they collect monthly payments from customers after the loan funds. These days, a lot of mortgage lenders don’t do that, and instead focus on making new loans and selling them off quickly so they can fund even more. But Lakeview has adopted a strategy some of the largest mortgage lenders in the country have, doing both. This means aside from servicing loans, they also originate billions in mortgages annually. Let’s see if they could be a good fit for a new mortgage. Lakeview Loan Servicing Fast Facts Direct-to-consumer mortgage lender that offers home purchase and refinance loans Founded in 2010, headquartered in Coral Gables, Florida Formerly a top-25 mortgage lender nationally during the boom years The 4th largest loan servicer in the country Licensed to lend in 48 states and the District of Columbia Also operates a wholesale and correspondent lending business As noted, Lakeview Loan Servicing, LLC operates as both a loan servicer and a direct-to-consumer mortgage lender. This is similar to a NewRez or a Rocket Mortgage. They are currently the nation’s fourth largest loan servicer in the country, and help more than 1. 4 million customers manage their home loans annually. The company also recently became the largest servicer of Ginnie Mae mortgages, aka FHA loans and VA loans. To clarify, they own the...

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### Zillow Offers Shuts Down Because It Can't Forecast Future Home Prices, 25% of Workforce to Be Let Go

- Published: 2021-11-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/zillow-offers-shuts-down/
- Categories: Housing Market, Mortgage News

In a somewhat strange turn of events, the iBuying unit of Zillow, known as Zillow Offers, is shutting down after an initial suspension late last month. I call it strange because it’s happening at a time when the real estate market has never been hotter. You would think that any entity or individual who purchased a boatload of residential real estate over the past year would make out like a bandit. But I guess that’s not the case, at least when it comes to Zillow. The company addressed the move in a lengthy shareholder letter tied to their third quarter financial results. Among the reasons were COVID-19, a supply-demand imbalance, and the sheer inability to accurately forecast future home prices. Why Zillow Offers Is Being Shuttered Zillow is a publicly-traded company, and as such their main motive is turning a profit and rewarding their shareholders. Ultimately, their iBuying unit wasn’t profitable, and I suppose wasn’t looking like it was going to be anytime soon. They also determined that “further scaling up” would be even riskier, and “too volatile” to their earnings/operations. And the only way to make money was by scaling the business. Simply put, not a risk they wanted to take. All of this was exacerbated by COVID-19, which turned the housing market on its head, then created a supply/demand issue with regard to things like skilled labor. Since the company fixes up the homes they buy before flipping them to a new buyer, it’s a problem. Zillow also...

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### Zillow Hits Pause on iBuying for the Rest of 2021:  Should We Worry?

- Published: 2021-10-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/zillow-hits-pause-on-ibuying-for-the-rest-of-2021-should-we-worry/
- Categories: Housing Market, Mortgage News

In a rather surprising turn, Zillow has suspended new home purchases via its Zillow Offers unit through the end of 2021. It’s actually the second time they’ve suspended iBuying this year, the first coming back in March due to “market uncertainty” related to COVID-19. This time, it’s for reasons more loosely associated with COVID, namely a backlog in renovation and operational capacity. Similar to many other industries feeling the brunt of supply chain issues, Zillow is apparently having a difficult time finding folks to repair the many homes they buy and flip. Is this no big deal, or a sign of trouble ahead for the hot housing market? Why Is Zillow Completely Pausing Home Buying? In a press release, Zillow chief operating officer Jeremy Wacksman said the company is dealing “within a labor- and supply-constrained economy” during a time when the housing market is ultra-competitive. He added that Zillow hasn’t been exempt from market/capacity issues that others are experiencing in different sectors, and that they’ve now got “an operational backlog for renovations and closings. ” By pausing new home purchase contracts, they’ll be able to focus attention on home sellers who are already under contract with the company, along with existing housing inventory. In other words, they own too many homes and don’t have enough contract labor to fix them up and get them back on the market in a reasonable timeframe. Of course, with the way the housing market is going, what’s the rush to put them on the...

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### 2022 Home Prices: Goldman Sachs Sees Values Rising Another 16%

- Published: 2021-10-13
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2022-home-prices/
- Categories: Housing Market

Think home prices are expensive today? Well, get ready for an even bigger shock. A new report claims 2022 home prices could be 16% by the end of next year. For example, a home listed for $350,000 might be going for $406,000 next year. If you put down 20%, you’ll need $81,200 instead of $70,000. And if mortgage rates stay around 3% for a 30-year fixed, your monthly payment will increase from about $1,180 to $1,370. That’s if mortgage rates don’t rise between now and then, which is certainly questionable at the moment. In other words, if you’re currently shopping for a home, you might want to get even more serious about it. Why Will 2022 Home Prices Go Up Double-Digits? As I wrote last week, the same fundamentals that have been at play for a while now continue to be at play. Namely, a very tight supply of available housing, ultra-low mortgage rates, and lots of prospective home buyers. This hasn’t changed because there is still a massive supply imbalance that home builders have yet to make up. It’s going to take time for builders to catch up, because well, building hundreds of thousands of homes takes time. In the meantime, expect a highly competitive housing market, where bidding wars are the norm. And don’t assume the housing market has topped simply because home prices have risen roughly 20% over the past 12 months. Winter Might Cool Things Down Temporarily Goldman Sachs U. S. Economics analyst Jan Hatzius makes...

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### Why Are Mortgages Cheaper Than Rent?

- Published: 2021-10-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgages-cheaper-than-rent/
- Categories: Mortgage Tips

Mortgage Q&A: “Why are mortgages cheaper than rent? ” Today we’ll discuss why mortgages often appear to be less expensive than a monthly rent payment, despite allowing you to build precious home equity. For example, you might be shopping mortgage rates and see a sample loan amount of $240,000, along with a hypothetical interest rate. Let’s pretend that rate is 3% and the loan program is a 30-year fixed, the most popular option available. This would result in a monthly payment of roughly $1,012. Sounds pretty darn cheap, doesn’t it? Especially with how much rents are these days. But there’s more to the story. The Mortgage Payment Isn’t Everything, Not Even Close Monthly Cost Homeowner Renter Mortgage payment $1,012 $0 Rent $0 $1,843 Property taxes $312. 50 $0 Homeowners insurance $125 $0 Repair/maintenance $200 $0 Utilities (water/trash/etc. ) $250 $0 Total expense $1,900 $1,843 While an advertisement might highlight the monthly mortgage payment, especially when mortgage rates are low, it’s just the tip of the iceberg. I assume a lot of folks could afford a monthly housing payment of $1,012 in most parts of the country these days. That’s well below the U. S. Typical Monthly Rent (Zillow Observed Rent Index) of $1,843 as of July, the latest data reported by Zillow. In fact, it’s nearly half of the typical rent Zillow is reporting, which tells me a mortgage is a screaming bargain, at least on the surface. But the $1,012 mortgage payment isn’t your all-in monthly housing expense. It’s...

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### Mortgages for Doctors:  Expanded LTVs and Large Loan Amounts

- Published: 2021-10-07
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/mortgages-for-doctors-expanded-ltvs-and-large-loan-amounts/
- Categories: Mortgage Tips

If you’re a doctor, resident, or even a veterinarian, getting a mortgage can be a little bit easier thanks to so-called "physician mortgages" offered by most major lenders. Just about every bank offers a special mortgage program for doctors, including large commercial banks like Bank of America and small local credit unions as well. The names of these programs, along with the guidelines and perks, will vary from bank to bank. They’re typically not heavily advertised, so you may have to do some digging to find all the details. But they all seem to have two things in common; large maximum loan amounts and high loan-to-value ratios (LTVs). My assumption is lenders are keen to offer these loans to future doctors because they’ll be good clients with lots of assets, ideally kept with the bank. In fact, you may need a prior banking relationship to get approved. What Is a Physician Mortgage? A mortgage designed specifically for doctors, residents, fellows, and interns As well as dentists, orthodontists, pharmacists, and veterinarians Offers more flexible underwriting like higher loan amounts and LTVs and no mortgage insurance Applicants can get approved regardless of medical school debt and/or limited employment history In a nutshell, a "doctor mortgage" is a home loan designed specifically for physicians that offers flexible underwriting guidelines and unique features a traditional mortgage loan may not offer. But we’re not just talking medical doctors (MDs). These loan programs are often available to a wide range of disciplines, including dentists, orthodontists, veterinarians,...

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### Dude, Where’s My Low Mortgage Rate?

- Published: 2021-09-28
- Modified: 2021-09-28
- URL: https://www.thetruthaboutmortgage.com/dude-wheres-my-low-mortgage-rate/
- Categories: Mortgage Rates, Mortgage Tips

A Common Mortgage Rate Tale You’ve been shopping mortgage rates and finally found a lender you like. The loan officer asks if you want to lock in your rate and you say huh? They explain that you can lock in your interest rate today so it won't change, or you can float and take your chances on rates going even lower before you close. You decide you don’t want to lock just yet because rates just seem to be moving lower and lower. Then you wake up to stock rally after stock rally, which puts you in a good mood because your stocks are making you rich, at least on paper. You decide it’s time to lock and call your lender to dial in that 2. 75% rate on the 30-year fixed you were quoted last week. No sense in taking any chances, right? It’s probably best not to get greedy and just go with a rate of 2. 75% you can enjoy until the year 2051! It’s a very low rate and dreams of a sub-2% 30-year fixed-rate mortgage are probably just dreams and nothing more. Here Comes the Not Good Surprise The loan officer picks up the phone and you tell her you want to move ahead with what was quoted last Thursday. Well guess what? Your low rate isn’t so low anymore. Yep. Rates went up since last week and because you chose not to lock, you’re now stuck with a higher rate. No, the lender isn’t...

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### It’s Okay to Rent Until You Find a House You Really Like

- Published: 2021-09-20
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/its-okay-to-rent-until-you-find-a-house-you-really-like/
- Categories: Home Buying, Housing Market, Mortgage Tips

When deciding between renting and buying, individuals often fret about missing out on home equity if they do the former. In other words, for all those years they choose to rent instead of own, they’re not gaining any sort of ownership, and their money is simply being thrown out the window. Of course, that rent money is providing shelter and a roof over their head, so it's hard to say it's all for nothing. And while the argument has some truth to it, it’s often blown out of proportion. Or skewed in favor of buying as opposed to renting. Imagine if someone bought a home and prices went down. Would they still be talking about throwing away money on rent? Has the Housing Market Gotten Ahead of Itself? When things start to feel bubbly prospective home buyers seem to get even more desperate This can lead to bad decisions, especially when it comes to a major purchase Make sure you're buying a property for the right reasons and not throwing out your own rules It should never be a rushed decision or one in which you make too many sacrifices Lately, there’s been a lot of talk about bubbles and a potential housing market crash. But home prices have only surged due to a lack of inventory, not because of bad mortgages. The low mortgage rates on offer have also made the housing market hot, perhaps too hot. And after some really stellar home price gains, they've begun to moderate...

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### What the Names Zillow, Redfin, and Trulia Mean

- Published: 2021-09-14
- Modified: 2025-03-10
- URL: https://www.thetruthaboutmortgage.com/what-the-names-zillow-redfin-and-trulia-mean/
- Categories: Mortgage Tips

Nowadays, just about everyone looking to buy or sell real estate begins their search online. And a small handful of websites seem to be dominating the home buying space, including oddly-named real estate tech companies. I use these websites all the time when researching real estate, but never actually knew the details behind their names. So here goes. Zillow Is a Play on the Word Zillion The name Zillow is a made up word that is a combination of existing words It relates to the zillions of data points used to come up with their famous Zestimate And also happens to rhyme with the word pillow, which appears to the emotional side of homeownership First up is Seattle, Washington-based Zillow, which got its start by offering free house values using an algorithm. Before they came along, it was hard to know what your home was worth without getting an appraisal done. As for their unique name, it rhymes with popular words like willow and pillow. And while willow trees are certainly homey, the word pillow is actually part of the name. They note that a home is more than just data; it’s also a place to lay one’s head, hence the word pillow. But primarily, Zillow is a play on the zillions of data points the company digests to come up with home values (Zestimates). The company was founded back in 2005, and since then has become a major player in both the real estate realm and the mortgage world....

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### What Is Lender-Paid Mortgage Insurance? First Of All, You Still Pay For It

> While it sounds like you're getting something for free with lender-paid mortgage insurance, it's more about how you pay for this coverage.

- Published: 2021-09-13
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/what-is-lender-paid-mortgage-insurance/
- Categories: Mortgage Tips

Mortgage Q&A: “What is lender-paid mortgage insurance? ” Several years back, a rule went into effect that made mortgage insurance permanent on most FHA loans for the entire life of the loan. Ouch! Before this game-changer, FHA loans were the cat’s meow because of the low mortgage rates offered, coupled with mortgage insurance premiums that were not only more affordable, but removed once the loan amortized to 78% LTV. But in an effort to reduce losses, the FHA ended its so-called easy money policies and clamped down on borrowers taking advantage of a program originally intended for the underserved. As a result, borrowers began giving conventional loans a lot more attention, seeing that private mortgage insurance (PMI) automatically terminates at 78% LTV. Homeowners with these types of loans can also request PMI removal at 80% LTV (based on original amortization schedule) or even sooner if the home appreciates in value. And even better, there's a thing called "lender-paid mortgage insurance" on conventional loans where borrowers don't have to pay for their own coverage! That certainly sounds too good to be true, but there is a catch. Lender-Paid Mortgage Insurance Isn’t Free The phrase "lender-paid" is somewhat deceiving/confusing (it's not free coverage) Your mortgage lender isn't doing you a favor out of the goodness of their heart The borrower still pays for this insurance coverage, just not directly out-of-pocket Instead the lender will pay the premium on your behalf, which should increase your mortgage rate When you see the term lender-paid...

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### Two Simple Ways to Boost Your Credit Score Before Applying for a Mortgage

- Published: 2021-09-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/two-simple-ways-to-boost-your-credit-score-before-applying-for-a-mortgage/
- Categories: Credit Scores, Mortgage Tips

A while back, I cautioned readers to avoid swiping the credit card before applying for a mortgage. In short, the more you charge, the higher your outstanding balances. And the higher your balances, the lower your available credit. This can result in lower credit scores since utilization is a big factor for FICO. And it can increase your debt-to-income ratio as well. Simply put, if you're seen as overextended due to maxed out credit cards, your credit scores will suffer. So you can give your credit scores a boost by simply doing nothing, but there are some proactive measures you can take as well. Increase the Credit Limits on Your Credit Cards One quick and easy way to boost your credit scores is to increase your available credit You can do this by raising the credit limits on the credit cards you have open Simply ask your credit card issuers for credit line increases online or by phone Once granted your utilization will go down and your credit scores should improve over time One simple trick to improve your credit scores is via a credit limit increase. This is something that is very easy (and fast) to accomplish thanks to the many credit card management tools now at our fingertips. If you visit just about any credit card issuer’s website, you should be able to find an area to increase your credit limit online. Typically, all you need to do is enter enter your gross annual income and monthly housing/rent...

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### Michigan State Athletes Will Soon Be Paid $500 Per Month to Promote Mortgage Brokers

- Published: 2021-09-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/michigan-state-athletes-will-soon-be-paid-500-per-month-to-promote-mortgage-brokers/
- Categories: Mortgage News

Back in July, the NCAA granted college athletes the opportunity to make money by using their “name, image and likeness” (NIL). This means getting paid to sign autographs, make appearances, or promote products and services, among other things. Importantly, it keeps college sports from turning into pay-for-play schemes, while also providing clarity to student-athletes and their families. These NIL opportunities are beginning to materialize, and we now have what appears to be the first mortgage-related deal. The nation’s second largest mortgage lender, United Wholesale Mortgage, is offering $500 per month to Michigan State University (MSU) athletes. Because UWM is a wholesale mortgage lender, these athletes will essentially be promoting the mortgage broker model. MSU Athletes Can Earn $500 Per Month for the 2021-2022 Season This new partnership involves MSU men’s basketball and football players, of which there are 133 in total. Each one will have the opportunity to earn $500 per month for the 2021-2022 season, which will amount to $6,000 per player. In terms of how they’ll market UWM, it’ll apparently be via social media channels as opposed to a clothing partnership. Per Crain’s Detroit Business, the MSU players won’t “be required to wear UWM logos on their jerseys. ” This differs from UWM’s earlier deal with the Detroit Pistons, in which their logo will feature on the left front strap of official team jerseys for the 2021-22 NBA season. So expect all your favorite MSU student-athletes to pitch mortgage brokers and specifically UWM on Instagram and other social...

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### 6 Ways to Snag a Low Mortgage Rate Even If They Suddenly Jump Higher

- Published: 2021-09-08
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/six-ways-to-secure-a-low-mortgage-rate-despite-the-recent-jump/
- Categories: Mortgage Tips

Over the past year, mortgage rates have been relatively steady near their all-time lows. This has continued to benefit existing homeowners who wish to refinance their mortgages. And has exacerbated an already too-hot housing market. But there has been increasing talk of rate increases, with the Fed eyeing a possible taper to its bond buying program. If they do announce such a plan, it could lead to an interest rate spike, especially if the economy improves and COVID gets under control. Of course, the jobs report released last Friday was very poor, with blame being tied to the more infectious Delta variant. In short, reopenings and tourism/hospitality have been struggling once again as more folks stay at home. However, if and when that does change, you need to be prepared. I've compiled a list of ways to keep your mortgage rate down if we do see another taper tantrum and mortgage rate fiasco. Just Buy It Down by Paying Points Want an even lower mortgage rate than what's being offered? Simply pay discount points at closing and you'll get one This is a surefire way to get your hands on a discounted rate It'll cost you a little more upfront, but your monthly payment will be lower for the life of the loan One tried and true method to push your mortgage rate lower is to buy down the rate. Simply put, you pay interest upfront in the way of discount points for a lower rate long-term. Yes, your closing...

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### Mortgage Insurance vs. Homeowners Insurance: Only One of Them Protects You

- Published: 2021-09-01
- Modified: 2022-03-21
- URL: https://www.thetruthaboutmortgage.com/mortgage-insurance-vs-homeowners-insurance/
- Categories: Mortgage Matchups

These days, it seems as if you can insure just about anything. Your car, your house, your dog, your phone, and maybe even your hair? At one time, there was a form of home down payment insurance, which at last glance appears to no longer exist. While all these new policy options may be perceived as “great news! ” by overzealous insurance agents, for individual consumers it’s often just more money down the drain. After all, paying for insurance always feels like a chump’s game until you actually need to file a claim, which never seems to happen if you actually have insurance in place. And if you do file a claim, your insurance rates will go up! What a deal! When you purchase a home, your insurance needs will certainly rise, which will put even more strain on your already-strained checkbook. Let’s look at two common forms of insurance tied to homeownership, and explore what each actually provides. Mortgage Insurance Protects the Bank/Lender Mortgage insurance doesn't protect homeowners It protects the mortgage lender from payment default It exists because they're taking a bigger risk by offering you a home loan with very little down The trade-off is you get a mortgage despite having a sizable down payment If you've been shopping for a home (and a home loan) lately, you may have heard about mortgage insurance. At first glance, it might sound like something that protects you in the event you can't pay the thing. But contrary to what...

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### Change Home Mortgage Review: If Homeownership Feels Like a Long Shot, Give Them a Call

- Published: 2021-08-30
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/change-home-mortgage-review/
- Categories: Mortgage Tips

If you’ve driven the 405 freeway lately, you may have seen a billboard from “ChangeFi,” a bank that’s looking to eliminate social and racial inequity in banking/lending. That means growing Black and Latino homeownership, while serving underbanked businesses and individuals. In the process, they hope to empower all Americans to pursue their dreams by working to close the wealth gap. Aside from operating as a bank, ChangeFi is big on home loans, offering a ton of products via their “Change Home Mortgage” brand. Let’s discover more about them to see if they might have a solution others don’t. Change Home Mortgage Fast Facts A Community Development Financial Institution (CDFI) Offers banking, small business loans, and home loans Specializes in lending for non-traditional borrowers (gig workers, immigrants, etc. ) Founded in 1994 (rebranded in 2021), headquartered in Irvine, CA Licensed in 27 states and the District of Columbia Originated more than $7 billion home loans last year Also operate a wholesale lending division called Change Wholesale As noted, ChangeFi operates a residential home lending division known as Change Home Mortgage. They were formerly known as “Commerce Home Mortgage,” and also do business under the name “Change Home Loans. ” The company offers both home purchase financing and refinance loans, with a large variety of loan programs available. They're unique because they operate as a Community Development Financial Institution (CDFI), which allows them to offer mortgages to non-traditional borrowers. Simply put, they enjoy certain regulatory exemptions related to Regulation Z and risk...

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### ClearPath Lending Review: They're a Big Time VA Loan Lender

- Published: 2021-08-25
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/clearpath-lending-review/
- Categories: Mortgage Tips

If you’re in need of a VA loan, one mortgage company that deals almost exclusively in them goes by the name “ClearPath Lending. ” Roughly 99% of the home loans they originated last year were VA loans, and they were pretty much all refinance loans as well. That means there’s a high likelihood ClearPath Lending knows what they’re doing when it comes to funding a VA loan quickly and competently. Let’s learn more about this Southern California-based mortgage lender to see if they could be a good choice for your veteran home loan needs. ClearPath Lending Fast Facts Direct-to-consumer mortgage lender that offers purchase and refinance loans Specializes in VA lending which comprises about 99% of their overall volume Founded in 2012, headquartered in Irvine, California Funded $5. 57 billion in home loans during 2020 Currently licensed to do business in 29 states nationwide Most active in California, Florida, and Texas ClearPath Lending is a direct-to-consumer mortgage lender located in Irvine, California, which is basically the epicenter of the mortgage industry on the West Coast. The operate a call center, but no physical branches, so you’ll be working remotely with their lending team to close your loan. Last year, they originated a whopping $5. 57 billion in home loans, which makes them almost a top-100 mortgage lender nationally. While they originated a large amount of loans in over a dozen different states, they were most active in California, Florida, Texas, Virginia, and Arizona. As noted, most of the loans they...

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### Neat Loans Will Give You a $500 Discount on Your Mortgage If You Got the COVID-19 Vaccine

- Published: 2021-08-25
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/neat-loans-covid-19-discount/
- Categories: Mortgage News

This appears to be a first – digital mortgage lender Neat Loans will provide applicants with a $500 discount if they’re vaccinated for COVID-19. The Boulder, Colorado-based company believes they are the first mortgage lender, and indeed financial services company, to offer a discount for getting the COVID-19 vaccine. At a time when cases are surging again in many parts of the country following a bit of a lull, it appears they’re putting safety first. Of course, this move will probably come with its share of controversy as well, like all things COVID do. As to why they’re doing this, Neat Capital CEO Luke Johnson said, “Mortgage lenders need to have important conversations with their clients about the home-buying process and their vaccine status as it relates to employment. ” Adding that responsible companies have required their employees to get vaccinated to keep workplaces safe, and without a job, it’s tough to get a home loan. Vaccinated Customers Will Receive a $500 Lender Credit from Neat Loans Specifically, Neat Loans will provide a $500 lender credit to borrowers if they provide proof of COVID-19 vaccination. Borrowers may use any digital or electronic picture of a vaccine record to satisfy the requirement. So you can probably take a photo of a paper copy and upload it as well. It doesn’t matter which vaccine manufacturer you went with, such as J&J, Pfizer, or Moderna, or the number of doses received. This offer is available to both those purchasing a home and those...

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### Borrowers Don’t Choose Mortgage Lenders for the Best Interest Rate

- Published: 2021-08-25
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/borrowers-dont-choose-mortgage-lenders-for-the-best-interest-rate/
- Categories: Mortgage Rates, Mortgage Tips

Conventional wisdom would lead us to believe that consumers go with the mortgage lender that offers the lowest interest rate. After all, who can resist a discount? But this appears to not be the case... In fact, it’s the least common reason why a borrower selects a particular home loan lender, which is pretty shocking considering how much money is at stake. I suppose this is the power of marketing, taking a very boring product that is for all intents and purposes a commodity and selling it for more than your competitors. Referrals, Referrals, Referrals... Clever marketing aside (hello Rocket Mortgage and their push button get mortgage tagline), there's also a little thing called referrals. You know, when your real estate agent says they have a mortgage gal or guy they think you should use  because they're "the best. " When it comes to home purchase loans, a referral from a real estate agent or builder is the top reason (53%) why a borrower chooses a certain lender, this according to a survey from mortgage advisory firm STRATMOR Group. The survey results are part of its MortgageSAT Borrower Satisfaction Program, which the company claims is the mortgage industry’s only “Borrower Satisfaction measurement tool. ” It's actually a older study, with data for the 12-month period ending June 30th, 2018. But I don't think it has changed much. If anything, this trend has probably gotten even more pronounced with a more competitive housing market. Are You Choosing the Mortgage Lender or...

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### Is the Housing Market Finally Slowing Down? Not So Fast…

- Published: 2021-08-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-the-housing-market-finally-slowing-down/
- Categories: Housing Market, Mortgage News

It’s a question a lot of prospective home buyers are asking right now. When will the housing market slow down? When will the bidding wars end and prices fall back to earth? After an unprecedented year of home price gains, which somehow took place during a global pandemic, would-be buyers are looking for a reprieve. But is it finally here, or is this just another seasonal fakeout? It Has Been Very Much a Seller’s Market in 2021 The median home-sale price increased 17% year-over-year to a record high $361,973 Asking prices of newly listed homes are up 10% from the same time a year ago Half of homes had an accepted offer within the first two weeks of being on the market 52% of homes sold above their list price, up from just 30% a year earlier First, the bad news, assuming you don’t own yet. Home prices continue to be on a tear, with the median home-sale price rising 17% year-over-year for the week ending August 15th, per Redfin. That pushed home prices up to an all-time high of $361,973, and was a much more pronounced climb than what we saw in previous years. Part of that can be attributed to the COVID-inspired home buying frenzy, while the other underlying drivers have been constant for a while now. There continues to be a supply glut, with too many buyers and not enough homes. Home builders have yet to catch up and don’t appear to be close to doing so....

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### Nation’s Second Largest Mortgage Lender to Accept Bitcoin Because They Want to Be First

- Published: 2021-08-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/nations-second-largest-mortgage-lender-to-accept-bitcoin-because-they-want-to-be-first/
- Categories: Mortgage News

The nation’s second largest mortgage lender, United Wholesale Mortgage, has plans to accept bitcoin for mortgage payments. The Pontiac, Michigan-based company’s CEO Mat Ishbia told Yahoo that scores of its customers hold crypto, so why not let them use it to pay the mortgage? As to why they’d want to do that, it’s a bit unclear. But he holds nothing back when saying UWM is the “best tech company in the mortgage space by a wide margin. ” And yes, that’s probably a shot at its crosstown rival Rocket Mortgage, which is situated about 25 miles south in downtown Detroit. Almost One Million Homeowners Pay UWM Every Month During the interview, Yahoo’s Julie Hyman brought up the company’s plans to accept bitcoin, and like AMC’s recent announcement, “read it as a way to get headlines. ” Ishbia brushed that off and spoke of the company’s role as a leader, innovator, and tech company (something mortgage companies are big on these days). He added that nearly one million customers pay them each month since they're a loan servicer too, and a lot of them apparently have a good amount of cryptocurrency. “They’d like to be able to transfer it in,” he said, so how do they accomplish that? Well, they accept bitcoin obviously. Again, in terms of motivation to do that, it’s not clear. Maybe the convenience of it, maybe something else? But Ishbia’s motivation appears to be driven by competition, namely from Rocket Mortgage, the nation’s top mortgage lender. If...

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### Your Positive Rental History Will Now Help You Qualify for a Mortgage

- Published: 2021-08-12
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/your-positive-rental-history-will-now-help-you-qualify-for-a-mortgage/
- Categories: Mortgage News

In a bid to help more renters become homeowners, Fannie Mae has introduced a new “innovation” that will incorporate rental history into its automated underwriting system. The added feature, which will launch on September 18th, 2021 via Fannie Mae’s Desktop Underwriter (DU), automatically identifies recurring rent payments in an applicant’s bank statement data. This will allow mortgage lenders to “deliver a more inclusive credit assessment,” with the permission of the borrower. Fannie Mae CEO Hugh R. Frater said he believes it’s the first time a large-scale AUS will leverage electronic bank statement data to incorporate positive rental history. The move is expected to even the playing field for homeowners and renters by “correcting the housing inequities of the past. ” And it should lead to more mortgage approvals for those who otherwise may not have qualified for a home loan due to insufficient credit history. How Rental History Can Help You Get Approved for a Mortgage The addition of positive rental history can be used as compensating factor during the underwriting process Beneficial if the borrower has a limited traditional credit history (lack of credit cards, loans, etc. ) Positive rents will automatically be pulled from submitted bank statements and incorporated into the underwriting engine Nearly 20% of denied applicants from a sample study could have been approved with this change in place Prior to this announcement, it was possible to use positive rental history as a compensating factor if you didn’t quite qualify for a mortgage. But it’s a...

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### Are Mortgage Calculators Accurate? Why Some Totally Miss the Mark

- Published: 2021-08-11
- Modified: 2021-08-11
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-calculators-actually-accurate/
- Categories: Mortgage Tips

Time for more mortgage Q&A: “Are mortgage calculators accurate? ” Just about anyone looking to buy real estate or apply for a mortgage refinance will rely upon a loan calculator to get a better understanding of what their monthly payment might be. But not all mortgage calculators are created equal – in fact, some totally miss the mark. For that reason, it’s important to understand what you’re actually calculating to ensure you get the numbers right. Or at least close to right... The More Stuff That's Included, the Better... Let’s start with the basics here. Any mortgage calculator worth its salt should let you calculate principal, interest, taxes, insurance, and even include PMI and HOA dues. Why?   Because these are all very real costs, and ignoring them means underestimating what you'll owe each month. If it simply shows you principal and interest, you’re missing a pretty decent chunk of the payment, assuming your mortgage has impounds (which many do). Or if you're buying a condo (and will be subject to HOA dues) or put less than 20% down and don’t opt for LPMI. I know many mortgage calculators often ignore some of these costs, or automatically assume they don't apply to your situation. This can be misleading. I conducted a little research on Google by looking up the first few mortgage calculators that came up in their search. Mortgage Calculator Results Definitely May Vary Not all mortgage calculators are created equal In fact, many don't include very important components...

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### Mortgage Rates vs. Unemployment: Keep a Close Eye on the Jobs Report!

- Published: 2021-08-09
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-unemployment/
- Categories: Mortgage Matchups, Mortgage Rates

It's time for another mortgage match-up: "Mortgage rates vs. unemployment. " When it comes to making (or for our purposes saving) money, everyone probably wishes they could predict the future. After all, if you know what’s coming next, there are plenty of great ways to capitalize. For homeowners, good timing or a penchant for fortunetelling can result in buying a property at market bottom. Or landing a lower mortgage rate, assuming one takes the time to shop around and gather multiple quotes from different lenders. Ultimately, a low mortgage rate can easily eclipse the savings of other tedious money-saving tasks in one fell swoop. Why?   Because the savings are realized month after month, and year after year, for potentially decades. The Economy Guides Mortgage Rates Mortgage interest rates are mainly driven by the state of the economy Things like unemployment and new job creation can have a big impact Good news = a growing economy and higher rates Bad news = a stagnant/contracting economy and lower rates While there are plenty of economic indicators that affect the direction of mortgage rates, perhaps the biggest is the monthly “Employment Situation” report, delivered by the Bureau of Labor Statistics (BLS) on the first Friday of each month. It’s affectionately known as the “jobs report” or the “NFP,” which stands for nonfarm payrolls (it excludes farm workers, government employees, and some others). The latest report released a few days ago revealed that nonfarm payroll employment increased by 943,000 jobs in July, well...

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### Rocket Mortgage Launches Detroit Home Loan+: Is It a Good Deal?

- Published: 2021-08-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/detroit-home-loan-plus-rocket-mortgage/
- Categories: Mortgage News

The nation’s largest mortgage lender, Rocket Mortgage, has just rolled out a home loan program exclusively for customers buying homes in Detroit. The goal of the so-called “Detroit Home Loan+” is to help more Detroiters own a home in Detroit, where the company has been headquartered for more than a decade. Rocket Mortgage (formerly Quicken Loans) has been a major player in revitalizing downtown Detroit, which had been one of the hardest cities in the country during and after the Great Recession. This new initiative supports with the company’s mantra of “for-more-than-profit. ” What Is the Detroit Home Loan+? Mortgage program offered exclusively to home buyers purchasing in city of Detroit Comes with up to $2,500 in closing cost credit if buying a primary residence Borrowers can also take advantage of pre-purchase mortgage counseling from the Detroit Housing Network Those who are unbanked and/or credit invisible can work with fintech MoCaFi to improve their finances In a nutshell, Detroit Home Loan+ is a new program offered by Rocket Mortgage that provides $2,500 in closing cost credits for those buying a home in Detroit. It exists because less than 47% of Detroit’s residents own homes, a number that is well below the national average of around 66%, per the Census Bureau. Simply put, the program incentivizes homeownership vs. renting in Motor City (maybe now better known as Mortgage City), which can be a positive for both the individual and the larger community. Aside from the closing cost credit, it also offers...

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### Why It's Best to Apply for a Mortgage When Things Are Slow

> If you apply for a mortgage when it's super busy, you might not get the lowest interest rate, or the best customer service!

- Published: 2021-08-04
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-you-may-want-to-apply-for-a-mortgage-when-things-are-slow/
- Categories: Mortgage Tips

A working paper from the National Bureau of Economic Research revealed that it might be best to apply for a mortgage when no one else is. The analysis, “The Time-Varying Price of Financial Intermediation in the Mortgage Market” (if you like light reading you should check it out), found that price changes on the secondary mortgage market aren’t fully passed on to consumers if volume is high. In other words, if lenders are busy, they aren't offering their lowest mortgage rates. In a sense, this is somewhat ironic, in an Alanis Morissette kind of way. Savings Aren't Passed Along When Demand Is Strong When demand for a certain product, such as a home loan, is particularly strong There is less (or no) incentive for lenders to pass along even more savings This is similar to how retailers won't lower prices if they've got plenty of buyers Why should they if they're already slammed? The researchers refer to this cost as “intermediation,” which they define as the middleman between the borrower and the purchaser of the loan (the investor), essentially the lender. This intermediary buys the mortgage from the borrower and then sells it to an investor. They provide the principal balance to the borrower and offer a rebate, otherwise known as a lender credit. The rebate can cover closing costs associated with the loan so the borrower doesn’t have to pay them out of pocket. Conversely, the borrower can take less or none of this rebate (or even a negative...

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### Why a Really Cheap Mortgage Might Actually Be Trouble

> An ultra-cheap mortgage might give you a false sense of living below your means, pushing you to spend when you otherwise wouldn't.

- Published: 2021-08-04
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-a-really-cheap-mortgage-might-actually-be-trouble/
- Categories: Mortgage Rates, Mortgage Tips

I know, I know. It sounds ridiculous to complain about or imply that something cheap is a bad thing. Clearly I’m going to have some explaining to do, which I’m prepared to do so bear with me. I’m by no means against cheap mortgages or anything else cheap, but I do see one drawback that can present itself in certain situations. Existing Homeowners Are Enjoying the Lowest Payments in Years Despite record high home prices and appreciation that hasn’t been seen in decades, existing homeowners are enjoying relatively low monthly payments. This is a result of record low mortgage rates coupled with increased wages and perhaps a sprinkling of inflation. Yes, affordability has worsened for renters who have yet to enter the market, due to a whopping 17. 2% rise in home prices from June 2020, per CoreLogic. But for those who were already homeowners, monthly payments are often getting cheaper via a rate and term refinance. These borrowers are turning in their old mortgages for ones with smaller balances and lower interest rates. The combination is an even cheaper mortgage payment, which is great for the household balance sheet, right? Homeowners Might Be Flush with Cash, But What Are They Spending It On? Here’s the problem for some of these folks. If they’ve got super cheap mortgage payments, they might feel wealthier than they really are. After all, we live in a time of 2% mortgage rates, which isn’t usual, though it’s been the new normal for quite a...

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### Resetting the Clock When You Refinance: Why It Could Cost You

> If you decide to refinance your mortgage, be sure to factor in your new loan term, which could add thousands of dollars in interest.

- Published: 2021-08-03
- Modified: 2025-02-04
- URL: https://www.thetruthaboutmortgage.com/resetting-the-clock-when-refinancing-your-mortgage/
- Categories: Mortgage Tips

Mortgage rates are trickling back toward record lows again and refinance applications are on the rise. You can thank our questionable economy, a COVID resurgence, and the Fed’s pledge to continue buying mortgage-backed securities. The recent announcement regarding the end of the Adverse Market Refinance Fee is also undoubtedly helping. My expectation is we'll see a big jump in refinance applications when the Mortgage Bankers Association (MBA) reports the data tomorrow morning. While the rally could be short-lived, it may renew interest for some that were on the fence about refinancing, especially if their current interest rate isn’t all that high compared to current market rates. What Does It Mean to Reset the Mortgage Clock? Mortgage term: 30 yearsAge of mortgage: 5 years oldTime left on mortgage: 25 yearsWhen you refinance your mortgage, there are lots of implications. It’s not just about a lower monthly payment, despite that being the chief motivation. There’s also the cost and time involved, the product you choose, the status of your existing mortgage, along with what you plan to do post-refinance. One thing some homeowners might overlook when refinancing is their mortgage term, seeing that most individuals tend to focus on monthly payments above all else. But when you refinance, you wind up with a new loan term and associated amortization schedule. So if you previously had a 30-year mortgage that was five years old, and refinanced into another 30-year mortgage, your term would increase from 25 years back to 30 years. A 35-Year...

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### How to Lower Your Mortgage Rate Without Refinancing

> There are several ways it might be possible to lower your mortgage rate without a refinance. Find out if one of these methods works for you!

- Published: 2021-07-27
- Modified: 2024-09-23
- URL: https://www.thetruthaboutmortgage.com/can-i-lower-my-mortgage-interest-rate-without-refinancing/
- Categories: Mortgage Tips, Refinance

Here’s an interesting one. Is it possible to obtain a lower mortgage rate without refinancing? While it’s not all that difficult to refinance a home loan, it does take a bit of time and energy, and you generally need to qualify for the thing! Not everyone qualifies for a mortgage for one reason or another, and the same goes for refinancing an existing loan. For example, if your credit score isn’t quite up to snuff, or you don’t have the required income to keep your DTI below key levels, you may not get approved. This means you might be locked out when it comes to obtaining a lower mortgage interest rate in times when rates are favorable. There are also times when it just doesn’t make much sense to refinance because rates are higher or similar to what you’ve already got. So what are you to do if you can’t or simply don’t want to refinance, but still want a lower rate? Well, there are some options to consider. Just Call and Request a Lower Mortgage Rate While perhaps not conventional or all that common, some folks have obtained lower interest rates simply by calling up their mortgage lender and requesting one. This is formally known as a mortgage rate modification and offered with some credit unions and depository banks. You need to indicate that you have no interest in refinancing with them because otherwise they'll just take you down that route. It’s kind of similar to the old credit...

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### Why Are Mortgage Payments Mostly Interest?

> Homeowners often complain that mortgages are mostly interest, despite the low rates offered. But is it true, and if so why? Let's find out!

- Published: 2021-07-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-are-mortgage-payments-mostly-interest/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: “Why are mortgage payments mostly interest? ” Here’s an interesting mortgage question – pun sadly intended because I couldn't help it. Lots of folks are obsessed with how much interest is paid on a mortgage, often citing the total interest paid over 30 years. This counters the argument that mortgages are the cheapest debt you can own, which they basically are. Let's discuss what they're getting at to see what all the fuss is about. Payment Composition Over Time Most homeowners tend to take out fixed-rate mortgages The monthly payments on these types of loans don't change during the full 15- or 30-year terms But while the mortgage payment remains constant throughout the life of the loan The amount that is allocated to principal and interest changes monthly as the loan is paid off The way mortgages are set up here in the United States, each monthly payment is the same amount, assuming it’s a fully amortizing fixed-rate mortgage, which most tend to be. The payment amount after month one is the same as it is during month 360, assuming you take out a 30-year fixed and keep it until maturity. This makes housing payments more affordable (and predictable) because the balance is paid off evenly over a long period of time, such as 30 years. However, even though the payment amount is fixed, the composition of the payment will change monthly until the loan term ends. Just check out the chart above - the light blue interest...

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### New Mortgage Startup Tomo Exists Because Buying a Home Can Be Terrible

- Published: 2021-07-19
- Modified: 2024-06-22
- URL: https://www.thetruthaboutmortgage.com/tomo-mortgage-review/
- Categories: Mortgage Tips

The mortgage and real estate industry is no stranger to disruptors, especially over the past few years as scores of companies have tried to change the way we buy, sell, and obtain a home loan. One of the latest examples is “Tomo,” a venture-backed fintech with some big-name founders and investors, including former Zillow employees Greg Schwartz, Carey Armstrong, and Spencer Rascoff. What’s unique about this mortgage lender is they only originate home purchase loans. No refis. That means they’re completely committed to home buyers. Like other lenders, they’re attempting to level the playing field between cash buyers and those who need a mortgage, an especially relevant concern in today’s ultra-competitive housing market. Tomo Mortgage Is a Purchase-Only Lender (No Refis) Direct-to-consumer, purchase loan-only mortgage lender Founded in 2020, headquartered in Stamford, CT Started by former Zillow executives Greg Schwartz and Carey Armstrong Do not charge lender fees and offer both a low rate and closing guarantee Will also pair you with a real estate agent for an additional mortgage rate discount Tomo Exists Because Buying a Home Can Be Terrible Tomo was created because purchasing a property can be a real pain in the neck, and instead of relying on old technologies, they’re going the digital route. This means you can get started right from their website in minutes, whether by desktop computer or smartphone. They’re also streamlining the process, simplifying how you can complete tasks, and throwing in a bunch of guarantees along the way. It all starts...

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### Fixed-Rate Mortgages vs. ARMs: Which to Choose and Why?

- Published: 2021-07-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/30-year-fixed-vs-arm/
- Categories: Mortgage Matchups, Mortgage Tips

Mongoose vs. Cobra. Coyote vs. Roadrunner. Pirate vs. Ninja? And finally, "fixed-rate mortgage vs. adjustable-rate mortgage. "  Yes, we're talking about the greatest rivalries of all time. Okay, maybe this one isn't as interesting as those others mentioned above, but it can be if you're buying a home or refinancing an existing mortgage. So what's better, the boring old fixed-rate mortgage or the more provocative and often controversial adjustable-rate mortgage (ARM)? Let's discuss both and come up with some conclusions, which can vary based on individual preferences and circumstances. Fixed-Rate Mortgage vs. Adjustable-Rate Mortgage During the housing boom in the early 2000s, homeowners often chose adjustable-rate mortgages as a means to qualify for a home they probably wouldn’t be able to afford with a traditional fixed mortgage. Back then, you could qualify a borrower at the ARM's lower start rate, even though the loan would eventually adjust much higher. Even if they could afford a fixed-rate loan, homeowners were happy to take the lowest interest rate possible, which typically came with the ARM. But times have changed, and adjustable-rate mortgages have now fallen out of fashion with fixed-rate mortgage rates hitting all-time record lows. Rates have since risen quite a bit but the trend is the same. In fact, fixed-rate mortgages account for more than 90% of the purchase money mortgages and refinance loans being originated nowadays. Sure, fixed mortgages are definitely more popular, but that doesn't mean they're any better, or always the right choice. It's just a matter...

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### Better Will Now Guarantee Your Mortgage Even If the Appraisal Comes in Low

- Published: 2021-07-13
- Modified: 2025-01-29
- URL: https://www.thetruthaboutmortgage.com/better-appraisal-guarantee/
- Categories: Mortgage News

With the housing market so competitive, and properties often going above asking, getting a mortgage can be a little more stressful. One major component of the mortgage approval process is determining the collateral value of the subject property, otherwise known as the appraised value. A bank or lender generally won’t approve you for a home loan without getting an independent appraisal first, at your expense. Simply put, they want to know that the property you’re buying or refinancing is actually worth what you or the seller think it’s worth. Even if you’re a stellar borrower with an excellent credit score and tons of money in the bank, a valuation issue can sink your loan approval. While this typically isn’t a problem, it can muddy the waters if the appraisal happens to come in low. The good news is we’re in a rising real estate market, with home prices experiencing their best annual gains in decades. They’re also at new record highs. This means even a bid over asking could easily come in at value when the appraisal is conducted. But what if it doesn’t? Often, the home buyer would need to make some adjustments to their financing to “make it work. ” The most common tactic is to put more money down to keep the loan-to-value (LTV) ratio at its original level. Unfortunately, this isn’t always an option if a buyer is light on cash, and home sellers (or at least their listing agents) know this. This is why they...

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### American Express Cardholders Can Get Up to $6,000 Statement Credits If They Use Rocket or Better Mortgage

- Published: 2021-07-07
- Modified: 2023-09-05
- URL: https://www.thetruthaboutmortgage.com/american-express-mortgage-promotion/
- Categories: Mortgage News

If you happen to be an American Express cardholder, or were thinking about becoming one, they’ve got new a limited-time promotion with Rocket Mortgage and Better Mortgage. On top of waiving some origination fees, the card issuer will provide cardholders with up to $6,000 in statement credits if they use one of the mortgage lenders above to purchase a home or refinance an existing home loan. So if you were planning on using either of these lenders, it could actually make sense to become a cardholder first, then apply. Or if you were thinking about using a different lender, you might want to get a quote from these two lenders as well. Then do the math to see if this promotion makes them the cheaper option. How the Amex Mortgage Promotion Works Finance a home purchase or refinance a loan with Better or Rocket Mortgage to receive a statement credit $2,000 statement credit for conforming loan amounts $6,000 statement credit for jumbo loan amounts Both lenders will also waive loan origination fees like processing and underwriting In order to be eligible for this new promotion, you need to be an American Express cardholder. Specifically, you need to be a “basic account holder” of a personal consumer American Express card, such as the pricey American Express Platinum or a free option like their Amex EveryDay credit card. Aside from that, you also need to apply/lock your home loan by a certain date, and close by the cutoff as well. The good...

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### If You Want to Be a Homeowner, Go to College and Get a Degree

- Published: 2021-06-21
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/if-you-want-a-mortgage-go-to-college-and-get-a-degree/
- Categories: Mortgage Tips

Assuming you want to become a homeowner, it’s probably best to go to college, even if you have to take out costly student loans in the process. You may have read articles over the past several years that talk about snowballing student loan debt and the inability to afford a mortgage as a result. While this might be true in some cases, it turns out you’re still more likely to buy a home if you obtain at least a bachelor’s degree. The Benefits Outweigh the Costs A commentary (since removed) from mortgage financier Fannie Mae revealed that those who go to college are more likely to become homeowners than those who simply graduate from high school. The most probable homeowners are those with a college education and no student loans, with a likelihood of homeownership that is 43% higher than high school graduates without student loans. Meanwhile, student loan holders with bachelor’s degrees are still 27% more likely to become homeowners relative to those debt-free high school graduates. There is a catch though – if you don’t actually complete your bachelor’s degree and simply wind up with student loans, you’re actually worse off than those who simply called it quits after high school. This last group is 32% less likely to own a home than a debt-free high school graduate. They’re also more likely to be behind on student loan payments, which isn’t very surprising. The takeaway here is that it pays to go to college, even if it costs...

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### 3 Reasons Why Putting Less Down Can Raise Your Mortgage Payment

> While a low down payment can make it easier to buy your dream home, it may increase your mortgage payment in three different ways.

- Published: 2021-06-17
- Modified: 2021-08-08
- URL: https://www.thetruthaboutmortgage.com/3-ways-a-low-down-payment-can-raise-your-mortgage-payment/
- Categories: Mortgage Tips

If you’re in the market to purchase a new home, perhaps because mortgage rates are low and you're an extremely brave individual, you may be thinking low down payment all the way. Heck, for many borrowers these days, a low down payment is the only way to play, with home prices surging to new all-time highs in record fashion. In case you hadn’t heard, zero down mortgages are mostly extinct, other than VA loans and USDA loans. But there are still other low-down payment options, such as the ever-popular FHA loan, which only requires 3. 5% down, along with conventional mortgage options that call for just 3% down. While these low-down payment mortgages can make homeownership more accessible, your mortgage payment will rise, which obviously erodes your affordability. There are actually three ways a low down payment can increase your mortgage payment, which could even put your loan in jeopardy. Let's explore these issues to determine if putting down more money might be the better move. Less Money Down = Larger Loan Amount The most obvious downside to a lower down payment is a larger loan amount The less you put down, the more you'll need to borrow from the bank This means paying more each month in the way of principal and interest Pay extra attention to loan amount if it's close to the conforming limit First and foremost, if you put less money down on your home purchase, you’ll wind up with a larger mortgage. There’s really no...

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### The Mortgage Firm Review: Twice a SocialSurvey Winner for Customer Satisfaction

- Published: 2021-06-16
- Modified: 2024-08-17
- URL: https://www.thetruthaboutmortgage.com/the-mortgage-firm-review/
- Categories: Mortgage Tips

Today we’ll check out Florida-based lender “The Mortgage Firm,” which has been originating home loans since the mid-1990s. That’s a lifetime in today’s world of nascent startups, and shows they’ve been able to weather the ups and downs of the housing market while earning a stellar reputation at the same time. In fact, they were recently named the top mortgage lender by SocialSurvey for customer satisfaction, beating out dozens of other companies in their category. Let’s learn more to see if they could be a good fit for you. The Mortgage Firm Fast Facts Direct-to-consumer retail mortgage lender Offers home purchase financing, refinance loans, and reverse mortgages Founded in 1995, headquartered in Orlando, FL Funded about $3. 5 billion in home loans last year Licensed in 22 states and the District of Columbia Does most of their business in home state of Florida along with Georgia The Mortgage Firm is an independently operated direct-to-consumer retail mortgage lender that offers home purchase financing, mortgage refinance loans, and reverse mortgages. They primarily serve home buyers and existing homeowners in the Southeastern United States, with their home state of Florida providing most of their overall volume. Last year, they funded roughly $3. 5 billion in home loans, making them a large-sized regional lender. About two-thirds of their volume was dedicated to home purchase loans, with the rest mostly comprised of mortgage refinances. At the moment, they’re licensed to do business in 22 states and the District of Columbia. Those states include Alabama, Arizona,...

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### Top Mortgage Lenders by State in 2020: Rocket Claims 19 States and D.C.

> Check out which mortgage lender dominated each state across the nation in 2020. Rocket Mortgage won a whopping 19 states and D.C.!

- Published: 2021-06-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/top-mortgage-lenders-by-state-2020/
- Categories: Mortgage News

Assuming you actually needed to be told, Quicken Loans (aka Rocket Mortgage) was the top residential mortgage lender in the United States last year. The company funded roughly $314 billion in home loans during what was a record year for many mortgage companies thanks to record low mortgage rates and an uptick in home purchases. That handily beat out runner up Wells Fargo ($267 billion), which until recently had been the #1 mortgage lender in the country for many years. Coming in third was United Wholesale Mortgage (UWM), which funded an impressive $183 billion despite only operating on the wholesale level with mortgage broker partners. Rounding out the top five were Chase with $149 billion and Freedom Mortgage Corp. with $122 billion. While interesting, I wanted to know which companies were performing best in each state, or simply who the top mortgage lenders were in say California or Texas or New York. Thanks to 2020 HDMA data parsed and organized by Richey May, I was able to see which states were top in all 50 states and the District of Columbia. Rocket Easily Outpaced Its Competitors on a State-by-State Basis Aside from being the top mortgage lender nationally, Quicken/Rocket was also the leader by total number of states with 19, along with the District of Columbia. That was a truly impressive figure, as no other single lender claimed double-digits. In fact, only one other company came even remotely close, San Francisco-based bank Wells Fargo, with nine total states. It drops...

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### Directors Mortgage Review: Oregon's Local Mortgage Lender

- Published: 2021-06-07
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/directors-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out “Directors Mortgage,” a Portland, Oregon-based mortgage lender that says it “takes a community-first, people-focused approach” to the home loan business. This means you can actually sit down and speak with a human being about your homeownership goals instead of filling out an online form, assuming you prefer face-to-face interaction. And those human beings are apparently happy because the company is consistently recognized as one of the best companies to work for in Oregon. So hopefully they’ll make you happy too. They are also one of the top philanthropic businesses in the area and involved with many of the local sports teams, including youth teams and pros like the Portland Thorns and Portland Timbers. Let’s learn more about this local mortgage lender to see if they could be a good fit for you. Directors Mortgage Fast Facts Independent retail direct-to-consumer mortgage lender Largest privately owned mortgage company headquartered in Oregon Locally owned and operated in Lake Oswego since 1998 Offer home purchase loans, refinances, construction loans, and reverse mortgages Currently licensed to do business in eight Western states Funded nearly $1. 5 billion in home loans last year Also operate a wholesale lending division called USA Direct Funding Directors Mortgage is a retail direct-to-consumer mortgage lender that was founded back in 1998 by current CEO Mark J. Hanna. They are one of the largest independent mortgage companies located in the Northwest, and say they don’t take a "one-size fits all" approach like some of the bigger banks....

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### Thursday Is the Best Day to List Your House

> The best day to list your home is Thursday because they go pending faster and are more likely to sell above asking!

- Published: 2021-06-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/thursday-is-the-best-day-to-list-your-house/
- Categories: Housing Market, Mortgage News

Not that it matters much these days, but apparently Thursday is the best day to list your home for sale. This is the latest advice from iBuyer and home valuation company Zillow, which noted that 21% of properties are listed on that particular day of the week. What’s So Great About a Thursday Anyway? Roughly 21% of properties are listed for sale on Thursdays (the most of any other day) The share of homes listed on Thursdays is as high as a third in some markets nationwide (Portland, Seattle) Properties listed on a Thursday typically go pending faster than homes listed on any other day of the week And homes listed on Thursdays are more likely to sell above their asking price I like Thursdays – ever since college it’s been the unofficial start of the weekend, something I didn’t grasp until, well, college. Fridays are generally the lighter work days (or school days), with most of the heavy lifting completed earlier in the week. The other special thing about a Thursday, at least when it comes to real estate, is that open houses and private showings often take place on the weekend, when folks aren’t working. So if a property is listed just a day or two before, there’s a good chance it’ll be seen very shortly after, as opposed to sitting on the market all week before the prospective buyers start showing up. Conversely, if you put your property on the market on say a Sunday, for some...

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### Supreme Lending Review: A Local Lender That Aims to Close Loans in 20 Days or Less

- Published: 2021-06-02
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/supreme-lending-review/
- Categories: Mortgage Tips

Today we’ll check out “Supreme Lending,” a mortgage banker out of Dallas, Texas that is all about speed. In fact, their goal is to close and fund every loan that comes in their door in 20 days or less, using the latest technology and more efficient loan processing. This is especially important because they specialize in home purchase lending, which is often more time-sensitive than a standard mortgage refinance. They also believe they can offer lower rates and fees than other lenders thanks to their advanced processing software and automated underwriting systems. Additionally, their “Give Back Program” provides up to $800 in reduced closing costs to veterans, first responders, and cancer survivors, and possible discounted real estate agent fees as well. Supreme Lending Fast Facts A direct-to-consumer retail mortgage banker that offers home purchase and refinance loans Founded in 1999, headquartered in Dallas, Texas (a dba of Everett Financial) Funded $16 billion in home loans last year About a third of their overall volume comes from home state of Texas Licensed to do business nationwide including the District of Columbia Has 300 physical branches and 1,800+ employees across the country Supreme Lending is a direct-to-consumer retail mortgage banker based in Dallas, TX that was founded all the way back in 1999 by Scott Everett. The company is actually a dba of Everett Financial, which gets its namesake from, you guessed it, their founder. They are a home purchase-heavy lender, meaning they probably have good relationships with real estate agents and...

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### Do Mortgage Payments Go Down Over Time?

> While everyone always seems to focus on mortgage payments adjusting higher, there are a number of reasons why a mortgage payment may decrease.

- Published: 2021-06-02
- Modified: 2023-09-05
- URL: https://www.thetruthaboutmortgage.com/do-mortgage-payments-decrease/
- Categories: Mortgage Tips

Mortgage Q&A: “Do mortgage payments decrease? ” While everyone always seems to focus on mortgage payments adjusting higher, there are a number of reasons why a mortgage payment may actually decrease over time. No really, there are, so let’s take a look at how this pleasant surprise could happen, shall we... Mortgage Payments Can Decrease on ARMs While perhaps not as common as the payment going up Monthly payments can drop if you have an adjustable-rate mortgage But you'll need the associated mortgage index to decline in the process And your lender may have a built-in floor, so basically don't bank on it If you have an adjustable-rate mortgage, there’s a possibility the interest rate can adjust both up or down over time, though the chances of it going down are typically a lot lower. Still, it is viable to take out an ARM, hold it throughout its initial fixed-rate period, then wind up with a lower rate once it becomes adjustable. You may remember that now infamous interest rate reset chart, the one that showed billions of dollars worth of mortgages resetting from their fixed-rate period into their scary adjustable period. Well, the damage wasn't nearly as bad as it originally appeared because many of the mortgage indexes tied to those loans plummeted to rock-bottom levels and/or all-time lows. As a result, some homeowners who stayed in those seemingly “exploding ARMs” may have actually seen their mortgage payments fall. And the savings could have been significant. For example, say...

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### Mortgage vs. Cash: Which Is the Better Option When Buying a Home?

> The pros and cons of using a mortgage to finance your home purchase, or paying all-cash instead to save on interest.

- Published: 2021-05-25
- Modified: 2025-01-10
- URL: https://www.thetruthaboutmortgage.com/mortgage-vs-cash-which-is-the-better-option-when-buying-a-home/
- Categories: Home Buying, Mortgage Matchups

It’s been a while since my last mortgage match-up, so let’s give it a whirl again: "Mortgage vs. cash. " Today, the focus will be on taking out a mortgage versus simply using cash when purchasing a home and skipping the lender piece altogether. Of course, it's not that simple for the majority of the population to throw a few hundred thousand dollars (or more) down on a property. So for many, this won't even be an option. But it's worth visiting regardless to see how even the very rich often opt for a home loan when they've got plenty of cash to spare. Buying a Home with Cash Has Its Benefits Cash buyers are more attractive to home sellers The home buying process can be a lot faster without a mortgage Don't need to abide by any mortgage lender's rules No property restrictions or inspections to worry about Don't have to pay interest to the bank for several decades First let’s talk about buying a home with cash. This is almost certainly the favored approach of real estate investors and perhaps the mega-rich, though billionaires like Mark Zuckerberg still take out mortgages. And investing gurus like Warren Buffett think the low mortgage rates are a great deal... especially when you get to lock in a low fixed rate for 30 years. But for a large swath of the population, this either/or question doesn’t even get any consideration because most of us can’t afford to buy a home (or even...

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### How Many Mortgage Quotes Should I Get? A Key Study Says the More the Better

- Published: 2021-05-19
- Modified: 2024-03-27
- URL: https://www.thetruthaboutmortgage.com/how-many-mortgage-quotes-should-i-get/
- Categories: Mortgage Tips

Mortgage Q&A: “How many mortgage quotes should I get? ” When it comes to getting the best deal on your mortgage, you can never shop too much. Just like any other product you may comparison shop for, the more time you put in, the better deal you’ll probably receive. Sure, it’s a pain in the you know what, but you’re not shopping for a plasma TV. This is your mortgage, most likely one of the largest financial decisions you’ll make in your life. And one that can affect your pocketbook for years and years to come depending on how long you keep it. So not spending a considerable amount of time shopping for one would be very ill advised.   Don't be one of the many individuals who obtains just one mortgage quote! Look At Mortgage Rates Online and Track Weekly Averages There's no specific number of quotes needed to score the best deal But the more mortgage quotes you receive the better your odds of finding that low rate A study from Freddie Mac found that even two quotes as opposed to one can save you thousands over the loan term And 5+ quotes from different lenders has the ability to save you even more These days, we’ve got the luxury of using the Internet to comparison shop. Back when, you had to scour the phonebook and make phone call after phone call to check on prices and availability. I remember doing this to buy a pair of high-tops...

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### Garden State Home Loans Review: One of the Highest-Rated Lenders I’ve Come Across

- Published: 2021-05-13
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/garden-state-home-loans-review/
- Categories: Mortgage Tips

Today we’ll check out East Coast mortgage lender “Garden State Home Loans,” which says it has some of the lowest mortgage rates and most competitive fees in the industry. They’re able to offer more attractively priced mortgages to their customers because they operate mostly online, meaning low overhead and a streamlined operation. And their thousands of customer reviews appear to back that up, with excellent marks across all the major ratings websites. Let’s learn more about them. Garden State Home Loans Fast Facts Mortgage broker that offers home purchase loans and refinances Founded in 2011, headquartered in Cherry Hill, New Jersey Licensed to do business in six states on the East Coast Has funded more than $4 billion in home loans since inception Aims to close most loans in 30 days or less (21. 3-day average turn time currently) Garden State Home Loans is a mortgage broker located in Cherry Hill, NJ that offers home purchase financing and mortgage refinances. As a broker, they can shop your loan on your behalf with their wholesale lender partners to find the best pricing and most flexible programs available. At the moment, the company is licensed in just six states, including Connecticut, Florida, Maryland, Michigan, New Jersey, and Pennsylvania. Since inception, the company has originated more than $4 billion in home loans and says it’s able to fund loans very quickly, with an average turn time of just 21. 3 days from submission to closing. How to Apply with Garden State Home Loans...

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### Nation’s Top Wholesale Mortgage Lender Launches New Line of Adjustable-Rate Mortgages

- Published: 2021-05-13
- Modified: 2021-09-02
- URL: https://www.thetruthaboutmortgage.com/united-wholesale-mortgage-arms/
- Categories: Mortgage News

Declaring that ARMs are back, United Wholesale Mortgage (UWM) has just rolled out a new line of adjustable-rate mortgages for its mortgage broker partners. The new offering from the nation’s largest wholesale mortgage lender includes a 5-, 7-, and 10-year ARM to flank the usual fixed-rate options, such as the very popular 30-year fixed and the shorter-term 15-year fixed. What makes these loans interesting is the fact that they come with significantly better pricing than fixed-rate mortgages currently available with other lenders. And that might be enough to change the ARM argument, which has been decidedly dour for years now thanks to record low fixed mortgage rates. How Long Will You Actually Keep Your Home Loan? Something like 90% of purchase mortgages are 30-year fixed loans And roughly 80% of all mortgages including refinances are 30-year fixed loans Yet less than 10% of borrowers actually keep their home loan for more than seven years This means the bulk of homeowners with a mortgage are overpaying for the perceived safety of a fixed interest rate UWM aptly points out that fewer than 10% of borrowers stay in the same mortgage for more than seven years, yet something like 80% of mortgagors hold 30-year fixed mortgages. In other words, a large majority are paying too much for their home loan, yet never actually receiving the benefit of an interest rate that is fixed for the life of the loan. And because many adjustable-rate mortgages come with a lengthy initial fixed-rate period, many...

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### Quicken Loans Changes Name to Rocket Mortgage

- Published: 2021-05-12
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-changes-name-to-rocket-mortgage/
- Categories: Mortgage News

In an effort to perhaps streamline its brand and create a little less consumer confusion, Quicken Loans announced today that it is officially changed its name to “Rocket Mortgage. ” Going forward, you won’t see the old “Rocket Mortgage by Quicken Loans” blurb, and instead will just see Rocket Mortgage, which has clearly become the hot brand in home loans. The nation’s number one mortgage lender said the change will “bring alignment” to the Rocket brand, while making clear to home buyers that technology is the core tenet of Rocket Companies, Inc. From searching for a home to mortgage closing, the Rocket brand will feature, whether it’s sister company Rocket Homes or Amrock Title, or the company’s wholesale lender Rocket Pro TPO. At the same time, the Quicken Loans brand is essentially being retired after about 20 years in existence. In case you’re wondering, the name originally came from Intuit Inc. , the company behind TurboTax and QuickBooks, after Rock Financial founder Dan Gilbert sold to them in 1999. He later bought back the company and kept the name, though I believe they had to pay naming rights to keep it. Rocket Mortgage Quickly Took Over Its Parent Company Founder Dan Gilbert started a regional branch-based mortgage broker in metro Detroit called Rock Financial in 1985 Later changed the name to RockLoans. com in 1999 and sold the company to Intuit, the owner of Quickbooks and TurboTax They changed the company name to Quicken Loans before he eventually bought it...

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### Central Bank Mortgage Review: A Modern Home Loan from a 100-Year Old Bank

- Published: 2021-05-11
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/central-bank-mortgage-review/
- Categories: Mortgage Tips

Today we’ll review a Midwest-based depository bank that is big on home loans, “Central Bank,” which also operates an online lending division known as “Online Central. ” They’re perhaps best described as a neighborhood bank that has embraced the latest mortgage technology to allow for an up-to-date, digital home loan experience. So if you’re looking for a banking institution that has been around for a while, which operates the old-fashioned way with regard to values and personal service, they could be a good option. You’ll also get access to the latest technology too, and perhaps a low rate as well since they say they offer “very competitive” interest rates. Let’s learn more about them. Central Bank Fast Facts Direct-to-consumer retail mortgage lender backed by a depository bank Offers home purchase loans, refinances, and home equity products Founded in 1902, headquartered in Jefferson City, Missouri Backed by Central Bancompany, a $16-billion bank holding company Licensed to do business in all 50 states and the District of Columbia Also operates an online lending division called "Online Central" The Central Bank is a direct-to-consumer retail mortgage lender, meaning they offer home loans both online and in-person via their 140 physical bank branches. You can get a home purchase loan, a mortgage refinance, or a home equity product such as a HELOC. Their parent company Central Bancompany was founded more than 100 years ago, and is headquartered in Jefferson City, Missouri. Those bank branches I mentioned are located throughout the Midwest, from as far...

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### Why You Shouldn't Swipe Your Credit Card Before You Apply for a Mortgage

- Published: 2021-04-29
- Modified: 2025-02-13
- URL: https://www.thetruthaboutmortgage.com/dont-swipe-your-credit-card-before-you-apply-for-a-mortgage/
- Categories: Mortgage Tips

Large Credit Card Purchases Really Can Tank Your Credit Score While missed payments are arguably the worst offense Even racking up a lot of debt can lower your credit score significantly So it's best to put the spending on hold a few months before applying for a home loan That way there won't be any unwelcome surprises when it comes time to pull your credit You’ve probably heard at some point that making large purchases with your credit card(s) before applying for a mortgage is a no-no. In fact, you may have read that on this very site, since I’ve warned about it on numerous occasions in multiple posts because it's such a common problem. You might be aware of this issue, but shrugged it off, thinking what’s a few points, right? You already have excellent credit so it doesn’t matter if you purchase a new $5,000 couch with your AmEx card for the new digs ahead of time. Well, think again. It really does matter, and it can do serious damage to your credit score. I’m not just talking about 5-10 points. I’m talking enough movement to potentially take you out of the running for a mortgage altogether, or at minimum raise your mortgage rate. My Credit Score Got Rocked After Maxing Out a Credit Card I maxed out one of my credit cards a few years ago And my excellent credit score dropped about 50 points seemingly overnight That's enough to raise your mortgage rate depending on how...

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### New Fannie/Freddie Refinance Option Drops Adverse Market Fee, Offers $500 Appraisal Credit

- Published: 2021-04-28
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/new-fannie-freddie-refinance-option-drops-adverse-market-fee-offers-500-appraisal-credit/
- Categories: Mortgage News, Refinance

In an effort to undo some of the damage the Federal Housing Finance Agency (FHFA) basically caused itself, it’s throwing a bone to so-called low-income families to save on their mortgage. It all spurs from the adverse market fee the very same agency implemented back in August 2020 to contend with heightened losses related to COVID-19 forbearance and loss mitigation. The 50-basis point fee, which went into effect on September 1st, 2020, applies to all new refinance loans backed by Fannie Mae and Freddie Mac. While it’s not a . 50% increase in mortgage rate, the fee does get passed along to consumers in the form of either higher closing costs or a slightly higher mortgage rate, perhaps an . 125% increase all told. Either way, it wasn’t well received at the time, and still isn’t today, and this announcement is a somewhat bittersweet one, as it only applies to a certain subset of the population. Still, the FHFA believes families who are eligible for this new refinance initiative could see monthly savings between $100 and $250 on average. Who Is Eligible for Fannie Mae RefiNow and Freddie Mac Refi Possible? Homeowners with incomes at or below 100% of the area median income Must result in a lower monthly mortgage payment, and at least a 50-basis point reduction in interest rate Must currently hold an agency-backed mortgage (Fannie Mae or Freddie Mac) Loan must be seasoned for at least 12 months Property must be a 1-unit principal residence Borrower must...

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### Don't Be a Desperate Home Buyer: Be Prepared and Willing to Move On

- Published: 2021-04-23
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/dont-be-a-desperate-home-buyer/
- Categories: Housing Market, Mortgage Tips

It’s no secret the housing market is hot at the moment, so much so that just about everyone is wondering when the next housing crash will take place. The few homes that are out there are flying off the shelves, and bidding wars are becoming more and more common, if not a foregone conclusion. Instead of home sellers delivering price reductions to prospective buyers, as they did just a couple years ago, properties are going way above asking. While some are quick to scream “Another housing crisis! ,” for me it just reinforces the housing market dynamic we've seen over the past year and change. One driven by limited housing supply, low mortgage rates, and rising salaries for prospective buyers, all of which increase both home prices and purchasing power. At the moment, it's clear the home sellers have all the leverage, but that doesn't mean you still can't negotiate or get a better deal. Sure, the past few years have been crazy – but you shouldn’t have to write a letter to the seller begging them to accept your offer. And while it’s still easy to get caught up in all the excitement, don't forget that you have power too as the home buyer, no matter the market conditions. Simply put, don’t be a desperate home buyer. Or a desperate buyer of anything. If you are, you’ll likely get ripped off, or at the least pay more than you need to. Here are some things to consider to avoid...

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### Why Is the Housing Market So Hot?

- Published: 2021-04-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-is-the-housing-market-so-hot/
- Categories: Housing Market, Mortgage News

Real estate Q&A: "Why Is the Housing Market So Expensive Right Now? " If you asked me this same question a few years ago, I would have had the same basic answer I’m about to explain. And since that time, home prices have surged much, much higher, which basically tells me the same fundamentals have been at play for quite a while now. Additionally, they may continue for more years to come. Similar to a market downturn, when things are hot, they remain hot for years, which is why it can pay to hold on, just like those who didn’t sell their bitcoin at first-profit. Reason #1: There Is Very Limited Inventory and Lots of Buyers Housing supply is at record low levels meaning few homes are available to buyers And 45 million Americans are hitting the median first-time home buyer age over the next decade While home building has increased lately it's still stubbornly low and insufficient This has allowed a seller’s market to persist for nearly a decade simply because demand outweighs supply The top reason why the housing market is so high right now has to do with limited inventory, or supply. It’s one of those fundamental concepts even a child can comprehend. When you have a small or finite amount of something, and people want it, its value goes up. This is basically what’s been going on with real estate since the market bottomed in 2012. In reality, supply has been tight ever since the market...

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### Do Mortgage Brokers Offer Better Rates Than the Competition?

- Published: 2021-04-19
- Modified: 2021-08-22
- URL: https://www.thetruthaboutmortgage.com/do-mortgage-brokers-offer-better-rates-than-the-competition/
- Categories: Mortgage Rates, Mortgage Tips

In your endless search to find the lowest mortgage rates on the planet, you may be wondering which route will lead to the biggest savings. Should you go to your local bank, try your luck with an online mortgage lender, visit a credit union, or consult with an independent mortgage broker/banker? You've Got a Lot of Options When It Comes to a Mortgage There are many avenues you can take to obtain a home loan Including local brick-and-mortar banks and credit unions you may already know and work with Or direct mortgage lenders (both online and offline) you may have never heard of that promise low rates Lastly don't forget to consider an independent mortgage broker as well You may have heard that mortgage brokers offer the lowest interest rates thanks to their wholesale partners. And as we all know (or should know), wholesale prices tend to be cheaper than retail prices, the latter of which rise as operating costs are passed along. So does this mean brokers will automatically offer better rates than the competition? To be blunt, there’s no easy answer here. Actually, there is, but it’s not without its legwork. I’d argue to call/visit all of the above to see who offers the best interest rate and closing cost combination. Yes, I know it’s a pain, but if you don’t do it, you’ll never really know what could have been. And consider the return on your investment for those few extra hours you put in. Of course,...

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### When Will the Next Housing Market Crash Take Place? All Eyes on 2024

- Published: 2021-04-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/when-will-the-next-housing-market-crash-take-place/
- Categories: Housing Market, Mortgage Tips

I’ve noticed a trend lately. Everyone’s a real estate expert. It seems the most recent crisis and recovery has turned just about every single person into a guru on all things to do with home buying and selling. I suppose part of it has to do with the fact that the massive housing bubble that formed a decade ago swept the nation and was front page news. It also directly affected millions of Americans, many who serially refinanced their mortgages, then found themselves underwater, then eventually short sold, were foreclosed upon, or held on for the ride back up to new heights. And now with home prices surging and real estate so expensive, it might be conjuring up not-so-distant memories for some that we could be in for another rude awakening. A New Housing Bubble Mentality Real estate is red-hot again thanks to limited supply and intense demand It can feel like an ominous sign that we're headed down a dark road again But that alone isn't reason enough for the housing market to crash again There have to be clear catalysts and financial stress for another major downturn It’s a common conversation piece these days to talk about your local housing market. Thanks to greater access to information, folks are scouring Redfin and Zillow and coming up with theories about what that home should sell for, or what they should have listed it for. Neighbors are getting upset when nearby listings are not to their liking for one reason...

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### Jim Cramer Just Paid Off His Mortgage with Bitcoin Gains

- Published: 2021-04-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/jim-cramer-just-paid-off-his-mortgage-with-bitcoin-gains/
- Categories: Mortgage News

File this one under bizarre, for several different reasons. Mad Money host Jim Cramer disclosed yesterday that “he recently paid off a mortgage using profits from his investment in bitcoin. ” He apparently purchased a significant amount of the cryptocurrency back when it was trading at around $12,000, which was actually as recently as last October. The price of a single bitcoin has launched since then, hitting a record high of around $64,000 this week. For Cramer, that’s an investment return of about 433%, something he then moved into his mortgage account, which was probably earning a return of say 2-4%, which is the mortgage rate. He said it was “great to pay off a mortgage,” likening it to using “phony money” to pay for “real money. ” But why would he pay off a home loan that was priced at 2-4%, which is essentially its annual rate of return? Surely a big-wig investment guru like Jim Cramer could do better than a measly 2-4% in this market, or any market for that matter. What Is Cramer’s Rush to Be Free and Clear? Mortgage debt is typically the cheapest debt you can own, especially today Yet homeowners are often in a huge rush to pay off their home loans While this could make sense from an emotional or psychological point of view It’s a bit of a head-scratcher coming from an investment guru like Jim Cramer Now I understand it’s a common goal for homeowners to pay off their home...

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### How to Pay for Home Renovations: Pros and Cons to Different Methods

- Published: 2021-04-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-to-pay-for-home-renovations-pros-and-cons-to-different-methods/
- Categories: Mortgage Tips

Most properties require some amount work to get into their desired shape, even newer ones. And just about everyone knows that home renovation projects aren’t cheap. This is generally the case regardless of whether the job is a small one or a large one, or a matter of preference versus a mandatory fix. It’s going to cost you some real money, especially if you’ve got plans to update a kitchen or bathroom, replace a leaky roof, and so on. And at the moment, it seems everyone is addressing these issues at the same time, which has made it more difficult to hire a pro, and probably more expensive too. Let’s talk about the many ways you can pay for it all, and which might be best depending on the situation. Options to Pay for Home Improvements Various Ways to Pay for Renovations Method Cost Pros Cons Credit Card Zero if you use a 0% APR credit card Potentially very cheap, easy to apply and use Hard to pay contractors, costly if you don’t pay on time Project Loan Interest rates in mid to high single-digits, e. g. 7. 99% APR Relatively low APR, fixed monthly payments, flexible use of funds May be stuck working with one company HELOC Interest rate around 5% depending on prime rate and lender Pretty cheap, can draw if/when needed, tax deductible Need to apply for a loan, uses your home equity, rate is adjustable Home Equity Loan Interest rate slightly higher than HELOC in most...

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### 10 Reasons to Buy a House Other Than for the Investment

- Published: 2021-04-08
- Modified: 2023-02-11
- URL: https://www.thetruthaboutmortgage.com/10-reasons-to-buy-a-house-other-than-for-the-investment/
- Categories: Housing Market, Mortgage Tips

There are a lot of good reasons to buy a house, and probably a lot of bad ones too. But all too often, folks seem to get fixated on the investment side of things above all else, as if they’re playing the stock market. This is especially true at the moment, with home prices up substantially since the housing crisis that look place about a decade ago. Simply put, people don't want to overpay or buy a home at the top of the market, especially with bidding wars all too common again. And that's a fair concern. The thing is, a house isn’t just an investment, if it’s even an investment at all. It’s shelter if you plan on residing in it. A roof over your head to keep the rain and the cold out. It's a safe place where you can put down roots and create a foundation, maybe start a family. So when you consider that pros and cons of buying a house list, you need to think outside the box as well. You shouldn’t simply consider current home prices, or attempt to time the market to determine that right time to buy. Homeownership is much more than that, though I do recognize everyone wants to get a good deal, whether buying a new pair of shoes or real estate. That being said, let's look at some reasons why buying a home can be about much more than the investment. 1. Stay as long as you pay For...

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### 11 Ways to Build Home Equity

- Published: 2021-03-31
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/10-ways-to-build-home-equity/
- Categories: Housing Market, Mortgage Tips

These days, home equity is booming thanks to rapidly appreciating property values. At last glance, total equity on mortgaged properties exceeded $10 trillion, with more than $6. 5 trillion of it tappable, per recent figures from Black Knight. Yes, that's a "T" not a "B. " But you would of never guessed it less than a decade ago after the housing bubble burst and put millions in underwater positions. In the early 2000s, it was all about tapping into your home equity with a line of credit or a cash-out refinance, often at absurdly high loan-to-value ratios (such as 100%). The whole using your house as an ATM thing to make lavish purchases or even just pay the bills each month became the norm. As a result of all that excess, the narrative quickly changed to overpriced homes, declining equity, negative equity, underwater mortgages, loan modification programs, foreclosures, and so on. Funny how that works... This reversal of literal fortune was caused by crashing home prices and zero down mortgages, many of which weren't properly underwritten to begin with. Most of those who got into trouble purchased homes at the height of the market at unsustainable prices, while at the same time relying on 100% financing to get the deal done. This caused lots of homeowners to leave or think about walking away, as home price deprecation was found to be the leading driver of default. But many of those who stuck around and rode it out are actually in...

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### Spring EQ Review: Need a Second Mortgage?

- Published: 2021-03-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/spring-eq-review/
- Categories: Mortgage Tips

With the weather warming up, I thought it’d be prudent to check out “Spring EQ,” a lender that specializes in getting cash out of your home. By that, I mean they offer cash out refinances and second mortgages, including both home equity loans and lines of credit (HELOCs). They also partner with other lenders to provide secondary financing, so if you get a combo loan, you might find that they’re your lender on the second mortgage. Aside from allowing you to tap your home equity, they also offer home purchase financing too, so they’re a full-service lender. Let’s learn more about them to determine if they could be a good option for your first or second mortgage, or even both. Spring EQ Is All About Second Mortgages Direct-to-consumer nonbank lender that offers first and second mortgages Including home equity loans and home equity lines of credit Founded in 2016, headquartered in Philadelphia, Pennsylvania Currently licensed to do business in 39 states and D. C. Also operates a wholesale lending division for its mortgage broker partners Acquired by Cerberus Capital Management in December 2023 Spring EQ is a direct-to-consumer mortgage lender based out of Philadelphia, Pennsylvania that got its start in 2016. Originally, they sought to transform the home equity lending business model from “a long, drawn-out paperwork based process into a 21st century digital experience. ” This mirrors the efforts currently being made by mortgage lenders that focus on first mortgages, moving from a clumsy, slow process into a digital...

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### 10 Reasons Why You Can't Refinance Your Mortgage

> A look at some of the most common refinance roadblocks and what you can do to overcome them now.

- Published: 2021-03-29
- Modified: 2023-01-19
- URL: https://www.thetruthaboutmortgage.com/7-reasons-why-you-cant-refinance-your-mortgage/
- Categories: Mortgage Tips, Refinance

With mortgage rates so low, just about everyone and their mother has at least inquired about refinancing their mortgage lately, whether it's to obtain a lower interest rate and/or tap into their newfound equity. There are actually many reasons to refinance a mortgage, some you may have never considered, so it's important to ensure you're always eligible if the need comes up. Unfortunately, a lot of existing homeowners are finding that they don’t qualify for a refinance for one reason or another. What may have been a slam dunk a few years ago is now not even close to a sure thing. Let’s explore some common reasons why you may be denied that precious mortgage refinance. And don't fret, I'll also offer solutions to get around some of these common roadblocks. Lack of Equity/ LTV Restraints It can be difficult to refinance if you lack home equity due to a low down payment and/or falling home prices Lenders typically want your LTV to be below 100% to ensure you've got skin in the game However, there are some loan programs that address high-LTV and underwater mortgages Including streamline refinances that don't require a home appraisal Perhaps the most typical reason for a denied refinance is a lack home equity, which translates to a loan-to-value ratio well above what’s acceptable. For example, a great number of homeowners took out interest-only home loans and option-arms during the housing boom because home prices were only going in one direction. Up. But once things...

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### 21 Things That Can Drive Your Mortgage Rate Higher

- Published: 2021-03-24
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/21-things-that-can-drive-your-mortgage-rate-higher/
- Categories: Mortgage Rates, Mortgage Tips

Wondering why you didn’t receive the low mortgage rate you saw advertised on TV or the Internet? Well, there are a ton of reasons why the quote you obtained was higher than anticipated. Let’s explore a lot of them so you can actually get your paws on that low rate. 1. Low credit score This is a biggie, if not the biggest reason. Most lenders assume (for the sake of their super low advertised rates) that you have stellar credit. So if you take the time to read the fine print, it might say something to the effect of “minimum 740 FICO score. ” That means your interest rate will be higher if you don’t have a credit score that high. Fortunately, the fix is easy... work on all three of your credit scores ahead of time to ensure they’re where they should be and you won’t be hit with any unnecessary pricing adjustments. In fact, you could even get a pricing break in the process if your scores are really good! Just keep in mind that it could take time to see a boost in your scores, so take action early. 2. You don’t occupy the property Mortgage lenders also tend to advertise rates on the basis that you’ll occupy the subject property. If it’s not going to be your primary residence, expect the mortgage rate to be significantly higher. Simply put, second homes, also known as vacation homes, and investment properties create more risk for lenders, and they...

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### Marriage and Mortgage May Not Mix

- Published: 2021-03-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/marriage-and-mortgage/
- Categories: Mortgage Tips

Marriage or Mortgage? The premise of the new Netflix show "Marriage or Mortgage" is simple. It pits a wedding planner against a real estate agent. The prize, if you want to call it that, is getting the spouses-to-be to go in one direction over the other. In this case, an over-the-top wedding versus a dream house. Because they can't possibly have both, at least not on their budget. While this might make for great reality television, it is a serious issue many young couples face, especially with home prices a lot higher than they've been. At the same time, the pressure to throw an incredible wedding has never been greater, perhaps thanks to Instagram and social media. It's like a weird competition no one really wins. It's Okay to Rent and Be Married, Honest There's nothing wrong with renting at any time in your life You don't need to own a home just because you're married or engaged But if you do plan on starting a family in the near future it might be smart to put down roots somewhere This will provide added stability and perhaps more space for additional occupants So you're planning on getting married this summer, and you just have to find a perfect house to call your own before that magical day. Or very soon thereafter. There's no possible way you could continue to live in an apartment and rent once you're married! That just won't do. Married people are supposed to be homeowners, right?...

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### Demystifying How Mortgages Are Calculated

- Published: 2021-03-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/demystifying-how-mortgages-are-calculated/
- Categories: Mortgage Tips

The Importance of Knowing How to Calculate a Mortgage While there are plenty of mortgage calculators out there that do all the heavy lifting for you It can actually be helpful to know the math behind it You'll probably better understand the implications of paying extra/early or the impact of a lower interest rate And if nothing else you can impress your friends and family Mortgages can be complicated business – fortunately there are a ton of great calculators out there that take the legwork out of all the tricky math. But as your teachers probably told you in school time and time again, it’s good to actually know how things work too. That's why they asked you to show your work! And hey, it’s never smart to rely too heavily on technology in case something goes wrong. Oh, and you can impress your friends too. Well, probably not, but let's move on. That brings us to how mortgage interest works. Ready to do some light algebra? Neither am I, but let’s try it anyway. The Interest Part Is Easy to Calculate It's very easy to calculate monthly mortgage interest A standard calculator will do the job if you need to run a quick calculation Simply multiply your loan amount by your interest rate and divide by 12 That will give you the monthly interest due based on the outstanding principal balance Let’s say you’ve got a 30-year fixed mortgage with a loan amount of $200,000 and your mortgage rate...

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### Condo vs. Townhouse: Why It Matters

- Published: 2021-03-14
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/condo-vs-townhouse-why-it-matters/
- Categories: Housing Market, Mortgage Matchups, Mortgage Tips

It’s been a while since I’ve done a matchup, so let’s talk about an important one if you’re in the market to buy real estate. Today, we’ll breakdown the similarities and differences of a condo vs. townhouse. First things first, let’s define what a condo is, then we can do the same for a townhouse, and finally we can compare the two and talk about how they affect mortgage financing. What Is a Condo? A Form of Ownership A condo, short for condominium, is actually a Latin word that basically means joint ownership (con+dominium). It’s technically a type of ownership, though it is commonly used to refer to a building style, whether correct or not. Practically speaking, it’s best defined as a structure that is divided into individual living units, with common areas throughout that are owned by all members of the association. If we’re just talking about the aesthetic, condos are basically no different than apartment buildings. The distinction is ownership versus renting, with condos being something you own, and apartments being something you rent, assuming you’re not the owner of the entire building. For example, a friend may have told you that they're renting a condo, which is basically a misnomer and likely uttered to make it sound more appealing. I think there's a more positive (valuable) connotation with the word condo than there is with apartment, as if condos are nicer or more luxurious than apartments. However, this can certainly vary by region of the United States...

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### Why You May Want to Switch Mortgage Companies

- Published: 2021-03-11
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/more-than-half-of-consumers-switch-mortgage-companies/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Loyalty? Not in the mortgage business. That is, if you actually want to save money on your home loan. A few years back, an HSBC survey revealed that 52% of U. S. homeowners “switched providers” (sorry, they’re British) when obtaining subsequent mortgages. This was mainly driven (53%) by the desire to get a better deal, aka a lower mortgage rate with fewer closing costs. That survey also found that 46% of consumers investigated a mortgage switcheroo, again either to save money or to lock in a new low rate due to rising interest rates. Other reasons homeowners decided to go with another mortgage company were because they moved and purchased a new property. Or due to their current mortgage deal was expiring. I think they mean an adjustable-rate mortgage resetting. Is It Bad to Switch Mortgage Lenders? A new report from Black Knight claims that loan servicers retained just 18% of the estimated 2. 8 million homeowners who refinanced a mortgage in the fourth quarter of 2020, the lowest share on record. Interestingly, those who refinanced to improve their rate and/or term were retained at a higher rate (23%) versus those pulling cash out as part of the transaction (11%). This could be due to cash out refinances being harder to come by lately, and thus offered by fewer lenders. Or it just feeling more complex to the homeowner. But here's the biggie - among higher-credit quality rate and term refinances, borrowers who switched mortgage lenders received more than an...

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### What Is the Loan-to-Value Ratio? (LTV) How to Easily Calculate It Fast

> The loan-to-value ratio (LTV) is your mortgage loan amount divided by the current appraised value or sales price.

- Published: 2021-03-08
- Modified: 2024-02-01
- URL: https://www.thetruthaboutmortgage.com/what-is-loan-to-value/
- Categories: Mortgage Tips

Let's talk mortgage basics: “What is the loan-to-value ratio? ” If you're currently shopping for a home or already going through the mortgage loan process, chances are you've heard the phrase loan-to-value ratio get thrown around on more than one occasion. You may have also encountered the acronym "LTV" while perusing mortgage advertisements or playing around on mortgage rate comparison websites. Regardless of what's going on in the housing market, you should know all about this very important term when applying for a home loan. Why? Because it can greatly affect mortgage rate pricing, refinance options, and overall loan eligibility. How to Calculate the Loan-to-Value Ratio (LTV) It's actually one of the easiest calculations you can make Simply divide the loan amount by the appraised value or purchase price And you'll wind up with a percentage known as your LTV The tricky part might be agreeing on a sales price and getting the home to appraise at value Simply put, the loan-to-value ratio, or “LTV ratio” as it's more commonly known in the industry, is the mortgage loan amount divided by the lower of the purchase price or appraised value of the property. If we're talking existing mortgages (in the case of refinance loans), it's the outstanding loan balance divided by the appraised value. When calculating it, you will wind up with a percentage. That number is your LTV. And the lower the better here folks! It's actually very easy to calculate (no algebra required) and takes just one step....

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### Why Every Mortgage Lender Will Disappoint You

- Published: 2021-03-04
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-every-mortgage-lender-will-disappoint-you/
- Categories: Mortgage Tips

People constantly ask me if a particular lender is good, bad, or should be avoided at all costs. They also ask who the best mortgage lender is, often citing some customer satisfaction survey or what not. Or whether they should use a mortgage broker or a bank. And my answer is pretty much always the same – it depends on how your particular loan goes. You might end up hating the company or loving them, all based on how things go when it’s your turn. So yes, two individuals can wind up with completely different opinions, even when working with the same company, and perhaps even the same exact employees. The problem with the mortgage industry is that it’s very regulated, dynamic, and complex, and as such, it’s very difficult to please everyone all of the time, even with the best of intentions. In other industries, such as the credit card industry for example, customer service reps can “make things right” if something goes wrong, usually just by pushing a button. You didn't like our service? Okay, how about a $25 statement credit? The same goes for your cable company, who you have to call each month to ask for a billing adjustment after they attempt to gouge you. With home loans, it's a little different. Aligning Expectations with Reality in the Mortgage Biz Thanks to the widespread "the customer is always right" policy Consumers are almost guaranteed to be dissatisfied with the home loan experience Because it doesn't work...

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### 18 Reasons to Refinance Your Mortgage

- Published: 2021-03-03
- Modified: 2023-09-22
- URL: https://www.thetruthaboutmortgage.com/18-reasons-to-refinance-your-mortgage/
- Categories: Mortgage Tips, Refinance

There are many reasons to refinance your mortgage, some obvious and some a bit more obscure and/or different. I figured I’d compile a list of the many reasons I can think of to refinance. Some of the situations are complete opposites of one another and will depend on your unique financial goals and/or risk appetite. But most will be appealing at times when interest rates are low, as they are now. 1. To get a lower interest rate This one is the no-brainer that everyone will agree on. If you want a lower interest rate then refinancing your mortgage is the way to go, assuming mortgage rates are lower now than when you took out your original mortgage. The classic rate and term refinance allows homeowners to reduce their interest rate so they can enjoy a lower monthly payment. The potential downside to this is resetting the clock on your mortgage, though you can also go with a shorter term at the same time to avoid that. 2. Because your borrower profile has improved Another reason to refinance has to do with your unique borrower profile. Say you improved your FICO scores over the past year and cleaned up some other negative stuff. Or perhaps your home value increased enough to push your LTV into a lower tier. It's also possible that your new loan amount could fall below the conforming loan limit, thereby opening up new loan programs and potentially providing even greater savings. In short, if your borrowing...

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### Own Up Review: The Mortgage You Deserve?

- Published: 2021-03-02
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/own-up-review/
- Categories: Mortgage Tips

Today we’ll check out “Own Up,” a new technology company that wants to be your mortgage co-pilot. By that, they mean help you comparison shop for a home loan without having to jump through hoops or get badgered by salespeople. And stick with you every step of the way. Aside from making the process faster and easier, they can apparently save you some serious dough too – to the tune of $27,102 in interest over the life of the loan (on average). How Own Up Works Complete an online profile on the Own Up website in about five minutes Schedule a call with a dedicated home advisor to discuss your mortgage goals Compare rates and fees from partner lenders on their platform and select the one you like best Fill out the lender’s application and they’ll process, underwrite, and fund your loan Instead of going to a bank or calling a lender to get a mortgage, you begin by creating a profile on the Own Up website. While they refer to themselves as a tech company, they’re technically a mortgage broker, just on a larger scale, as opposed to a mom and pop shop. They seem to be similar to Credible, the Fox-owned brokerage that operates a comparable mortgage marketplace for homeowners. What this means for you is that Own Up acts as an intermediary between borrowers and mortgage lenders. After you complete your anonymous online profile, you’ll be assigned a dedicated home advisor who will discuss your needs/goals, along...

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### Why Does Everyone Want Us to Pay Down Our Mortgages?

- Published: 2021-02-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-does-everyone-want-us-to-pay-down-our-mortgages/
- Categories: Mortgage Rates, Mortgage Tips

You may have come across one of those articles lately that talks about how a couple paid off their mortgage in five years. Or some other absurdly-fast timeline. While it also sounds super enticing and perhaps inspiring, it's often just a feel-good story that may not actually make a lot of sense financially. At least for your particular situation. And with mortgage rates close to levels never seen before, one should question whether it makes sense to target the mortgage as a bad debt. Mortgage Debt Has Hit Record Highs The New York Federal Reserve Bank recently reported that household debt, largely comprised of home loans, hit a record $14. 56 trillion in the fourth quarter of 2020. It was driven "by a steep increase in mortgage originations," which the NY Fed estimated to be a staggering $1. 2 trillion in the fourth quarter of 2020. That was also a record which surpassed the massive volumes seen during the historic refinance boom back in the third quarter of 2003 (at least in nominal terms). At first glance, this makes it appear as if Americans are going down that dark debt path once again. But in reality, it's more illustrative of surging property values, not so much overflowing debt balances. Many homeowners these days actually owe very little relative to what their homes are worth, which puts them in a much better position than where we were at a decade ago. Back then, scores of homeowners applied for cash out refinances...

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### Why Do Mortgage Companies Want You to Refinance So Badly?

- Published: 2021-02-18
- Modified: 2025-02-10
- URL: https://www.thetruthaboutmortgage.com/why-do-mortgage-companies-want-you-to-refinance-so-badly/
- Categories: Mortgage Tips, Refinance

If you already have a mortgage, there’s a good chance you receive junk mail on a regular basis urging you to refinance. You may receive solicitations from both your current bank/loan servicer and from a competing lender or mortgage broker looking to acquire your business. But why do they want you to refinance your mortgage so badly? What’s in it for them, especially if they already originated your mortgage and get paid interest each month? Wouldn’t it be in their best interest (seriously, no pun intended) to hold onto your mortgage and continue to earn a decent rate of return, rather than give you a new low rate. Why Would They Offer You a Lower Rate? Why would a mortgage lender offer you a lower interest rate than you currently have That would ostensibly earn them less money each month? Because they often sell the loans off to investors to make a profit Or they never owned your mortgage to begin with, so they earn a commission and proceeds from a sale This might be easier to grasp if we look at it the other way around. Imagine you have a savings account that earns an APY of 0. 95%. Your same bank wouldn’t come to you and say hey, let’s get you into an account with a rate of 1. 25% instead, you deserve more! If they did, there would be a huge catch, such as locking up your money for five years at a fixed rate of return...

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### Do I Qualify for a Mortgage?

- Published: 2021-02-17
- Modified: 2024-03-16
- URL: https://www.thetruthaboutmortgage.com/do-i-qualify-for-a-mortgage/
- Categories: Mortgage Tips

Sometimes I tend to skip past the seemingly basic mortgage questions, assuming everyone already knows the simple stuff. Unfortunately, that’s not the case, and what may appear basic isn’t really all that straightforward. So let’s talk about qualifying for a mortgage. As you might suspect, it’s a pretty complex process. After all, you're asking a bank to loan you a ton of money for a long period of time. They'll want to know you can actually pay it all back. Jump to mortgage qualification topics: - The Mortgage Qualification Process - The Home Loan Submission Process - Keys to Qualifying for a Mortgage - Use Common Sense and Think Like the Lender - What You Need to Qualify for a Mortgage Mortgage Qualification Varies by Lender and Loan Type There is no one-size-fits-all approach Some mortgage lenders may say no while others says yes It depends on their risk appetite and available loan programs But your goal should be a smooth loan approval no matter where you apply The first thing I’ll say on this topic is that qualification for a mortgage can vary greatly from bank to bank, and also by loan type. For example, one lender may allow FICO credit scores as low as 550 for FHA loans, while another may require a minimum credit score of 620. So right there you could be approved by one company and denied by another, simply because of their unique credit scoring thresholds. Not every lender necessarily offers the same product...

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### Should You Buy a New Home or an Old Home? There Are Pros and Cons to Both

- Published: 2021-02-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/should-you-buy-a-new-home-or-an-old-home/
- Categories: Housing Market, Mortgage Matchups, Mortgage Tips

New Home vs. Old Home It’s time for another match-up, this time we’ll compare buying a new home versus purchasing an old one. For the record, some home builders refer to existing homes as “used,” which sounds kind of silly considering we're talking about a house and not a car. Ultimately, it's a marketing gimmick to sway you toward buying new as opposed to old, but let’s continue on to determine the pros and cons. Millennials and Gen X Are Big on New Homes A recent report from the National Association of Home Builders found that interest in newly-built homes has surged. They noted that during the fourth quarter of 2020, 41% of prospective buyers were searching for a newly-built home, double the 19% share a year earlier. At the same time, the share interested in an existing home fell from 40% to 30%. It's even more pronounced when we break it down by generation, with 50% of Millennial and 48% of Gen X buyers looking to buy a new home. Meanwhile, just 13% of Boomers indicated that they were looking for a new home vs. existing. Interestingly, Gen Z is a little more into existing homes than Boomers with a 38% share, but still below that of Millennials and Gen X. New Homes Are Untouched and Clean The number one reason to buy a new home is probably the fact that it's never been lived in Some people may not like the idea of living somewhere that was previously...

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### You Can Now Request COVID-Related Mortgage Forbearance for Up to 18 Months

- Published: 2021-02-10
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/covid-mortgage-forbearance-15-months/
- Categories: Foreclosure, Mortgage News

Some good news for homeowners struggling to make ends meet thanks to COVID-19, which as the name implies has been going on for a while now. The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, has just announced an extension to the COVID forbearance period, which was previously capped at 360 days. Now borrowers who requested mortgage forbearance back in March or April of 2020 will be able to get another few months to keep monthly payments on hold. COVID-Related Mortgage Forbearance Extended Another Six Months Homeowners with a Fannie/Freddie-backed mortgage can now request an additional six months of forbearance Originally allowed for an initial 180 days of payment relief (and an additional 180 days if the borrower needed more time) Now borrowers can get a full 18 months of mortgage payment relief if in a COVID-19 forbearance plan Applies to those who are in a COVID-19 forbearance plan as of February 28th, 2021 The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) originally allowed homeowners with a federally-backed residential home loan to request forbearance for up to 180 days, or roughly six months. It also included a 180-day extension if they were still struggling to make mortgage payments at the end of the original 180-day term. Now the FHFA has gone a step further by allowing an additional six months of relief, for a grand total of 18 months of suspended mortgage payments. In other words, a homeowner who is unable to pay their...

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### The CEO of a Tech-Enabled Loan Servicer Believes We Might Be on the Cusp of Another Foreclosure Crisis

- Published: 2021-02-02
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/valon-loan-servicer-cusp-of-another-foreclosure-crisis/
- Categories: Foreclosure, Housing Market, Mortgage News

The co-founder and CEO of a so-called “tech-enabled residential mortgage servicer” named Valon (formerly Peach Street) has warned we could be on the brink of another foreclosure crisis. While real estate is flying high at the moment, it’s appears that two very different stories are unfolding at the same exact time. On the one hand, the housing market has never been hotter, with supply at record lows and dwindling, while demand from prospective buyers skyrockets. Meanwhile, home builders are playing catch-up, which has pushed property values to all-time highs, with a further 10% increase expected in 2021. Then there’s the other story, which got some press early last spring when the pandemic took hold, but has since been somewhat ignored. Nearly 3 Million Homeowners Have Their Mortgage Payments on Hold Currently 2. 7 million borrowers are taking part in COVID-19 mortgage forbearance These programs essentially put payments on hold for up to 360 days But once the forbearance ends the borrower must at least resume regular payments This could lead to another wave of short sales and foreclosures if the economy doesn’t get back on track There are 2. 7 million U. S. homeowners in mortgage forbearance plans at the moment, which represents 5. 38% of loan servicers’ portfolio volume, per the latest weekly report from the MBA. These borrowers essentially have their payments on hold for up to 360 days due to a COVID-19-related issue, such as unemployment or reduced earnings. It’s even worse for government-backed loans like FHA...

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### Sage Mortgage Review: A Fully-Digital Refinance Lender

- Published: 2021-01-25
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/sage-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out “Sage Mortgage,” a digital mortgage lender startup backed by Red Ventures, which refers to itself as a portfolio of internet brands and digital platforms. You may have heard of some of their companies, such as the popular credit card blog The Points Guy, along with Healthline, NextAdvisor, and Bankrate. Well, now it appears they’re trying their hand at mortgage lending themselves, as opposed to merely offering advertising on behalf of third-party lenders. Let’s find out more about them. Sage Mortgage Fast Facts A direct-to-consumer mortgage broker Headquartered in Fort Mill, South Carolina Appear to only offer mortgage refinances at the moment Acquired by Red Ventures in 2020 Say they can offer a 100% digital mortgage experience Licensed to do business in 12 states currently Sage Mortgage is actually a dba of Forward Mortgage Lending, Inc. , which was acquired by Red Ventures in 2020. It’s unclear when they launched, but it could well have been last year by the looks of it. They certainly look brand new. They actually operate as a mortgage broker, but on a larger scale than your mom-and-pop variety. This means they connect borrowers with wholesale mortgage lenders they work with to help them find competitive interest rates. At the moment, they appear to just offer mortgage refinancing, with no mention of home purchase loans on their website. So if you’re a current homeowner looking for a lower mortgage rate and/or cash out, they could be of good use. They are available...

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### Does a Refinance Require an Appraisal?

- Published: 2021-01-21
- Modified: 2024-10-28
- URL: https://www.thetruthaboutmortgage.com/does-a-refinance-require-an-appraisal/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “Does a refinance require an appraisal? ” A reader recently asked if they needed an appraisal to refinance their existing mortgage, knowing they can often add weeks to the refinance process. As with anything in the mortgage realm, the answer is it depends. Mainly, it depends on the type of loan you plan to refinance. Additionally, the type of refinance (rate and term vs. cash out) you're applying for can also come into play, as can the property type. Nowadays, there are both appraisal waivers and a number of different home loan programs that do not require an appraisal to refinance, known as streamline refinances. Let's learn more about if and when an appraisal might be required, and how you might be able to avoid one. Introducing the Appraisal Waiver Fannie Mae and Freddie Mac can both waive the appraisal requirement in some cases This applies to both home purchase loans and refinance transactions But you must meet maximum LTV limits (or minimum down payment requirements) They are not an option on 2-4 properties, manufactured homes, and properties valued over $1 million In recent years, Fannie Mae and Freddie Mac introduced a novel concept known as an "appraisal waiver. " As the name implies, it allows you to waive the appraisal requirement typically needed to get to the finish line. Initially, this was an option for certain types of refinance transactions, but now it's good for some home purchases as well. (Note that this isn't possible for purchase...

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### Optimum First Mortgage Review: #1 in Price and Customer Service?

- Published: 2021-01-19
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/optimum-first-mortgage-review/
- Categories: Mortgage Tips

You’ve got to pretty confident to say you’re #1 in both price and customer service, but that’s exactly how “Optimum First Mortgage” describes itself. The Southern California-based mortgage lender isn’t afraid to say it has the lowest rates in the industry, or the best customer service. It’s a bold claim (or two), but based on their stellar reviews from past customers, they might be on to something. Let’s discover more about them. Optimum First Mortgage Fast Facts Direct-to-consumer mortgage lender Founded in 2008, headquartered in Fountain Valley, CA Offers home purchase loans and mortgage refinances Also able to broker out loans via its wholesale lending partners Claims to offer the lowest rates in the industry and top customer service Employs roughly three dozen loan officers Licensed to lend in 14 states nationwide Optimum First Mortgage is a direct-to-consumer mortgage lender based in Fountain Valley, California, which is situated pretty close to Huntington Beach. As noted, they claim to be #1 when it comes to mortgage rates and customer service, which they claim is possible because of their high volume of business. In short, because they originate more home loans, they’re happy to earn less per loan and make up for it by simply closing more loans. They also have the advantage of brokering out loans via their wholesale lender partners, and say they’ve got about 30 different rate sheets at their fingertips to find the right home for your mortgage. So unlike a retail bank that might just have one...

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### What Is a Streamline Refinance?

> If you simply want a lower interest rate on your existing home loan, look into a “streamline refinance” that requires limited paperwork.

- Published: 2021-01-13
- Modified: 2024-03-12
- URL: https://www.thetruthaboutmortgage.com/what-is-a-streamline-refinance/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “What is a streamline refinance? ” While qualifying for a mortgage refinance is generally a lot harder than it has been in the past (now that lenders actually care how your home loan performs), there are less cumbersome options available. In fact, many lenders offer “streamlined” alternatives to existing homeowners to lower costs and make refinancing more accessible, knowing that borrowers simply want payment relief. When you think about it, a mortgage with a lower interest rate should also be lower-risk, as the monthly payment will be reduced, putting less burden on the homeowner. It is for this reason that “streamline refinance” programs are available with just about every bank and lender out there. They come with looser credit scoring requirements, easier income and asset verification, and limited paperwork. And in some cases, you don’t even need to order a home appraisal since collateral isn't really an issue if you're just swapping your mortgage for one with a lower rate. Simply put, a streamline refinance takes a lot of the legwork (and time) out of the process, and may increase your chances of approval. However, streamline refinances also come with their own list of requirements, namely that the refinance has a “net tangible benefit. ” In other words, it should help the homeowner, not just put money in the pocket of the loan originator (yes, they benefit too when you refinance by earning a commission). This generally means that the mortgage rate should drop by an amount that...

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### Nations Lending Review: A Human Home Loan?

- Published: 2021-01-06
- Modified: 2024-10-16
- URL: https://www.thetruthaboutmortgage.com/nations-lending-review/
- Categories: Mortgage Tips

While tech has taken center stage in the mortgage world, Nations Lending still strives to make home loans human. That’s their motto, and it means looking beyond the numbers and at the individual themselves to determine their needs. They believe the key to a successful mortgage starts with a good conversation, which should ultimately ensure you wind up with the right home loan. So far, their approach seems to be paying off, with excellent customer reviews fueling a rapidly growing business. Nations Lending is also pretty ambitious - their goal is to become a top-10 independent mortgage banker in the next five years. Let’s discover more about them. Nations Lending Fast Facts Retail direct-to-consumer mortgage lender founded in 2003 Offers home purchase loans and refinance loans Headquartered in Independence, Ohio (suburb of Cleveland) Employs more than 1,300 people, with 120+ branches across the United States Licensed to do business in all 50 states and the District of Columbia Funded more than $4. 6 billion in home loans last year Nations Lending is a retail direct-to-consumer mortgage lender that offers home purchase financing and refinance loans. This means you can call them up on the phone or visit a branch to apply for a mortgage. They were founded in 2003, but since that time have grown from a small local lender to a billion-dollar national originator with aspirations to become a household name. The company mustered more than $4. 6 billion in loan origination volume last year, with nearly $700 million...

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### How to Move Out of Your Parents House

- Published: 2021-01-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-to-move-out-of-your-parents-house/
- Categories: Housing Market, Mortgage Tips

There’s nothing inherently wrong with living with your parents, other than EVERYTHING! So let’s talk about how to GET OUT! To be clear, I’m going to discuss moving out and buying a place of your own, not moving out and renting, seeing that the latter is fairly self-explanatory. The desire to move out now might be especially strong right given we just went through a pandemic and everyone was home, all of the time. But don't just make a home purchase on a whim, really take the time to think it through, especially since home prices aren't very cheap anymore. The pandemic housing boom, fueled by record low mortgage rates, led to a surge in property values as everyone and their mother snapped up anything and everything. So the landscape has changed quite a bit with today's home buyers now facing mortgage rates in the 6-7% range instead of the low 3% range. Living with Your Parents Is a Great Launchpad Live rent-free and save up money for a home purchase Establish steady and reliable employment history (2+ years is generally good) Pay off other non-housing debt like student loans, credit cards, etc. Work on your credit scores and bolster your credit history (aim for a 780 FICO) Study how real estate and mortgages work and peruse listings to get a feel Determine if and where you want to buy a property (and why! ) While it might not be cool now or ever, living with your parents is actually...

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### Ruoff Mortgage Review: Enjoy a Stress-Free Mortgage Process?

- Published: 2020-12-29
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/ruoff-mortgage-review/
- Categories: Mortgage Tips

If you live in Indiana, there’s a very good chance you either got your home loan from Ruoff Mortgage, or at least considered them if you’re a homeowner. After all, the company managed to originate nearly $3 billion in home loans last year, with roughly $2 billion coming from the Hoosier State alone. They’ve even got an IndyCar with Ruoff Mortgage plastered along the front and sides of the vehicle, and the naming rights to the Ruoff Music Center, the largest outdoor music venue in Indianapolis. So it’s clear they’re laser-focused on a certain region of the country, as opposed to trying to tackle the nation as a whole. This has proven to be a successful model as they are now one of the top mortgage lenders in the nation, and #1 in Indiana. You may also want to check out First Internet Bank of Indiana if you live in the Hoosier State. Ruoff Mortgage Fast Facts Independent direct-to-consumer mortgage lender Founded in 1984, headquartered in Fort Wayne, Indiana Employ nearly 1,000 workers across 70+ branches Ranked the #1 mortgage lender in Indiana Now the "Official Mortgage Partner of NASCAR" If you’re wondering where they got their name from, they were originally known as the Dave Ruoff Mortgage Co. , after founder David Ruoff. They later changed the company name to Ruoff Mortgage, and today employ around 1,000 employees across some 70 branches. As noted, they are highly-concentrated in the Midwest, with another $500 million in volume coming from nearby...

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### PenFed Mortgage Review: Competitive Rates with No Lender Fees

- Published: 2020-12-29
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/penfed-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a deep dive into a major credit union that's also a sizable mortgage lender, Pentagon Federal Credit Union, or PenFed for short. While originally intended to serve the U. S. military, veterans, and various defense department government employees, today anyone can join PenFed, whether part of those groups or not. For example, if you have no military affiliation whatsoever, it’s possible to join if your employer is eligible or if you make a small donation to an organization. PenFed has been around since 1935, and today serves more than two million members worldwide with a whopping $25 billion in assets. They lend in all 50 states and the District of Columbia, as well as in Guam, Puerto Rico, and Okinawa. Let's learn more. PenFed Mortgage Fast Facts Members-only credit union federally insured by NCUA Founded in 1935, headquartered in Alexandria, Virginia Anyone free to join regardless of lack of military background Offer checking and savings accounts, credit cards, mortgages, and HELOCs Licensed to lend in all 50 states, D. C. , Guam, Puerto Rico, and Okinawa Funded $18. 9 billion in home loans last year Did about a fifth of total loan volume in home state or Virginia Also operate a wholly-owned title insurance company called PenFed Title, LLC and real estate brokerage called PenFed Realty As noted, anyone can join PenFed, though they are a members-only credit union. So once you become a member, you can take advantage of their many product offerings, including home mortgages....

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### 2021 Mortgage and Housing Market Predictions

- Published: 2020-12-16
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/2021-mortgage-and-housing-market-predictions/
- Categories: Housing Market, Mortgage News

Welp, it’ll be nice to close out 2020 and look ahead to a brand-new year that hopefully features a lot less drama and much more good news. While the housing market actually absorbed both the COVID-19 pandemic and the presidential election surprisingly well, we can probably thank the record low mortgage rates for that. And the continued lack of inventory. That has been the silver lining for existing homeowners, but it’s created an even wider divide between the haves and the have-nots, otherwise known as homeowners and renters. So what does 2021 look like when it comes to mortgages and the housing market? Let’s dust off the old crystal ball and make some predictions. 1. Mortgage rates will hit new record lows As of this writing, mortgage rates hit 14 new all-time lows in 2020. And there’s a decent chance they’ll hit a 15th before the year is complete. This has many pundits calling for an end to the low rates. Sound familiar? It does because every single year they call for higher rates, only to be proven wrong over and over. I expect mortgage rates to hit new all-time lows in 2021, though the caveat is that they may not remain there. In other words, we could see 30-year fixed mortgage rates reach levels never seen before in the first half of the year, before they rise back above lows seen this year. The good news is rates should remain low throughout the year if the 2021 mortgage rate...

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### Paramount Residential Mortgage Group Review: A Top-50 Lender Chock Full of Loan Programs

- Published: 2020-12-15
- Modified: 2024-07-19
- URL: https://www.thetruthaboutmortgage.com/paramount-residential-mortgage-group-review/
- Categories: Mortgage Tips

While searching for a home loan, you may have come across “Paramount Residential Mortgage Group,” or PRMG for short, along the way. It’s also possible that your real estate agent referred you to the company since they do quite a bit of home purchase loan volume. In fact, more than 75% of their overall business last year was derived from home purchase financing, with the remainder split between refinance loans. The Southern California-based company is a top-50 mortgage lender nationally, having closed more than $7 billion in home loans last year. Let’s discover more about them. Paramount Residential Mortgage Group Fast Facts Direct-to-consumer retail mortgage lender Corporate headquarters located in Corona, CA Founded in 2001 by mortgage veteran Paul Rozo Now employ over 2,000 with 180 retail locations nationwide (and growing) Licensed to do business in 48 states and D. C. Funded more than $7 billion in home loans last year Also operate wholesale and correspondent lending programs Paramount Residential Mortgage Group got its start back in 2001, founded by Paul Rozo and a couple friends. Today, the company employs more than 2,000 workers across more than 180 retail locations nationally, and just cracked the top-50 for total home loan volume among all banks and lenders out there. That means they’re a very large mortgage company, and because they’re licensed in 48 states and the District of Columbia, they should be an option for most of us. Aside from running a retail direct-to-consumer mortgage business, they also operate sizable wholesale...

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### 2021 Mortgage Rate Predictions: Mostly Flat But New Record Lows Possible

- Published: 2020-12-14
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2021-mortgage-rate-predictions/
- Categories: Mortgage News, Mortgage Rates

Yet another year is about to come to an end, and that means it's time to look ahead to what next year has in store. I think just about everyone wants to see the back of 2020, though it wasn't all bad news. The housing market actually held up surprisingly well, and mortgage lenders enjoyed record mortgage originations. Anyway, without further ado, here are the “2021 mortgage rate predictions” from a number of major mortgage and real estate groups, along with my own outlook. MBA 2021 Mortgage Rate Prediction First quarter 2021: 3. 1% Second quarter 2021: 3. 1% Third quarter 2021: 3. 2% Fourth quarter 2021: 3. 3% Like in past years, we’ll begin with a prediction from the Mortgage Bankers Association (MBA). They publish a monthly Mortgage Finance Forecast that includes predictions for 30-year fixed mortgage rates on a quarterly and annual basis, with rates all the way to 2023. We’ll focus on the 2021 numbers and throw in 2022 for good measure. As you can see, the MBA expects the 30-year fixed to remain relatively flat in the first half of 2021, before rising ever so slightly in the second half. Their quarterly average for the 30-year fixed is 3% flat for the fourth quarter of 2020, so the 3. 1% average would also represent a slight increase. They expect mortgage rates to rise to 3. 6% in 2022, which is a more significant increase that homeowners would actually notice and likely disapprove of. For the record,...

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### Partial Claim May Be Option for VA Borrowers Exiting COVID-19 Forbearance

- Published: 2020-12-10
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/partial-claim-va-loan-covid-19-forbearance/
- Categories: Foreclosure, Mortgage News

The Department of Veterans Affairs (VA) has proposed a new loss mitigation method to help homeowners with VA loans in COVID-19 related forbearance get back on track. The new program, known as the COVID-19 Veterans Assistance Partial Claim Payment program, or COVID-VAPCP for kind of shorter, somewhat mirrors existing programs offered by the FHA and USDA to pay forbearance back. It would allow veteran borrowers to defer the repayment of missed mortgage payments for up to 60 months. And the full repayment of any forborne payments wouldn’t be due in full for 120 months, or 10 years to provide veterans with a "soft landing. " However, there would be interest charged, though at a very nominal 1% rate, which differs from the interest-free offerings at the FHA/USDA. Additionally, the FHA/USDA both don’t require repayment until the loan is refinanced or otherwise paid-in-full. While perhaps not as attractive, it has to do with the VA's smaller guaranty percentage versus those other loan types. Still, when compared to a standard loan modification, a veteran homeowner could stand to save thousands in interest and stay on track with respect to paying off their loan in full. It should be noted that loan servicers would only consider this proposed partial claim option after evaluating “all loss-mitigation options for feasibility. ” How the COVID-VAPCP Works Any missed mortgage payments from CARES Act forbearance are set aside Monthly payments on this amount are deferred for up to 60 months (five years) The repayment period begins in...

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### Lower Mortgage Review: A Techy Mortgage Lender in Love with Everything Low

- Published: 2020-12-02
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/lower-mortgage-review/
- Categories: Mortgage Tips

Today we’ll check out another one of the newcomers in the mortgage industry that is all about technology and low rates, aptly named "Lower Mortgage. " Similar to Better Mortgage, which is also a one-word-named mortgage company, they like to keep things simple and make it easy to apply for a home loan. That means you can get started right on their website, or even begin your home loan process with a text message. They’re also all about things being lower, whether it’s mortgage rates, lender fees, monthly payments, or the amount of hassle it takes to get a mortgage. They even take a subtle jab at Quicken Loans on their website, saying “No rocketry. Just the important stuff—like lower rates. ” Let’s find out more about this low-loving, techy mortgage lender. Lower Mortgage Quick Facts Direct-to-consumer mortgage lender that offers home purchase loans and refinances Launched in 2018, headquartered in New Albany, Ohio (just outside Columbus) Originated roughly $5 billion in home loans last year Licensed in 43 states and the District of Columbia A top-rated lender on LendingTree that has won several customer satisfaction awards They have a sister company called Homeside Financial (founded in 2013) Exclusive mortgage provider for Opendoor Lower, which actually refers to itself as a technology company, was launched in December 2018. The main goal of the company is to improve the online mortgage and refinance experience, knowing that the majority of applicants start the process on the Internet. In a sense, they’re kind...

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### USA Mortgage Review: Nearly a Top-5 Mortgage Lender in Missouri

- Published: 2020-11-17
- Modified: 2024-06-22
- URL: https://www.thetruthaboutmortgage.com/usa-mortgage-review/
- Categories: Mortgage Tips

If you live in the USA and need a mortgage, perhaps you’ve thought about applying at "USA Mortgage. " Makes sense, right? It just so happens that USA Mortgage is located right smack in the middle of our fine country, in St. Louis, Missouri to be exact. Well, that’s pretty darn close to the midpoint... Anyway, geography aside, they’ve been around for about 20 years now and actually operate under the name DAS Acquisition Company, LLC, which purchased the lender when it was a distressed company. Today, it’s one of the largest privately held mortgage bankers in the state of Missouri and employs more than 750 licensed loan officers and operations personnel. Technically, USA Mortgage is a full-service mortgage broker, meaning they can offer loan programs from various lender partners at wholesale prices. USA Mortgage Is a Top Lender in St. Louis Employee-owned direct-to-consumer mortgage lender located in St. Louis, MO Founded in 2001 by current president and CEO Doug Schukar Originally acquired as a distressed asset by DAS Acquisition Company, LLC Was the #1 mortgage lender in metro St. Louis for about a decade Funded nearly $800 million in home loans during 2023 40% of total loan volume came from their home state of Missouri Currently licensed to do business in 41 states and D. C. If you live in Missouri, there’s a good chance you’ve heard of USA Mortgage. They did nearly half their business in The Show-Me State last year. The company is also one of the...

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### Why Joe Biden and Kamala Harris Haven't Paid Off Their Mortgages

- Published: 2020-11-11
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-joe-biden-and-kamala-harris-havent-paid-off-their-mortgages/
- Categories: Mortgage Tips

You’d think presumably wealthy politicians like Joe Biden and Kamala Harris would own their homes free and clear. But that’s not the case, per their 2019 tax returns. Both individuals disclosed their returns on the JoeBiden. com website, and each paid tens of thousands of dollars in mortgage interest last year. But why would they pay interest if they had the means to simply pay off the loans, a luxury most other Americans can’t afford to do? The reason is simple. Mortgage Debt Is the Cheapest Debt Out There Joe and Jill Biden paid $15,796 in home mortgage interest in 2019 Kamala Harris and Douglas Emhoff paid $32,041 in home mortgage interest in 2019 There’s a good chance both parties could have paid off their mortgages in full But why bother if you can earn a higher rate of return for your money elsewhere? Why Biden and Harris and so many other rich homeowners choose to carry mortgages as opposed to paying them off has to do with how cheap they are relative to virtually everything else. Ultimately, it doesn’t get much better than home loan debt, especially with mortgage rates in the 1-2% range at the moment. What other type of loan offers such cheap financing? This is why I refer to mortgages as good debt, especially since you have the opportunity to write off the interest in many cases. On top of that, the low rate of interest makes it easy for savvy homeowners to beat the rate...

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### FBC Mortgage Review: A Florida Lender with a Simple Loan Process

- Published: 2020-11-09
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/fbc-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a look at FBC Mortgage, which is a Florida-based mortgage lender that does a ton of business in its home state. In fact, they originated nearly $2 billion in home loans in the Sunshine State last year, which accounted for roughly 60% of their overall loan volume. They also recently struck a deal with the University of Central Florida (UCF) to be the field sponsor at the “Bounce House. ” So it’s safe to say that if you live in Florida, there’s a good chance you’ve heard of FBC Mortgage. Either way, read on to learn more. FBC Mortgage Fast Facts Direct-to-consumer retail mortgage lender Founded in 2005 in Orlando, Florida Licensed in 48 states nationwide (excluding Hawaii and New York) Funded over $3 billion in home loans during 2019 Refer to themselves as a top-20 national mortgage lender Also operate correspondent and wholesale lending divisions FBC Mortgage is somewhat middle-aged for a mortgage company, having been around for about 15 years. The name is related to their past affiliation with the Florida Bank of Commerce, hence the initials FBC. During their relatively short time in existence, the company changed hands twice but came full circle. First, it was sold to privately-owned investment bank Sterne Agee Group, Inc. in 2012, then three years later it reacquired itself. That excitement aside, today the independent nonbank lender has roughly 1,000 employees nationwide and funds billions in home loans annually. Last year, nearly 80% of their total loan volume consisted...

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### If a Mortgage Lender Reaches Out to You, Reach Out to Other Lenders

- Published: 2020-11-09
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/if-a-mortgage-lender-reaches-out-to-you-reach-out-to-other-lenders/
- Categories: Mortgage Tips, Refinance

A lot of homeowners are looking to refinance their mortgages at the moment. That’s abundantly clear based on the record volume of refis expected this year, per the MBA. And while mortgage rates are in record low territory, thus making the decision to refinance an easy one for most, it still pays to shop around. I think we all have a tendency to care less about prices when something is on sale, but there’s no reason you shouldn’t strive for even better, regardless of how cheap something is. Look Beyond Your Current Mortgage Lender New technology is making it easier for lenders to improve borrower retention rates This means using the same lender for life even if their interest rates aren’t the lowest But like most things loyalty often doesn’t pay when it comes to a home loan So take the time to shop around and negotiate like you would anything else Thanks to emerging technology, it has become easier for mortgage lenders, mortgage brokers, and loan officers to improve their customer retention. This means if and when a past customer looks to refinance their home loan or purchase a new home, they might be notified if they pay for such services. There are companies that can keep an eye on your data over time to see if you’ve applied for a home loan elsewhere, if your home equity has increased, or if your debt load has gone up. The same goes for your credit score, which if it’s improved...

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### An Alternative to Paying Mortgage Points: Just Be a Little 'Extra'

- Published: 2020-11-05
- Modified: 2022-01-18
- URL: https://www.thetruthaboutmortgage.com/alternative-to-paying-mortgage-points/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

If and when you take out a mortgage, you’ll be faced with an important choice. To pay or not pay mortgage points. In short, those who pay points should hypothetically secure a lower interest rate than those who do not pay points, all else being equal. That’s because mortgage points, at least the ones that are bona fide discount points, are just a form of prepaid interest. So you’re essentially paying a portion of the interest on the underlying loan upfront, as opposed to monthly over the life of the loan term. The caveat is that it is possible for a home buyer or refinancer to obtain a lower mortgage rate than another borrower without paying any points, assuming they shop around and use a mortgage lender with lower rates. Now back to whether you should pay points or not, especially at a time when mortgage rates continue to hit new all-time lows. Mortgage Rates Have Hit Record Lows 12 Times This Year In an environment where mortgage rates are declining over a long period of time, paying mortgage points can be a mug’s game. After all, you paid money upfront for a lower mortgage rate, only to find yourself back at the refinancing table. No bueno. Indeed, many homeowners these days are asking the question, how soon can I refinance again? Those who went the no cost refinance route have basically nothing to lose, other than maybe resetting the mortgage clock. While those who paid several thousand dollars in...

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### Watch Out for Low Mortgage Rates You Have to Pay For

- Published: 2020-11-04
- Modified: 2022-01-18
- URL: https://www.thetruthaboutmortgage.com/watch-out-for-low-mortgage-rates-you-have-to-pay-for/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Mortgage rates keep on marching lower and lower, with new records broken seemingly every week. But with all the fervor surrounding mortgage rates, some lenders are playing the “how low can we appear to go” game. For example, mortgage lenders may be talking about their lowest rates (with multiple points required), as opposed to offering their par rates, the latter coming at no extra cost to the consumer. So instead of being presented with a mortgage rate of say 2. 75% on a 30-year fixed, you may see a rate as low as 1. 99%. Or even a 15-year fixed at 1. 75%! Here's the problem; with mortgage rates breaking record lows time and time again, 10+ times so far in 2020, many homeowners are finding the need to refinance the mortgage twice. Or even three times. And those who chose to pay points at closing, only to refinance within months or a year, essentially left money on the table. Or they decide not to refinance to an even lower rate, knowing they'll lose that upfront cost that's already been paid, which is also a tough situation. Mortgage Rates Aren’t as Low as They Appear In order to advertise lower mortgage rates lower than the competition Lenders will often tack on discount points to their publicized rates Meaning you'll have to pay a certain amount upfront to obtain the low rate in question Make sure you're actually comparing apples to apple when mortgage rate shopping Guess what? That absurdly low...

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### When to Refinance a Home Mortgage: Now, Later, or Never?

> A mortgage refinance can result in big savings, but it's not always the right move. Learn when to refinance your mortgage to maximize your benefit and when you may want to pump the brakes.

- Published: 2020-10-28
- Modified: 2025-02-04
- URL: https://www.thetruthaboutmortgage.com/when-to-refinance-a-mortgage/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “When to refinance a home mortgage. ” With mortgage rates at or near record lows, you may be wondering if now is a good time to refinance. Heck, your neighbors just did and now they're bragging about their shiny new low rate. The popular 30-year fixed-rate mortgage slipped to 2. 80% last week, per Freddie Mac, well below the 3. 75% average seen a year ago, and much better than the 4-6% range seen years earlier. Historically, mortgage interest rates have never been lower, making a mortgage refinance a veritable no-brainer for many homeowners out there. In other words, there's a good chance you won't be holding off from refinancing because interest rates are too high (unless you just recently refinanced). But even if you did, there's a possibility it could make sense to refinance a second time. Should I Refinance My Mortgage Now? Consider your current interest rate relative to today's available rates Along with required closing costs and how long it will take to break even Think about how long you plan to keep the mortgage/property And any other factors like removing mortgage insurance or shortening your loan term Well, the answer to that question depends on a number of factors that will be unique to you and only you. First, what is the interest rate on your existing mortgage(s)? Is it higher or lower than current mortgage rates? If it's higher, how much higher? If it's lower, is your current loan adjustable? Or do you...

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### Royal United Mortgage Review: A Faster, Friendlier Mortgage Lender?

- Published: 2020-10-27
- Modified: 2024-12-09
- URL: https://www.thetruthaboutmortgage.com/royal-united-mortgage-review/
- Categories: Mortgage Tips

If customer satisfaction is your thing, and you happen to need a home loan, you might want to check out Royal United Mortgage. The company recently topped LendingTree’s customer satisfaction rankings for four consecutive quarters, and have consistently ranked in the top-10 for the past six years. Another thing that makes them unique is the fact that they offer home equity lines of credit (HELOCs), and a lot of them at that, based on their HMDA data. Let’s learn more. Royal United Mortgage Fast Facts Privately-held, employee-owned retail mortgage lender licensed in 32 states Founded in 2008, headquartered in Indianapolis, Indiana Funded roughly $1 billion in home loans during 2019 via consumer direct channel Ranked a top-10 mortgage lender by LendingTree since 2014 Began 2020 as LendingTree’s #1 lender in customer satisfaction for 4th quarter in a row Most of their business comes from the states of Florida, Indiana, and Texas Royal United Mortgage is a relatively young company, around since 2008, which is right around the time the mortgage crisis and Great Recession took place. But they’ve made it through some tough times and mustered over a billion in home loan volume last year. They’re a privately-held, employee-owned direct-to-consumer mortgage lender, meaning they operate remotely without branches. At the moment, they seem to be licensed to do business in 32 states, including Alabama, Arizona, Arkansas, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New Mexico, New York, North Carolina, Ohio,...

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### Synergy One Lending Review: They've Got an App But How Is the Pricing?

- Published: 2020-10-26
- Modified: 2024-09-30
- URL: https://www.thetruthaboutmortgage.com/synergy-one-lending-review/
- Categories: Mortgage Tips

Today, we’ll take a look at Synergy One Lending, a company whose mission is to create a modern mortgage experience for its clients. To achieve this goal, the direct-to-consumer mortgage lender plans to focus on fintech for the next generation of home buyers who expect speed and convenience. This means being able to apply for a home loan from anywhere, without the usual red tape and headaches we’re all accustomed to when taking out a mortgage. However, they haven’t forgotten about the power of human touch, which is why Synergy One Lending says it offers the right combination of people and technology. Synergy One Lending Fast Facts Retail consumer-direct mortgage lender based in San Diego, CA, founded in 2013 Currently licensed in 33 states and the District of Columbia Funded more than $1. 5 billion in home loans during 2023 A top-100 retail mortgage lender nationwide About a third of their total loan volume came from home state of California In 2013, Synergy One Lending began as an independent mortgage lender before being acquired by a bigger fish, Mutual of Omaha Bank, just five years later in 2018. But just two years after that, a management-led asset purchase ("MBO") of the company's distributed retail channel took place in mid-2020, so they’re back to being on their own. During their brief spell under Mutual of Omaha Bank ownership, they acquired certain assets of BBMC Mortgage, a mortgage company that was based in Lombard, Illinois. At the moment, Synergy One Lending appears...

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### Record Home Purchase Activity Expected in 2021 Despite Higher Mortgage Rates

- Published: 2020-10-26
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/record-home-purchase-activity-expected-in-2021-despite-higher-mortgage-rates/
- Categories: Housing Market, Mortgage News

While mortgage rates are projected to be slightly higher next year, home purchase activity should hit a new record high, per the latest forecast from the Mortgage Bankers Association (MBA). The group said it expects purchase loan origination volume to increase a further 8. 5% to a record high $1. 54 trillion in 2021. That $1. 54 trillion would better the previous all-time high of $1. 51 trillion in purchase loan volume set back in 2005, just a year or so before the housing bubble burst. Interestingly, they’re forecasting an even better 2022, with purchase volume of $1. 57 trillion. Similar to 2005, 2022 could be one of the last big years in the housing market before things take a turn, though there’s no guarantee of history repeating itself. It’s just that it sounds awfully familiar... Higher Mortgage Rates in 2021? The MBA is once again calling for higher mortgage rates next year They expect the popular 30-year fixed to rise from 3. 00% to 3. 30% in 2021 Then they see rates rising to 3. 6% in 2022 and 3. 9% in 2023 I’m not convinced mortgage rates will rise next year – they could in fact fall further And now for the bad news, at least for mortgage lenders. The MBA sees mortgage refinance originations plummeting 46. 3% to $946 billion next year. Of course, that’s not horrible, it’s just that 2020 has been so good for the refinance market that it’ll be tough to follow it up...

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### Loan Simple Mortgage Review: A Boutique Mortgage Lender

- Published: 2020-10-21
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/loan-simple-mortgage-review/
- Categories: Mortgage Tips

One mortgage lender that’s been around a while, but is beginning to shake things up is Loan Simple. As the name suggests, they’re all about simplicity, whether it’s simple talk or a simple loan process. They consider themselves a boutique mortgage lender, striving for relationships and quality customer service over sheer volume. However, they still managed to fund half a billion in home loans in 2019 via the retail channel, with even more slated for 2020 and beyond. One thing I like about Loan Simple is their effort to increase mortgage literacy by offering free classes powered by EverFi. So they actually want you to know more about mortgages before/when you apply, which is a rarity in this industry or any other for that matter. Additionally, they donate to charities they care about each time a loan funds, including Feeding America, Water. org, and the World Wildlife Fund. Loan Simple Quick Facts Direct mortgage lender located in Englewood, Colorado Founded by Roland Dozois more than 20 years ago (son Jason is current CEO) Licensed to lend in 30 states nationwide Launched a wholesale lending division in late 2020 Donate to charities for each loan funded Also a licensed loan servicer Loan Simple did about half a billion in loan volume last year, which makes them one of the smaller fish, but a growing one. They did more than half their total loan volume in their home state of Colorado, so if you’re from the Centennial State, you’ve likely heard of...

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### Should You Prepay the Mortgage or Invest Instead? How to Earn a Better Return

- Published: 2020-10-19
- Modified: 2024-03-19
- URL: https://www.thetruthaboutmortgage.com/prepay-the-mortgage-or-invest-instead/
- Categories: Mortgage Matchups, Mortgage Tips

It’s been a while since I last posted a mortgage match-up, so without further ado, here’s the latest installment: "Prepay the mortgage or invest instead? " There are likely thousands of articles that deal with this very subject, all with plenty of differing opinions, but we are in unprecedented times. Mortgage rates have never been lower than they’ve been over the past year, and that changes the argument quite a bit, especially since stocks continue to generate massive returns in the face of a global pandemic. Simply put, it makes holding a low-rate mortgage for a long time more attractive than it has ever been, assuming you can earn a better return elsewhere. The good news is with mortgage rates in the 1-2% range, it shouldn't take much to earn a better return. Can You Earn a Better Return Than Your Mortgage Rate? Your mortgage interest rate is essentially your rate of return It may be possible to beat it by investing elsewhere like the stock market Prepaying the mortgage might not always be the best move if you can put your money someplace that earns a higher yield This could sway your decision to pay the mortgage early or dictate a refinance decision As I noted in a prior post, the 30-year fixed averaged 5. 72% over the past decade, and 6. 52% over the past 20 years. The average jumps to 7. 45% over the past 30 years. Today, the average interest rate on a 30-year fixed mortgage...

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### Will Mortgage Rates Go Up or Down If Trump/Biden Wins the Election?

- Published: 2020-10-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/will-mortgage-rates-go-up-or-down-if-trump-biden-wins-the-election/
- Categories: Mortgage News, Mortgage Rates

As everyone knows, we have a very important U. S. presidential election just around the corner. In fact, it’s now less than three weeks away. It could be the biggest in U. S. history, at least in terms of drama and friction, and possibly an unknown or disputed outcome come November 3rd. Unfortunately, not everyone takes the time to vote for one reason or another, and it appears that those behind on the mortgage are even less likely to vote. Those Behind on the Mortgage Are Less Likely to Vote A new survey from Apartment List revealed that 87% of homeowners who began the month without any unpaid mortgage bills will “definitely” vote next month. This compares to just 60% of those who had unpaid bills to begin the month. Now it’s unclear if these borrowers are actually late, given the fact that mortgage lenders often provide a grace period to pay the mortgage until the 15th of the month. But we can at least glean some patterns and trends that emerge over time. You can also see that voter turnout is even worse for renters, whether they pay on time or not. Only 68% of on-time renters plan to vote, whereas just 48% of those behind on rent expect to make it out to the polls. As to why renters are generally less likely to vote than homeowners, Apartment List noted that homeowners are often motivated by policies and propositions that could affect local property values. There are also...

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### Is Refinancing Worth It? Consider the Costs and How Long You'll Keep the Loan

- Published: 2020-10-13
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-refinancing-worth-it/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

With mortgage rates at or near record lows, a lot of existing homeowners are probably asking themselves, “Is refinancing worth it? ” The problem is there’s no absolute right or wrong answer to this question, though with interest rates a lot lower than they were a year or two ago, the answer to this question will often be YES. Simply put, if there’s a larger spread between your existing mortgage rate and current refinance rates, it’s that much easier to save money. Conversely, if rates haven’t budged much since you last obtained a home loan, you’re going to have to get knee-deep in the math to ensure it makes sense financially. This Is the #1 Reason Homeowners Don’t Refinance If you’re questioning whether a refinance is worth it you’re not alone It’s actually the top reason why homeowners don’t bother refinancing 34% said so in a new survey from YouGov for Forbes Advisor But instead of wondering, take action and determine if a refinance can save you money As noted, lots of homeowners are probably mulling over a mortgage refinance, even those who just refinanced last year, or perhaps even earlier this year. The top reason they haven’t yet is because they’re not sure it’s worth it, followed by a good chunk saying they just recently refinanced (how soon can I refinance? ). Others are concerned about fees, rightfully so. A mortgage requires work – it isn’t a set it and forget it situation. Since mortgage rates can change tremendously...

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### What Mortgage Rate Can I Expect? Answer These Questions First

- Published: 2020-10-12
- Modified: 2023-11-17
- URL: https://www.thetruthaboutmortgage.com/what-mortgage-rate-can-i-expect/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: “What mortgage rate can I expect? ” The thing with mortgage rates is that they can vary greatly depending on a number of market forces and borrower-specific factors. That's why it's impossible to just throw a random interest rate out there such as 5. 99% or 6. 99%. Sure, a handful of borrowers may qualify for a mortgage rate like that. But there will be many others who qualify at a higher rate, assuming they even get approved to begin with. To get a better idea, answer some questions about yourself and the subject property. Your Default Risk Determines Your Mortgage Rate First you need to know what type of borrower you are (excellent credit, bad credit, etc. ) And what type of property you're buying or refinancing with what down payment Once you know the level of risk you present to the lender you can get a better idea of mortgage rate expectations Those who are deemed lower risk with be able to obtain the lowest market rates available This is one of the most common mortgage questions I get. Everyone wants to know what their mortgage rate will be. As noted, it's hard to pinpoint, but we can arrive at some good estimates by learning more about the loan scenario. In fact, this is exactly how a mortgage lender or mortgage broker approaches it. They generate your loan scenario by asking basic questions. Once they know your credit score, occupancy/property type, and transaction type, they'll have...

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### Costco Mortgage Review: Yes, They Do Home Loans Too, Kind Of

- Published: 2020-10-10
- Modified: 2025-03-15
- URL: https://www.thetruthaboutmortgage.com/costco-mortgage-review-what-dont-they-do/
- Categories: Mortgage News

Costco, the well-known mega wholesaler that runs a chain of membership warehouses internationally, rolled out it’s so-called “Mortgage Services” program back in 2011. Now known as "The Mortgage Program," their lending partners have funded nearly 200,000 mortgages worth more than $51 billion. Costco already offers all types of insurance, a co-branded credit card, RV and boat loans, food and drink, jewelry, electronics, not to mention gigantic tubs of mayonnaise. So what’s the deal here? Why did Costco get into mortgages? Could it really be that profitable? Update:On May 1st, 2022, Costco shuttered the service, which just so happened to coincide with mortgage rates doubling! It's unclear if they'll ever bring it back. Costco Is Marketing Mortgages, Not Actually Making Them Just to be clear here, there is no Costco Mortgage Nor is Costco actually originating mortgages on their own (they are NOT a lender) They are simply marketing home loans via their lending partners Because they have a massive stable of customers who are or want to become homeowners Let me start by saying there is no "Costco Mortgage. " It does not exist. What Costco’s really doing is marketing a mortgage product on behalf of another company, formerly First Choice Loan Services Inc. , and now CrossCountry Mortgage. CrossCountry actually oversees a group of preferred lenders, including national depository banks and mortgage bankers, such as NASB Home Loans and Consumer Direct Mortgage. Apparently, Costco doesn't get paid for the loans that close or receive any sort of loan origination...

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### Redfin: 2020 Home Sales Will Be Highest Since 2006

- Published: 2020-10-08
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/redfin-2020-home-sales-will-be-highest-since-2006/
- Categories: Housing Market, Mortgage News

While 2020 continues to surprise us, somehow, someway, home sales are expected to hit their highest point since 2006 this year. This, despite an ongoing worldwide pandemic and a contentious U. S. presidential election that’s less than a month away. You’d think those types of events would give prospective home buyers pause, but they could actually be accelerating peoples’ plans. 6. 2 Million Home Sales Expected for 2020 The total includes both newly-built homes and existing home sales Would be the highest total since 2006, around the time home prices peaked Their low-end estimate is 6. 08 million home sales, still 1% above last year Their high-end estimate is 6. 4 million home sales, 6% above last year While the year 2020 certainly got off to a rocky start, and resulted in obvious disruptions during the traditional spring home buying season, we appear to be back on track. In fact, some 6. 2 million homes are expected be sold by the end of 2020, per Redfin’s model forecast, a 3% increase from 2019. That’d make 2020 the best year for home buying since 2006, back when real estate was flying high, and only years before it all came crashing down and ushered in the Great Recession. This doesn’t mean we’re doomed once again – things were a lot different back then, namely mortgage underwriting guidelines. In 2006, you could buy a house with zero down, stated income, and a subprime credit score. In fact, you could by a 4-unit investment...

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### What Will Happen When the CARES Act Forbearance Option Ends?

- Published: 2020-10-07
- Modified: 2024-05-23
- URL: https://www.thetruthaboutmortgage.com/cares-act-forbearance-option-end-date/
- Categories: Foreclosure, Mortgage News

While it’s still possible to request mortgage forbearance via the CARES Act if you’re having trouble making monthly payments, this option will eventually come to an end. In fact, you might only have about two months left to contact your loan servicer for relief. So if you think you'll need help, act sooner rather than later to avoid missing out. This cutoff date depends on the type of mortgage you have, e. g. an FHA loan or a conventional loan. What's the Last Day to Apply for Mortgage Forbearance? Fannie and Freddie loans - when the "national emergency" ends FHA loans - June 30th, 2021 USDA loans - June 30th, 2021 VA loans - June 30th, 2021 Oddly, it’s not even known when that date is, at least when it comes to mortgages backed by Fannie Mae and Freddie Mac. That’s because the GSEs currently have the end date for relief set to the end of the national emergency. So it might be a moving target given COVID-19 seems to just be getting started. Seeing that the other agencies have extended into the first six months of 2021, the hope is Fannie/Freddie will also do at least that. The FHA had set a deadline of October 30th, 2020 (which was extended to December 31st , 2020, then Feb. 28th, 2021, then to March 31st, 2021, and now to June 30th). Similarly, the USDA had announced a deadline of December 31st, 2020 for approving forbearance requests, then aligned it with the...

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### You Can Buy More House If You Put More Money Down

- Published: 2020-10-07
- Modified: 2024-03-12
- URL: https://www.thetruthaboutmortgage.com/you-can-buy-more-house-if-you-put-more-money-down/
- Categories: Housing Market, Mortgage Tips

I was reading through the latest quarterly home price report from the National Association of Realtors yesterday and stumbled upon an interesting nugget. It might seem obvious, but it’s worth pointing out to prospective home buyers who might be lacking in the income department. Simply put, if you are able to come to the table with more money for a down payment, you’ll be able to buy more house. Allow me to explain, using the NAR’s latest Metropolitan Median Area Prices and Affordability and Housing Affordability Index release (Q2 2020). National Median Home Price Rises to $291,300 Expect home prices to keep rising throughout the year and next This should continue to hurt purchasing power despite low mortgage rates But if you're able to come in with a larger down payment You can keep your loan amount at a reasonable level and boost affordability In the report, they noted that the national median existing single-family home price rose to $291,300 in the second quarter of 2020, up 4. 2% from a year earlier ($279,560). For the record, the pace slowed a bit as the median price in the first quarter of 2020 was 7. 7% higher than it was during the first quarter of 2019. Still, we continue to see healthy (maybe too healthy) home price growth and it’s probably going to keep rising, which should make it more difficult for some would-be buyers to purchase homes due to DTI restrictions. Yes, mortgage lenders limit what you can afford based...

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### The Mortgage Broker Comeback

- Published: 2020-10-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/the-mortgage-broker-comeback/
- Categories: Mortgage News

Once left for dead, the mortgage broker is alive and well. And in fact, thriving. There are now more than 100,000 mortgage brokers in business, per the latest jobs report from the U. S. Bureau of Labor Statistics, an increase of 20% from a year ago. And it only appears to be getting better for the mortgage broker, as large shops continue to embrace them as either a complement or alternative to retail. That’s a stark contrast to the trend seen less than a decade ago, after the prior housing boom quickly turned mortgage bust, with brokers the first to be blamed. Mortgage Broker Redux The mortgage broker share hit nearly 35% back in 2008 It then fell sharply to around 7% in 2011 as the housing crisis worsened They have since regained market share with it climbing back to around 16% in 2019 Brokers may see market share rise to/above 20% in 2020 and beyond if the trend continues Back in the early 2000s, mortgage brokers were all the rage, accounting for a large chunk of the overall mortgage market. Pretty much every major depository bank and large mortgage banker had a wholesale lending division. And if they didn’t, they quickly created one. There was such a strong appetite for mortgage backed securities on Wall Street that it was a virtual no-brainer for a mortgage firm to rapidly boost loan volume by enlisting third-party brokers. This led to a near-35% mortgage broker share back in 2008, at least with...

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### Union Home Mortgage Review: Ohio's Mortgage Lender

- Published: 2020-10-06
- Modified: 2025-03-04
- URL: https://www.thetruthaboutmortgage.com/union-home-mortgage-review/
- Categories: Mortgage Tips

If you’ve watched a Cleveland Guardians baseball game lately, you may have noticed a big sign for “Union Home Mortgage” out in center field. That’s because UHM is the official mortgage partner of the Guardians, along with the Professional Bull Riders (PBR) organization. They also recently partnered with former Cleveland Browns quarterback Bernie Kosar for some commercials, and are now the title sponsor of the Cleveland Marathon. So it’s clear they’re big sports fans and proud to call Northeast Ohio home. The company’s headquarters also aren’t too far away from two other major players in the mortgage industry, Quicken Loans and United Wholesale Mortgage. Like those two heavy-hitters, Union Home calls itself a “high-growth” company and has plans to keep building out its campus and expanding. Let’s learn more about them. Union Home Mortgage Fast Facts A retail mortgage lender based out of Strongsville, Ohio Founded in 1970, led by former MBA chairman Bill Cosgrove Licensed in 48 states and the District of Columbia More than 155 branch locations and nearly 1,400 Partners nationwide 18% of total loan volume comes from the state of Ohio Funded more than $5 billion in home loans during 2023 (latest data available) Union Home Mortgage, or UHM for short, is a direct-to-consumer retail lender based in Strongsville, Ohio. That means you can call them up, visit a branch, or simply surf over to their website to get started. They are an approved direct lender for Fannie Mae, Freddie Mac, the FHA, USDA, and VA,...

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### Should You Use Experian Boost Before Applying for a Mortgage? How It Can Help

- Published: 2020-10-06
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/should-you-use-experian-boost-before-applying-for-a-mortgage/
- Categories: Credit Scores, Mortgage Tips

You may have seen commercials lately for “Experian Boost,” a program that says it can increase your credit scores instantly. Their latest ad spot features wrestler John Cena riding around on a horse, giving people with no hope of getting approved for a loan, well, hope. Even better, it’s free to use. So if you’re on the cusp of average, good, or even excellent credit, perhaps a boost could improve your approval odds and save you money. Well, that’s the idea at least. In practice, it might not actually work that way, especially if we’re talking about a home loan. What Is Experian Boost? A free service from credit bureau Experian that may increase your credit score instantly Works by adding positive payment history to your credit report for things like phone bills or even Netflix payments These recurring utilities and other monthly payments often aren’t factored into your credit history By connecting your bank accounts, Experian can factor in these payments and give your credit score a boost Average Experian Boost users see their Experian-based FICO Score 8 rise by 13 points As the name suggests, it’s a credit score boosting program from credit reporting company Experian, which together with Equifax and TransUnion, makes up the three major credit bureaus. How it works is fairly simple – you sign up for Experian Boost, then connect your bank account(s) to your profile. This essentially provides read-only access to your bank account history, allowing Experian to quickly scan and find qualifying...

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### Regions Mortgage Review: A Mortgage Leader in the Southeast

- Published: 2020-10-01
- Modified: 2025-03-07
- URL: https://www.thetruthaboutmortgage.com/regions-mortgage-review/
- Categories: Mortgage Tips

If you live in Texas or the Southeast, you’ve likely heard of Regions Mortgage. In fact, you might already be a banking customer with parent company Regions Financial. The company is a banking leader in the states of Alabama and Tennessee, so if you’re the type that likes to do all your business in one place, Regions Mortgage might be for you. Aside from their strong presence in the Southeast, they also provide banking and home loan services in Indiana, Illinois, and Missouri. Their basic pitch is that you should get your mortgage from a lender you can trust, namely a massive billion-dollar bank with a near 50-year history. Let’s learn more to see if Regions Mortgage could be a good fit for your home financing needs. Regions Mortgage Quick Facts Publicly traded commercial bank serving customers in the Midwest, South, and Texas Founded in 1971, headquartered in Birmingham, Alabama One of the largest banks in the United States (top 40) A top-30 mortgage lender nationally by volume Funded nearly $9 billion in homes loans via retail channel in 2023 Florida accounted for 21% of total home loan volume Also a major mortgage lender in the states of Alabama, Georgia, and Tennessee Regions Mortgage is the retail mortgage banking arm of Regions Financial, a full-scale depository bank. The company, which is one of the largest banks in the United States, was founded in 1971 and is headquartered in Birmingham, Alabama. Last year, they funded almost $9 billion in home loans,...

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### UWM Offering 50 Basis Point Discount on VA Streamline Loans Through Veterans Day

- Published: 2020-10-01
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/uwm-offering-50-basis-point-discount-on-va-streamline-loans-through-veterans-day/
- Categories: Mortgage News, Mortgage Rates

United Wholesale Mortgage continues to bring the heat, this time shaving 50 basis points off streamline VA loans from now until Veterans Day on November 11th. The move will make it even cheaper for veteran homeowners to refinance their existing mortgages to take advantage of today’s near record low mortgage rates. What’s the Deal? UWM is offering 50-basis point discount on VA IRRRLS Offer good on rate locks now through Veterans Day (November 11th) Can also be combined with VA Conquest program Rates start as low as 2. 25% on the 30-year fixed To celebrate and better yet, appreciate our active duty military and veterans, UWM is offering a special pricing incentive on VA Interest Rate Reduction Refinancing Loans, or IRRRL for short. This means existing veteran and active duty homeowners in the market for a mortgage refinance can save even more through Veterans Day. At the moment, mortgage rates are already basically rock bottom, hovering near all-time lows achieved just a couple weeks ago. When combined with UWM’s already low VA Conquest program, which has interest rates starting at 2. 25% for a 30-year fixed, a borrower might be able to snag an exceptional deal over the next month and change. And if we see mortgage rates creep down even lower prior to the election, thanks to the election and COVID-19, homeowners might get their hands on a deal of a lifetime. The VA IRRRL is a streamlined refinance program that doesn’t require an appraisal and allows for an...

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### Primary Residential Mortgage Inc. (PRMI) Review: Faster, Simpler, Smarter?

- Published: 2020-09-29
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/primary-residential-mortgage-review-prmi/
- Categories: Mortgage Tips

Primary Residential Mortgage, Inc. , or PRMI for short, is a direct mortgage lender based out of Salt Lake City, Utah that has been around since 1998. Since that time, they have grown into a multi-billion-dollar mortgage originator with over 250 branches and more than 1,800 employees nationwide. At the moment, they are licensed to lend in 49 states (New York being the exception), and while they originate lots of home loans in many states, their highest volume comes from Florida and Maryland. They do mostly home purchase loans (~70% share) thanks to their many relationships with real estate agents, but also a good deal of refinance loans as well. Additionally, they offer a $5,000 Loan Closing Guarantee, whereby they’ll pay you $2,500 and the seller $2,500 if they issue a mortgage pre-approval and don’t close on time. Let’s learn more about what PRMI offers and if they’re the right mortgage lender for you. Primary Residential Mortgage Fast Facts Direct-to-consumer mortgage lender located in Salt Lake City, Utah Founded in 1998 by Dave Zitting, Jeff Zitting, and Steve Chapman Licensed to originate mortgages in 49 states Over 250 branches and more than 1,800 employees Funded $6+ billion in home loans during 2019 (top-50 lender nationally) Florida and Maryland are their top two states by loan volume Also operate a wholesale lending division for mortgage broker partners Getting a Home Loan with Primary Residential Mortgage You can apply for a home loan directly from their website in minutes Their digital mortgage...

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### Beeline Loans Mortgage Review: Using Tech to Make Mortgages Painless

- Published: 2020-09-25
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/beeline-loans-mortgage-review/
- Categories: Mortgage Tips

In early 2019, a new mortgage lender called Beeline Loans, or Beeline for short, was launched. Their mission: to completely transform the home loan experience. No small task, but they’ve already made meaningful changes that should make it both more fun and cheaper to take out a mortgage. They say they’ve “removed pointless steps,” while automating others. And they don’t charge a pricey loan origination fee, nor do they pay out commissions to middlemen. This is similar to Better Mortgage, which also doesn't charge lender fees. Let’s learn more about this up-and-coming mortgage lender that’s looking to shake things up. Beeline Loans Fast Facts Direct-to-consumer mortgage lender (operates exclusively online) Offers home purchase loans and mortgage refinancing Founded in 2019, located in Providence, Rhode Island Currently licensed to do business in 28 states and D. C. Charge a flat origination fee of $1,049 for conforming purchase & refinance loans And $1,999 for non-conforming loans (DSCR/jumbo/bank statement, etc. ) Beeline Loans is a direct-to-consumer mortgage lender that was founded in 2019. They offer both home purchase loans and mortgage refinances. The company is located in Providence, Rhode Island and are currently licensed to do business in 28 states and the District of Columbia. Those states include Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. They operate exclusively online, meaning there are no physical branches you can walk...

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### United Wholesale Mortgage Going Public

- Published: 2020-09-24
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/united-wholesale-mortgage-going-public/
- Categories: Mortgage News

Despite the ongoing pandemic, it’s turning out to be a very good time for companies to go public, especially mortgage lenders, which are seeing record volumes thanks to über-low mortgage rates. The latest announcement comes from United Wholesale Mortgage, the largest wholesale mortgage lender in the country that works exclusively with mortgage brokers. While they don’t offer home loans directly to the public, they still managed to crack the top-3 in terms of overall loan volume thanks to their legion of broker partners, who are client-facing. United Wholesale Mortgage IPO Going public via a special purpose acquisition company (SPAC) transaction Will merge with Gores Holdings IV, sponsored by The Gores Group Combined company expected to have equity value worth $16. 1 billion at closing Deal expected to close at some point in the fourth quarter of 2020 As opposed to a traditional initial public offering (IPO), the Pontiac, Michigan-based company is becoming a public company via a special purpose acquisition company (SPAC) transaction. It will merge with already-public blank check company Gores Holdings IV, Inc. , which is an affiliate of The Gores Group. The deal is expected to close sometime in the fourth quarter of 2020, which is kind of fast-tracked to take advantage of the buzz in the mortgage space at the moment. It’s the largest SPAC in history with a value of $16. 1 billion, which is nearly 10x the company's estimated 2021 adjusted net income of roughly $1. 7 billion. Like Rocket Companies Inc. , parent...

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### Zillow Homes: Zillow Launches a Real Estate Brokerage

- Published: 2020-09-23
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/zillow-homes-zillow-launches-a-real-estate-brokerage/
- Categories: Housing Market, Mortgage News

Zillow has officially launched a real estate brokerage, known as “Zillow Homes. ” The move is intended to “simplify and streamline” the company’s Zillow Offers platform, which up until now relied upon outside real estate brokerages to manage its iBuying transactions. While it sounds like unwelcome news for real estate agents, the company said it doesn’t intend to compete with other brokerages or recruit agents. Rather, the company will have existing Zillow Offers employees become licensed real estate agents, and they’ll only work on Zillow Offers deals. What Is Zillow Homes? A new licensed real estate brokerage launched by Zillow Will be used for Zillow Offers transactions beginning in 2021 All Zillow-owned homes will be listed on the multiple listing service (MLS) Real estate commissions will be paid to agents representing home buyers In 2018, the company’s iBuying program known as Zillow Offers was launched. Today, it’s operational in 25 markets across the United States. At the moment, it functions with the use of outside real estate brokerages, who work with home sellers and Zillow concurrently to quickly offload properties. In a video message, Zillow chief industry development officer Errol Samuelson noted that this back and forth from outside brokerage to Zillow, while generally problem-free, has created confusion for customers. So going forward, the entire transaction from start to finish will be conducted using only Zillow employees. The Zillow employees will work for Zillow Homes, a brokerage entity focused solely on Zillow Offers transactions. And Zillow Homes will be the...

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### Cardinal Financial Mortgage Review: A High-Octane Mortgage Lender

- Published: 2020-09-15
- Modified: 2024-08-10
- URL: https://www.thetruthaboutmortgage.com/cardinal-financial-mortgage-review/
- Categories: Mortgage Tips

One of the “most senior lenders in the industry,” in their own words, is Charlotte, North Carolina-based Cardinal Financial. The retail mortgage lender has been around since 1987, truly making them one of the veterans in the mortgage space. After all, a lot of newcomers, while perhaps large and growing, only formed around the time of the mortgage crisis in 2006. Cardinal Financial, on the other hand, has some 30+ years under their belt, but that hasn’t stopped them from innovating and adopting new technologies. In fact, they even have an Alexa skill (search for Cardinal Financial) that provides hands-free answers to dozens of everyday mortgage questions. Credit to them for helping their potential customers get smarter. Cardinal Financial Fast Facts Direct-to-consumer mortgage lender based in Charlotte, NC Founded in 1987, 118 branch locations nationwide Licensed in all 50 states and the District of Columbia Funded nearly $8 billion in home loans during 2019 On their way to being a top-25 mortgage lender nationally Also operate a wholesale lending division for mortgage brokers Cardinal Financial is a direct-to-consumer mortgage lender with 118 branches nationwide. They are licensed in all 50 states and the District of Columbia, which is a somewhat rare feat unless we’re talking about the largest mortgage lenders in the nation. As it stands, they’re a top-40 mortgage lender with aspirations to perhaps land in the top-25 at some point. While they do a lot of business all across the nation, their biggest state based on volume in...

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### Is It a Bad Idea to Buy a Home During a Pandemic?

- Published: 2020-09-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-it-a-bad-idea-to-buy-a-home-during-a-pandemic/
- Categories: Housing Market, Mortgage Tips

A recent op-ed said buying a home during a pandemic was a terrible idea. The author, Teresa Ghilarducci, noted that both home prices and uncertainty are high. Her basic message - we’re maybe acting irrationally due to the COVID-19 pandemic, and that it could be smart to hunker down until the dust settles. While I totally get the author’s point of view, I never agree with blanket rules, especially when it comes to real estate and/or mortgages. Ultimately, we are all different people in unique situations, and what benefits one individual may not work for another, and vice versa. Simply put, it could be a great time to buy a home right now, and also a very bad one. It just depends... Do You Have a Solid Home Purchase Plan? Don’t buy a house just because everyone else is Don’t buy a house because you don’t want to miss out Don’t buy a house due solely to speculation Don’t buy a house sight unseen or on a whim Don’t buy a house without knowing your exit strategy No matter what’s going on in the world, you should have a clearly thought out plan when venturing into the world of real estate. Purchasing a home is a big commitment, and a costly one at that. Even if you get cold feet and decide to sell shortly after, there are lots of closing costs on both ends of the transaction. You might be able to break even if home prices continue to...

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### NOVA Home Loans Review: Arizona's Mortgage Lender

- Published: 2020-09-09
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/nova-home-loans-review/
- Categories: Mortgage Tips

If you reside in Arizona, there’s a really good chance you’ve driven by a billboard advertising NOVA Home Loans. I don’t even live in Arizona but always see their advertisements when visiting. The direct-to-consumer mortgage lender has a huge presence in the Copper State, and actually generated about 65% of its business there last year. They are a top Arizona mortgage lender. While they also have brick-and-mortar locations in nearby states like California, Colorado, Nevada, and Texas, the lion’s share of mortgages are on properties located in Arizona. And that’s a big deal because the company originated nearly $8 billion in home loans in 2020, meaning everyone in Arizona has probably heard of them, and lots have a NOVA Home Loans mortgage. Their second biggest state is Colorado, where they do about a quarter of total volume, so it’s clear that much of their mortgage lending happens between these two states. NOVA Home Loans Fast Facts Independent nonbank retail mortgage lender based in Tucson, Arizona A top-100 mortgage lender nationally founded in 1980 Originated nearly $8 billion in home loans during 2020 About two-thirds of its volume came from Arizona, and a quarter from Colorado Licensed in 14 states including Arizona, California, Colorado, Florida, Illinois, Indiana, Kentucky, Nevada, New Mexico, Oregon, Pennsylvania, Texas, Utah, and Washington Also offers financing on commercial and multi-family properties via NOVA Commercial Loans Sponsors the annual NOVA Home Loans Arizona Bowl Applying for a Mortgage with NOVA Home Loans The company prides itself on efficiency...

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### Mortgage Lending Volume Hits Highest Level on Record Despite COVID-19

- Published: 2020-09-09
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-lending-volume-hits-highest-level-on-record-despite-covid-19/
- Categories: Housing Market, Mortgage News, Refinance

It makes sense that the mortgage industry would see its best quarter in history during a global pandemic. Okay, it doesn’t make sense, but that’s what happened anyway, per the latest Mortgage Monitor report from Black Knight. Mortgage Lenders Originated $1. 1 Trillion in Home Loans During the Second Quarter Mortgage lenders experienced best quarter in history during Q2 2020 Driven most by refinance loans thanks to record low mortgage rates Refinancing was up 60% from first quarter and 200% from a year earlier Purchase lending was only down 8% from a year earlier despite pandemic The data analytics firm said about $1. 1 trillion (yes, trillion) in first-lien mortgages were originated during the second quarter of 2020, the best three months on record since reporting began in January 2000. The record numbers were mostly fueled by mortgage refinance transactions, which have surged due to continued record low mortgage rates, helped in part by the COVID-19 pandemic. They said refinance lending was up more than 60% from the first quarter alone, and more than 200% higher than the same time last year. Such home loans accounted for almost 70% of all first-lien mortgage originations in terms of dollar value, compared to just 39% in the second quarter of 2019. Meanwhile, home purchase lending was down about eight percent from a year earlier, which is surprisingly strong given the economic uncertainty surrounding the coronavirus. Some $351 billion in home purchase loans were originated during the quarter, thanks again to low mortgage...

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### Rounding Up Your Mortgage Payment: Can It Really Save You Money?

- Published: 2020-09-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/rounding-up-your-mortgage-payment-does-it-actually-work/
- Categories: Mortgage Tips

There are all sorts of gimmicks, tips, and tricks out there to pay down the mortgage a little (or a lot) quicker. And one that sounds relatively painless is the simple rounding up of one’s mortgage payment. So if you owe $1,550 each month, paying $1,600 instead could make a sizable dent in your mortgage over the years, thereby reducing the loan term and saving you lots of money in interest. But just how effective is rounding up your mortgage payment? Well, it depends. Let’s take a look at a couple of potential scenarios to find out. It Depends How Much You’re Actually Rounding Up The biggest factor is your actual monthly mortgage payment Which will determine how much extra you pay each month Assuming you round up your payments to the nearest whole number It can be quite different depending on that original payment amount First off, you need to take a look at your actual monthly mortgage payment. If it’s $1,599 a month, rounding it up to $1,600 will do virtually nothing to save you money on your mortgage. If anything, you might just confuse your loan servicer when sending in what appears to be the wrong payment amount. Conversely, if your monthly home loan payment is $1,501, bumping it up to $1,600 will lead to considerable savings. Of course, if you have to increase your payment by nearly $100 a month, it’s no easy task, especially if you have other expenses to worry about, or high-interest debt...

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### Beware the New Mortgage Fee Fearmongering

- Published: 2020-09-01
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/new-mortgage-fee-refinance/
- Categories: Mortgage News, Mortgage Rates, Refinance

You may have heard there’s a “new mortgage fee. ” And you might have been told to hurry up and refinance NOW to avoid said fee. While there is some truth to that, it is by no means a reason to panic, nor is it even applicable to all homeowners. Additionally, it’s possible it may not save you money to refinance now versus a couple months from today, depending on what direction mortgage rates go. So before we all get in a tizzy and give in to what some are clearly utilizing as a scare tactic, let’s set the record straight. What the New Mortgage Fee Is and Is Not A 50-basis point cost known as the Adverse Market Refinance Fee intended to offset COVID-19 related losses It’s not a . 50% higher mortgage rate It’s an additional . 50% of the loan amount via closing costs Only applies to mortgage refinance loans backed by Fannie Mae or Freddie Mac Home purchase loans are NOT affected by the new fee Nor does it apply to FHA loans, USDA loans, or VA loans Over the past week, I’ve been bombarded by articles warning of the new mortgage fee – most feature something to the effect of “refinance now” and “act fast! ” But in reality, you might not need to do anything different, nor hurry. Sure, it’s an amazing time to refinance a mortgage, what with mortgage rates hovering at or record all-time lows. No one can argue that. Still, it...

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### CMG Financial Mortgage Review: Is Their All In One Loan for You?

- Published: 2020-08-26
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/cmg-financial-mortgage-review/
- Categories: Mortgage Tips

CMG Financial isn’t new to the mortgage industry, having been around since 1993. That makes them a veritable veteran in the home loan space, as many of today’s top mortgage lenders have only been around since the 2000s. Of course, age isn’t everything, so let’s talk about what sets apart this top-30 lender, with aspirations to crack the top-25 and beyond. CMG Financial Quick Facts Privately held retail mortgage lender founded in 1993 Located in San Ramon, California Operates in all 50 states and the District of Columbia Funded roughly $7 billion in home loans via retail channel during 2019 Top states based on loan volume include California, Tennessee, and Texas Also runs correspondent and wholesale lending divisions As noted, the company got its start all the way back in the early 1990s, when Christopher M. George established CMG Mortgage, Inc. in Pleasanton, California. If you’re wondering what CMG stands for, well, now you know. Or at least I hope you know! The company later began doing business as CMG Financial to better reflect its philosophy of making sure borrowers found the right solution for their broader financial goals, not just the mortgage. They might be most famous for their Home Ownership Accelerator, now known as the “All In One Loan,” which received a U. S. patent in 2009. It’s a loan that functions as a checking account to help homeowners save on mortgage interest. Last year, the company did roughly $7 billion in home loan origination volume via the...

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### When Do Mortgage Payments Start? It Depends When You Close

- Published: 2020-08-26
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/when-do-mortgage-payments-start/
- Categories: Mortgage Tips

A little bit of mortgage Q&A: “When do mortgage payments start? ” New homeowners (and those refinancing a mortgage) often wonder when mortgage payments start, as there’s sometimes a considerable gap between loan closing and the due date of the first monthly payment. For example, you may have been told by your real estate agent or mortgage broker that payments won’t start for 45 days or longer and express some intense optimism as a result. But you might be skeptical as well, and for good reason. Why would it take so long to start paying your mortgage lender back? Let's find out! Mortgages Are Paid in Arrears Unlike rental payments that are paid a month in advance Mortgage payments are paid after the fact (arrears) Because interest must actually accrue before it becomes due So once the month is over you pay interest for that time period This loan was closed in early August, but the first payment isn't due until October. This phenomenon occurs because mortgages are paid in arrears, not in advance, meaning payment is made at the end of a certain period, such as one month. Because interest is accrued on a mortgage balance each month, it cannot be paid until after the fact. Simply put, your mortgage payment made on the first of the month will cover last month’s interest, along with taxes and insurance, and principal (if applicable). This differs from monthly rental payments, which arepaid in advancefor the month they cover; if you rent...

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### U.S. Bank Mortgage Review: Is Their Smart Refinance a Wise Choice for You?

- Published: 2020-08-24
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/us-bank-mortgage-review/
- Categories: Mortgage Tips

While there are thousands of mortgage companies nationwide, only a select few land in the top 10. Today, we’ll examine U. S. Bank Mortgage, which ranked 9th in 2019 for total home loan origination volume. Being a very large depository institution, they’ve got advantages that other, smaller competitors don’t have. Namely, lots of liquidity and the ability to keep loans on their books, instead of having to sell them off and rely on short-term financing. This means they can offer mortgage products that the other guys can’t, and potentially lower mortgage rates too. Let’s learn more about U. S. Bank’s mortgage division. U. S. Bank Mortgage Fast Facts 9th largest mortgage lender in 2019 based in Minneapolis, Minnesota Operates both a retail direct-to-consumer and correspondent lending business Funded $32 billion in home loans last year A third of total loan volume took place in California Nearly half of their volume consisted of jumbo loans Originate a large share of adjustable-rate mortgages Available in all 50 states and D. C. , branches located in 40 states How to Apply for a Mortgage with U. S. Bank You can apply online or by phone via digital mortgage application powered by Blend A faster pre-qualification or loan estimate is also available if simply shopping around Can request a call from a loan officer or visit a retail branch if located near you Once approved you can track loan progress via the U. S. Bank Loan Portal Those who want to apply for a...

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### Fannie Mae and Freddie Mac Mortgage Refinances Just Got More Expensive

- Published: 2020-08-13
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-mortgage-refinances-just-got-more-expensive/
- Categories: Mortgage News, Refinance

Way to rain on our parade, Fannie Mae and Freddie Mac. Just when mortgage rates were hitting record lows, the pair decided to add a new fee to mortgage refinances in light of the ongoing pandemic. Simply put, they expect more losses related to a higher rate of loan defaults, and are adjusting their pricing accordingly. And refinance rates are higher to begin with so it's a double-whammy. Remember, they don’t lend directly, but rather purchase and securitize many of the mortgages that are funded by banks and mortgage lenders. As such, this new cost will be passed along to you, the consumer. Introducing the Adverse Market Refinance Fee Fannie Mae and Freddie are charging a new fee to account for higher risk related to COVID-19 It applies to all mortgage refinance transactions, including those without cash-out Only exception is certain single-close construction-to-permanent loans The new fee will apply to mortgages with settlement dates on or after September 1st, 2020 On August 12th, both Fannie Mae and Freddie Mac released lender letters discussing a new fee that they’re going to tack onto ALL mortgage refinance loans. Known as the “Adverse Market Refinance Fee,” it is designed to cover higher costs associated with increased risk thanks to COVID-19. Instead of absorbing that cost themselves, they’re passing it onto homeowners, even if you don’t actually pose any additional risk to Fannie and Freddie, collectively known as the government-sponsored enterprises (GSEs). Fannie Mae said the new fee is being charged as a result...

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### How Low Will Mortgage Rates Go?

- Published: 2020-08-12
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/how-low-will-mortgage-rates-go/
- Categories: Mortgage Rates, Mortgage Tips

It seems that lately we reach a new all-time low for mortgage rates just about every week, which begs the question, how low can they go? Indeed, mortgage rates have hit record lows eight times so far in 2020, and it is only mid-August. If you had to bet, you’d probably guess that we’d see at least two more record lows this year, given the recent trend of lower and lower. I assume that too would break some sort of record for most record lows in a calendar year, but that’s unclear. What is clear is that we continue to see old records get broken with relative ease, and at this point even lower rates feel like a given. The 2020 mortgage rate predictions are now totally laughable, with a 30-year fixed around 3. 75% the most common response. Can Mortgage Rates Get Even Better from Here? Fixed mortgage rates are already at all-time record lows There have been eight record lows this year, including three record lows in three weeks recently Is it possible that mortgage rates could move even lower in the second half of 2020? The trend certainly seems to point to even lower rates, especially with wide spreads relative to Treasuries As noted, mortgage rates are hitting record lows so often it’s becoming a bit of a non-event. Heck, I don’t even write about it anymore. And it’s hard to know if homeowners are even excited about it at this point. When something happens on a...

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### Do Mortgage Inquiries Affect Your Credit Score? Yes, But You Can Still Shop

- Published: 2020-08-10
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/do-mortgage-inquiries-affect-credit-score/
- Categories: Credit Scores, Mortgage Tips

Mortgage Q&A: “Do mortgage inquiries affect credit score? ” When preparing to take out a mortgage, you may have concerns about your credit report being pulled numerous times within a short period of time. This can occur while shopping for that perfect mortgage with multiple mortgage lenders or mortgage brokers over the span of a few weeks or even months. But while mortgage inquiries can certainly add up, they won’t necessarily lower your credit score or affect your ability to obtain home loan financing. It's Totally Fine to Shop Around for a Mortgage! You should definitely shop around for your home loan This ensures you explore all options and obtain the lowest rate possible Fortunately FICO has an algorithm designed specifically for mortgage inquiries Doesn't penalize mortgage shopping in a specified window of time The developers of the FICO score know how mortgage shopping works and have adjusted their super secret algorithm accordingly. First off, FICO ignores any mortgage inquiries made in the 30-day window prior to scoring, meaning those recent credit pulls shouldn't adversely affect your credit scores. For example, if mortgage lender A pulls your credit, then you decide to get quotes and/or pre-approved with mortgage lenders B and C in the same week, they wouldn't count against you. This allows to you shop without worry of your credit scores going down each time you do. Additionally, FICO counts multiple mortgage inquiries in a certain time span as a single inquiry. The FICO Mortgage Shopping Period If your...

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### Prosperity Home Mortgage Review: A Berkshire Hathaway Backed Mortgage Lender

- Published: 2020-08-10
- Modified: 2025-04-09
- URL: https://www.thetruthaboutmortgage.com/prosperity-home-mortgage-review/
- Categories: Mortgage Tips

Prosperity Home Mortgage based out of Chantilly, Virginia originally got started in the Carolinas back in 2006. While that was probably the last good year for the mortgage industry before the Great Recession, the independent mortgage banker was able to weather the storm and come out bigger and stronger. Today, they are one of the largest mortgage lenders in the United States, having originated roughly $6 billion in home loans in 2019. They operate exclusively via the retail direct-to-consumer channel in 44 states (and D. C. ) with 700 branch locations nationwide. Interestingly, they are a wholly owned subsidiary of The Long & Foster Companies, which is a part of HomeServices of America, a Berkshire Hathaway affiliate, so they appear to have a strong connection to the real estate industry. Let’s learn more about why Prosperity Home Mortgage could be a good choice for your next mortgage. Prosperity Home Mortgage Quick Facts Formed in 2006 in the Carolinas, currently based out of Chantilly, Virginia More than 700 brick-and-mortar branch locations nationwide and 350+ loan consultants 11 regional offices that process, underwrite, and close loans Closed roughly $6 billion in home loans during 2019 via retail channel Also operate a family of local brands including Edina Realty Mortgage, FM Lending Services, DFW Texas Mortgage, and Long Mortgage Part of the HomeServices family of mortgage companies, a Berkshire Hathaway Affiliate As noted, Prosperity Home Mortgage is a relatively young mortgage company, having been formed in 2006. However, they’ve already managed to fund...

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### COVID-19 Is Pushing Home Buyers to Move Sooner

- Published: 2020-08-06
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/covid-19-is-pushing-home-buyers-to-move-sooner/
- Categories: Housing Market, Mortgage News

Sometimes you need a little push to get things going, especially when it’s a big something like purchasing a home. Well, it turns out a pandemic can be that driving force, as evidenced by a new survey from real estate brokerage company Redfin. The company said 25% of the 1,000 home buyers it polled are moving (or moving sooner than planned) due to COVID-19. COVID-19 Induced Low Mortgage Rates Are Getting Buyers Off the Fence In terms of what’s getting people moving, literally, it’s the record low mortgage rates currently on offer. Thanks in part to COVID-19, mortgage rates have hit new record lows eight different times this year (so far and it's only August), as economic uncertainty often has a positive effect on interest rates. Some 55% of respondents cited the “low mortgage rates” as reason to change or speed up their plans. The second biggest factor (52%) was “spending more time at home,” something I think we’ve all done a lot of lately. When you’re home all the time, you have more time to think, and more time to complain about your surroundings too. Third was the work from home angle (40%), which is changing living preferences for prospective home buyers. It tends to mean buying more house so a home office can be designated in one of the bedrooms. It also means moving out of the city to the more spacious and affordable suburbs. Home Buyer Preferences Aren’t What They Used to Be While 25% of respondents...

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### UWM’s Exact Rate Lets Borrowers Choose Exact Mortgage Rates

- Published: 2020-07-30
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/uwms-exact-rate-lets-borrowers-choose-exact-mortgage-rates/
- Categories: Mortgage News, Mortgage Rates

The mortgage industry can be a little bit old school. Similar to how the stock market used to operate in sixteenths, and later eighths, mortgage rates are mostly offered in eighths. Before 2001, the stock market only allowed price movements as small as one-sixteenths, an archaic method that gave way to the introduction of decimals. The issue was that big traders were losing out when trading millions of shares, because as we all know, those little fractions can add up. The rest of the world was also using decimals, so it was time to evolve. Today, you can buy and sell stocks for prices like $73. 805 as opposed to just $73 3/4. That matters if we’re talking about a large purchase or a massive sell order. Now it’s probably not going to be as impactful with a mortgage, but in this day and age, every little bit seems to matter. Do You Want a Really Specific Mortgage Rate? UWM Exact Rate allows custom rates to the thousandth decimal point Mortgage brokers can “create the unshoppable loan” Pricing better matches closing costs on the loan and can be used to avoid principal reductions Even a fractional improvement may be enough to win a borrower’s business Typically, you’ll see that your mortgage rate is either a whole number, such as 3%, or an eighth of a number, such as 3. 125%. Some lenders and credit unions also offer promotional rates below key thresholds, such as 2. 99%, to make their offer...

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### Homespire Mortgage Review: Now Waiving Lender Fees for Healthcare Workers

- Published: 2020-07-29
- Modified: 2024-12-04
- URL: https://www.thetruthaboutmortgage.com/homespire-mortgage-review/
- Categories: Mortgage Tips

Today we’ll learn more about "Homespire Mortgage," which has made the Inc. 5000’s List of America’s Fastest-Growing Private Companies for the past four years in a row. Aside from being a rapidly expanding mortgage company, they're also consistently recognized as a top mortgage employer. Happy employees should increase your odds of being a happy borrower. They pride themselves on breaking the mold, fusing innovative mortgage technology with the power of the human spirit to create a winning mortgage experience. The company was founded in 2006 by Michael Rappaport (no, not the actor), who also currently serves as their president. Let's discover more about a lender borrowers trust, and real estate agents recommend. Homespire Mortgage Fast Facts Direct-to-consumer retail mortgage lender Offers home purchase and mortgage refinance loans Also an approved Fannie Mae and Freddie Mac seller and loan servicer. Founded in 2006, based out of Gaithersburg, Maryland Currently operates in 41 states and the District of Columbia Funded roughly $2. 4 billion in home loans during 2020 About half of total lending volume was in the state of Maryland Homespire Mortgage is a direct-to-consumer retail mortgage lender that operates 32 branches in 17 states. They are currently licensed to do business in 41 states nationwide, with Alaska, Hawaii, Missouri, Nebraska, Nevada, New York, South Dakota, Utah, and Wyoming the exceptions. In 2020, roughly 70% of their loan origination volume consisted of purchase loans, with the remainder refinance loans. In other words, real estate agents trust them to get the job...

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### Is a 2.25% 30-Year Fixed Mortgage Rate in the Cards?

- Published: 2020-07-29
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-a-2-25-30-year-fixed-mortgage-rate-in-the-cards/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

One of the problems with refinancing a home loan right now is that mortgage rates keep falling. As such, you might find the need to refinance again shortly after refinancing. Aside from being inconvenient, it’s also not very cost-effective. Yes, it costs money to refinance, whether you pay for it out-of-pocket or via a higher interest rate, the latter being a no cost refinance. So in a sense, mortgage rates moving even lower can be seen as a bit of a double-edged sword – sure, lower is better, but does it make your prior refinance worthless in the process? Are More Record Lows on the Way? Mortgage rates hit record lows for three weeks in a row Then pulled back slightly in the latest week, per Freddie Mac data The popular 30-year fixed currently averages about 3% flat Could we see 2. 75%, 2. 5%, and eventually 2. 25% at some point soon? At the moment, mortgage rates are essentially at record lows, give or take a few basis points. The 30-year fixed is hovering around 3%, which is basically its lowest point on record. Some borrowers are obtaining rates even lower than rate, say at 2. 875%. Over the past year, mortgage rates have defied expectations by marching lower and lower. This has led to a surge in mortgage refinance activity for the past 12 months or longer. But it’s also led to questions like, “How soon can I refinance again? ” You see, while homeowners are locking in...

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### Homeowners in Forbearance Plans Have Lower Credit Scores, Higher DTI Ratios

- Published: 2020-07-28
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/homeowners-in-forbearance-plans-have-lower-credit-scores-higher-dti-ratios/
- Categories: Mortgage News

The latest weekly Forbearance and Call Volume Survey from the Mortgage Bankers Association (MBA) revealed that 7. 80% of outstanding home loans were in forbearance. That number was up slightly from 7. 74% a week earlier, putting roughly 3. 9 million homeowners in forbearance plans. Much of these are COVID-19-related, thanks in part to a very liberal CARES Act that allows just about anyone to apply for relief with no documentation. Ginnie Mae Loans Continue to Perform the Worst More than 10% of FHA/USDA/VA loans are in forbearance plans This compares to roughly 5. 5% of Fannie Mae and Freddie Mac loans While the forbearance numbers have leveled off in recent weeks There’s a good chance the numbers may spike again if COVID worsens and the economy slows In the latest week, the share of Ginnie Mae loans in forbearance increased from 10. 26% to 10. 27%, while the share of Fannie Mae and Freddie Mac loans in forbearance fell from 5. 64% to 5. 49%. Mortgages backed by Ginnie Mae include FHA loans, USDA loans, and VA loans, all of which have relatively easy qualifying criteria relative to conforming loans backed by Fannie/Freddie. While the numbers seemed to have leveled off lately across all loan types, things could get worse if the COVID-19 flare ups across the country continue. And who knows what the fall and winter hold. In the meantime, we’ve got some data that sheds light on what types of homeowners are entering into mortgage forbearance plans,...

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### What Is a Gift of Equity? One Way to Buy Your Parents House

- Published: 2020-07-22
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-a-gift-of-equity/
- Categories: Mortgage Tips

One of the biggest hurdles to homeownership is down payment. Most people can afford a monthly mortgage payment, especially with interest rates so low, because it’s often not too different than a rent payment. But coming up with 20% of the purchase price is a different story. Heck, most Americans don’t even have a couple month’s reserves in their bank account. And while there are several zero down mortgage options like USDA loans and VA loans, and low down payment mortgage programs like FHA loans and Fannie Mae HomeReady, you pay more when you put less down. Simply put, the more risk you present to the lender, the more you pay, whether it’s through mortgage insurance or a higher mortgage rate. To alleviate this concern, you could look into a “gift of equity,” which as the name implies, is a contribution of equity from the seller to the buyer that can be used toward down payment on a home purchase. How a Gift of Equity Works A relative agrees to sell their home at below-market value The difference between appraised value and loan amount is the gift Can be used for down payment and closing costs Allows buyer to avoid PMI and obtain a cheaper mortgage via lower interest rate In short, it’s a “gift” provided by the home seller to the property buyer that works like a credit, which can be used toward the down payment and closing costs. Instead of selling the property at market price, the seller...

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### Is Mortgage a Good Debt or a Bad Debt? It Can Be the Absolute Best Debt

- Published: 2020-07-20
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/is-mortgage-a-good-debt-or-a-bad-debt/
- Categories: Mortgage Tips

You may have heard that mortgage is a “good debt,” in that it’s okay to carry a multi-hundred-thousand-dollar loan for decades on end. While that may sound counterintuitive to the many anti-debt folks out there, such as Suze Orman or Dave Ramsey, there is actually some real truth to it. Why Mortgage Is a Good Debt Home loans are typically essential debt because most people can’t buy homes with cash They feature some of the lowest interest rates relative to all other types of loans The underlying asset typically rises in value over time as the debt is paid off The property provides shelter and/or investment value to the holder of the debt As noted, financial experts tend to agree that mortgage is a good debt. They say this because the underlying property is deemed an “asset,” as opposed to a liability. For example, a big screen TV that will become obsolete by the time your 36 months of financing comes to an end is a liability. It doesn’t rise in value during the loan term, and if anything becomes worthless by the time it’s actually paid off. Conversely, a piece of real estate should rise in value over time if history is any indication. Sure, there might be some hiccups along the way, but home prices do increase as time goes on. A good example being the homes that were underwater in the wake of the Great Recession, many of which are now worth significantly more than they were...

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### Knock Home Swap: Buy, Sell, a Get a Mortgage with Just One Company

- Published: 2020-07-16
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/knock-home-swap-buy-sell-a-get-a-mortgage-with-just-one-company/
- Categories: Mortgage News

One of the trickiest aspects of homeownership is unloading an existing property while acquiring a replacement. Aside from being stressful, it can also be difficult it not impossible thanks to financing constraints and unwanted contingencies, which a home seller likely won’t accept in a hot market. Unfortunately for those in this predicament, real estate is red hot at the moment, thanks to a lack of inventory and record low mortgage rates. This means contingent offers, where you must sell before you commit to buy, aren’t likely to be accepted. And worse yet, even an offer that requires a mortgage could be denied in favor of an all-cash offer. Enter “Knock Home Swap,” which as the name implies, looks to solve this common conundrum by giving the concurrent home buyer/seller some helpful tools to compete. How Knock Home Swap Works First you get pre-approved for a mortgage with Knock Lending LLC This allows you to make offers on a replacement home with down payment assistance included Once you find the right home you can move in and make just the new mortgage payment In the meantime, your old home will be prepped, listed, and sold while they cover monthly mortgage payments We’ve heard of home swapping before, with it being a common feature with popular iBuyers. For example, Opendoor, HomeLight, Reali, and Offerpad all offer trade-in programs where you can sell them your home and buy one from them at the same time. But unlike an iBuyer, Knock doesn’t purchase your...

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### A Look Inside the Books of Rocket Companies, Inc.

- Published: 2020-07-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/a-look-inside-the-books-of-rocket-companies-inc/
- Categories: Mortgage News

Thanks to a newly released SEC Form S-1 associated with their upcoming initial public offering (IPO), we now know a lot more about closely held Quicken Loans, aka Rocket Mortgage, aka “Rocket Companies, Inc. ” The company, which bills itself as the nation’s largest mortgage lender, plans to trade on the New York Stock Exchange (NYSE) under the ticker symbol “RKT. ” Moving Toward the Rocket Mortgage Brand, Away from Quicken? The first takeaway here is that they seem to be embracing the Rocket Mortgage brand over the Quicken Loans brand, with the latter still paying royalties to Intuit for the use of that name, per the S-1. As you can see from the graphic provided in the S-1, they’ve got quite a few affiliated companies under the Rocket Companies umbrella that cover virtually all aspects of the home buying and mortgage lending process. Their Rocket Homes unit refers home buyers who have been pre-qualified for a mortgage by Quicken Loans to a network of third-party partner real estate agents. And their Amrock unit offers title insurance, property valuations (home appraisals), and settlement services. Consider them a one-stop shop, like others in the business are trying to achieve (see Redfin Mortgage and Zillow Offers). Quicken Loans Mortgage Services Is Huge In case you weren’t aware, the company has a major wholesale lending operation as well via Quicken Loans Mortgage Services (QLMS), which accounted for about 36% of total production in 2019. That was a big jump from 2018 and earlier...

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### Now Home Prices Are Expected to Fall By 2021 Thanks to COVID-19

- Published: 2020-07-07
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/now-home-prices-are-expected-to-fall-by-2021-thanks-to-covid-19/
- Categories: Housing Market, Mortgage News

While the housing market has been coming up roses lately, even in the face of COVID-19, it might turn out to be a short-lived affair as widespread unemployment takes hold. A new report from CoreLogic today revealed that despite a strong showing in May compared to a year earlier, home prices are actually slated to fall by 2021. This would mark the first national decline in nearly a decade, which could signal a top in home prices after many years of stellar gains. First Annual Home Price Decrease in Over 9 Years While home prices rose 4. 8% year-over-year in May They are expected to fall 6. 6% from May 2020 to May 2021 Would be the first annual decrease in more than nine years Could signal the end of a very long recovery for home prices Nationally, home prices were up 4. 8% year-over-year in May, per the latest CoreLogic Home Price Index (HPI) Report. For perspective, the May 2020 HPI gain from May 2019 was only 3. 6%, so home price growth accelerated and defied many expectations that anticipated the opposite. We’ve certainly had a good run, with the HPI increasing every month since February 2012 on a year-over-year basis, chalking a massive 68. 3% gain after bottoming in March 2011. However, when you look at the increase in real terms adjusted for inflation, home prices are still 6. 7% below their 2006 peak in May. As you can see from the image above, home prices haven’t truly...

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### The Top 25 Mortgage Lenders of 2019

- Published: 2020-06-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/the-top-25-mortgage-lenders-of-2019/
- Categories: Mortgage News

If you’re curious which mortgage lender closed the most home loans in 2019, I’ve got your answer. You probably already guessed that the top mortgage lender was Detroit, Michigan-based Quicken Loans, which also led on total dollar amount in recent quarters. But if you didn’t, now you know. The direct mortgage lender, which doubles as fintech company Rocket Mortgage, closed 541,000 mortgages last year, per HMDA data recently released by the CFPB. That’s about 1,500 closed loans a day if you break it down over 365 days, which tells you the scale of that institution, one that might be planning an IPO at this very moment. Of that total, 134,000 were home purchase loans. Their mortgage refinance share was around 70%, which is fairly high. Coming in second place was their neighbor United Shore Financial, also known as United Wholesale Mortgage (UWM), based out of Pontiac, Michigan. The wholesale mortgage lender that works exclusively with mortgage brokers closed a whopping 339,000 home loans last year, of which 152,000 were purchases. They seem to have their sights set on Quicken, with their Conquest loan program offerings rates as low as 2. 5% (and 2. 25% for VA loans). That put their refinance share closer to 50%, which is a solid mix and shows they aren’t overly dependent on the record low mortgage rates around at the moment. Rounding out the top three was San Francisco-based Wells Fargo, which closed 232,000 home mortgages in 2019. They'll probably still be #1 based on...

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### Veterans Can Now Get Rates as Low as 2.25% on a 30-Year Fixed Mortgage

- Published: 2020-06-24
- Modified: 2021-08-06
- URL: https://www.thetruthaboutmortgage.com/veterans-can-now-get-rates-as-low-as-2-25-on-a-30-year-fixed-mortgage/
- Categories: Mortgage News, Mortgage Rates

It seems mortgage rates keep moving lower and lower, and now some veterans and active duty military might be able to snag a 30-year fixed as low as 2. 25%! That’s pretty unheard of. While it sounds too good to be true, it appears to be a reality thanks to United Wholesale Mortgage’s push to dominate the mortgage market. The rapidly growing wholesale lender based out of Pontiac, Michigan announced the new offering today via their website, calling it “Conquest for VA. ” Who Is Eligible for Conquest for VA? Active duty military and veterans who otherwise qualify for VA loans Those looking for a VA purchase loan or VA IRRRL (streamline refinance) Primary residence only for purchases Primary and second homes for VA IRRRLs Minimum FICO score of 640 Must obtain financing via a mortgage broker approved to work with UWM Homeowner must not have closed a refinance through UWM in past 18 months Mortgage rates start from 2. 25% to 2. 375% on the 30-year fixed Now let’s talk about who’s eligible for this seemingly fantastic loan program, which UWM says is being offered to honor our nation’s veterans. As the name suggests, Conquest for VA is reserved for veterans and active duty military, and anyone else generally eligible for a VA home loan. So if you don’t qualify for a VA loan, you’ll have to look into their general Conquest loan program instead. Additionally, these low rates are only applicable to new home purchase loans and streamline...

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### COVID-19 May Have Just Been a Speed Bump for Surging Housing Market

- Published: 2020-06-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/covid-19-may-have-just-been-a-speed-bump-for-surging-housing-market/
- Categories: Housing Market, Mortgage Tips

We’re starting to get a better picture of how COVID-19 affected the housing market, with the National Association of Realtors’ existing-home sales report showing a big drop in May. It’s based on completed transactions, including both single-family homes and condos/townhomes, meaning these were likely under contract during the full lockdown seen a month or so ago. Home Sales Hit Hard by COVID-19 Existing home sales fell 9. 7% in May from a month earlier per NAR Off a sizable 26. 6% from April 2019 as traditional home buying period disrupted by virus Housing supply increased but likely only due to artificially slower sales pace Home prices were down slightly month-to-month but still registered 99th straight YoY increase As expected, existing home sales were off 9. 7% from April, falling to a seasonally-adjusted annual rate of 3. 91 million in May. That’s a whopping 26. 6% below the 5. 33 million sales pace seen in May 2019, though there are some pretty serious extenuating circumstances at play here. NAR chief economist Lawrence Yun noted that the sales completed last month “reflect contract signings in March and April. ” The true test on the existing home sale front will be a month or two from now, assuming the country remains open post the worst of COVID-19. The lack of home sales also seemed to boost unsold inventory, which rose to a 4. 8-month supply based on the current sales pace, up from 4. 0 months in April and 4. 3-months in May...

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### NewRez Mortgage Review: Are They the Home of Your Perfect Loan?

> Newrez is one of the fastest growing mortgage lenders in the nation, currently offering a $1,000 closing cost credit to home buyers.

- Published: 2020-06-12
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/newrez-mortgage-review/
- Categories: Mortgage Tips

One mortgage lender making a big splash of late is Newrez, short for New Residential Investment Corp. They've grown mightily thanks to their 2019 acquisition of Shellpoint Partners LLC, which was the parent company of New Penn Financial. As a result, the company has a robust loan origination platform to flank their expansive loan servicing business. Newrez is also a publicly-traded company worth billions of dollars that has quickly become a top-10 mortgage lender nationwide. Read on to learn more about their history, loan offerings, interest rates, and more. Newrez Fast Facts Founded in 2008, originally known as New Penn Financial A direct-to-consumer mortgage lender based in Fort Washington, PA Parent company is publicly-traded Rithm Capital (NYSE: RITM) Also operates a correspondent lending and wholesale division Licensed to lend in 49 states and DC (pending approval in NY state) Funded nearly $40 billion in 2022 (a top-10 lender nationwide) 2,600+ employees and 616,000+ customers served Acquired Caliber Home Loans in summer of 2021 Newrez was founded in 2008 and is headquartered in Fort Washington, Pennsylvania. Their NMLS ID is 3013. It is part of the Rithm Capital family of companies, which includes loan servicer Shellpoint Mortgage Servicing. Their acquisition of Shellpoint in 2019 allowed them to grow their retail loan origination business thanks to its subsidiary New Penn Financial, which was an established mortgage player. In August 2021, Newrez got even bigger after acquiring Caliber Home Loans, which was already a household name in the mortgage space. This propelled them...

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### Quicken Loans IPO: Top Mortgage Lender Reportedly Going Public

- Published: 2020-06-12
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-ipo-going-public/
- Categories: Mortgage News

Some very big news in the mortgage world – Quicken Loans is reportedly going public, with an IPO currently being worked on by Credit Suisse, Goldman Sachs, JPMorgan, and Morgan Stanley. It's now confirmed. Quicken has officially filed its IPO, under the name “Rocket Companies Inc. ” It will trade under the symbol RKT on the New York Stock Exchange. Rocket Companies Inc. consists of many consumer brands, including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Core Digital Media, Rock Connections, Lendesk and Edison Financial. It doesn’t appear that the Cleveland Cavaliers basketball team or Rocket Mortgage FieldHouse are part of the deal, but that's unclear. The size of the deal and number of shares have not been disclosed and it’s subject to market conditions, which we all know are questionable at the moment. It is being led by Morgan Stanley, Credit Suisse, JP Morgan, Goldman Sachs, and others. The Detroit-based company, which recently became the bona fide largest mortgage lender in the nation across all channels, has been private since 2002. There was a period of time when the lender was publicly-traded before eventually being sold to 
TurboTax and QuickBooks maker Intuit in 1999. A few years later, founder Dan Gilbert bought Quicken Loans back from Intuit and took it private again. Fast forward to 2020 and it appears they’re ready to test the market on Wall Street once again, this time being the #1 mortgage lender in the country. The story resembles the path Countrywide...

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### Planet Home Lending Review: 3 Trees Planted for Every Closed Loan

> Planet Home Lending is a mortgage lender and loan servicer that was recently named one of the fairest lenders based on HMDA data.

- Published: 2020-06-10
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/planet-home-lending-review/
- Categories: Mortgage Tips

Today we’ll take a good look at Planet Home Lending, a rising star in the mortgage world that’s beginning to make inroads and become a household name. Founded less than 20 years ago, they were able to muster about $25 billion in residential loan origination volume in 2023, per a company release. It was split between conventional loans, FHA loans, and VA loans, with a handful of jumbo loans and USDA loans thrown into the mix as well. They seem to do the most business in California, Florida, and Texas, despite being headquartered in Connecticut. True to their name, Planet Home Lending has also partnered with the National Forest Foundation, pledging to plant three trees for every closed loan, up to 30,000 trees in 2020. Planet Home Lending Quick Facts Direct mortgage lender founded in 2007, headquartered in Meriden, Connecticut Operates both a retail and correspondent lending business Originated about $25 billion in home loans during 2023 Services more than 250,000 active loans for borrowers Does majority of business in California, Colorado, Florida, Texas, and Virginia Licensed in 48 states, D. C. , Puerto Rico, and the Virgin Islands Not licensed to originate loans in Hawaii or Massachusetts 3rd largest correspondent lender and 2nd largest government loan correspondent lender nationally Despite 2023 being a challenging year for most mortgage lenders, Planet Home managed to originate $25 billion in mortgage loans. They also managed to become #2 government correspondent lender and the #3 correspondent lender overall as of the end of...

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### 5 Things to Know If Considering Mortgage Forbearance

- Published: 2020-06-09
- Modified: 2021-09-01
- URL: https://www.thetruthaboutmortgage.com/5-things-to-know-if-considering-mortgage-forbearance/
- Categories: Mortgage Tips

If you’re a homeowner, or just became one during the pandemic, you’ve likely heard of mortgage forbearance. Not to be confused with mortgage forgiveness, it allows borrowers to suspend mortgage payments for a period of time if experiencing a hardship related to COVID-19. Eventually those missed payments need to be repaid, likely via a payment deferral where they're set aside and paid off via refinance or home sale. Some 8. 46% of mortgages are now in forbearance, per the latest Forbearance and Call Volume Survey from the Mortgage Bankers Association (MBA). The most widely used forbearance program is offered via the CARES Act because it covers a wide swath of the mortgage market, including loans backed by Fannie Mae and Freddie Mac, along with FHA loans, USDA loans, and VA loans. Recently, the Consumer Financial Protection Bureau (CFPB) and Conference of State Bank Supervisors (CSBS) released additional guidance regarding mortgage forbearance to ensure it’s being implemented correctly. While it’s geared toward mortgage lenders and loan servicers to ensure they’re in compliance of the CARES Act and not causing consumer harm, it could serve as a consumer guide as well. No Documentation Is Required for Mortgage Forbearance While you must attest to having a COVID-19-related hardship in order to qualify for mortgage forbearance, no other documentation is required. Sure, you can provide your lender or loan servicer with a forbearance request letter to satisfy that attestation, but they can’t ask for proof that you’re unable to make your mortgage payment(s). That...

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### Home Equity Could Prevent Flood of Forbearance-Related Foreclosures

- Published: 2020-06-08
- Modified: 2021-09-01
- URL: https://www.thetruthaboutmortgage.com/home-equity-could-prevent-flood-of-forbearance-related-foreclosures/
- Categories: Foreclosure, Housing Market, Mortgage News

The latest Mortgage Monitor report from Black Knight reveals that many homeowners in forbearance plans are sitting on a healthy amount of home equity, meaning if they're forced to sell banks may not lose out. Per the data analytics company, fewer than one in 10 homeowners (9%) in forbearance have 10% or less home equity in their property, which the company believes is “typically enough to cover the costs of selling the property. ” Additionally, just one percent of homeowners in forbearance are currently underwater on their mortgages, surely a bad sign if they stop making monthly payments too. Overall, 80% of the 4. 76 million homeowners in active forbearance plans have 20% or more equity in their homes, meaning they’ve got options and loan servicers do too. This should reduce the number of foreclosures that hit the housing market and also keep default-related losses in check, a good sign for the housing market and the borrowers at risk of losing their homes. Home Equity the Difference This Time Around 4. 76 million homeowners in active forbearance as of May 26th 46% of homeowners in forbearance made their April mortgage payment as of April 30th 22% of those in forbearance have made their May payments as of May 26th Forbearance volume declined for the first time since the COVID-19 pandemic began The last mortgage crisis was marked by toxic mortgages and a lack of home equity, a one-two punch that sent to the housing market to its knees. Or whatever’s...

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### FHA Will Insure Mortgages in Forbearance, With a Catch

- Published: 2020-06-05
- Modified: 2021-09-01
- URL: https://www.thetruthaboutmortgage.com/fha-will-buy-mortgages-in-forbearance-with-a-catch/
- Categories: Foreclosure, Mortgage News

The Federal Housing Administration (FHA) finally announced a new policy, which is temporary, to endorse mortgages where the borrower has requested or obtained COVID-19 forbearance. Mortgagee Letter 2020-16 temporarily reverses the FHA’s existing policy that doesn’t permit FHA insurance for mortgages in forbearance. The agency said the policy ensures “the safeguards of the FHA program continue to work for new homeowners facing a financial hardship due to COVID-19. ” Now before mortgage lenders get too excited about this, there is a major hitch. They must sign an indemnification agreement with the FHA that leaves them on the hook for 20% of the original loan amount if it goes bad. What Are the Requirements for Insuring FHA Loans in Forbearance? Borrower must be experiencing a financial hardship due directly or indirectly to COVID-19 Mortgage must have been current at time of request for forbearance Mortgage must satisfy all requirements for FHA insurance at time of closing Mortgagee must execute a two-year partial indemnification agreement Aside from that pretty significant piece about lenders being liable for 20% of the original loan amount, there are also some general requirements that must be met. First off, the borrower must be experiencing a financial hardship directly or indirectly related to COVID-19 and in a forbearance plan. Additionally, they must have been current on the mortgage at the time they requested the forbearance. In the letter, the FHA says “forbearance provided to borrowers experiencing a financial hardship due, directly or indirectly, to COVID-19 is not considered...

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### On Q Financial Mortgage Review: The Simple Way to Get a Mortgage?

- Published: 2020-05-28
- Modified: 2024-09-07
- URL: https://www.thetruthaboutmortgage.com/on-q-financial-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a good look at On Q Financial, a direct mortgage lender based in Tempe, Arizona that wants to make getting a mortgage simple. In fact, their slogan is, “Mortgages Simplified,” so my guess is their loan process is pretty straightforward and possibly easier than the other guys. That could have something to do with their digital mortgage offering that promises a faster and easier experience, complete with a smartphone app that can do most of the heavy lifting. While they’ve only been around since 2005, they’re growing rapidly and making a name for themselves in the industry. They weren't in the top 100 based on 2018 HMDA data, but now refer to themselves as a top-50 lender. On Q Financial Quick Facts Direct mortgage lender headquartered in Tempe, Arizona Founded in 2005 by former mortgage loan officer John Bergman A top-50 mortgage lender with more than 550 employees and 70 locations Offers a digital mortgage experience that allows you to apply via smartphone app Specialize in home purchase loans but also offer refinancing Licensed in 47 states and DC (not available in Hawaii, New Jersey, or New York) Helped over 10,000 families purchase a home in 2019 On Q Financial Digital Mortgage Process On Q Financial prides itself on making the often-agonizing home loan process fast and easy, so you should expect a better experience than what you may have heard or are used to. Their “Mortgages Simplified” digital mortgage solution allows you to submit income, asset,...

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### PennyMac Mortgage Review: A Top-3 Mortgage Lender Nationally

- Published: 2020-05-27
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/pennymac-mortgage-review/
- Categories: Mortgage Tips

One of the fastest growing and largest mortgage lenders in the country goes by the name PennyMac, not to be confused with Freddie Mac. If you're wondering what the rather odd name means, it stands for Private National Mortgage Acceptance Co. While the company started as a buyer of distressed mortgage assets after the mortgage crisis in the early 2000s, it wasn’t long before they were originating their own home loans. Today, they refer to themselves as a “top 3 lender in the U. S. ,” which is likely driven by their strong correspondent lending business. They purchase home loans from small and mid-sized banks, along with credit unions and other smaller mortgage lenders. But they’re also becoming a major retail mortgage lender as well, serving consumers directly and beginning to make a household name for themselves. In fact, in October 2019 they broke their one-month record by lending more than $1 billion directly to consumers. If you’re looking to purchase a home or refinance an existing mortgage, PennyMac might be a lender worth looking into. PennyMac Mortgage Quick Facts Publicly-traded mortgage company launched in 2008 Former Countrywide Financial CFO is their founder A top-3 mortgage lender licensed everywhere but NY Nearly 4,000 employees, headquartered in Westlake Village, CA Funded $125B in home loans during 2021 (6th largest lender nationally) Services more than $368B in home loans for its customers First a little history on PennyMac, which only stretches back to 2008. But they’ve been busy since. Back then, they...

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### Eagle Home Mortgage Review: Should You Get a Mortgage from the Nation’s Largest Homebuilder?

- Published: 2020-05-26
- Modified: 2024-06-22
- URL: https://www.thetruthaboutmortgage.com/eagle-home-mortgage-review/
- Categories: Mortgage Tips

Update:Eagle Home Mortgage is now known as Lennar Mortgage. If you’re thinking about buying a home or refinancing an existing mortgage, you may have come across Eagle Home Mortgage on your journey. They’re more likely to come up if purchasing a home since they are a direct mortgage lender owned by Lennar, which is now the nation’s largest homebuilder thanks to its acquisition of CalAtlantic in April 2018. In short, Eagle Home Mortgage acts as the home builder’s financing department, though if you buy a home from Lennar you don’t have to use them. It’s just that borrowers often use the builder’s finance department as opposed to an outside mortgage lender seeing that it’s the easiest and most obvious choice, and usually the path of least resistance. There may also be some synergies to using affiliated companies, whether it’s a special incentive or just a faster loan process, knowing a home purchase with their builder is on the line. In 2019, they provided home loan financing to more than 34,000 families looking to purchase a home. Let’s discover more about Eagle Home Mortgage. Eagle Home Mortgage Is Lennar's Captive Lender Retail consumer-direct mortgage lender founded in 1981 Subsidiary of Lennar Corp. , nation’s largest homebuilder Company headquarters located in Miami, Florida Closed more than 34,000 home purchase loans in 2019 More than 1,500 employees nationwide A top-30 mortgage lender overall that specializes in new home purchase financing Does most of their business in Florida and Texas Where Is Eagle Home...

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### 46% of Homeowners in Forbearance Plans Still Made Their Mortgage Payments

- Published: 2020-05-22
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/46-of-homeowners-in-forbearance-plans-still-made-their-mortgage-payments/
- Categories: Housing Market, Mortgage News

Another interesting trend has emerged from the latest mortgage forbearance data, this time courtesy of a new report from data analytics company Black Knight. Nearly 5 Million Now in Mortgage Forbearance Plans 4. 75 million borrowers in active forbearance plans (9% of all mortgages) FHA/VA forbearance rate rises to 12. 6% as of May 19th Fannie/Freddie forbearance rate climbs to 7. 1% Other loan type forbearance rate (portfolio loans and private-label) up to 9. 5% First things first, some 4. 75 million homeowners, or about 9. 0% of all mortgages, are now in COVID-19 mortgage forbearance plans, per the company’s McDash Flash Forbearance Tracker. That represents more than $1 trillion in unpaid principal balances, just to give you an idea of what loan servicers and the GSEs could be on the hook for. Both FHA loans and VA loans continue to exhibit the worst levels of forbearance, at 12. 6% of all loans, versus just 7. 1% for GSE-backed loans (Fannie Mae and Freddie Mac). Other types of loans, such as portfolio loans and private-label securities, have a forbearance rate of 9. 5%. While things have settled down lately, Black Knight said the pace of forbearance has risen “slightly in recent days,” with the number of active forbearances climbing by about 93,000 over the past week. However, that’s still a ~70% decline from the 325,000 jump during the first week of May, and 93% below the first week of April when active forbearance plans surged by almost 1. 4 million...

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### Fairway Independent Mortgage Review: A Top-20 Lender Big on Home Purchase Financing

- Published: 2020-05-21
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/fairway-independent-mortgage-review/
- Categories: Mortgage Tips

One of the largest mortgage lenders in the country you may not have heard of is Fairway Independent Mortgage Corp. , based out of Madison, Wisconsin. They were the 9th largest residential mortgage lender in 2022, per HMDA data, just below Caliber Home Loans and Amerihome Mortgage. That’s pretty impressive, considering the few others ahead of them include the likes of UWM, Chase, Bank of America, Wells Fargo, and Quicken Loans. Despite that, they're only the 5th largest lender in Wisconsin, which is somewhat strange as it's their home state. But it illustrates the fact that their business is a national one that extends across the entire United States. Fairway Independent Mortgage Fast Facts Direct-to-consumer retail mortgage lender licensed in all 50 states Founded in 1996 by Steve Jacobson and Randy Cross Headquartered in Madison, WI and Carrrollton, TX Top-10 lender that funded $41 billion in home loans during 2022 Heavily focused on home purchase financing as opposed to refinance Used to operate a wholesale channel known as Fairway Wholesale Lending Fairway Independent Mortgage got started back in 1996 and has funded more than $200 billion in home loans since that time, with $41 billion originated in 2022 alone. The Madison, Wisconsin-based direct lender employs over 7,000 people across 500 branches nationwide, and counts roughly 3,000 team members as loan originators. They are licensed in all 50 states. Their focus is to provide unparalleled customer service to help Americans achieve their dream of homeownership. Speaking of, the vast majority of...

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### Only 5% of Homeowners Who Got Approved for Mortgage Forbearance Needed It

- Published: 2020-05-20
- Modified: 2020-05-22
- URL: https://www.thetruthaboutmortgage.com/only-five-percent-who-requested-mortgage-forbearance-needed-it/
- Categories: Mortgage News, Mortgage Tips

Just five percent of homeowners who recently got approved for mortgage forbearance actually needed it, according to a shocking survey from home loan comparison company LendingTree. The company said 70% of those in forbearance plans could have made mortgage payments, but “wanted a break. ” While 26. 2% said they would have had to “skip other essential bills,” which is interesting because borrowers historically pay the mortgage first. The trend was even more apparent among younger generations, with 71% of Millennial and Gen X respondents saying “they could’ve made their payment but just wanted a pause. ” And only 4. 3% of these two groups on average indicated that they wouldn’t have been able to pay the mortgage without forbearance. Meanwhile, 20% of baby boomers said they actually needed forbearance to avoid missing their mortgage payment, despite being less likely to apply for assistance. The Moral Hazard of Mortgage Forbearance CARES Act offers mortgage forbearance to homeowners with no proof of hardship Allows borrowers to voluntarily accept assistance even if not necessary Just 5% wouldn’t have been able to pay their mortgage without forbearance 72% who received forbearance feel “at least a little guilty about it” While you would expect that most people who asked for mortgage forbearance to actually need it, turns out it’s just not the case. This might explain why a large number of those who successfully received it feel some level of guilt. A staggering 40. 7% of Gen X respondents said “a lot” when asked...

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### Despite COVID-19, You Can Still Get a Jumbo Home Loan

- Published: 2020-05-20
- Modified: 2020-05-20
- URL: https://www.thetruthaboutmortgage.com/despite-covid-19-you-can-still-get-a-jumbo-home-loan/
- Categories: Mortgage News, Refinance

While lots of lenders have recently cut back on offerings that aren’t backed explicitly by the government, some are rolling out new loan programs to help homeowners get the financing they need. We’ve already seen non-QM lending basically dry up as the COVID-19 pandemic hit, though some lenders in the space are still hanging on with reduced menus. And I’ve reported that numerous large, depository banks have also eliminated their higher-risk programs, including Chase upping credit score requirements and no longer offering HELOCS. Similarly, Wells Fargo tightened its mortgage guidelines and even implemented a rule requiring $250,000 in one of their bank accounts in order to get a jumbo loan. Clearly that won’t work for a lot of folks, so if you’re in need of a jumbo home loan, it might be a lot harder than it used to be. Sprout Mortgage Launches Premier Jumbo Program Loan amounts as high as $3 million for purchase or refinance Up to 90% loan-to-value (LTV) with a 700 FICO score and no PMI Up to 43% DTI ratio (40% DTI for LTV>85%) 1-4 unit primary, second homes, and investment properties (condos included) One mortgage lender has just launched a new proprietary jumbo loan program that allows loan amounts up to $3 million on a 30-year fixed, which is available to approved mortgage brokers and correspondents. Sprout Mortgage based in East Meadow, New York unveiled its so-called “Premier Jumbo” today to meet the demand of home buyers and homeowners left behind by larger banks...

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### There Will Be a 3-Month Waiting Period to Get a Mortgage After Forbearance

- Published: 2020-05-19
- Modified: 2021-09-01
- URL: https://www.thetruthaboutmortgage.com/mortgage-forbearance-waiting-period/
- Categories: Mortgage News, Mortgage Tips, Refinance

We’ve finally got some clarity regarding what happens after mortgage forbearance in terms of obtaining a subsequent home loan. The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, announced temporary guidance regarding the matter today. Waiting Period After Mortgage Forbearance for Fannie and Freddie No wait to buy a home or refinance if you’re in a forbearance plan but continued making payments 3-month waiting period if you didn’t make payments while in a forbearance plan Those who paused payments must make 3 consecutive monthly mortgage payments after forbearance ends to be eligible for a new home loan Only applies to mortgages backed by Fannie Mae or Freddie Mac While it’s not 100% clear, thanks to ambiguous wording from the FHFA, it appears there will be a three-month waiting period to get a mortgage after forbearance ends, assuming you didn’t make payments during that time. The key to eligibility is to ensure that you have made three consecutive payments after forbearance comes to an end, via a repayment plan, the payment deferral option, or loan modification if applicable. Those who just go back to making regular payments via the payment deferral option should only need to make three regular payments to restore eligibility for a mortgage refinance or new home purchase loan. The semi-confusing part is the release also says borrowers in forbearance plans are eligible to refinance or buy a home, presumably right away, if they are current on their mortgage. For example, if a homeowner...

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### Mortgage Forbearance Rate Only Rises 3% From a Week Ago, But Second Wave Could Be Coming

- Published: 2020-05-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-only-rises-3-from-a-week-ago-but-second-wave-could-be-coming/
- Categories: Foreclosure, Mortgage News

Maybe there’s some good news out there, or maybe it’s just the calm before another storm. The mortgage forbearance rate barely budged during the week ending May 10th, per the latest installment of the Forbearance and Call Volume Survey from the Mortgage Bankers Association (MBA). The group said the total number of loans in forbearance increased to 8. 16% of loan servicers' portfolio volume from 7. 91%, a mere three percent increase from a week prior. It could represent a flattening in the forbearance rate after a massive surge from basically zero in March, or it could be a pause before another breakout, possibly mirroring COVID-19. Mortgage Forbearance Rate Hits 8. 16% Total loans in forbearance up to 8. 16% from 7. 91% Ginnie Mae forbearance rate up to 11. 26% from 10. 96% Fannie Mae and Freddie Mac forbearance rate up to 6. 25% from 6. 08% Private-label and portfolio loan forbearance up to 9. 26% from 8. 88% While the forbearance rate obviously increased again, as everyone expected, the 25 basis point weekly increase was the smallest gain since the week ending March 16th. It was also pretty consistent across all loan types, with both Fannie/Freddie loans and Ginnie loans (FHA/USDA/VA) seeing very minor increases from a week earlier. Additionally, loan servicer call volume, hold times, call lengths, and abandonment rates all dropped from a week prior. As noted last week, it is somewhat early in the month, as you can generally pay the mortgage until the 15th...

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### Home Buyer Demand Bounces Back, Small Towns Become Hot

- Published: 2020-05-14
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/home-buyer-demand-bounces-back-small-towns-become-hot/
- Categories: Housing Market, Mortgage News

Well that didn’t take long – demand to buy a home is now back above its so-called 
“pre-coronavirus levels,” per a new analysis from real estate brokerage Redfin. The company said demand was a seasonally-adjusted 5. 5% higher during the week ending May 10th than it was prior to the COVID-19 pandemic. Of course, it would probably have been a lot higher if not for the complete dislocation of the economy, but it’s still a good sign. A V-Shaped or a W-Shaped Recovery? Redfin sees a V-shaped recovery because home buyer demand has totally bounced back But prospective buyers might not be looking at the same properties post-pandemic Realtor. com sees a W-shaped recovery in 2020 thanks to coronavirus second wave Expects sales to drop 15% as sellers de-list their properties and buyer demand see-saws There are two camps when it comes to real estate in 2020. There is Redfin, which is already calling a V-shaped recovery, or complete return to pre-pandemic levels. And there is Realtor. com, which expects a W-shaped recovery, brought on “as secondary waves of coronavirus infections pop up throughout the U. S. ” Redfin says the V-shaped recovery is being driven by record low mortgage rates and the loosening of shelter-at-home orders in certain states. They believe after a two-month wait, prospective buyers who are still gainfully employed and perhaps even confident about their financials are jumping back in. Meanwhile, the Realtors expect home sales to rebound as virus-related concerns dip, but anticipate a decline...

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### Payment Deferral Will Be an Option to Repay Mortgage Forbearance

- Published: 2020-05-14
- Modified: 2021-08-06
- URL: https://www.thetruthaboutmortgage.com/covid-19-payment-deferral/
- Categories: Mortgage News

The Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac have launched a new payment deferral option in light of the unprecedented disruption caused by the coronavirus. The new workout option, known as “COVID-19 payment deferral,” was specifically designed by Fannie Mae and Freddie Mac to help those affected by a temporary hardship related to COVID-19. The goal is to help borrowers in a simple and straightforward manner achieve current loan status after up to 12 months of missed mortgage payments. How COVID-19 Payment Deferral Works The delinquent amount is moved into a non-interest bearing balance No payments are made toward this balance and mortgage remains otherwise changed It is due at maturity or earlier if mortgage is refinanced or home sold No trial period is necessary and runs through automated process to expedite The way payment deferral works is pretty simple, which is the entire point of offering it. Say a borrower missed 12 mortgage payments that were $2,000 each. That $24,000 would be set aside in a non-interest bearing account. It would not need to be paid down or touched at all until the homeowner either refinanced their mortgage, sold their home, or otherwise reached maturity based on the original loan term. The borrower’s original mortgage would remain unchanged otherwise, meaning they’d resume making the $2,000 monthly payment they were accustomed to making before COVID-19 disrupted their income. This would make getting back on track very straightforward, and hopefully doable for most homeowners, assuming...

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### Will Forbearance Prevent You from Getting a Mortgage in the Future?

- Published: 2020-05-13
- Modified: 2020-05-19
- URL: https://www.thetruthaboutmortgage.com/will-forbearance-prevent-you-from-getting-a-mortgage-in-the-future/
- Categories: Mortgage News, Mortgage Tips, Refinance

Since the CARES Act rolled out in early April, more than four million Americans have reportedly put their mortgage payments on hold for up to 12 months. The massive numbers taking part can be attributed to the widespread fallout from the coronavirus epidemic (COVID-19), and also the ease at which a homeowner can request assistance, with not much more than a letter or simple request to their loan servicer without proof. It’s expected that many more borrowers will request mortgage forbearance in the month of May and beyond, as evidenced by a recent survey from Bankrate. Update:There Will Be a 3-Month Waiting Period to Get a Mortgage After Forbearance Need Help, But Not Yet Asking for It Apparently, many Americans are concerned about making mortgage payments in light of possible job losses or income curtailments, but most haven’t reached out for help yet. Some 70% of Millennials said they were concerned about their ability to make mortgage payments over the next three months, but only 60% said they have contacted their lender. Meanwhile, 56% of Gen Xers are concerned, but a mere 29% have reached out to their lender or loan servicer. It’s even worse for Baby Boomers, with 43% concerned, and only 17% asking for help. As to why, some said they didn’t know it was an option, or simply haven’t gotten around to it, or are waiting for lenders to reach out to them (good luck! ) Others cited unspecified reasons or said they came up with their...

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### It’s Now Possible to Get a 1.99% Mortgage Rate on a 30-Year Fixed

- Published: 2020-05-13
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/its-now-possible-to-get-a-2-5-mortgage-rate-on-a-30-year-fixed/
- Categories: Mortgage News, Mortgage Rates

Here's a good sign mortgage rates might be moving even lower than they already are. Pontiac, Michigan-based United Wholesale Mortgage (UWM), which refers to itself as the #1 wholesale lender in the nation, has launched an exclusive new program that offers mortgage rates as low as 1. 99% on the 30-year fixed. That’s basically the lowest rate in history on the popular loan program, and a direct jab at local competitor Quicken Loans, whose CEO recently said 30-year fixed mortgage rates wouldn’t fall below 3%. UWM CEO Mat Ishbia announced the new loan program, known as “Conquest,” in a Facebook Live post this morning. Let’s learn more about it. Conquest: What’s in a Name? Exclusive program designed to help mortgage brokers win new business Offers “significantly better pricing” than UWM’s other offerings Mortgage rates range from 1. 999% to 2. 875% on the 30-year fixed Rates may be even lower (or higher) based on mortgage market conditions First off, UWM is a wholesale-only lender, meaning they don’t work directly with the public. Instead, they work with mortgage brokers, who are consumer-facing liaisons. So if you want a loan with UWM, you’d need to hook up with a broker who is approved to work with UWM. Anyway, the new Conquest program was basically launched to grab more market share as UWM goes head-to-head with Quicken Loans for nation’s largest lender. While Quicken is #1 thanks to a recent stellar first quarter, UWM hasn’t been far behind lately. And Ishbia didn’t mince...

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### Mortgage Forbearance Rate Up Near 8%, Housing Assistance Fund Proposed

- Published: 2020-05-11
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-up-near-8-housing-assistance-fund-proposed/
- Categories: Foreclosure, Mortgage News

The mortgage forbearance rate increased again last week, rising to 7. 91% from 7. 54% a week earlier, per the Mortgage Bankers Association (MBA). That marked the smallest weekly increase (4. 91%) since the newly-created Forbearance and Call Volume Survey was launched, but it’s important to remember it was only 0. 25% back in March. Additionally, the weekly gains just aren’t going to be headlines anymore because it’s hard to move the needle once millions are already in forbearance plans. Still, it’s pretty clear we’re heading to 10% sooner or later, which is pretty remarkable and sure to stress a lot of loan servicers. It's also time to start thinking about more than just the next 12 months. Forbearance Rate Close to 11% for Ginnie Mae Loans 10. 96% of FHA/USDA/VA loans in forbearance 6. 08% of Fannie/Freddie loans in forbearance 8. 88% of private-label and portfolio loans in forbearance Depositories (8. 75%) faring worse than independent nonbanks (7. 54%) Once again, home loans backed by Ginnie Mae exhibited the worst forbearance rate at 10. 96%, up from 10. 45% a week prior. Meanwhile, Fannie Mae- and Freddie Mac-backed mortgages saw forbearance creep up to 6. 08% from 5. 85%. Private-label securities and portfolio loans fell in between those levels with a forbearance rate of 8. 88%, up from 8. 30%. And depositories continue to fare worse than independent mortgage bank (IMB) servicers, otherwise known as nonbanks, which is relatively good news because the former have money on hand. Keep...

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### Home Prices vs. COVID-19: Will They Go Up or Down?

- Published: 2020-05-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/home-prices-vs-covid-19-will-they-go-up-or-down/
- Categories: Housing Market, Mortgage Tips

It’s time to take a look at how COVID-19 could impact home prices given the massive disruption to the local, state, national, and global economy. On the one hand, inflation is expected due to all the government spending, which could lead to a price increase since real estate often acts as an inflation hedge. Conversely, if tons of borrowers lose their homes due to unemployment, we could see properties flood the market. And when combined with fewer eligible buyers, it could lead to a supply glut. Consider the Lack of Housing Supply and Mortgage Quality The housing market has three great things working in its favor right now Housing supply is low enough even if buyer demand wavers during this uncertain time The quality of today’s mortgages is excellent any many homeowners have lots of equity Mortgage rates are at record lows, which further increases home buyer appetite First, let’s compare today’s housing market to the one in 2006. They really couldn’t be any different, both from an inventory standpoint and from a mortgage perspective. Simply put, back then there were way too many homes being built, and not enough demand to meet that supply. At the same time, banks and lenders were doling out home loans to anyone with a pulse, knowing they could quickly bundle the underlying mortgages and sell them to Wall Street shortly after origination. Taken together, it was a recipe for disaster. Homeowners had massive mortgages they couldn’t truly afford that were often set to...

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### Nearly 4 Million Homeowners Now in Mortgage Forbearance Plans, Servicers May Get $500 Payments

- Published: 2020-05-05
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/nearly-4-million-homeowners-now-in-mortgage-forbearance-plans-servicers-may-get-500-payments/
- Categories: Mortgage News

The mortgage forbearance rate worsened yet again compared to last week, though as expected the increase has slowed as the pool of borrowers grows larger. As of April 26th, some 3. 8 million homeowners were in forbearance plans, per the Mortgage Bankers Association's (MBA’s) most recent Forbearance and Call Volume Survey. The forbearance rate increased from 6. 99% to 7. 54%, a mere eight percent rise from a week earlier, but still more bad news for loan servicers. And I should note that we’re about to begin a new month, so those on the fence last month could request forbearance this week, creating a new surge. Forbearance Rate Tops 10% for FHA/VA Loans Ginnie-backed loans have a forbearance rate of 10. 45% Fannie/Freddie loans have forbearance rate of 5. 85% Private-label securities and portfolio loans have rate of 8. 30% Depository banks have rate of 8. 41%, independent mortgage bank (IMB) servicers have rate of 7. 13% In terms of loan type, government-backed home loans continue to fare worst, with Ginnie Mae mortgages (FHA loans and VA loans) seeing forbearance rates climb to 10. 45% from 9. 73%. Meanwhile, the Fannie Mae and Freddie Mac forbearance rate rose from 5. 46% to 5. 85%. Other mortgages, such as private-label securities and portfolio loans, which can include jumbo loans, increased from 7. 52% to 8. 30%. With regard to institution type, depository banks saw their forbearance rate go up from 7. 87% to 8. 41%, and independent mortgage bank (IMB) servicers...

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### Loan Servicers Accused of Providing Unclear and Dated Mortgage Forbearance Information

- Published: 2020-04-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/loan-servicers-accused-of-providing-unclear-and-dated-mortgage-forbearance-information/
- Categories: Mortgage News

While some have complained that the mortgage forbearance program under the CARES Act is far too liberal, a new report claims some loan servicers aren’t being very transparent about the assistance available to homeowners. A new report from the U. S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) found that some loan servicers’ websites are displaying loan forbearance information that is “incomplete, inconsistent, dated, and unclear. ” Are Loan Servicers Trying to Discourage Forbearance? The CARES Act requires loan servicers to provide mortgage forbearance for up to 360 days on federally-backed loans That includes an initial 180 days and an additional 180-day extension if needed Borrowers are not required to pay it all back in one lump sum But there’s a lot of misinformation out there, even on loan servicers’ websites The CARES Act allows homeowners to request forbearance for 180 days, followed by an additional 180 days if need be. Effectively, borrowers can put 12 mortgage payments on hold while they deal with financial disruptions directly or indirectly related to the coronavirus epidemic (COVID-19). Additionally, not much is needed from the homeowner other than a request for forbearance via a letter or perhaps a phone call, with no proof of hardship actually required. This has led to an outcry from some pundits who believe it’s too easy to get mortgage assistance, even if you really haven’t experienced a decline in income at all. But the HUD OIG’s report claims some loan servicers aren’t doing...

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### NewDay USA Mortgage Review: A Mortgage Company Designed for Veterans

- Published: 2020-04-29
- Modified: 2024-07-24
- URL: https://www.thetruthaboutmortgage.com/newday-usa-mortgage-review-a-mortgage-company-designed-for-veterans/
- Categories: Refinance

Today we’ll review NewDay USA, a mortgage lender that is geared specifically toward veterans and active duty military. Like other mortgage companies, they offer both home purchase loans and refinance loans, but only those backed by the United States Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA). Let’s discover more about this company, whose goal is to become one of the largest VA lenders in the country. NewDay USA Quick Facts Top-10 VA mortgage lender headquartered in Fulton, Maryland Founded in 1998 by current CEO Rob Posner Direct-to-consumer company offering VA loans and FHA loans A Ginnie Mae (GNMA) approved issuer/servicer Licensed to lend in 43 states and the District of Columbia Originated around $2. 5 billion in 2019 How to Apply with NewDay USA NewDay USA is a direct-to-consumer mortgage lender. This means you work directly with a loan officer at their company to obtain your mortgage. To get started, you fill out what amounts to a lead form and then a loan officer will contact you to go over your options and eligibility. You enter basic information including the type of loan you’re looking for, property type, estimated home value, property address, name, and contact info. It’s also possible to call the company directly or fill out a much shorter contact form if you’re interested in getting a loan. Unfortunately, they don’t seem to offer the ability to apply for a home loan directly on their website. So you will need to speak with a...

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### Mortgage Forbearance Rate Hits 7%, Fannie/Freddie May Offer Partial Claim to Repay

- Published: 2020-04-28
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-hits-7-fannie-freddie-may-offer-partial-claim-to-repay/
- Categories: Mortgage News

Here we go again – the latest Forbearance and Call Volume Survey from the Mortgage Bankers Association's (MBA) revealed that the total number of loans in forbearance increased from 5. 95% to 6. 99% as of April 19th, 2020. That means roughly 3. 5 million homeowners have now asked for their mortgage payments to be put on hold due to the coronavirus epidemic (COVID-19). It’s a 17. 48% increase from a week earlier, nowhere near the first couple weekly surges, but consider that just 0. 25% of all loans were in forbearance during the week of March 2nd. As I mentioned a week ago, the percentage gains won’t sound as devastating going forward, but the number of Americans in forbearance plans keeps rising, putting a lot of stress on themselves and loan servicers. Share of FHA and VA Loans in Forbearance Nears 10% Ginnie Mae forbearance rate up to 9. 73% from 8. 26% Fannie/Freddie forbearance rate climbs to 5. 46% from 4. 64% Other loans (private-label securities & portfolio loans) forbearance rate up to 7. 52% from 6. 43% Forbearance rate 6. 52% for independent nonbanks, 7. 87% for depositories When broken down, FHA loans and VA loans continue to exhibit the worst forbearance rates relative to other home loan types. Again, this might be attributable to their lower credit score requirements, and higher loan-to-value ratios (LTVs), with the VA requiring no down payment whatsoever. These Ginnie Mae-backed mortgages had a forbearance rate of 9. 73% this week, up...

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### 12 Reasons Today’s Housing Market Is Not the Great Recession All Over Again

- Published: 2020-04-27
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/12-reasons-todays-housing-market-is-not-the-great-recession-all-over-again/
- Categories: Housing Market, Mortgage Tips

While it’s becoming easier to compare the housing bust that sparked the Great Recession with today’s uncertain climate, the two just aren’t the same. You’re probably going to see lots of articles warning of the next housing crash, claiming homeowners will be unable to pay their mortgages and forced to sell due to COVID-19. But those opinions may ignore a lot of real statistics that paint an entirely different picture. I used actual numbers from the latest Black Knight Mortgage Monitor report for February 2020 to illustrate. Greater Share of Homeowners with 10% or More in Equity First off, today’s homeowners are flush with home equity. In 2007, 14. 5% of homeowners had 10% or less in equity. Today, just 6. 6% have less than 10% equity. This is due to several years of strong appreciation coupled with deleveraging. In other words, not tapping equity via a HELOC or a cash out refinance, while also paying down debt via regular principal and interest payments. During the early 2000s, homeowners were serially refinancing their homes while also making interest-only payments. This meant they were overleveraging themselves and often getting into loans they couldn’t actually afford due to lax underwriting standards. Loan-to-Value Ratios (LTVs) Are Lower Today To that same point, today’s loan-to-value ratios (LTVs) are a lot lower than they were a decade or so ago thanks to more prudent underwriting guidelines. The total market combined LTV (CLTV), which includes second mortgages, was 57. 4% in 2007, and just 52. 3%...

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### FHFA Says No Lump Sum Due Once Mortgage Forbearance Ends

- Published: 2020-04-27
- Modified: 2020-04-27
- URL: https://www.thetruthaboutmortgage.com/fhfa-says-no-lump-sum-due-once-mortgage-forbearance-ends/
- Categories: Mortgage News

It’s Monday and I’ve got some good news for homeowners regarding mortgage forbearance. This morning, the Federal Housing Finance Agency (FHFA) announced, or rather reiterated, that homeowners currently in forbearance with a Fannie Mae- or Freddie Mac-backed mortgage are not required to pay back all the missed payments in one lump sum. Rather, they’ll be given more practical options to get back on track, such as a repayment plan or a loan modification to ensure it’s affordable once the country reopens again. Why the Lump Sum Repayment Fears? Lenders often require mortgage forbearance to be paid back in one lump sum So if you miss six payments all six are due once the forbearance period ends There had been early reports of banks/lenders telling borrowers this Obviously it’s not practical for many homeowners who are out of work because of COVID-19 In normal times, banks and mortgage lenders offer mortgage forbearance to homeowners as one of their many loss mitigation tools. However, this solution is usually only good for a month or two while the homeowner either sorts out their financial issues or the loan moves into default then foreclosure. This isn’t a normal time. There are literally millions of homeowners either out of work or laid off because of the coronavirus, through no fault of their own. At last glance, about six percent of mortgages were in a forbearance plan, and more than eight percent of homeowners with an FHA loan or VA loan were in a similar boat....

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### Quicken Loans Officially the Biggest Mortgage Lender in the Country

- Published: 2020-04-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-officially-the-biggest-mortgage-lender-in-the-country/
- Categories: Mortgage News

Back in early 2018, Quicken Loans proclaimed it was the largest mortgage lender in the country, thanks to a solid fourth quarter in 2017. It managed to originate $25 billion in home loans, beating out its long-time rival Wells Fargo by about $2 billion. However, there was a caveat: it only counted retail loan origination volume. Wells Fargo does a ton of correspondent mortgage lending as well, whereby its product is resold by other banks. When taken together, the San Francisco-based bank was still the king, and by quite a large margin. But that has finally changed. Quicken Funded Nearly $52 Billion in the First Quarter Detroit-based Quicken Loans originated $51. 7B in home loans during Q1 Company increased their lending slightly from the fourth quarter San Francisco-based Wells Fargo only managed $48B over same period A near-20% decline from the fourth quarter of 2019 In the first quarter, Quicken Loans reported $51. 7 billion in home loan originations, pushing it to the top of the rankings of the first time ever, per new figures from Inside Mortgage Finance. While the Detroit-based nonbank lender has been referring to itself as “America’s Largest Mortgage Lender” since overtaking Wells on retail originations, it is now truly the #1 mortgage lender across all lending channels. Quicken Loans only saw “a modest increase in first-lien mortgage production” from quarter to quarter, but it was more than enough to finally give them the out-and-out crown. That’s because Wells Fargo saw originations slip 20% from the...

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### It’s Going to Be Harder to Get a Mortgage Thanks to COVID-19

- Published: 2020-04-23
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/its-going-to-be-harder-to-get-a-mortgage-thanks-to-covid-19/
- Categories: Mortgage News, Mortgage Rates

While the first quarter was booming for many mortgage lenders (see Quicken's record month), the second quarter and beyond might be a different story as COVID-19 becomes a harsher reality. Over just the past five weeks, some 26. 4 million Americans have filed for unemployment. And that number is likely to grow, forcing more and more loans into forbearance. Yesterday, the Federal Housing Finance Agency (FHFA) that oversees Fannie Mae and Freddie Mac said it would allow the pair to buy mortgages in forbearance, but with a big catch. They are tacking on loan level pricing adjustments (LLPAs) of anywhere from 5% to 7%, which is a huge cost for lenders that unload their loans on the secondary market. Ultimately, this new bone thrown out to loan servicers isn’t as good as expected, and for some probably totally worthless. The exorbitant cost essentially makes it a lifeline to stay afloat, but not a practical option to keep pumping out new loans that immediately go into forbearance. How Will Lenders Deal with New Mortgages That Sour Quickly? Most lenders sell off their home loans on the secondary market quickly after origination It's a profitable business model as many loans stay current and investor appetite is strong But they may need to increase mortgage rates to absorb some of the risk of near-term forbearance And/or implement even harsher underwriting standards to improve credit quality to mitigate risk We’ve already seen some big depository banks roll out tougher mortgage underwriting guidelines. For example,...

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### Fannie Mae and Freddie Mac Agree to Buy Mortgages in Forbearance

- Published: 2020-04-22
- Modified: 2020-04-22
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-agree-to-buy-mortgages-in-forbearance/
- Categories: Foreclosure, Mortgage News, Refinance

While the CARES Act has allowed millions of homeowners nationwide to put their mortgage payments on hold, doing so has left lots of questions for mortgage lenders. One being how they’d continue to pay investors while the loans they service were in forbearance. The FHFA clarified that piece yesterday by agreeing to only hold servicers to the first four missed payments. But how do they originate new loans if borrowers turn around and stop paying right away? Will lenders be punished, even if they had no idea these homeowners would immediately request forbearance? Fannie and Freddie Will Temporarily Buy/Securitize Loans in Forbearance Lenders can now sell or securitize their new mortgages even if in forbearance This is a temporary policy aimed at keeping the mortgage market liquid Loans must still meet the general requirements of Fannie Mae and Freddie Mac Eligible loans will be priced to mitigate the heightened risk of loss to the GSEs To alleviate some of that concern, both Fannie Mae and Freddie Mac (the GSEs) have announced a temporary policy to purchase mortgages actively in forbearance plans, counter to their long-held position. Typically, mortgage loans that are either delinquent or in forbearance are ineligible for delivery under Fannie/Freddie requirements. However, things are far from typical at the moment thanks to the coronavirus (COVID-19). In short, some borrowers have sought mortgage forbearance just after closing on their loan, before the lender could actually deliver it to the GSEs. This put lenders in a bad spot if they...

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### Nearly 6% of Mortgages in Forbearance as FHFA Provides Relief to Loan Servicers

- Published: 2020-04-21
- Modified: 2020-04-21
- URL: https://www.thetruthaboutmortgage.com/nearly-6-of-mortgages-in-forbearance-as-fhfa-provides-relief-to-loan-servicers/
- Categories: Foreclosure, Mortgage Rates

With each week that goes by, the mortgage forbearance rate climbs to new highs thanks to the coronavirus (COVID-19). The more or less complete shutdown of the world economy has led to skyrocketing unemployment and the inability for many to make ends meet, including the monthly rent or mortgage payment. While it’s unclear how bad it will get, the trajectory is very much on the up and up, and it could get a lot worse once May hits and those on the fence turn to their loan servicers as well. Mortgage Forbearance Rate Increased Nearly 60% From a Week Ago Home loans in forbearance increased to 5. 95% from 3. 74% 8. 26% of Ginnie Mae mortgages (FHA/USDA/VA) in forbearance 4. 64% of Fannie/Freddie mortgages in forbearance Upside is hold times and call abandonment rates have both gone down considerably The mortgage forbearance rate rose 59. 1% during the week ending April 12th, from 3. 74% to 5. 95%, per the latest MBA weekly survey. While the percentage gains will understandably drop as more enter forbearance plans, it’s still a pretty nasty spike. So even if the forbearance rate only climbs 30% next week, it would still mean nearly eight percent of all mortgages would effectively be on pause. In other words, look at the total percentage of loans in forbearance, and pay less attention to the weekly gains as time goes on. Like prior weeks, Ginnie Mae-backed home loans continue to fare worst, with FHA loans, USDA loans, and...

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### Introducing the Livestream Open House

- Published: 2020-04-20
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/introducing-the-livestream-open-house/
- Categories: Housing Market, Mortgage News

Necessity is the mother of innovation, and with that comes the so-called “Livestream Open House,” which has just been launched by Realtor. com in the face of COVID-19. To combat the ill effects of the coronavirus on the housing market, companies have been stepping up efforts to introduce new tech that allows consumers to continue pursuing the American Dream. A few weeks back, Clear Capital announced the release of OwnerInsight, a new tool that lets homeowners take interior pictures of their home like an appraiser normally would. This allows for social distancing to be adhered to, even while the home buying and selling process goes on. What Is a Livestream Open House? An open house that is broadcasted online in real-time via a video platform Allows listing agents to show multiple home shoppers around the property Buyers can ask the agent questions and request to see specific home features up-close It is scheduled in advance just like a normal open house Now we’ve got the Livestream Open House, which as the name denotes, allows real estate agents to continue showing property listings while maintaining proper distance. There had been reports of open houses still going on in some areas of the country, but with social distancing measures in place and probably a lot of nervous people in masks. Redfin CEO Glenn Kelman wrote about one in Hoboken, New Jersey, where six groups of potential home buyers were being staggered like a Disneyland ride. But in today’s day and age, that’s...

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### Nearly 3 Million Homeowners Already Receiving Mortgage Forbearance

- Published: 2020-04-17
- Modified: 2020-04-24
- URL: https://www.thetruthaboutmortgage.com/nearly-3-million-homeowners-already-receiving-mortgage-forbearance/
- Categories: Foreclosure, Mortgage News

We’re now getting more information on just how many Americans might be receiving mortgage relief due to the crippling effects of coronavirus. It’s only been a couple weeks since mortgage forbearance programs were officially launched, including the relief that’s part of the CARES Act, which allows homeowners to pause six to 12 mortgage payments. And so far, it appears a lot of homeowners are reaching out to their loan servicers to get assistance. Part of that might have to do with the fact that you only need so much as a mortgage forbearance letter to take part. 2. 9+ Million Borrowers in Mortgage Forbearance Plans 5. 5% of outstanding mortgages are in a forbearance plan This is well above FHFA director’s predictions earlier this month If numbers keep rising it could be devastating for loan servicers Higher percentage of FHA/VA loans affected than Fannie/Freddie loans Data analytics company Black Knight has launched its own mortgage forbearance data report known as the “McDash Flash Forbearance Report” in light of the unprecedented crisis. As of April 16th, more than 2. 9 million homeowners “have entered into COVID-19 mortgage forbearance plans,” which represents 5. 5% of all outstanding mortgages. This is a lot higher than what FHFA director Mark Calabria predicted back in early April, when he said there’d only be 700,000 missed payments for the overall market in April. We are already at over four times that if the extrapolated data from Black Knight’s sample set of loans is accurate. And it’s...

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### Could a Cash Out Refinance Be a Better Solution Than Mortgage Forbearance?

- Published: 2020-04-16
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/could-a-cash-out-refinance-be-a-better-solution-than-mortgage-forbearance/
- Categories: Foreclosure, Mortgage News, Refinance

The current solution for those struggling to make mortgage payments due to COVID-19 is mortgage forbearance. It allows homeowners to “pause” mortgage payments for anywhere from six to 12 months while their income is reduced or completely nonexistent. Once it comes to an end, the homeowner must repay the missed payments, either by making a lump sum payment or getting on some kind of repayment plan. But what about instead of forbearance, the borrower simply executed a cash out refinance and used the proceeds to cover expenses until they got back on track? This is an interesting idea floated by Urban Institute VP Laurie Goodman and Brookings fellow Aaron Klein. While taking on more debt doesn’t sound like the most sensible plan when you already can’t make ends meet, homeowners are currently sitting on a mountain of home equity. During the previous housing crisis, a streamlined refinance program called the Home Affordable Refinance Program (HARP) was implemented to lower monthly mortgage payments for roughly 3. 4 million Americans. It allowed homeowners to refinance even if they didn’t have sufficient equity in their home, or in most cases, negative equity. And they could do so with limited documentation and no home appraisal. The argument was that it didn’t increase risk to Fannie Mae and Freddie Mac because these homeowners wound up with lower monthly payments, even if they didn’t traditionally qualify for a mortgage refinance. Homeowners Don’t Have Cash, But They’ve Got Equity Today, we face a different challenge – homeowners...

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### Quicken Loans Just Had Its Biggest Month in History

- Published: 2020-04-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-just-had-its-biggest-month-in-history/
- Categories: Mortgage News, Refinance

The nation’s top retail mortgage lender just knocked it out of the park, despite the ongoing coronavirus pandemic. Quicken Loans CEO Jay Farner was on CNBC’s “Squawk Box” this morning to discuss the state of the industry, along with how his company is faring so far. And it appears they’re doing just fine, based on the massive numbers he threw out. March Was Quicken’s Best Month Ever Company funded nearly $21B in mortgages in March A new record for the direct-to-consumer mortgage lender Funded close to $53B in the first quarter Estimated near-$75B in mortgage applications for second quarter Let me preface this with the fact that there is a time lag for mortgage fundings, since they typically take 30-45 days from application to close. In other words, March’s numbers are based on mortgage applications that came in the door in late January or February, before our country shutdown due to COVID-19. That being said, Farner said Quicken Loans nearly funded a record $21 billion in home loans in March, its best month ever. And for the first quarter, did close to $53 billion in mortgage volume, which puts it on pace for a record year. It could also be enough to surpass Wells Fargo on total home loan volume, if you consider the San Francisco-based bank’s sizable correspondent lending business that is included in the overall numbers. The fact that Wells is pulling back on correspondent business while Quicken seems to be growing could be very good news for...

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### Stimulus Checks Barely Make Dent in Mortgage

- Published: 2020-04-15
- Modified: 2020-04-15
- URL: https://www.thetruthaboutmortgage.com/stimulus-checks-barely-make-dent-in-mortgage/
- Categories: Mortgage News

The so-called “coronavirus checks” have begun to hit Americans’ bank accounts this week, providing relief to those whose income has been curtailed or completely cut. It might be especially helpful to those who need to pay rent or make a monthly mortgage payment, the latter of which can be pushed back as late as the 15th of the month in most cases. But just how far can the stimulus check go toward covering a rent or mortgage payment? Well, that totally depends on where you live. Those with an adjusted gross income of up to $75,000 get the full $1,200 offered by the government. It’s even higher ($2,400) for married couples making $150,000 or less, and potentially much higher for married couples or heads of household with young dependents. Stimulus Checks Go Further on Rent than the Mortgage 77% of American renters could cover a month’s housing expenses with $1,200 check 47% of homeowners could pay their mortgage with the same check Share of homeowners who could make housing payment significantly higher in Indy (66%) Check would do very little to pay mortgage for most San Jose, CA homeowners (6%) First off, 77% of renters could cover one month’s worth of housing expenses with a $1,200 check, versus just 47% of homeowners, per a new analysis by real estate brokerage Redfin. The median monthly rent in the U. S. is $1,058 – it’s as low as $804 in Cleveland, Ohio, and as high as $2,283 in San Jose, California. As...

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### Mortgage Forbearance Rate Worsens, But Most Probably Won’t Lose Their Homes

- Published: 2020-04-14
- Modified: 2021-08-07
- URL: https://www.thetruthaboutmortgage.com/mortgage-forbearance-rate-worsens-but-most-probably-wont-lose-their-homes/
- Categories: Foreclosure, Mortgage News

Well, another week has gone by, and with that a new wave of mortgage forbearance requests. The total number of home loans now in forbearance is 3. 74%, up from 2. 73% a week earlier, per the latest Mortgage Bankers Association's (MBA) Forbearance and Call Volume Survey. That’s a 37% increase week to week, which while not as massive as the initial report, is still quite grim. To remind you, the total number of mortgages in forbearance had been just 0. 25% during the week of March 2nd. All told, we’re looking at a 1,396% increase in the total number of loans in forbearance, which is pretty staggering. It tells you that mortgage loan servicers are going to be under immense pressure without a liquidity backstop in place to protect them. FHA and VA Loans Continue to Post Highest Forbearance Rates Ginnie Mae forbearance rate rises to 5. 89% from 4. 31% Fannie/Freddie forbearance rate up to 2. 44% from 1. 69% Phone hold times with loan servicers decreased to 10. 3 minutes from 13 minutes Abandonment rates (hang-ups) declined to 17% from 21% Just like last week, Ginnie Mae backed home loans fared worst, which includes FHA loans, VA loans, and USDA home loans. The forbearance rate for such loans increased to 4. 31% to 5. 89%, meaning nearly six percent of homeowners with those types of mortgages now have their monthly mortgage payments frozen. The silver lining is Ginnie Mae took action and made changes to its existing...

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### Chase Now Requires a 700 FICO and 20% Down to Get a New Mortgage

- Published: 2020-04-13
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/chase-now-requires-a-700-fico-and-20-down-to-get-a-new-mortgage/
- Categories: Mortgage News, Refinance

Following in the footsteps of many other mortgage lenders of late, JP Morgan Chase has upped its minimum requirements to get a home loan. Once again, it has to do with COVID-19, which has led to a flood of unemployment filings and a general fear that many homeowners will begin to default on their mortgages. This has forced many big banks and mortgage lenders to tighten their belts, focusing on extending new loans to only those they see as the most creditworthy. In case you missed it, last week Wells Fargo said it now required $250,000 in a Wells bank account to get approved for a jumbo home loan. Chase’s New Mortgage Guidelines New customers will need to come with at least 20% down when purchasing a home Will also need a minimum FICO score of 700 to get approved Move is designed to limit exposure related to COVID-19 pandemic Also allows Chase to focus on its refinance customers Beginning this Tuesday, those who apply for a “new mortgage” will be required to make at least a 20% down payment and have a 700+ FICO score, per Reuters. While it’s somewhat unclear what a “new mortgage” is, the down payment piece points to a home purchase application, as opposed to a mortgage refinance, which comes with a minimum loan-to-value ratio. The “new” part refers to those who aren’t already Chase customers, such as a home buyer who doesn’t already have a Chase mortgage. It might also include an existing homeowner...

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### Citizens Bank Mortgage Review: Digital Process and a Smartphone App

- Published: 2020-04-09
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/citizens-bank-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a hard look at Citizens Bank Mortgage, which is operated by one of the oldest and largest banks in the United States. As of the end of 2019, they considered themselves the 13th largest retail bank in the U. S. , with $165. 7 billion in assets and $125. 3 billion in customer deposits. Citizens Bank Mortgage Fast Facts Headquartered in Providence, Rhode Island 13th largest retail bank in the U. S. with 1,100 branches nationwide Owns Franklin American Mortgage Company which provides correspondent and wholesale mortgage lending Typically a top-25 mortgage lender nationally Much of their home loan lending takes place in East Coast states like New York and Rhode Island They originate a high percentage of home purchase loans and ARMs They have roughly 1,100 physical branches across 11 states in New England, the Mid-Atlantic region, and the Midwest. Outside of the bank’s 11-state branch footprint, they refer to themselves as "Citizens One Home Loans. " The company also counts Franklin American Mortgage Company as one of its businesses, which offers both correspondent lending and a wholesale division to serve mortgage brokers. In 2018, Franklin American Mortgage Company did roughly $3. 2 billion in total loan volume, with much of it via home purchase financing. The majority of the lending was concentrated in Texas, Florida, Pennsylvania, and Tennessee. Citizens Bank recorded total home loan volume of nearly $10 billion in 2018, with about two-thirds of it purchase loans and the remaining third mortgage refinances. Nearly...

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### Which Housing Markets Are Most at Risk From COVID-19?

- Published: 2020-04-08
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/which-housing-markets-are-most-at-risk-from-covid-19/
- Categories: Foreclosure, Housing Market, Mortgage News

While it’s hard to compare the current possible housing crisis to the very real one experienced about a decade ago, there are fears of negative market impact due to COVID-19. We’ve already seen listing prices fall, along with a big jump in delistings, where home sellers pull their properties off the market. And home purchase mortgage applications continue to plummet, especially in large metros like LA, NY, and Seattle, per the MBA. Meanwhile, real estate brokerage Redfin revealed via an SEC filing that it was laying off 7% of its workforce, which could result in roughly 236 job losses. Then we have Wells Fargo curtailing its mortgage menu, and ARMs pricing higher than fixed-rate mortgages. The number of mortgages in forbearance has also surged 1000%, and is likely to get a lot worse the longer this goes on. The real estate and mortgage industry certainly isn't operating as usual, and it's even reminiscent of times back in the early 2000s. Temporary Inability to Pay the Mortgage? The housing crisis a decade ago was driven by shoddy financing Such as stated income, option ARMs, interest-only loans, and so on This potential crisis is being driven mostly just by loss of income due to COVID-19 As long as it's temporary it shouldn't create too many problems for the housing market This time around, the number one issue is inability to make mortgage payments due to loss of income or unemployment as a result of coronavirus. Either companies have laid off staff due...

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### Number of Mortgages in Forbearance Jumps Nearly 1000%

- Published: 2020-04-07
- Modified: 2020-04-07
- URL: https://www.thetruthaboutmortgage.com/number-of-mortgages-in-forbearance-jumps-by-nearly-1000/
- Categories: Foreclosure, Mortgage News

While estimates have ranged from two million to 12. 5 million, we’re now getting our first clues as to just how many homeowners will request mortgage forbearance from their loan servicer due to COVID-19. And so far, it doesn’t look too good, which might be a result of the many mortgage relief programs being offered, along with the ease at which one can qualify under programs like the CARES Act. Early Forbearance Numbers Look Pretty Grim Total number of home loans in forbearance up to 2. 66% from 0. 25% Mortgages backed by Ginnie Mae up to 4. 25% from 0. 19% FHA, USDA, and VA loans faring the worst so far Independent mortgage bank (IMB) servicers have largest share of loans in forbearance at 3. 45% A new survey from the Mortgage Bankers Association known as the “Forbearance and Call Volume Survey” paints a grim picture for the mortgage market in the face of COVID-19. From March 2nd to April 1, 2020, the total number of home loans in forbearance increased from just 0. 25% to 2. 66%, or 964%. The MBA's survey data covers roughly 22. 4 million serviced loans, which accounts for nearly half (45%) of the first-lien mortgage servicing market. So it should give us a pretty good idea of what’s happening out there. By investor type, Ginnie Mae loans have fared the worst so far, with the forbearance rate climbing from 0. 19% to 4. 25%. FHFA boss Mark Calabria actually called this one when...

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### How Is Mortgage Forbearance Paid Back? Lump Sum Now or Never?

- Published: 2020-04-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-is-mortgage-forbearance-paid-back/
- Categories: Foreclosure

At this point, most homeowners have probably heard of the CARES Act and its massive 12-month forbearance option for those with federally-backed mortgages. It sounds pretty sweet – you can request six mortgage-free months, followed by an additional six months if you need it, with little paperwork or evidence of hardship from COVID-19. Apparently, all you need is a mortgage forbearance letter and you should be good to go, assuming loan servicers don’t revolt and balk at the sheer number of requests that flood through the door. Does Mortgage Forbearance Need to Be Repaid? Yes, homeowners are expected to repay the missed mortgage payments Loan servicers are NOT waiving payments, they are offering to delay them The big question is how and when are homeowners supposed to catch up Especially if the homeowner loses their job permanently or severely depletes their assets along the way The million-dollar question is how will the skipped mortgage payments be paid back. Remember, these aren’t waived mortgage payments, they are delayed mortgage payments. You are getting a brief moratorium on payments while furloughed or out of work, after which time you must make good on those missed payments, assuming you do get back to work. Everything is working on the assumption that this is a temporary situation, unlike the mortgage crisis a decade ago that was driven by fundamental issues, like sketchy mortgage financing and overpriced homes. Most homeowners could afford to make their mortgage payments in the normal, pre-COVID-19 world, so once this...

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### Wells Fargo Will Only Give You a Jumbo Loan If You Have $250k in Their Bank

- Published: 2020-04-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-will-only-give-you-a-jumbo-loan-if-you-have-250k-in-their-bank/
- Categories: Mortgage News, Refinance

In yet another sign that the mortgage market is completely volatile and far from liquid, top mortgage lender Wells Fargo has severely tightened its jumbo loan guidelines. Going forward, the San Francisco-based bank now requires customers to have $250,000 in liquid assets in a Wells account in order to get approved for a jumbo home loan, per the WSJ. Before this immediate market-driven change, I don’t believe there was any such rule in place, other than asking that the customer meet typical reserve requirements. At the same time, Wells stopped buying jumbo loans from other banks by eliminating the product from their correspondent lending menu. This means banks that resell Wells Fargo’s jumbo loan can no longer do so until told otherwise. The bank has also reportedly stop offering cash out refinances, and has placed restrictions on HELOCs. Update:You now apparently need $1 million in new deposits at Wells Fargo to get a jumbo refinance loan with the bank if you're a new customer. Additionally, they've lowered max LTVs across the board by 5% on all products. The move is intended to reduce risk and slow business since they're already overwhelmed. However, existing Wells Fargo customers will no longer need to jump through these hoops, so it's a trade-off. Why So Strict on the Jumbos? Wells won't give you a jumbo loan unless you have $250k in one of their bank accounts New rule only applies to refinance loans, not purchase home loans Reflects the lack of liquidity in the...

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### How Do I Know If Fannie Mae or Freddie Mac Owns My Mortgage?

- Published: 2020-04-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-do-i-know-if-fannie-mae-or-freddie-mac-owns-my-mortgage/
- Categories: Mortgage Tips

Quick mortgage tip: “How do I know if Fannie Mae or Freddie Mac owns my mortgage? ” One of the key requirements to getting approved under the CARES Act to receive mortgage forbearance is ensuring that your loan is indeed owned or guaranteed by Fannie Mae or Freddie Mac. If it isn't, you might still be eligible for mortgage relief as long as your loan is backed by the FHA, USDA, or VA. For those explicit government loans, it's a little more straightforward. Knowing who owns your loan can also be helpful to determine if you're eligible for a particular loan modification, or if you can pursue certain foreclosure prevention options via each agency. Fortunately, the pair has made it very simple to find out if your mortgage is owned or backed by either. Fill Out the Short Form To find out if Fannie Mae or Freddie Mac own your mortgage All you have to do is fill out a short form on their website You will be notified immediately if they do or do not own it If they do you'll be directed to options for assistance All you have to do is fill out a short form with your name, last four of your social, and property address, and they'll let you know immediately if they own your home loan. You will receive one of two status messages. Either that no matches were found, or that a match was indeed found. If it's the latter, you may be...

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### Real Estate Delistings Increase 148% From a Year Ago as COVID-19 Impact Grows

- Published: 2020-04-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/home-delistings-increase-148-from-a-year-ago-as-covid-19-impact-grows/
- Categories: Housing Market, Mortgage News

Housing supply was bad before the coronavirus epidemic reared its ugly head, and now it has gotten even worse, per new data from real estate brokerage Redfin. Homes Flying Off the Market 28,140 homes were taken off the market before selling in the past week That represents a 148% year-over-year increase in delistings Even worse in cities of Chicago, Los Angeles, and Philadelphia Some cities not yet impacted as stay at home orders finally go into effect this Friday The company noted that home delistings, where home sellers pull their properties off the market, increased 148% during the week of March 29th, compared to a year earlier. And during that seven-day period, nearly 4% of active listings were taken off the market, which is roughly twice the typical rate. It was even worse in the cities of Chicago, Los Angeles, and Philadelphia, where 6% of listings were pulled. All of those hard-hit cities have a shelter in place mandate, so it’s clearly not the best time to sell a home. Conversely, Atlanta only saw 2% of active homes delisted, which might be related to their lack of stay at home orders until this Friday. Once implemented, the delisting trend will likely catch up to homes in Georgia as well. New Real Estate Listings Have Also Declined Just 58,366 new for-sale listings nationwide last week Down 33% from the same week in 2019 Comes as traditional spring home buying season kicks into gear Detroit and Philadelphia saw worst of it with...

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### Generate a Mortgage Forbearance Request Letter with This Free Tool

- Published: 2020-04-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/generate-a-mortgage-forbearance-request-letter-with-this-free-tool/
- Categories: Foreclosure, Mortgage News

You may (or may not) have heard that the CARES Act is allowing a huge chunk of homeowners to request forbearance for six to 12 months of mortgage payments. If you haven’t heard, you can review the details here, but the takeaway is that anyone with a federally-backed mortgage who has been economically affected by COVID-19 is eligible. And like other mortgage relief programs that have been rolled out by various private banks and state governors, the forbearance won’t hurt your credit score/history, nor will you pay penalties or fees. It’s still somewhat unclear what happens after the forbearance period ends, but the CARES Act did stipulate that you can’t be charged interest beyond what would have been due had you remained current on your loan. For me, that means the missed mortgage payments get added to the end of the loan term, effectively putting the mortgage on hold. But that’s just my opinion, and the whole thing is still a bit fluid and confusing. Even the experts are trying to make sense of it all. Another key point is that you don’t need to provide any documentation of hardship to receive the forbearance. You simply need to attest to your loan servicer that you’re experiencing a financial hardship due to the COVID-19, and request relief. Hello Lender Generates Free Mortgage Forbearance Request Letters Free tool generates a letter to send your loan servicer for mortgage assistance Simply answer a handful of questions and it does the rest You will...

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### How Many Homeowners Are Expected to Miss Mortgage Payments Due to Coronavirus?

- Published: 2020-04-01
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/how-many-homeowners-are-expected-to-miss-mortgage-payments-due-to-coronavirus/
- Categories: Foreclosure, Housing Market, Mortgage News

It’s the first of the month, and with that comes fear and uncertainty that both homeowners and renters won’t be able to make payments due to loss of income related to the coronavirus. While it’s not clear how bad things will get just yet, CNBC interviewed FHFA director Mark Calabria to get some preliminary numbers, which he himself called “very rough” and subject to change quickly. Two Million Missed Mortgage Payments by May 300,000 missed payments for Fannie/Freddie owned loans in April 700,000 missed payments for overall market in April Jumps up to 1M and 2M respectively by May Expected to be worse for government loans backed by FHA/VA He currently estimates that roughly 300,000 home loans backed by Fannie Mae and Freddie Mac could go delinquent in April, which is just over 1% of their book. For the overall mortgage market, he said that translates to roughly 700,000 delinquent home loans. By May, those numbers jump up to one million and a little more than two million missed payments, respectively. He sees more stress in FHA/VA loans due to their lower credit score requirements, higher DTI ratios, and so on. While it sounds pretty dire, Calabria was quick to point out that it only represents somewhere between 3-5% of the market, and that he’s "not seeing worst-case scenarios. " This is counter to a comment made by MBA chief economist Mike Franantoni, who warned that if a quarter of U. S. homeowners (~12. 5 million households) sought six months...

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### I’ve Been Offered the Opportunity to Skip Two Mortgage Payments

- Published: 2020-04-01
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/ive-been-offered-the-opportunity-to-skip-two-mortgage-payments/
- Categories: Mortgage Tips

So I received an unmarked piece of mail the other day, and whenever that happens, I know it’s going to contain some kind of nonsense. Upon opening the letter, which I could have easily just thrown away, I discovered that it was a mortgage solicitation. Fun! More specifically, it was a refinance offer from a random mortgage company I'd never heard of. It began by informing me that their “loan restructuring team” had reviewed my home loan and determined that I might be able to refinance my mortgage to a new low rate. Sweet! Although I think they’d have a lot of trouble getting my mortgage interest rate any lower. Even better, they mentioned that as an added “bonus,” I might get the opportunity to skip one or even two mortgage payments. Wow! That’s amazing! However, they cautioned that they receive high call volume, so to leave a message if I don’t get a live rep on the phone... Skip a Mortgage Payment or Skip Writing a Check? Ever heard of skipping a mortgage payment? It's a common sales pitch used by mortgage brokers and loan officers to excite homeowners Often listed as one of the many benefits of refinancing But do you really skip a mortgage payment or simply delay it? Here’s the thing with skipping mortgage payments. It’s kind of a misnomer because you don’t really skip a payment, you skip writing a check to your lender, or sending a monthly payment electronically. In reality, you still pay...

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### Clear Capital’s New OwnerInsight Tool Lets Homeowners Fill in Appraisal Gaps

- Published: 2020-03-26
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/clear-capitals-new-ownerinsight-tool-lets-homeowners-fill-in-appraisal-gaps/
- Categories: Mortgage News

As reported earlier this week, some important pieces of the home loan process have been disrupted by the ongoing and seemingly intensifying coronavirus epidemic. One issue has been home appraisals, which are required for most mortgages and often require a human being to enter the subject property to take photos and inspect the condition of the home. Due to social distancing measures and shelter in place mandates in many cities and states nationwide, this has become increasingly difficult in certain areas the country. Even if business is permitted, it might make either party uncomfortable, rightfully so. And while the FHFA has already directed Fannie Mae and Freddie Mac to make temporary alternatives available, such as desktop appraisals and exterior-only appraisals, Clear Capital has gone a step further. Clear Capital's OwnerInsight Asks Homeowners to Be the Photographers The company, which is focused on appraisal modernization, has released a new product called OwnerInsight (being offered for free in response to COVID-19) that puts homeowners in the driving seat. Instead of someone entering your home, or the property you wish to purchase, the existing homeowner takes the interior photos and answers related questions using an easy-to-follow guide. This ensures appraisers have the information required to complete accurate appraisals, while also giving homeowners and appraisers space that allows them to comply with social distancing guidelines. OwnerInsight doesn’t require the user to download an app, and it works seamlessly on camera-enabled mobile devices, such as our everyday smartphones. Additionally, the photo metadata (time/location/etc. ) is...

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### Fannie Mae and Freddie Mac Roll Out New Payment Deferral Option

- Published: 2020-03-26
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-and-freddie-mac-roll-out-new-payment-deferral-option/
- Categories: Foreclosure, Mortgage News

To further complicate the complicated mortgage relief picture surrounding the coronavirus outbreak, Fannie Mae and Freddie Mac have released their new “payment deferral” option early. Originally slated to roll out on January 1st, 2021, the pair are encouraging loan servicers to begin evaluating eligible borrowers on or after July 1st, 2020. Note that this relief option isn't directly related to COVID-19, but can be a practical solution. What Is Fannie/Freddie’s Payment Deferral Option? A loss mitigation option that sets aside 1-2 missed mortgage payments Missed payments are placed in a non-interest bearing unpaid balance (UPB) The UPB is paid back once the loan reaches maturity, or if mortgage refinanced/home sold before then You have to be delinquent but back to making regular mortgage payments to take part In short, it’s a new loss mitigation solution that Fannie Mae and Freddie Mac can offer to borrowers who missed one or two mortgage payments, but are now able to pay their mortgage each month. If utilized, the past-due principal and interest (P&I) payments are set aside as a non-interest bearing unpaid balance (UPB). So imagine your monthly mortgage payment is $2,000 per month and you missed two payments due to unemployment related to the coronavirus epidemic. That $4,000 would be deferred and would only be due at the end of the mortgage term, or earlier if you sold your home or refinanced your mortgage. Importantly, you’d have to already be delinquent in order to receive this type of relief, which is obviously...

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### California Homeowners Now Eligible for 90-Day Mortgage Payment Relief Due to Coronavirus

- Published: 2020-03-25
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/california-homeowners-now-eligible-for-90-day-mortgage-payment-relief/
- Categories: Foreclosure, Mortgage News

California Governor Gavin Newsom has announced a “major financial relief package” that gives homeowners in the Golden State a three-month mortgage reprieve. Those who have been (or will be) economically impacted by the coronavirus (COVID-19) are eligible to receive a 90-day grace period on their mortgage payments. This is similar to what some individual mortgage lenders have already offered, and much like the universal mortgage relief program that has been proposed. “Millions of California families will be able to take a sigh of relief,” said Newsom in the press release. “These new financial protections will provide relief to California families and serve as a model for the rest of the nation. I thank each of the financial institutions that will provide this relief to millions of Californians who have been hurt financially from COVID-19. ” How the California Coronavirus Mortgage Relief Will Work Mortgage payments are waived for 90 days with additional relief beyond that also a possibility No negative information reported to the credit bureaus (will not impact your credit scores) Lenders will not initiate foreclosure sales or evictions for at least 60 days Any mortgage-related fees will either be waived or refunded for at least 90 days These measures go into effect as of March 25th, 2020 Participating financial institutions will provide homeowners with a streamlined process to request mortgage payment forbearance for COVID-19-related reasons. As noted, affected homeowners may receive a 90-day grace period to make their mortgage payments. These banks will also provide borrowers with the opportunity...

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### Streamlined Mortgage Relief Program Could Mean No Payments for 12 Months

- Published: 2020-03-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/streamlined-mortgage-relief-program-could-suspend-payments-for-12-months/
- Categories: Foreclosure, Mortgage News

A group of mortgage industry heavyweights have sent a letter to the Federal Reserve, HUD, FHFA, CFPB, Treasury Department, and the White House advocating for a uniform, streamlined mortgage relief program in the wake of the coronavirus outbreak. It could result in waived mortgage payments for up to 12 months for millions of Americans, without the need for much paperwork if any. However, they did stress that “those who can pay their mortgage, should pay their mortgage. ” How a Uniform Mortgage Relief Program Could Work Same assistance across all government agencies and the GSEs Limited documentation requirements Available to owner-occupants and investors Payment forbearance for 90 days initially Payment relief can be extended up to 12 months if necessary Followed by either a loan modification or the resumption of regular mortgage payments No credit hit, fees, penalties, etc. Nationwide foreclosure and eviction moratorium The mortgage relief proposal would allow all homeowners with a mortgage to receive an initial forbearance of 90 days, in which monthly payments would not be due. This would apply to those with conventional loans backed by Fannie Mae or Freddie Mac, along with those who hold a government loan, such as an FHA loan, USDA loan, or VA loan. Importantly, it would provide universal relief regardless of loan type, without the stringent documentation typically required. If we learned anything from HAMP and HARP, the last thing the industry needs is paperwork delays and bureaucratic procedures, especially with social distancing and lockdowns in place. Anyway, the...

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### Quicken Loans Warns Some Parts of Loan Process May Not Proceed Due to Shelter-in-Place

- Published: 2020-03-23
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-warns-some-parts-of-loan-process-may-not-proceed-due-to-shelter-in-place/
- Categories: Mortgage News

Quicken Loans told customers certain parts of the loan process “can’t proceed” in areas of the country affected by shelter-in-place orders. Specifically, they said home appraisals can’t be conducted while homeowners are sheltering in place, nor can rate lock requests be made. They have updated their statement saying, "Even though shelter-in-place orders are in effect in many areas of the country, the mortgage process can still continue. " Apparently, appraisers and closing agents may enter your home while under the shelter-in-place order. But if not, they say they've got alternative ways to complete these tasks. As to why you can’t lock a rate, which isn’t an in-person activity, presumably they don’t want to make commitments if the loan isn’t going to move further, especially with the current dislocations and volatility in the secondary market. They have since clarified that there's been "a slight adjustment" to their rate lock process where they can’t offer long rate locks because of the rapidly changing environment. Normally they'd lock a loan before underwriting, but to accommodate shelter-in-place orders, you’ll need to lock your rate closer to closing day in affected areas. This will likely affect both Quicken Loans and Rocket Mortgage customers. For appraisers that are still working, Quicken has taken protective measures to ensure folks don’t get sick. This includes making sure appraisers and signing agents aren’t working while showing signs of symptoms or based on recent travel and interactions. And ensuring “team members and partners understand and follow all CDC guidelines and...

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### Top iBuyers Stop Buying Homes: Zillow, Redfin, Opendoor Purchases All on Hold

- Published: 2020-03-23
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/top-ibuyers-stop-buying-homes-zillow-redfin-opendoor-all-on-hold/
- Categories: Housing Market, Mortgage News

The real estate market carnage continues with all the major iBuyers pausing home purchases thanks to the coronavirus. Zillow Offers Pauses Purchases This morning, Zillow announced that it had stopped home buying via Zillow Offers amid the “market uncertainty” related to COVID-19. While it’s unclear if it was mandated, they did note that the move was “in response to local public health orders related to COVID-19,”and also to ensure the protection and safety of its staff, customers, and partners. Specifically, some states like California have implemented emergency orders requiring individuals to stay at home and cease all non-essential business, which includes some real estate activities. The company said it would continue to market and sell homes through Zillow Offers, despite halting open houses for its homes last week. Zillow said it ended 2019 with 2,707 homes in its inventory, and as of March 19th, had reduced it to approximately 1,860 homes. All 24 markets where Zillow Offers currently operates are affected by the move. Opendoor Cash Offers Suspended Meanwhile, Opendoor is putting cash offers on hold as a result of COVID-19. In a statement posted on their website, the iBuyer said, “If you’re currently in our offer process, be on the lookout for communication from us. If you’re not, here’s how we can still help with your home sale. ” In terms of that help, they are still allowing third parties to make a cash offer for your property, as opposed to Opendoor itself. If you take them up on...

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### Bank of America, Ally Home, Quicken Loans, Wells Fargo Offer to Defer Mortgage Payments Due to Coronavirus

- Published: 2020-03-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-ally-home-offer-to-defer-mortgage-payments-due-to-coronavirus/
- Categories: Foreclosure, Mortgage News

Here comes the mortgage assistance! I honestly thought I wouldn’t be writing about this sort of stuff anytime soon, but here we are. It feels like 2009 all over again. As previously blogged about, all the major housing agencies have pledged to help homeowners affected by the coronavirus, including Fannie Mae, Freddie Mac, HUD, USDA, and the VA. Now individual banks and mortgage lenders are stepping up to the plate to put a hold on mortgage payments. Good on them. Bank of America Offers Mortgage Deferment for Those Affected by Coronavirus Bank of America will defer mortgage payments for an unknown period of time Company is doing so on a case-by-case basis, may need to prove hardship Deferred payments will be added to the end of the loan Unclear if interest will be charged during deferment period First up, Bank of America is offering deferment on basically all loans and credit cards, including mortgages and home equity loans/lines. The caveat is that the mortgage or home equity loan/line must be held on the bank’s books. So if you make mortgage payments to Bank of America each month, as opposed to some other loan servicer, you might be eligible for assistance directly from them. Additionally, you need to make the request, they aren’t just freezing mortgage payments for all customers in advance. This appears to be on a case-by-case situation as well, which they said is how they’ve approached things in the past during other natural disasters or the semi-recent government...

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### Mortgage Lenders Now Providing Payment Relief Due to Coronavirus

- Published: 2020-03-19
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-lenders-may-provide-payment-relief-due-to-coronavirus/
- Categories: Foreclosure, Mortgage News, Mortgage Rates, Refinance

CARES Act permits 6-12 month forbearance for mortgage payments on federally-backed home loans HUD has announced a foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for the next 60 days Fannie Mae has suspended foreclosure sales and borrower evictions until at least December 31st, 2020 Freddie Mac has announced the suspension of foreclosure sales and evictions until at least December 31st, 2020 VA has also announced a moratorium for borrowers affected by COVID-19 USDA Rural Development has granted authority to its lenders to help borrowers stay in their homes if they are having trouble making payments. NYS (New York State) loan servicers told mortgage payments to be WAIVED for 90 days based on financial hardship (no late fees or credit score hit) California homeowners eligible to receive a 90-day grace period on their mortgage payments Connecticut Governor has reached a deal with 50+ banks/credit unions to suspend mortgage payments for 90 days Nevada governor says vast majority of lending institutions offering homeowners 90-day grace period on mortgage payments New Jersey homeowners eligible for mortgage payment forbearance of up to 90 days Bank of America and Ally Home offer deferred mortgage payments A streamlined mortgage relief program has been proposed that would allow 12 months of mortgage forbearance Wells Fargo mortgage customers are being offering a "90-day payment suspension" Check out big list from American Bankers Association of all banks providing mortgage relief to homeowners How is mortgage forbearance paid back? COVID-19 Payment Deferral Mortgage forbearance waiting periods...

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### RedfinNow Temporarily Halts Offers as Housing Market Takes Turn for the Worse

- Published: 2020-03-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/redfinnow-temporarily-halts-offers-as-housing-market-takes-turn-for-the-worse/
- Categories: Housing Market, Mortgage News

We're now getting our first indication of how the coronavirus may affect the once booming housing market, thanks to a blog post from Redfin boss Glenn Kelman. It’s not good news, as indicated by the title of this post. RedfinNow Hits the Brakes The real estate brokerage is no longer buying homes for cash Unclear how long they will pause their iBuyer business Doesn't bode well for housing market sentiment But understandable given the uncertainty surrounding coronavirus First and foremost, the company’s iBuyer unit RedfinNow is halting offers it makes on homes, per a separate 8-K filing. On the surface, the company isn’t interested in buying your home for cash anymore, at least not at the moment. This doesn’t necessarily mean they think the housing market is going to tank, but it does seem to signal some uncertainty on their part. So that’s a little bit unsettling, though perfectly understandable for a large, publicly-traded business to disclose that material event. By the way, Redfin stock has fallen from around $33 per share a month ago to just over $10 today. It fell nearly 25% on Wednesday as the coronavirus continues to ravage the economy. The company did not indicate when they’d relaunch RedfinNow, but for now, it appears to be on hold. Home Buying Demand Has Taken a Hit from Coronavirus Home buying demand was up roughly 27% in both January and February compared to last year Last week year-over-year growth fell to just 1% And in the past few...

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### Is Now the Time to Pull Cash Out of Your Home and Buy Stocks?

- Published: 2020-03-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-now-the-time-to-pull-cash-out-of-your-home-and-buy-stocks/
- Categories: Mortgage Tips, Refinance

There’s been lots of chatter around Wall Street that this could be an unprecedented time to buy stocks on the cheap, given the market carnage related to the coronavirus. One asset manager, Ricky Sandler of Eminence Capital, has even gone as far as to recommend that you refinance your mortgage and use the proceeds to purchase stocks. Is this a good idea, a bad idea, or a reckless idea? Well, that depends. The Dow Is Now Sub-20K A month ago, the Dow was looking like it was about hit 30,000, which would have been cause for celebration, and the unveiling of new baseball caps with “Dow 30,000” emblazoned on the front. Instead, we’re now below 20,000 as of the time of this writing, thanks to another massive drop this morning. Does anyone have those old hats lying around? For reference, the Dow first surpassed 20,000 in January 2017, so we’ve basically just erased three years of gains in the matter of a month. For the contrarians, this is an exciting development. An opportunity to buy equities at 2017 prices. But who knows what the future has in store. Are stocks going to crumble even more in the short-term? While some are calling the selloff overdone, we are living in extraordinary times. When was the last time you remember the world effectively shutting down? The last time nations across the globe closed their borders? The last time the NBA, NHL, MLB, world soccer, and virtually all movies, concerts, and restaurants came...

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### Landed: Helping Educators Buy Homes in the Expensive Areas They Serve

- Published: 2020-03-17
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/landed-review/
- Categories: Mortgage Tips

There are tons of mortgage lenders out there, certainly too many to count, but Landed Home Loans is a little more unique than the rest. You see, their goal isn’t just to help Americans get a home loan. Their mission is to “help educators buy homes in expensive areas. ” And more importantly, to give these individuals “financial security near the communities they serve. ” This is a growing problem as popular cities become increasingly expensive, yet still require workers who are traditionally low-paid. Landed started with educators, but expects to roll out to healthcare workers and first responders, such as police and firefighters, at some point in the future. How Landed’s Shared Equity Down Payment Program Works Provides a portion of down payment in exchange for future home price appreciation No monthly payment is required, it is not a loan Each 1% contributed gives Landed 2. 5% of the appreciation (or depreciation) in the home They are paid back once you sell your property Unlike traditional mortgage lenders, they offer a shared equity down payment program to increase affordability and eliminate the traditional roadblock of needing a large lump sum of cash upfront. This is similar to EquityKey and the Unison HomeBuyer program. It allows home buyers to come in with a 20% down payment, which in turn eliminates the need for private mortgage insurance, and keeps the monthly payment within reach. Having a larger down payment may also make offers more successful in competitive markets where bidding wars...

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### No, You Aren’t Getting a 0% Mortgage Rate

- Published: 2020-03-16
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/no-you-arent-getting-a-0-mortgage-rate/
- Categories: Mortgage News, Mortgage Rates

At least not yet... As you probably know, the Fed slashed the federal funds rate to near-zero yesterday afternoon to prop up the economy as it contends with the growing coronavirus pandemic. If you read the headlines, you might falsely assume the Fed just slashed mortgage rates by a full percentage point. Combined with the half-point cut two weeks ago, you might be led to believe that mortgage rates are now truly rock bottom. But in reality, those actions had nothing to do with consumer mortgage rates. Those rate cuts were intended to help banks borrow from one another to ensure they maintain minimum reserve requirements. When that key rate is lowered, the money supply rises and lending to businesses and consumers increases, thereby spurring economic activity. That's the whole point. Didn’t the Fed Just Lower Mortgage Rates? The Fed rate cuts have no direct impact on mortgage rates They can serve as a guide for long-term rates, but the federal funds rate isn't your mortgage rate Your mortgage rate didn't just drop by 1% But the MBS buying program known as QE4 should lead to lower mortgage rates for consumers over time Ok, great, so how does this affect mortgage rates? Well, the Fed also announced the purchase of at least $200 billion in agency mortgage-backed securities (QE4), whichisintended to bring down mortgage rates. However, and this is a biggie, long-term fixed mortgage rates weren’t anywhere close to zero when they announced the news. They actually hit record lows...

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### The Federal Reserve Has Swooped In to Save Mortgage Rates

- Published: 2020-03-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/the-federal-reserve-has-swooped-in-to-save-mortgage-rates/
- Categories: Mortgage News, Mortgage Rates

In light of the ongoing coronavirus outbreak, which were the Federal Reserve’s very own words, the Committee took bold action to lower the target range for the federal funds rate to 0% to 0. 25%. That’s a full percentage point lower than the 1% to 1. 25% it had been previously. And comes on top of the half-point cut executed just over two weeks ago. As such, the prime rate has fallen from 4. 75% to 3. 25%. The prime rate directly affects consumers via things like credit card interest rates and home equity lines of credit (HELOC)s because they’re typically tied to that index. For homeowners with HELOCs, their interest rates will adjust down 1. 50%, which will provide meaningful monthly payment relief. But what about first-lien mortgage rates, which hit record lows a couple weeks ago, then shot back higher once the market was flooded with mortgage-backed securities (MBS). Well, the Fed also addressed that issue by effectively starting a new round of quantitative easing, which will probably be known as “QE4. ” Fed Pledges to Buy Agency MBS to Lower Mortgage Rates (QE4) Fed said coronavirus outbreak has hurt communities and disrupted economic activity in the United States To promote maximum employment and price stability it has lowered federal funds rate to 0% to 0. 25% range Also announced it will increase its holdings of Treasury securities by at least $500 billion and holdings of agency mortgage-backed securities by at least $200 billion This will lead to...

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### CrossCountry Mortgage Review: The Nation's Third Largest Retail Lender

- Published: 2020-03-12
- Modified: 2024-11-01
- URL: https://www.thetruthaboutmortgage.com/crosscountry-mortgage-review/
- Categories: Mortgage Tips

Today we’ll do an in-depth review of CrossCountry Mortgage, which as the name implies, is a nationally-licensed mortgage lender that offers its home loan services in all 50 states and the District of Columbia. Given their name, it’s a good thing they do. The consumer direct mortgage lender is based out of Brecksville, Ohio and has been around since 2003. Perhaps their biggest claim to fame is the fact that they were the main lender partner of Costco Mortgage. So if you're a Costco customer, you may have come across them. Now that the Costco mortgage program has wound down, they're flying solo, but still expected to originate billions in home loans annually. Read on to learn more about this direct mortgage lender and their many offerings. CrossCountry Mortgage Fast Facts Founded in 2003 by CEO Ronald J. Leonhardt, Jr Headquarters in Brecksville, Ohio Nationally licensed direct lender in all 50 states More than 7,000 employees at over 800 branches Fannie Mae, Freddie Mac, and Ginnie Mae Approved Seller/Servicer since 2012 Funded $29 billion in home loans in 2022, 13th largest overall Also own a loan servicing portfolio worth around $2. 5B The main mortgage lender partner for Costco (program has since closed) Interestingly, CrossCountry Mortgage began as a mortgage broker before transforming into a full-scale mortgage lender themselves. Today, they claim to be a top-3 retail mortgage lender, with aspirations to go even higher over time. In 2022, they funded roughly $29 billion in home loans, with a high...

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### Lenox Financial / WesLend Mortgage Review: The Biggest No-Brainer?

- Published: 2020-03-11
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/lenox-financial-weslend-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a look at Southern California-based Lenox Financial Mortgage Corp. , which also does business as WesLend Financial. First things first, be sure not to confuse them with Atlanta, GA-based Lenox Financial, whose famous radio pitch is/was, “the biggest no-brainer in the history of earth. ” To further muddy the situation, Lenox/WesLend has a very similar slogan, a slightly slimmed down, “home of the biggest no brainer” tagline. And it appears their flagship product is also the no cost refinance. So the first step here might be differentiating the two companies and their DBA WesLend Financial. Let’s learn more about them to determine if they could be a good choice for your home loan needs. Lenox Financial/WesLend History Company founded in 1999 Headquarters are in Santa Ana, CA CEO and founder is Wesley Hoaglund Direct mortgage lender with roughly 25 loan officers Also operates a wholesale lending division and loan servicing department WesLend Financial Corp. , which is a DBA of Lenox Financial Mortgage Corporation, is a direct mortgage lender licensed in 42 states nationwide. They don’t appear to do business in Alaska, Delaware, Montana, Nebraska, Nevada, North Dakota, Wisconsin, Wyoming, or the District of Columbia at the moment. The company is a full-service mortgage banker that offers a wide variety of loan programs via both the retail and wholesale channels. They are a direct seller/servicer with Fannie Mae and Freddie Mac, and also offer all types of government home loans, including FHA, USDA, and VA loans. Lenox/WesLend...

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### Quicken Loans CEO Doesn’t See the 30-Year Fixed Falling Below 3%

- Published: 2020-03-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-ceo-doesnt-see-the-30-year-fixed-falling-below-3/
- Categories: Mortgage News, Mortgage Rates

Call him a party pooper, but the CEO of top retail mortgage lender Quicken Loans doesn’t expect mortgage rates to decline any further from their new all-time lows. If anything, Jay Farner believes they will rise over the next few weeks, per a new interview with Marketwatch. Yesterday, the 30-year fixed fell to 3. 29%, according to Freddie Mac, its lowest level on record since hitting 3. 31% in late 2012. Some lenders were already offering rates below 3% this week, namely at 2. 875%. Whether you had to pay points to get those rates was another question. Why the Pessimism on Mortgage Rates? Quicken CEO points to an otherwise very strong economy The stock market had reached all-time highs before the coronavirus outbreak So if and when good news, or even not-so-bad news arrives Mortgage rates could return to higher levels seen a couple months ago In a nutshell, Farner sees the underlying fundamentals of the economy as “very, very strong,” so much so that if anything positive surfaces, we might see a big reversal. Basically, there’s so much negativity baked into the market right now that if anything good were to happen, we could see a stock market rally and a corresponding increase in mortgage rates. “Even if they come out and say maybe the coronavirus will be a little bit worse than we thought that would bring certainty,” he told Marketwatch. At some point, there will be certainty – whether it’s enough to stop the 10-year bond...

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### Churchill Mortgage Review: Dave Ramsey's Favorite Mortgage Lender

- Published: 2020-03-03
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/churchill-mortgage-review/
- Categories: Mortgage Tips

If you’ve heard of Dave Ramsey, you might have come across Churchill Mortgage, which happens to be his mortgage lender of choice. Why? Because like Dave, they believe that the real American Dream is debt-free homeownership, not a massive mortgage hanging over your head through retirement. To that end, they do things a little differently than the rest of the industry. Let’s learn more about what makes them unique. The History of Churchill Mortgage Direct-to-consumer mortgage lender founded in 1992 by Mike Hardwick Headquarters are located in Brentwood, Tennessee Employs more than 400 people with branches in dozens of states Does business in 46 states nationwide Funded more than $2 billion in home loans last year Did the most business in Tennessee, Texas, and California Their main product pitch is the money-saving 15-year fixed mortgage Churchill Mortgage is a privately-owned company that was founded in 1992, meaning it has been around for nearly 30 years. In the mortgage industry, that makes it one of the older companies still standing and/or independent, given many were lost during the Great Recession. It was founded by Lawson H. (Mike) Hardwick, III in Brentwood, Tennessee. He was previously one of the principal founders of Franklin National Bank until it was acquired by Fifth Third Bank. Today, his company has more than 400 employees across a nationwide branch network in 46 states. They don’t appear to do business in Delaware, Hawaii, Nevada, or New York. In 2019, the company originated more than $2. 2 billion...

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### AmeriHome Mortgage Review: A Lender with a Countrywide Mortgage Pedigree

- Published: 2020-03-02
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/amerihome-mortgage-review/
- Categories: Mortgage Tips

Today we’ll take a hard look at AmeriHome Mortgage Company, LLC, which is a direct mortgage lender based out of Southern California. Their current company headquarters are in Thousand Oaks, CA, just north of Los Angeles. You might recognize the name from Designing Spaces on Lifetime TV, where they are featured. They have an A+ rating with the Better Business Bureau and a 4. 2/5 score with Trustpilot. But first a little background. AmeriHome History Launched in 1988 as a Michigan-based corporation Later acquired by Impac Mortgage Holdings in 2010 Sold to Aris Mortgage Holding Company LLC in 2014 Now led by CEO Jim Farush, an ex-Countrywide and PennyMac executive Acquired by Western Alliance Bancorporation in early 2021 for $1 billion The company was started way back in 1988 as a Michigan-based corporation, but has changed hands several times since then. It was later sold by Impac Mortgage Holdings in 2014 to Aris Mortgage Holding Company LLC, after becoming a redundant mortgage platform for the company. AmeriHome is now led by Jim Farush, who is also the current CEO of the company. His experience includes working as CEO for Countrywide Bank, which was the banking business that backed former #1 mortgage lender Countrywide Financial. He also helped launch PennyMac, which began as a purchaser of distressed mortgage assets, and later become a full-scale lender. Clearly he’s got a strong mortgage pedigree, so we’ll assume AmeriHome has ambitions to be one of the top mortgage lenders in the country. Now let’s...

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### Just How Popular Has iBuying Become?

- Published: 2020-03-02
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/just-how-popular-has-ibuying-become/
- Categories: Housing Market, Mortgage News

In 2019, one out of every 100 homes were purchased by an iBuyer, short for instant buyer, per a new report from real estate brokerage Redfin. While it doesn’t sound like iBuying is catching on, consider the fact that the number is up nearly double from 0. 6% in 2018. And about 10 times higher than it was back in 2016, when virtually nobody sold their home via an iBuyer service. Also recognize that iBuying at scale is a very novel concept, and a business that big household names have just recently got involved in. Some of the larger names in the space include Offerpad, Opendoor, RedfinNow, and Zillow Offers. Simply put, an iBuyer will purchase your home for a fee somewhat similar to what a real estate agent would charge, only to rehab it and list it weeks or months later to a new buyer. The advantage is you don’t need to find an agent, list it, stage it, hold open houses, and deal with uncertainty from prospective buyers. In essence, you can consider these iBuyers institutional home flippers. If they streamline their operations enough to lower costs, they might grow even more popular and eventually displace thousands of real estate agents. iBuying Most Common in Raleigh While iBuyers still account for a tiny piece of the overall pie, they snagged a whopping 7. 3% share of home sales in Raleigh, North Carolina last year. That was nearly double the 3. 9% share reported in 2018, a testament to...

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### Mortgage APR: Why It's More Important Than Just Looking at the Mortgage Rate

> An in-depth look at the difference between the mortgage interest rate and APR, including the limitations of each.

- Published: 2020-02-27
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/mortgage-rate-vs-apr/
- Categories: Mortgage Matchups, Mortgage Rates

It's time for another mortgage match-up: "Mortgage rate vs. APR. " If you're shopping for real estate or looking to refinance, and you've seen a certain mortgage rate advertised, you may have noticed a second, similar percentage adjacent to or below that interest rate, possibly in smaller, fine print. But why? Well, one is the mortgage rate, which is the interest rate you'll pay every month on your home loan, which dictates what your monthly payments will be. And the other is the Annual Percentage Rate, or APR, which is the interest rate factoring in certain loan costs, such as processing, underwriting, loan origination fees, mortgage points, broker fees, and so on. Third-party loan fees, including title insurance and appraisal fees, which are provided by vendors other than the lender, typically aren't included in this figure. Understanding the difference between these two figures is very important, and they will undoubtedly come up a lot as you compare mortgage loans from different lenders. That's assuming you actually take the time to gather more than just one quote, which you absolutely should if your goal is to save money. Mortgage Rate vs. APR The APR is calculated to determine the cost of the loan It factors in lender fees and other closing costs The interest rate simply dictates how much interest you'll pay monthly, annually, and over the life of the loan And is used to calculate with what your monthly payment will be In short, the APR is a calculation used...

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### LemonBrew Launches Real Estate Agent Match and Rebate

- Published: 2020-02-26
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/lemonbrew-launches-real-estate-agent-match-and-rebate/
- Categories: Mortgage News

A new tech company called LemonBrew has launched its so-called “custom matching platform” to link up home buyers (and sellers) with local, expert real estate agents. The team behind the operation consists of “experienced entrepreneurs and operators” who work in the real estate and mortgage industry. Their goal is to create a frictionless home buying process and improve efficiencies in what is often a daunting and stressful endeavor. Initially rolled out via pilot in local markets across North Carolina and Florida last fall, LemonBrew plans to launch nationwide throughout 2020. It appears they are currently live in 15 states. The platform has a “couple thousand” Partner Agents in its database, but expects that number to climb above 50,000 by the end of the year. How LemonBrew’s Matchmaker Service Works Answer basic questions to get matched up with local real estate agents Questions include property type, budget, number of bedrooms and bathrooms If you already have a home picked out or are still looking, when you want to buy, etc. Then get top 3 matches in your area to choose from It can be difficult to choose a real estate agent. Do you go with someone a friend or family used, someone you saw in an ad, or do you respond to a flyer or freebie you received in the mail? All of those methods are pretty old school, yet still effective for agents for the time being. But are they the best approach for home buyers and home sellers? Possibly...

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### The Next Big Thing in Mortgage Is Keeping in Touch

- Published: 2020-02-25
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/the-next-big-thing-in-mortgage-is-keeping-in-touch/
- Categories: Mortgage News

I wrote a while back that more than half of consumers switched mortgage companies when obtaining a subsequent home loan. The message was pretty clear – there’s not much loyalty in the mortgage business. Ultimately, it’s hard to be loyal if there’s a better deal to be had elsewhere, or if someone else is offering to treat you better. In an effort to combat that, and improve customer retention in the homes loans business, lenders are beginning to take things a lot more seriously. Homebot Engages Past Customers with Real Data For example, last year Guild Mortgage partnered with Homebot to deliver regular, customized home financing digests to its existing customers. Their automated marketing platform allows loan officers to present past customers with relevant data, economic insights, and other market intelligence. Most importantly, it helps them stay connected with homeowners long after the mortgage has funded. As part of that agreement, Guild Mortgage’s 1,100+ loan officers have access to Homebot’s “Lender Base” software to serve its ongoing customer retention initiative. Many other mortgage lenders have also partnered up, including Planet Home Lending, Citywide Home Loans, and Cherry Creek Mortgage. HouseCanary’s ComeHome Wants Your Customers to Come Back In late 2019, HouseCanary launched ComeHome, a proprietary platform used to attract, retain and even convert customers. It creates an ongoing relationship with the homeowner that focuses on what’s probably their largest asset. The ComeHome solution allows lenders to inform homeowners of “opportunities,” such as the ability to refinance, or tap home equity...

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### Mortgage Rates vs. the Coronavirus: We Might Test New All-Time Lows

- Published: 2020-02-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-the-coronavirus/
- Categories: Mortgage Matchups, Mortgage News, Mortgage Rates

Mortgage rates can be pretty volatile. Just like stocks, they can change daily depending on what’s happening in the economy. Beyond that, mortgage rates can move based on news that doesn’t involve a report on the economic calendar, such as a jobs report, GDP, housing starts, inflation, etc. Even if there isn’t a direct financial implication to a news story, mortgage rates can go up or down. Just consider the recent conflict with Iran, which may have pushed mortgage rates down a little lower, even though it was unclear what the outcome would be. It turned out to be a short-lived situation, despite any obvious conclusion or resolution, but that’s just one of many recent examples. How the Coronavirus Could Affect Mortgage Rates Fear of a global economic slowdown has hit financial markets Dow Jones off nearly 1,000 points, Nasdaq down 350 points Investors fleeing market for safety of alternatives like bonds This has pushed the 10-year bond yield down near its all-time low Now we’re dealing with what could be seen as a global pandemic in the spread of Novel Coronavirus (COVID-19). It may or may not have originated in Wuhan, China, but it has rapidly made its way across the globe, with Italy just confirming a fifth death from the virus. The World Health Organization (WHO) hasn’t yet declared the coronavirus outbreak a pandemic, but did say it has “pandemic potential. ” In other words, there’s a lot to fear due to the unknown and the very real...

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### Mortgage Delinquencies Have Fallen to the Lowest Level on Record

- Published: 2020-02-20
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-delinquencies-have-fallen-to-the-lowest-level-on-record/
- Categories: Foreclosure, Mortgage News

What a difference a decade makes, at least when it comes to paying the mortgage on time. A new report from Black Knight revealed that mortgage delinquencies fell more than 5% in January to reach their lowest point since 2000, which appears to be as far back as the data goes. Overall, the U. S. home loan delinquency rate, which counts mortgages 30 or more days past due, but not those in foreclosure, was just 3. 22%. That was down 5. 37% from December and 14. 17% from January 2019. You can thank rising home prices, super low mortgage rates, and an improved economy for that, along with properly underwritten mortgages. Fewer Than Two Million Americans Past Due or in Foreclosure Thanks to the continuing improvement in mortgage payment behavior, there are now less than two million homeowners behind on the mortgage or in foreclosure, the lowest total since March 2005. While that’s also positive news, there was an uptick in foreclosure starts in January, perhaps related to a holiday moratorium the preceding month. Starts rose 8. 35% from December, but were still down 14. 74% from a year earlier. Meanwhile, the number of loans in active foreclosure were mostly flat month-to-month (+1,000 properties in foreclosure), and down a big 19,000 from a year ago. That left the national foreclosure rate unchanged. In total, 1,951,000 properties are either 30 or more days past due or in the process of foreclosure. Mississippi Worst When It Comes to Non-Current Mortgages While we...

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### Quontic Bank Launches No Doc Streamline Mortgage Refinance

- Published: 2020-02-19
- Modified: 2020-02-19
- URL: https://www.thetruthaboutmortgage.com/quontic-bank-launches-no-doc-streamline-mortgage-refinance/
- Categories: Mortgage News, Refinance

Quontic Bank, which bills itself as an “adaptive digital bank,” has launched what they refer to as a “first of its kind” no doc home loan with loan amounts as high as $3 million. The non-Qualified Mortgage (non-QM), which is available nationwide, doesn’t require income or asset verification, similar to the loans offered during the lead up to the mortgage crisis over a decade ago. Quontic Streamline Refinance Highlights No income or asset verification Minimum credit score of 660 Must have clean 24-month mortgage payment history Max LTV of 80% Loan amounts up to $3 million Mortgage rates start at 4. 875% Closing costs may be rolled into loan Can close in less than 30 days All that is required is a 660+ FICO score and a clean 24-month mortgage payment history. The bank doesn’t ask for tax returns, W2s, bank statements, or any other documents typically required to qualify for a home loan. Additionally, a home appraisal may not be required if the loan amount is $400,000 or less. In terms of interest rates, Quontic says they start at 4. 875%. While well above current market rates for a 30-year fixed, they may be much lower than what these homeowners would otherwise qualify for. They note a borrower with a $400,000 loan amount and a 7% mortgage rate could save over $500 per month if refinancing to a rate of 4. 875%. The loan can be closed in less than 30 days thanks to the reduced documentation requirements, and...

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### Quicken Loans’ One Reverse Mortgage to Pause Operations

- Published: 2020-02-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-one-reverse-mortgage-to-pause-operations/
- Categories: Mortgage News

One Reverse Mortgage, a Quicken Loans company, is reportedly pausing operations, according to a statement delivered to Reverse Mortgage Daily. While it’s unclear what the word “pause” means at this time, RMD also noted that the lender doesn’t expect to originate any more reverse mortgages. However, they will continue to process loans already in the pipeline to ensure existing customers aren’t disrupted by the news. Quicken Focused on Rocket Mortgage Brand Per a Quicken Loans company spokesperson who communicated with RMD, the move relates to the company’s goal of focusing on its burgeoning Rocket Mortgage brand. While Rocket Mortgage is a technology developed by Quicken Loans, it has perhaps become bigger than Quicken itself, at least as a household name for consumers. To that end, employees of One Reverse Mortgage will apparently be transitioned to roles within Quicken Loans that focus on forward, conventional home loan lending. The spokesperson noted that they “see demand shifting from the reverse mortgage market” while at the same time the Rocket Mortgage brand “continues to grow. ” The fact that they’re moving employees sounds like it could be the end for One Reverse Mortgage, though that hasn’t been clearly communicated just yet. But the spokesperson did add that the ORM employees would be used to meet the “growing needs of Rocket Mortgage. ” In other words, it sounds like they care more about making Rocket Mortgage bigger than they do originating reverse mortgages, which are a specialty mortgage product for seniors 62 and older....

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### Mortgage Due Dates 101: Is There Really a Grace Period?

- Published: 2020-02-18
- Modified: 2024-10-07
- URL: https://www.thetruthaboutmortgage.com/mortgage-due-dates-101/
- Categories: Mortgage Tips

If you recently took out a mortgage, or have been thinking about purchasing real estate, you may be wondering when your mortgage payments will be due each month, among other things (like how late Ikea is open). Well, mortgage payments are generally due on the first of the month, every month, until the loan reaches maturity, or until you sell the property. So it doesn’t actually matter when your mortgage funds – if you close on the 5th of the month or the 15th, the pesky mortgage is still due on the first. The only difference is when the first mortgage payment is due, which I’ve explained in my when mortgage payments start post. Mortgage Due on the 1st, Late on the 16th? Mortgages are typically due on the first of the month But mortgage lenders generally provide a grace period Of up to 15 days to pay without any fee or penalty Meaning it's only late if paid after the 15th of the month Most people probably know that mortgage payments are due on the 1st of the month, but many loan servicers (those who collect your payments) will allow you to pay 15 days “late” each month. So even though your mortgage payments are technically due on the first each month, you can pay as late as the 15th every month without any kind of penalty. No late fees, no credit report dings, no issues whatsoever. This is known as the “mortgage grace period,” similar to other grace...

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### loanDepot Mortgage Review: Their Digital Process Helps You Close 17 Days Faster

- Published: 2020-02-13
- Modified: 2025-02-12
- URL: https://www.thetruthaboutmortgage.com/loandepot-mortgage-review/
- Categories: Mortgage Tips

One of the largest nonbank mortgage lenders in the country is loanDepot, typically landing on the top-10 list overall year after year. In fact, they’ve even cracked the top five in some years as well, so they’re certainly a big time player in the mortgage world. At one time, they were even the subject of speculation that they’d be acquired by mega retailer Amazon in its effort to enter the mortgage business. And in early 2021, they became the Official Mortgage Provider of Major League Baseball (MLB). So expect to see their name and brand around a lot more this year. Let’s get some history on loanDepot and determine if they’re a good fit for your home loan needs. Table of Contents - loanDepot Fast Facts - How to Apply at loanDepot - mello smartloan technology - What Loan Types Do They Offer? - loanDepot Lifetime Guarantee - loanDepot Mortgage Rates - loanDepot Reviews - loanDepot Pros and Cons - loanDepot vs. Rocket Mortgage loanDepot Launched in 2010 Direct mortgage lender that offers home purchase and refinance loans Founded in 2010, headquartered in Foothill Ranch, CA Offers industry’s first end-to-end digital mortgage Ranked 2nd largest nonbank lender and a top-10 retail mortgage lender Also the 8th largest VA lender in the country Over 200 retail branches nationwide and growing Went public in early 2021 under ticker symbol NYSE:LDI Despite being a very young company, Foothill Ranch, CA-based direct lender loanDepot has funded more than $300 billion in consumer loans since...

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### More Than a Quarter of Millennial Homeowners Want to Go Back to Renting

- Published: 2020-02-13
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/more-than-a-quarter-of-millennial-homeowners-want-to-go-back-to-renting/
- Categories: Housing Market, Mortgage News

I guess homeownership isn’t for everyone, at least if you consider a new study from LendingTree. When respondents were asked if they would “ever go back to renting,” some 28% of Millennials said yes. Even worse, 10% said they’d go back to renting this year, while 14% said they’d ditch the mortgage for rent in the next 2-5 years. Another 4% said they’d be renting within 6-10 years, and the numbers are similarly high relative to other generational cohorts in the 10+ year category as well. Millennials the Least in Love with Homeownership LendingTree uses the following age ranges: Millennials: ages 23-38 Generation X: ages 39-53 Baby boomers: ages 54-73 While the numbers aren’t overwhelmingly high, if you look at other age groups, such as Gen Xers and Baby Boomers, Millennials are clearly the least in love with homeownership. Just over half of Millennials would never consider going back to renting, which sounds pretty good until you consider that 65% of Gen Xers and 68% of Baby Boomers wouldn’t. As to why Millennials are the most likely to kiss homeownership goodbye to rent again, there was no explanation. But if you look at the chart above, there seems to be a correlation with age and satisfaction with homeownership. The older a respondent gets, the less likely they are to go back to renting, which could be a sign of either being more comfortable as a homeowner, or better realizing the positive aspects over time. Because the Great Recession is only...

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### AmeriSave Mortgage Review: Pioneer of the Digital Mortgage?

> An in-depth look at Atlanta, GA-based direct lender AmeriSave Mortgage Corp., which claims to have launched digital origination.

- Published: 2020-02-12
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/amerisave-mortgage-review/
- Categories: Refinance

While perhaps not a major household name yet, there’s a good chance you’ll stumble upon AmeriSave if actively shopping your home loan. They have quite a presence online and are a top-rated mortgage lender with LendingTree, despite a lack of physical branches and national advertising campaigns. In August 2021, the company inked its first partnership with a professional sports organization, the Miami Dolphins. They will receive prominent branding at Hard Rock Stadium, along with marketing spots on radio broadcasts and team content. Let’s get some more background on AmeriSave to see if they could be a good choice for you. Table of Contents - Who Is AmeriSave? - What Does AmeriSave Mortgage Offer? - AmeriSave Rate Match Guarantee - $500 Application Fee - AmeriSave Mortgage Rates - AmeriSave Reviews - AmeriSave Pros and Cons - AmeriSave vs. loanDepot Who Is AmeriSave Mortgage Corp. ?  Direct-to-consumer mortgage lender that offers home purchase and refinance loans Founded in 2002, based in Atlanta, Georgia Has originated over $55 billion in home loans on over 230,000 properties Claims to have pioneered digital loan origination process Licensed in 49 states and D. C. (not available in NY) AmeriSave Mortgage Corp. is a direct-to-consumer mortgage lender lender based in Atlanta, Georgia that has been around since early 2002. They refer to themselves as a fintech company responsible for “pioneering the first truly digital mortgage experience,” a claim Rocket Mortgage might disagree with. Regardless, they are a mortgage lender that lives online, which hopefully means they can...

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### A Fast Mortgage Isn’t Necessarily the Best Mortgage

- Published: 2020-02-11
- Modified: 2020-02-11
- URL: https://www.thetruthaboutmortgage.com/a-fast-mortgage-isnt-necessarily-the-best-mortgage/
- Categories: Mortgage Tips

These days, all the mortgage advertisements I see promote speed. Get your loan fast. Get it with the push of a button. Get approved in minutes, close in a week! Hello Figure and Rocket Mortgage, and basically every other fintech newcomer in the space. But how much does speed actually matter? And is it really beneficial in most cases? Let’s explore. We Are an Impatient Species We’ve become an impatient society. Well, to be honest, we’ve been an impatient society. But perhaps ironically, thanks to new technology designed to make our lives easier, such as the internet and smartphones, we’ve grown less patient. When I fire up the Uber or Lyft app to hail a ride, I get upset if it doesn’t match me up with a driver in seconds. A decade ago, I remember having to call a taxi cab company and deal with their central command, who would tell me someone would be on their way shortly, maybe. Hopefully. Today, I practically lose it if someone isn’t en route within moments of making a ride request. The same goes for just about anything else, whether it’s a food order on Grubhub or Uber Eats, or a package delivery from Amazon. What’s taking so long! A Mortgage Requires Some Thoughtfulness Here’s the thing though – a mortgage isn’t a ride across town, nor is it a burrito. It’s something that sticks with you for a very long time, and has the potential to significantly shape your financial situation. In...

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### HomeLight Cash Close:  Make All-Cash Offers and Trade-In Your Old Home for a New One

- Published: 2020-02-10
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/homelight-cash-close-review/
- Categories: Mortgage News

Real estate agent matchmaker HomeLight has launched two new programs for homeowners in California (and now Texas) that make it easier to buy and sell by leveraging the power of cash. The new initiative, known as “HomeLight's Cash Close program,” includes HomeLight Trade-In and HomeLight Cash Offer. They can be utilized by both first-time home buyers and existing homeowners who may be looking to buy before they sell in a competitive market. The new offerings flank HomeLight’s iBuyer service known as Simple Sale, which generates all-cash offers in 48 hours or less. How the HomeLight Cash Offer Program Works Get pre-approved to determine home purchasing power Tour properties with a real estate agent and make your offer HomeLight will either guarantee you are clear to close or purchase the home on your behalf Cash offers can be 3X more likely to win and 5% cheaper vs. financed offers Just about everyone knows that cash is king, and it’s no different in the real estate game. A home seller is much more likely to go with a cash buyer versus someone who must get approved for a mortgage, given the uncertainty with the latter. With HomeLight Cash Offer, you can make an all-cash offer using funds from HomeLight, then secure your financing after the fact. Here’s how it works. First, their subsidiary HomeLight Home Loans verifies your income and assets to determine your purchasing power, similar to a mortgage pre-approval. Then you tour homes with your agent (or one recommended by...

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### New American Funding Review: A Direct Lender That Isn't Shy About Sharing Its Mortgage Rates

> New American Funding is a direct mortgage lender based in Tustin, CA that refers to itself as the #1 Hispanic mortgage lender in the United States.

- Published: 2020-02-06
- Modified: 2025-03-07
- URL: https://www.thetruthaboutmortgage.com/new-american-funding-review/
- Categories: Mortgage Tips

It’s time for another mortgage review, this time we’ll take a hard look at "New American Funding" to see if they should be included in your home loan search. They call themselves a family-owned business dedicated to helping other families improve their quality of life. That sounds like they have your best intentions in mind, especially when navigating what is arguably one of the biggest life decisions, buying a home. New American also refers to themselves as the "largest Hispanic-owned mortgage company in the United States. " And their mission is to increase lending to underserved communities, including Black and Latino borrowers. Let's find out more about them. New American Funding Fast Facts Retail direct-to-consumer mortgage company with 180 branches nationwide Launched in 2003, headquartered in Tustin, California (Orange County) Started by husband and wife team Rick and Patty Arvielo Originally a 40-employee call center, workforce now close to 5,000 Offers home purchase financing and refinance loans Licensed to do business in all states except Hawaii Funded nearly $10 billion in home loans during 2023 (nearly a top-25 lender nationally) Services more than 200,000 loans worth approximately $54 billion Ranked #1 loan servicer by J. D. Power in the 2022 study New American Funding got started back in 2003, which was around the time the housing market was booming. Just a few short years later, the subprime mortgage crisis hit, and hundreds of lenders didn’t survive. So I suppose that’s a testament to the resolve of New American Funding, which...

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### Point Home Equity Review: Get Payment-Free Cash In Exchange for Future Home Price Appreciation

- Published: 2020-02-04
- Modified: 2024-07-10
- URL: https://www.thetruthaboutmortgage.com/point-home-equity-review/
- Categories: Mortgage Tips

A company called Point wants to give you “early access to your home equity” without ever having to make monthly payments, similar to how a reverse mortgage works. While at first glance it sounds pretty good, you’ve got to dig into the details to see what you’re actually getting. Ultimately, you’re sharing your future home price appreciation with the company in exchange for a piece of the action today. Let’s learn more about how it all works to determine if it might be a better alternative to a traditional home equity loan or HELOC. How Point Works to Tap Home Equity Point makes an investment in your home in exchange for cash today No monthly payments are made during the 30-year loan term You pay back their investment at any time via sale, refinance, etc. Buyback cost includes amount originally received plus portion of your home’s appreciation Instead of taking out a loan to access your home equity, Point “invests” in your property via a Home Equity Investment (HEI) and gives you cash today for some of that sweet, sweet home appreciation tomorrow. Like a traditional first or second mortgage, you need to answer the usual questions like how much you make, what your home is worth, and what your credit scores are. They say you can pre-qualify for Point in less than two minutes, then you’ll be presented with a pre-offer to see how much you can borrow. Funds can be received in as little as 15 days. Their...

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### You Can Refinance a Mortgage with Bad Credit, However…

- Published: 2020-02-04
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/refinance-a-mortgage-with-bad-credit/
- Categories: Mortgage Tips, Refinance

For some reason, folks always want to know if you can do X, Y, and Z with bad credit. Which begs the question, why not improve your credit first! Okay, I get it, time is sometimes of the essence, especially if you have bad credit, so it’s not always an option to get things back on track before seeking out financing. There’s also that pesky thing known as patience, which seems to be lacking in the world today. The good news is it’s entirely possible to secure new credit, including a new mortgage, even if you have what’s known as “bad credit. ” So if you've got your eye on those record low mortgage rates, but aren't sure if you qualify, read on. First Off, What’s Bad Credit? Fannie and Freddie require a credit score of 620 or better to get a home loan VA loans and USDA loans don’t have minimum scores, but most mortgage lenders still require 620+ FHA can go as low as 500 if you have 10% equity in your home Otherwise you need at least a 580 FICO score for max financing While opinions may vary, bad credit is typically defined as a sub-620 FICO score in the eyes of mortgage lenders, though even scores a bit higher might be viewed with some disdain. But ultimately, 620 is the hard line in the sand, and the minimum score accepted by both Fannie Mae and Freddie Mac, which back or buy the majority of home loans...

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### Figure Review: The Fastest Way to Tap Home Equity?

- Published: 2020-01-31
- Modified: 2024-11-21
- URL: https://www.thetruthaboutmortgage.com/figure-review-home-equity/
- Categories: Refinance

I received a letter in the mail the other day from a fintech company called “Figure” that claims it can approve me for a home equity line of credit (HELOC) online in five minutes. Better yet, they can fund the thing in as little as five days, assuming I’m able to use their remote online notary and that five-day period doesn’t include a weekend or holiday. You can thank their 100% digital application for that, along with their proprietary blockchain solution known as “Provenance,” which is also being used by Caliber Home Loans, an unaffiliated lender. It all sounds lightning fast, so let’s learn more about Figure to determine if they could be a good solution for those looking to tap their home equity. Figure Calls It the Fastest HELOC on the Planet One of Figure’s taglines is “Fastest HELOC on the Planet,” which sounds pretty darn quick. We know they promise to get you approved and funded fast, which is great if you need cash ASAP for say, pressing home renovations, but speed isn’t everything. The underlying product also has to provide good value relative to similar offerings in the marketplace. It also has to make sense to take one out in the first place. Most homeowners are aware of home equity products, with the most common and popular probably the home equity line of credit, or HELOC for short. The Figure Home Equity Line is kind of a hybrid of two products, the HELOC and the home equity...

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### Credible Mortgage Review: An Online Mortgage Broker Owned by Fox

- Published: 2020-01-28
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/credible-mortgage-review/
- Categories: Mortgage Tips

There are lots of different ways to get a mortgage these days – you can walk into a physical bank branch, call a mortgage broker, or even start a loan application on your smartphone. While the mortgage broker model isn’t new by any means, a company called "Credible" is shaking things up on that front, promising real-time mortgage rates from multiple mortgage lenders without the “annoying calls or emails. ” They also let you compare rates and close your loan all in one place. Let’s learn why this company is different and if they make sense for your mortgage needs. Credible Launched Back in 2012 Company founded by former investment banker in 2012 Initially focused on student loan refinancing Has since delved into personal loans, credit cards, and mortgages Lets you compare personalized loan offers from multiple lender partners anonymously Acquired by Fox Corp. in late 2019 The company is relatively new, having been founded less than a decade ago in San Francisco. But that didn't stop it from being acquired by none other than Fox Corp. , better known for TV shows like The Simpsons rather than finances. Originally a student loan marketplace, the company has since expanded to personal loans, mortgages, and credit cards. Our focus will be the mortgage piece of the pie, this being a mortgage blog and all. In late 2018, Credible announced a “first-of-its-kind mortgage marketplace” that offers actual rates to consumers in just two or three minutes, all without affecting the applicant’s credit...

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### Don’t Take Out a Mortgage to Buy Super Bowl Tickets

- Published: 2020-01-23
- Modified: 2020-01-23
- URL: https://www.thetruthaboutmortgage.com/dont-take-out-a-mortgage-to-buy-super-bowl-tickets/
- Categories: Mortgage News

I came across a new partnership between ticket marketplace Stubhub and fintech company Affirm that lets you pay for purchases over time. They launched the new payment option “just in time for the Super Bowl,” per a company press release regarding the announcement. Affirm already works with brands you probably recognize, such as that ubiquitous mattress company Casper, iRobot, and that other company with the really well-liked commercials, what’s their name again, oh yeah, Peloton. Anyway, the idea is that you can get the things “you love” now and worry about paying them off later. Sweet. Everyone knows Super Bowl tickets are notoriously expensive, and so the partnership made perfect sense, especially since their survey found that cost was the leading reason why most people didn’t attend. How Affirm Works In short, you select Affirm instead of say a credit card or PayPal at checkout, then answer “five simple pieces of information” to see if you qualify for financing. That includes your name, mobile number, email address, date of birth, and the last four digits of their social. From there, your credit will be run and they’ll let you know if you’re approved to go to the Super Bowl... They say your credit score won’t be affected when checking eligibility, despite the credit check. But if you actually buy with Affirm, your loan and corresponding payments may affect your credit score. Obviously, you’ll have a new account on your credit report, new debt, payment history, etc. With regard to the...

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### Third Federal Mortgage Review: Is Their Smart Rate Right for You?

> Take a closer look at their Smart Rate ARMs and Low Cost mortgages that require just $295 out-of-pocket at closing.

- Published: 2020-01-23
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/third-federal-mortgage-review/
- Categories: Mortgage Tips

If you’re like me, you’ve received lots of mailers from a bank called “Third Federal Savings & Loan,” promising a low rate mortgage with very few fees. After maybe the 10th piece of mail from them came through my mailbox, I decided it was finally time to write a review. So here we go. Third Federal Has Been Around Since 1938 Began during Great Depression in Cleveland, Ohio Initially served immigrants from Poland and other Eastern European countries Now operates in 25 states and DC, with branches in Florida and Ohio They are a direct mortgage lender that offers purchase loans, refinances, and home equity products First off, let’s talk a little history. Third Federal isn’t a newcomer like Better Mortgage or Rocket Mortgage. They’ve been around since 1938, which if you’re counting, is nearly a century. That gives them some credibility, and if you ask, they’ll tell you that staying power can be attributed to conservative lending. In other words, avoiding fads and questionable product choices like subprime or Alt-A in exchange for lasting relationships and more stability. The company was started by Ben S. and Gerome Stefanski in Cleveland, Ohio during the Great Depression, using $50,000 in capital provided by members of the Slavic Village neighborhood. It began by serving struggling immigrant families from Poland and other Eastern Europe nations who had settled in the area. Over time, the business grew and thrived, and today they do business in 25 states, and run a branch network in the...

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### Are Home Prices Going to Surge in 2020?

- Published: 2020-01-22
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/are-home-prices-going-to-surge-in-2020/
- Categories: Housing Market, Mortgage News

It’s a new year, and with that comes old questions, like will mortgage rates go up or down in 2020? And will home prices rise or fall? Well, a few months ago, you would have probably thought the answer to the home price question was a no-brainer. After so many years of seemingly unsustainable appreciation, there’d just be no way home prices could eek out more gains, let along big ones. But that logic has just been turned on its head thanks to a new report from Zillow, which claims we’re running out of homes again. For-Sale Inventory Hits Lowest Point Since 2013 Uptick in housing inventory appears to have been short-lived Lowest number of for-sale homes on the market since at least 2013 Supply is only expected to worsen from here with little home building and lots of demand Could be the recipe for even higher home prices in 2020 This isn’t the first time we’ve run out of homes, but after an uptick in inventory over the past couple years, it appeared things were turning around. However, that “inventory bump a year ago proved to be short-lived,” per Zillow, as we now have the lowest number of for-sale homes in at least seven years. Yes, inventory is basically back to levels not seen since 2013, and if you recall, home prices were bottoming just before and around that time. To make matters worse, supply is supposed to get even tighter before we see any relief. While this is...

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### Quicken Loans Review: Should You Get Your Home Loan from the Top Mortgage Lender in the Country?

- Published: 2020-01-15
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-review/
- Categories: Mortgage Tips

If you’re looking to buy a home, or refinance an existing home loan you already have, you will undoubtedly come across Quicken Loans during your search. They are at times the largest mortgage lender in the United States (when only counting retail loan originations), recently overtaking San Francisco, CA-based bank Wells Fargo thanks to the success of their Rocket Mortgage technology. Wells Fargo has since taken back their crown, but the two will yo-yo in the rankings between #1 and #2 unless Quicken really breaks out and leaves them behind. Let’s learn more about Quicken Loans to determine if they’re a good choice for your mortgage needs. How Quicken Loans Got Started: A Little History Company was founded in 1985 by Dan Gilbert, originally called Rock Financial Later went public and sold to Intuit in 1999 and renamed Quicken Loans Bought back by Gilbert and investors in 2002 and taken private Has closed over half a trillion dollars in mortgages since 2013 Back in 1985, Dan Gilbert started Rock Financial, which would later be known as Quicken Loans. Just three years later, he took the company public with the help of Bear Stearns and Prudential Securities. Initially, the lender was branch-based like a depository bank, but Gilbert quickly embraced technology with the launch of online lender Rockloans. com in January 1999 (that website still exists but offers personal loans). At the end of 1999, Intuit Inc. , the company behind TurboTax and QuickBooks, acquired Rock Financial and renamed it Quicken...

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### There Is No Mortgage Trick

- Published: 2020-01-14
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/there-is-no-mortgage-trick/
- Categories: Mortgage Tips, Refinance

Over the years, I’ve seen tons of ads and articles about a so-called “mortgage trick,” only to click on the associated hyperlink and see nothing regarding any tricks. Talk about disappointing. For the record, I’m always interested to see what someone might have up their sleeve, which is why I continue to click year after year, hoping there really will be a trick one of these days. Instead, I repeat the same mistake over and over again, expecting a different result, which some liken to insanity. I’m okay with that, I’ll swallow my pride. You may have seen these same ads or articles claiming to save you thousands or more on your mortgage by “using this one trick,” only to be left disappointed or scratching your head. Did I miss something? In fact, I got suckered into another one this morning, which revealed absolutely nothing new. Quelle surprise. When it comes down to it, there’s no mortgage trick. A trick is defined as "a cunning or skillful act or scheme intended to deceive or outwit someone," per Google. Or one that mystifies the audience – think the quintessential magician pulling the rabbit out of the hat, or making a dove appear out of nowhere. Do you really think mortgages are like magic, or anywhere close to it? And are they entertaining or even the least bit interesting? Not really, even though I try to make them slightly more appealing on this blog. Whether I'm actually accomplishing is another question. A...

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### LendingTree Review: Compare Multiple Mortgage Offers Without Leaving Your House

- Published: 2020-01-13
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/lendingtree-review/
- Categories: Mortgage Tips

If you’ve been even remotely interested in taking out a home loan, you’ve undoubtedly heard of LendingTree, which bills itself as the leading online loan marketplace. Ultimately, they are a lead generator and mortgage broker that is licensed in all 50 states that matches up borrowers with lenders, similar to a company called Credible. Aside from home loans, they also help customers compare credit cards, auto loans, debt consolidation services, personal loans, student loans, insurance providers, and more. Let’s learn more about the company and why you might want to enlist them in your home loan search. Table of Contents - How LendingTree Got Started - What Does LendingTree Do? - How LendingTree Works - How Are LendingTree’s Mortgage Rates? - Should I Use LendingTree to Get a Mortgage? - LendingTree vs Rocket Mortgage How LendingTree Got Started Company began in 1996 after founder had trouble getting a mortgage Goal was to make it easier for consumers to compare loan rates/options without having to call individual lenders LendingTree model ensures customers actually comparison shop via multiple rate quotes Research shows more quotes equal more savings First things first, a little history on the company, which was founded back in 1996 by Doug Lebda and headquartered in Charlotte, North Carolina. Like many other prospective home buyers, Lebda grew frustrated with what turned out to be a time-consuming and arduous process while searching for financing on his first condo, valued at just $55,000. He wanted to ensure he took out the best...

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### Rocket Mortgage Becomes Official NFL Sponsor, Launches Super Bowl Squares Game

- Published: 2020-01-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/rocket-mortgage-becomes-official-nfl-sponsor-launches-super-bowl-squares-game/
- Categories: Mortgage News

If you’re into football squares, there’s a new game available via Rocket Mortgage by Quicken Loans related to them becoming an “official mortgage sponsor” of the NFL. The Rocket Mortgage Super Bowl Squares Sweepstakes, which the Detroit-based lender is calling “the largest official game of Super Bowl squares in history,” is free to enter. Simply cruise over to RocketMortgageSquares. com before 11:59 p. m. EST on Thursday, January 30, 2020 to register, then select one of 100 spaces on a 10-by-10 grid. If you don't want them to bother you, simply uncheck the many options that allow them to contact/solicit you. From there, hope your square gets picked, and also hope you’re randomly selected from what will probably be a large pool of entrants on the same square. How the Super Bowl Squares Game Works As noted, you get to pick one of 100 squares on a 10-by-10 grid. One axis (0-9) represents the last digit of the NFC team’s score, and the opposing axis (0-9) represents the last digit of the AFC team’s score. For example, if the game is 7-3 at any point, and your square shares those two digits from the corresponding teams, you’d be eligible to win a prize. And the prize is pretty significant - $50,000 per square. However, your square will likely be occupied by many more entrants, so it’s not a win unless you get picked from that pool of potential winners. The upside is this version of the game will award up...

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### Mortgage Rates vs. a Potential War with Iran

- Published: 2020-01-06
- Modified: 2020-02-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-a-potential-war-with-iran/
- Categories: Mortgage Matchups, Mortgage News, Mortgage Rates

Well, it’s a new year and it certainly didn’t begin quietly. Might as well address the elephant in the room when it comes to your mortgage. This isn’t the first time I’ve discussed the possibility of war and its impact on mortgage rates, with the last discussion centered on the Syrian conflict back in 2013. At that time, the 30-year fixed mortgage was roughly 4. 50% on average. As the drama unfolded, rates fell about 30 basis points in a matter of months before climbing back to where they started. That’s the most recent example, though it might not be the best indicator of things to come because the adversaries are different, as is the scenario. How an Iranian Conflict Would Affect Mortgage Rates First off, we aren’t at war with Iran, at least not formally. Some argue that we’ve been at war with Iran for decades, via a cold war involving its proxies. Secondly, that may not change as a result of the strike that took out their leading general, Qasem Soleimani. While the rhetoric has certainly ratcheted up in recent days, nothing has materialized yet other than more threats. There is a good chance Iran will take retaliatory action, but what action it takes will likely be the driving force behind any changes to mortgage rates. Simply put, fear leads to lower interest rates as investors flee the stock market, which is traditionally riskier, to the bond market, which is known as a safe haven in times of...

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### 2020 Real Estate and Mortgage Predictions

- Published: 2019-12-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2020-real-estate-and-mortgage-predictions/
- Categories: Housing Market, Mortgage News

Well, 2019 is set to come to a close. It's certainly been an interesting year (and decade), surely one to remember. But now it's time to look forward to what 2020 might bring with regard to the housing market, mortgages, and so on. Let's dive in. You can see my 2019 predictions here. 1. Mortgage rates will go down As always, we tackle mortgage rates first. The forecasts have been wrong year after year lately, with most pundits calling for an end to the ultra-low rate era. But over time, it has become apparent that this is simply the new normal for rates. They probably aren’t going back to 5-6% anytime soon. Instead, expect 30-year fixed rates closer to 4%, as they have been for years now. In 2020, we might even see new all-time lows if the election, Brexit, or other geopolitical events really shake things up. If you’re a home buyer or a refinancer, 2020 will be yet another favorable year in the financing department. 2. Home prices will go up (limited inventory, but not a seller’s market) Now let’s talk home prices, which don’t have a clear correlation with mortgage rates. No, one doesn’t go up while the other goes down, despite many assuming that. While we’ve already seen the really stellar years of appreciation since bottoming nearly a decade ago, the end of home price appreciation isn’t quite here yet. In fact, 2020 should be another solid year in terms of home price growth, likely mirroring...

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### 2020 Mortgage Rate Predictions: Expect Flat to Better

- Published: 2019-12-12
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2020-mortgage-rate-predictions/
- Categories: Mortgage News, Mortgage Rates

As 2019 wraps up, it’s time once again to consider what the future holds for mortgage rates. Looking back over the past 12 months, it was another great year for anyone looking to buy a home or refinance, at least with regard to interest rates. Sure, home prices aren’t on sale anymore, nor have they been for a long time, but financing remains dirt cheap, which is a big help for anyone struggling with affordability. While most pundits expected rates to rise throughout 2019 (I said mostly flat, but was still wrong), they once again defied expectations and sank back near all-time lows. Now let’s take a look at the freshest 2020 mortgage rate predictions from some industry heavyweights. MBA 2020 Mortgage Rate Forecast As always, we’ll start with the Mortgage Bankers Association first. Last year, they expected the 30-year fixed mortgage to hit 5% by the third quarter. Instead, it fell to around 3. 5% at that time, which was way off the mark. But they weren’t the only ones to get it wrong. Most predictions proved to be incorrect, just like in prior years. That being said, this is what their 2020 forecast looks like on a quarterly basis: First quarter 2020: 3. 7% Second quarter 2020: 3. 7% Third quarter 2020: 3. 7% 
Fourth quarter 2020: 3. 7% This year they’re playing it a lot safer and just going with a 3. 7% average for the 30-year fixed all year long. Yep, all year long. Great news...

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### 2020 FHA Loan Limits Rise Five Percent from a Year Earlier

- Published: 2019-12-05
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2020-fha-loan-limits-rise-five-percent-from-a-year-earlier/
- Categories: Mortgage News

Another year, another increase in FHA loan limits, thanks to yet another rise in home prices. This is good news if you’re thinking about taking out an FHA loan, as you’ll likely be able to borrow a little bit more without going over the maximum loan amount allowed. Like Fannie Mae and Freddie Mac, the FHA has a maximum loan amount, which varies based on whether the property resides in a low-cost or high-cost area of the country. Where home prices are generally cheaper, the “floor” is imposed. And in areas where home prices are more expensive, loan limits between the floor and “ceiling” are put in place. This is all driven by median home prices, which change from year to year. These loan limits are key to determine if you’re eligible for an FHA loan, or if you’ll need to seek conventional loan financing instead. If the home you have your eye on is particularly expensive, you might not be able to get an FHA loan, depending on loan limits in your city. This is because the FHA floor is significantly lower than the conforming loan limit, just 65 percent of the new higher max loan amount of $510,400 for a one-unit property. You Can Now Take Out an FHA Loan for $331,760 One-unit property: $331,760 Two-unit property: $424,800 Three-unit property: $513,450 Four-unit property: $638,100 Effective for case numbers assigned on or after January 1, 2020, you’ll be able to take out an FHA loan as large as $331,760....

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### 2020 Loan Limits Rise Above $500,000 for Conforming Mortgages

- Published: 2019-12-03
- Modified: 2019-12-05
- URL: https://www.thetruthaboutmortgage.com/2020-loan-limits-rise-above-500000-for-conforming-mortgages/
- Categories: Mortgage News

It’s that special time of the year again when the Federal Housing Finance Agency (FHFA) adjusts the conforming loan limit for the upcoming year. As expected, the loan limit is going up again thanks to another year-over-year increase in home prices nationwide. Per the FHFA's seasonally adjusted, expanded-data home price index (HPI), residential property values increased 5. 38% between the third quarters of 2018 and 2019. As a result, the baseline maximum conforming loan limit for 2020 will increase by that very same percentage. 2020 Conforming Loan Limit Will Be $510,400 $510,400 for a one-unit property $653,550 for a two-unit property $789,950 for a three-unit property $981,700 for a four-unit property Beginning in 2020, the maximum loan amount for a one-unit property backed by Fannie Mae or Freddie Mac will be $510,400, a $26,050 increase from the current $484,350 limit. Similarly, loan limits will rise on duplexes, triplexes, and fourplexes. That should help a greater number of homeowners qualify for a conforming mortgage, which are generally more readily available and potentially easier to get approved for. Additionally, some lenders offer lower interest rates on conforming loans versus jumbo loans, another plus for those looking to refinance their mortgage or take out a new purchase home loan. It means a home buyer with a 20% down payment can purchase a $638,000 property and avoid the jumbo loan realm. If you’ve only got 3% down, which is one of the pros to a conforming loan, you’ll still be able to purchase a...

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### Offerpad: Sell Your Home in 10 Days Without Even Listing It

- Published: 2019-11-12
- Modified: 2021-10-19
- URL: https://www.thetruthaboutmortgage.com/offerpad-review/
- Categories: Housing Market, Mortgage News

If you’re thinking about selling your home, you may have come across a company by the name of Offerpad. They are one of the original iBuyers, or instant buyers of homes, currently operating in a dozen metros nationwide. In short, they allow homeowners to unload their properties quickly and easily without the need for a real estate agent. But like all other iBuyers, such as Opendoor, RedfinNow, or Zillow Offers, there is a cost to the convenience. Let’s learn more about this company, founded in 2015 by real estate agent Brian Bair and operating out of Gilbert, Arizona. What Is Offerpad? An instant home buying service based out of Gilbert, Arizona They'll provide you with a free, no-obligation offer to buy your property in as little as 24 hours Launched in 2015 by so-called super agent Brian Bair The company also sells home directly in the cities where it buys them Went public in September 2021 under ticket symbol "OPAD" on the NYSE Offerpad’s mission is simple: provide the best way to buy and sell a home. After Bair and his team bought, sold, and renovated some 100,000 properties nationwide, they came to the realization that it’s stressful to sell a home. And they knew there was a “better way. ” That led to the creation of the Offerpad platform, which offers an instant buyer service to homeowners. This allows home sellers to forgo the real estate agent search, the open houses, the home staging, and most importantly, the uncertainty....

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### Apple Pledges $1 Billion in Mortgage Assistance to First-Time Home Buyers in California

- Published: 2019-11-05
- Modified: 2023-07-25
- URL: https://www.thetruthaboutmortgage.com/apple-pledges-1-billion-in-mortgage-assistance-to-first-time-home-buyers-in-california/
- Categories: Mortgage News

You know them for your computer, your phone, your TV streaming device, your TV programs (soon), maybe your credit card, and now possibly your mortgage too. No, it’s not quite the launch of Apple Mortgage some may have hoped for, but the computing giant is getting involved in the mortgage business, along with the real estate industry. Like everyone else, Apple understands there’s a “housing availability and affordability crisis in California,” and instead of sitting on their hands, they’re taking action. As part of a partnership with California Governor Gavin Newsom, the state of California, and various community-based organizations, Apple will provide $2. 5 billion to fund new projects in Silicon Valley and the Bay Area, along with statewide housing support. Apple Wants to Fix Housing in the Bay Area with $2. 5 Billion Dollars Funds will be used to build more affordable housing in Northern California Apple will also part with land it owns in San Jose worth $300 million Company realizes current situation is unsustainable Can't have a city that consists only of highly-paid tech workers The tech company cites the fact that nearly 30,000 folks left San Francisco in the second quarter of 2019 alone, and notes homeownership in the Bay Area is at a seven-year low. Apple believes it is their “civic responsibility” to ensure the Bay remains a place where individuals can live, start a family, and contribute to the community. As such, some $2. 5 billion is being ponied up to ease the burden...

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### Divvy Homes Review: Rent Now, Buy Later

- Published: 2019-11-04
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/divvy-homes-review/
- Categories: Mortgage News

Yet another disruptor, known as Divvy Homes, is out to change the rent-to-own space so more renters can become homeowners. Divvy says it’s like a lease, but unlike a typical lease, it’s designed to help you inch your way to homeownership with every lease payment you make. That way you’re not “throwing away money on rent,” the common argument people make against renting. While it’s not that cut and dry, as renting actually has lots of advantages over homeownership, this setup might work for someone not quite ready to own. How Divvy Works Divvy is a new rent-to-own company Currently available in select markets nationwide Allows you to buy a home with just 2% down payment Without having to qualify for a mortgage At the moment, Divvy is available in the metros of Atlanta, Cleveland, Dallas, and Memphis, St. Louis, and Tampa. Here’s how it works. First, you select a home that's available for sale on the market, just as you would if you were purchasing it. But instead of buying it yourself, Divvy purchases it on your behalf. They do require that you put down 2% of the purchase price at closing, with the company covering the rest. The rest includes closing costs typically associated with a mortgage, along with the remaining 98% of the purchase price. Interestingly, you are required to take a quiz as part of the closing process, and attend a webinar to ensure you understand what you’re getting into. The property must also pass inspection,...

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### Are Closing Costs Included In a Mortgage?

- Published: 2019-10-31
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/are-closing-costs-included-in-mortgage/
- Categories: Mortgage Tips

Mortgage Q&A: “Are closing costs included in a mortgage? ” There seems to be a great deal of confusion when it comes to closing costs and mortgages, so let's clear the air and make sense of it all. Simply put, home loans come with closing costs, similar to how most products and services come with associated fees. No one works for free, even if it doesn't hit your pocket directly. The interest alone isn't enough for lenders to originate mortgages, and a lot of hands are involved, so every party must get paid to participate. There's no way around that, but how you pay is certainly up to you. Typical Closing Costs with a Mortgage Lender fees such as admin/underwriting/processing and origination charges Third-party costs like home appraisal, home inspection, and notary fee Title and escrow fees Prepaid items (property taxes, homeowners insurance, HOA dues, etc. ) Closing costs include things like the loan origination fee, mortgage points, credit report fee, home inspection fee, appraisal fee, loan processing fee, application fee, title insurance and escrow fees, and so on. There's also the potential for recording fees, courier fees, wire fees, subescrow fees, endorsements, and more. So it's clear there are a lot of fees, and based on the number of said fees, the price tag can certainly add up pretty quickly. This is why it doesn't make sense to serially refinance your mortgage, just like it doesn't make sense to buy and sell a home over and over and pay...

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### RealSure Review: Guaranteed Cash Offer While Your Home Is Listed

- Published: 2019-10-24
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/realsure-review-guaranteed-cash-offer/
- Categories: Mortgage News

There’s no question real estate is in full disruption mode, with endless companies vying to turn the age-old model of buying and selling homes on its head. Each week, a new company or initiative is launched to change the game, so many that it’s hard to keep up with them all. Take Curbio, Blend, BoardRE, Reali, ZeroDown, the list goes on and on. One of the more recent innovations in the space comes from Realogy, which operates a variety of major real estate brokerages, including Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, and Sotheby's International Realty. RealSure Sell: A Cash Offer and a Traditional Home Listing in One Realogy, along with Home Partners of America, has launched two new products, which can be used in conjunction with one another to remove some of the obstacles involved with buying and selling real estate. The first is known as “RealSure Sell,” and is a guaranteed cash offer combined with a standard for-sale listing by a traditional real estate agent. Think of it as a plain old listing with an iBuyer option attached. When you list with a Realogy-affiliated agent, you receive a “compelling cash offer immediately upon listing. ” This offer is valid for a full 45 days while your home is listed on the market. It works kind of like a contingency plan, assuming your home doesn’t sell as planned. The company said it designed RealSure to solve two concerns consumers deal with when selling their home –...

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### Compass Launches Bridge Loan Services to Close Gap Between Selling and Buying a Home

- Published: 2019-10-23
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/compass-bridge-loan-services-review/
- Categories: Housing Market, Mortgage News

Real estate brokerage Compass has launched a unique new offering known as “Compass Bridge Loan Services” that solves the buy before you sell conundrum. Many existing homeowners buy replacement properties when selling their current ones, but it can be tricky to time a sale and purchase concurrently. Aside from mortgage lending issues, like coming up with a down payment and balancing two monthly mortgage payments, there’s also the other buyer/seller to worry about. This can be especially challenging in a hot market where all-cash offers are the norm, or if competition makes things like contingencies hard to draw into the contract. To alleviate these pressures, Compass has joined forced with two large mortgage lenders, Freedom Mortgage and Better, to help their home sellers get a bridge loan. How Compass Bridge Loan Services Works Sign listing agreement with a Compass real estate agent Apply for a bridge loan with any bank, including their preferred lenders Use funds to purchase replacement property and move in when you want Sell old property and use proceeds to pay off the bridge loan First, the home seller signs an exclusive contract with a Compass real estate agent to sell their existing home. Next, they apply for a bridge loan with the bank of their choice, including Compass’ vetted lenders Freedom Mortgage and Better. Those two lenders can apparently get the job done fast, as time is often of the essence in situations like these. For the record, Better isn’t available to customers in MA, NH,...

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### Should I Use an iBuyer to Sell My Home?

- Published: 2019-10-17
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/what-is-an-ibuyer/
- Categories: Housing Market, Mortgage Tips

If you’re thinking about selling your home, you’ve got a lot of options. It’s not 2012 anymore, when you simply enlisted the services of a real estate agent and went on about your day. Or bravely went down the for-sale-by-owner (FSBO) path, a much less common scenario. Today, there are many more ways to unload a property thanks to the disruptors. What Is an iBuyer? It stands for instant buyer, a company that buys your home and then sells it shortly after iBuyers offer all-cash in as little as 24 hours Can choose your own close date and sell property as-is Downside is offer will likely be below traditional market offers and fees and repair costs still apply By now, you’ve probably heard the phrase “iBuyer. ” The term iBuyer is short for “instant buyer. ” These companies buy homes almost immediately, with all-cash offers generated in as little as 24 hours, and then sell them not long after. While the valuation methods might differ from company to company, the name of the game is speed. With some companies, you simply enter your address into an online form and provide details about your home and the computers do the rest. They instantly run comparable sales and factor in any improvements your home has to generate a so-called competitive market offer. Assuming you like their offer, they’ll come by your home and verify the home is in the condition described, and adjust their offer to account for any necessary repairs. Others...

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### If You Took Out a VA Loan in the Past 20 Years, Look Out for a Possible Refund

- Published: 2019-10-10
- Modified: 2019-10-10
- URL: https://www.thetruthaboutmortgage.com/va-loan-funding-fee-refund/
- Categories: Mortgage News

Over the past few years, VA loans have been at the center of controversies related to loan churning and high prepayment speeds. In short, some veterans were refinancing their home loans at a very aggressive pace, whether beneficial to them or not. It was happening so frequently that Ginnie Mae, which guarantees the underlying mortgage-backed securities, got involved. This led to a number of important policy changes, including a requirement that the borrower make at least six consecutive monthly payments on the loan being refinanced. And required the first payment due date on the refinance loan to occur no earlier than 210 days after the first payment due date of the original loan. This seasoning requirement first applied to streamline refinances, and was later extended to cash out refinances. Several large VA lenders faced pooling restrictions thanks to their elevated prepayment speeds, which limited how they could unload their mortgages. $400 Million in VA Funding Fee Refunds Available Now it turns out more than 100,000 veterans are due a refund related to the VA funding fee found on most VA loans. This week, the U. S. Department of Veterans Affairs (VA) announced the completion of an “aggressive initiative” to process funding fee refunds to veteran homeowners. The result of the multi-year investigation, which included VA-backed home loans spanning nearly two decades, will result in refunds in excess of $400 million. The VA’s Loan Guaranty Service (LGY) program identified some 130,000 loans that were potentially due a refund, then VA staff...

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### Curbio Review: Renovate Today, Pay When You Sell

- Published: 2019-10-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/curbio-review/
- Categories: Housing Market, Mortgage Tips

A startup named Curbio wants to help homeowners sell for more by improving their properties before they go to market. The twist is that the homeowner doesn’t have to pay for the renovations until settlement, meaning cash on hand isn’t an issue. The Problem Curbio Wants to Solve Say you want to sell your home, which you’ve lived in for the past 30 years. You think it looks great, but after a real estate agent stops by and chimes in, you get a rude awakening. Apparently, the abundant doilies, giant draped windows, pink garage door, and outdated bathrooms and kitchen aren’t as fashionable as you thought. You’re told the home you expected to list for $650,000 is better off being listed for $549,000. Ouch. So do you chance it and defy the real estate agent’s best intentions and list for more, only for the property to stagnate on the market? Or do you do as they say, lower the price, and then hope it sells, despite the many improvements needed? Both scenarios probably don’t sound very appealing to the seller, and even if a buyer comes along, there’s a good chance there will be repair requests to get across the finish line. This situation is all too common, and perhaps one of the reasons why iBuyers like RedfinNow and Zillow Offers have surged in popularity over the past few years. The sell “as-is” thing worked when the housing market was on the up and up, but now that price gains...

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### 2012 Was a Really Good Year to Buy a Home

- Published: 2019-09-26
- Modified: 2021-08-20
- URL: https://www.thetruthaboutmortgage.com/2012-was-a-really-good-year-to-buy-a-home/
- Categories: Housing Market, Mortgage News

A new report from Redfin revealed 2012 was an absolutely fantastic time to purchase a home. Collectively, that crop of home buyers earned $203 billion in equity since their well-timed purchases, with the median homeowner having gained 261%, or $141,000. The average home sold in 2012 has increased by a whopping $110,000, from a median sale price of $210,000 to an estimated value of $320,000 today. And these lucky buyers typically started off with just $54,000 in home equity that ballooned into $195,000. Biggest Home Equity Gainers by City In terms of most home equity gained, it was San Francisco leading the way with $741,000 median dollars, followed by San Jose ($669,000) and Oakland ($461,000). Rounding out the top five were Seattle ($364,000) and Los Angeles ($318,000). Home equity has grown a staggering $15 billion in the Los Angeles metro alone thanks to rising home prices since the fairly recent housing bottom. They’ve also gone up more than $8 billion in Seattle and $7. 9 billion in Oakland. On a percentage basis, Tacoma, Washington (1453%) and Virginia Beach, VA (1333%) led the way, thanks in part to their proximity to major U. S. military bases. Median home equity growth in Tacoma is $218,000 through September, and $80,000 in Virginia Beach. This means sellers might be able to pocket six figures when unloading their properties, despite owning them little more than half a decade. The numbers are based on about 1. 4 million home sales across 138 housing markets nationwide during...

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### The Number One Reason Mortgages Were Denied in 2018

- Published: 2019-09-26
- Modified: 2019-09-26
- URL: https://www.thetruthaboutmortgage.com/the-number-one-reason-mortgages-were-denied-in-2018/
- Categories: Mortgage News

Hint: It wasn’t because of a low credit score. Some say a mortgage (homeownership) is a privilege, not a right. In other words, you have to display some financial responsibility in order to obtain one. After all, a bank is willing to let you borrow several hundred thousand dollars or more for three decades, so they can’t just be given out willy nilly. Fortunately, we returned to underwriting loans after the latest mortgage crisis, so the quality of loans is once again passable. Unfortunately, this means some borrowers are being left out in the cold when it comes to getting approved. But that doesn’t mean these folks have nowhere to turn – in most cases, it’s just matter of taking some steps to correct the issue. Home Improvement Loans Denied the Most In 2018, an astonishing 2. 65 million home loans were denied, which equated to an equally shocking 24. 7% denial rate, per CoreLogic, which recently parsed last year’s HMDA data. As you can see, home improvement loans were most likely to  be denied, with nearly half failing to cross the finish line in 2018. Both rate and term refis and cash out refis also exhibited high denial rates, at 28. 1% and 29. 8%, respectively. Meanwhile, home purchase loans were denied 14. 6% of the time, which can be pretty devastating for someone missing out on their dream home. DTI Is the Main Roadblock, Not Credit Scores or Down Payment Interestingly, credit scores and down payments were not...

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### Blend Launches One Tap Pre-Approvals for Mortgages

- Published: 2019-09-25
- Modified: 2019-09-25
- URL: https://www.thetruthaboutmortgage.com/blend-launches-one-tap-pre-approvals-for-mortgages/
- Categories: Mortgage News

The thing about mortgages is they continue to be difficult to obtain relative to just about everything else out there. Today, it’s easy to buy anything with the literal click of a button, whether it’s a new pair of shoes, groceries, a plane ticket, or a new car. You can pretty much do it instantaneously without leaving your couch. When it comes to home loans, it’s still a process that tends to take weeks or more than a month, despite being a fairly straightforward transaction. Even home buying and selling is becoming simple, with iBuyers like Zillow beginning to dominate the landscape and cut out real estate agents in the process. It’s just the pesky mortgage that slows it all down. Why Mortgages Take Forever Mortgages tend to take 4-6 weeks from start to finish There are many entities involved that slow down the process Such as processors, underwriters, appraisers, title/escrow companies, etc. The manual review of documents is also very time consuming, and can be exacerbated based on lender capacity One of the main roadblocks to instant mortgage approvals is the many entities involved, on several different levels. We’re talking borrowers, lenders, appraisers, employers, loan officers, loan processors, underwriters, funders, title and escrow companies, insurance companies, notaries, and so on. A borrower seeking a mortgage has to provide a ton of paperwork, from a credit report to paystubs and tax returns to bank statements, disclosures, and more. Unfortunately, these documents come from a variety of sources, and once collected,...

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### 20-Year vs. 30-Year Mortgages: Is It Possible to Get an Even Lower Rate?

- Published: 2019-09-19
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/20-year-vs-30-year-mortgages/
- Categories: Mortgage Matchups, Mortgage Tips

It’s time for a new mortgage match-up. Since paying down the mortgage early seems to be so en vogue these days, it makes sense to compare “20-year mortgages vs. 30-year mortgages. ” The most common type of mortgage is the 30-year fixed. It amortizes over 30-years and the mortgage rate never changes during that time. Each mortgage payment is the same every month, so there isn’t any fear of interest rates resetting higher and pushing a homeowner toward foreclosure. It's also very affordable relative to other loan programs because of the ultra-long amortization period. Pretty straightforward, right? For this reason, it holds a near-90% share of the home purchase market, and accounts for over three-quarters of all home loans, including refinances. It is the gold standard. This simplicity and safety explains its popularity, but that doesn’t mean it’s the perfect home loan. After all, they take a full three decades to pay off, and with first-time home buyers sometimes entering the market between the ages of 30 and 40, one could easily carry their mortgage into retirement. Fortunately, there are other options with different loan terms to consider. How a 20-Year Fixed Mortgage Works Just like the more common and popular 30-year fixed mortgage The interest rate never changes during the entire loan term But the 20-year mortgage term is a full decade shorter This results in less interest paid in exchange for a higher monthly payment The 20-year fixed mortgage is a pretty simple loan program, just like it's...

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### Borrowers with Low Credit Scores Should Shop Their Mortgage More

- Published: 2019-09-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/borrowers-with-low-credit-scores-should-shop-their-mortgage-more/
- Categories: Mortgage Rates, Mortgage Tips

Most people don’t bother shopping around for their mortgage, despite the tremendous potential savings involved. In fact, nearly half of consumers only bother obtaining a single mortgage rate quote. It’s understandable since it’s certainly not any fun calling a bank to inquire about a mortgage refinance or to set up home purchase financing. So expecting someone to call two or even three banks sounds completely intolerable. But the studies are out there – and they prove you can save some real money if you do take the time to contact more than one mortgage lender. While that’s totally your prerogative, it turns out some borrowers should put even more time into the process. Got a Low Credit Score? You Better Shop a Lot A new study from Zillow found that borrowers with the lowest credit scores are quoted the widest range of interest rates on their home loans, which means comparison shopping can be even more beneficial. For those with credit scores between 620 and 639, generally considered right smack above subprime, there was a 133-basis point (1. 33%) range between the lowest and highest APRs offered to borrowers seeking 30-year fixed-rate mortgages between September 2018 and mid-May 2019. Meanwhile, those with excellent credit scores (760+) only saw a range of 92 basis points (0. 92%) between the best and worst APRs. In terms of median APR offered, the 620 to 639 credit score cohort received a quote of 5. 48%, nearly a full percentage point (0. 94%) above the...

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### Mortgages for Self-Employed Borrowers: Tips to Qualify

> It can be more difficult to get a mortgage if you're self-employed. Learn about the special requirements and loan programs available to business owners.

- Published: 2019-09-05
- Modified: 2021-08-07
- URL: https://www.thetruthaboutmortgage.com/mortgages-for-self-employed-borrowers-tips-to-qualify/
- Categories: Mortgage Tips

Over the past few years, it’s gotten a lot easier to get a mortgage as technology has evolved. Today, when a mortgage lender asks for your financials, you may be given the option to grant digital access to things like your credit history, income, and assets using your login credentials. There’s much less of a need to collect, scan, and fax documents, or even upload them anymore. Yes, that too is becoming passé, thanks to single source validation and real-time income and asset reports. Unfortunately, one area that continues to be problematic is mortgages for self-employed borrowers, who often have more complicated financial situations that can’t be run through an automated underwriting system. That’s beginning to change as well, but if you’re self-employed and in need of a home loan, there’s a good chance the process is going to be more challenging than you expect. In fact, Fannie Mae's automated underwriting system used to explicitly view self-employment as representing increased risk. But going forward, now evaluates the composition of a borrower's income instead. So borrowers whose total annual income consists of a higher percentage of variable income, such as bonus pay, overtime, and commissions, will be seen as higher risk. You may also be restricted in how much you can borrow thanks to lender overlays, so be sure to take the time to shop around as requirements can vary by bank. Self-Employed vs. Salaried Borrowers If you are a W-2 employee you are considered salaried If you run your own...

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### Opendoor Home Loans Review: Quick Closings, No Fees

- Published: 2019-08-30
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/opendoor-home-loans-review/
- Categories: Mortgage Tips

On August 29th, 2019, major iBuyer Opendoor launched a mortgage lending division known as “Opendoor Home Loans” to create a one-stop shop for home buyers and sellers. As a result, those interested in purchasing a property from Opendoor can take advantage of their financing department, similar to how home builders partner with mortgage lenders to facilitate loan closings. You can even sell an existing property to Opendoor and finance a new one, all with one company if you feel so inclined. Let’s learn more about this new mortgage lender, which operates out of Plano, Texas. Opendoor Home Loans Wants to Cut Closing Times in Half Aim to close home purchase loans in 3 weeks Offer $100 per day toward closing costs if loan closing is delayed Can generate a pre-qual letter in minutes via phone or computer Limited-time $1,000 closing cost credit also available to customers Noting that financing is often “one of the most complicated and intimidating parts of a home purchase,” they claim they can cut the typical 45-day timeline in half. So instead of closing in a month and a half, they aim to close your home loan in as little as about three weeks. They’re backing up that promise by offering $100 per day for every day beyond the scheduled closing date that the loan closing is delayed. To get started, they ask that you get pre-qualified, which can be accomplished over the phone or online in just minutes. You’ll receive a pre-qualification letter as well,...

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### What Is a Lender Overlay? And How to Avoid Them

- Published: 2019-08-29
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/what-is-a-lender-overlay/
- Categories: Mortgage Tips

Mortgage Q&A: “What is a lender overlay? ” If you’ve been studying underwriting guidelines recently to determine if you’re eligible for a mortgage, it’s important to understand that they can vary widely from bank to bank. Even if you think you qualify based on the guidelines set forth by the FHA, USDA, VA, or Fannie Mae and Freddie Mac, you may be denied by an individual lender. Let's learn more about why this can happen and what you can do about it. Different Mortgage Lenders Assume Varying Levels of Risk Just like any other line of business out there Mortgage lenders have varying risk appetites and specialties Some will accept lots of risk in exchange for higher interest rates While others will stick to more conservative lending even if they lose customers in the process In a nutshell, mortgage lenders have different appetites for risk, along with different specialties, so what one lender will gladly approve, another may not touch with a 10-foot pole. One important concept you should familiarize yourself with is the “lender overlay,” which is essentially an expanded guideline (or set of guidelines) on top of what Fannie Mae, Freddie Mac, or the FHA/VA will allow. Think of it as a second coat of paint, applied after the primer. The primer is the bare minimum necessary, but you don’t see people driving around too often without that second coat. The same goes for mortgages. Fannie Mae, Freddie Mac, and the FHA/VA all set underwriting guidelines for residential...

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### FHA Approved Condos: Individual Units Now Eligible for Financing!

- Published: 2019-08-15
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/fha-approved-condos-individual-units-now-eligible-for-financing/
- Categories: Housing Market, Mortgage News

People looking to buy a condo with FHA financing rejoice. HUD has released a new condominium approval process that, among other things, brings back spot approvals. The policy, which goes into effect on October 15th, 2019, is part of the FHA's “broader Administration objective to reduce regulatory barriers that currently restrict affordable homeownership opportunities” In layman’s terms, it means more folks with low credit scores and not a lot of money in the bank will be able to take out a low-down payment mortgage on a condo, instead of being restricted to a single-family home purchase. That's an important distinction because condos tend to be considerably cheaper than houses, making them a more affordable option for those with lower incomes. Per HUD, there are more than 150,000 condominium projects in the United States, but a mere 6. 5% of them are approved for FHA financing. The new policy is estimated to make somewhere between 20,000 to 60,000 condominium units eligible for FHA-insured financing annually. The FHA’s New Condo Approval Process In the past the entire condo complex needed to be approved for FHA financing New rule will allow for individual units to obtain FHA financing Should make it easier for home buyers to purchase a condo with fewer restrictions Also extends recertification requirement for approved condominium projects from 2 to 3 years Come October 15th, it’ll get easier to obtain an FHA loan on a condominium. Before this rule was proposed, and as it stands now, if a condo complex...

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### You Might Get a Better Deal If You Buy a House Where Kids Live

- Published: 2019-08-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/you-might-get-a-better-deal-if-you-buy-a-house-where-kids-live/
- Categories: Housing Market, Mortgage Tips

It’s common knowledge that home buyers are interested in purchasing properties in good school districts. After all, many individuals purchase homes because they either have kids, or plan to in the near future. Simply put, families and families-to-be need more space, and a house is where you get that. But even if you don’t have children (and no plans to start a family), it can be smart to buy a house in a solid school district to ensure the resale value is strong when it comes time to sell. What’s perhaps more interesting is the idea that you might be able to get a better deal on a home purchase if you buy it from a family. Homeowners with Kids Sell More Urgently 23% of homeowners with kids sold “very urgently” per Realtor survey Versus just 14% of homeowners without kids Nearly half of homeowners with kids sold “somewhat urgently” While half of homeowners without kids said they could wait for right offer A new survey from the National Association of Realtors revealed that homeowners with children sold more urgently than those with no children. Specifically, 23% of sellers with children reported to NAR that they sold their home “very urgently. ” Comparatively, only 14% of sellers without kids said they had to sell their home quickly. Additionally, 46% of those with children residing in the home said they had to sell “somewhat urgently,” while about half of sellers with no children said they were “able to wait for the...

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### Mortgage Rates vs. the Stock Market

- Published: 2019-08-06
- Modified: 2023-02-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-stock-market/
- Categories: Mortgage Matchups, Mortgage Rates

Mortgage match-ups: "Mortgage rates vs. the stock market. " With all the recent stock market volatility, you may be wondering what effect such events have on mortgage rates. Do mortgage rates go up if stocks go down and vice versa? Or do they move in relative lockstep? Let's find out! Stocks and Mortgage Rates Follow the Economy Both stocks and mortgage rates take cues from the economy And they react to news in mostly the same way Whether it's good news or bad news Because what's going on economically matters to the underlying security Simply put, when economic fears rise, as they commonly do, whether justified or not, investors flee the stock market and head toward safer U. S. Treasury bonds, such as the benchmark 10-year bond. So stocks and bonds have an inverse relationship. Imagine a scale that is constantly rising and falling as investors jump from one side to the other. This phenomenon is known as the "flight-to-quality," whereby investors ditch the risk and head to safe havens like gold and U. S. Treasuries when fear is in the air. They do this because Treasuries have an explicit government guarantee, whereas anything can happen with individual stocks. In fact, a stock could go to zero and that would be that. Investment lost. Anyway, when demand for Treasuries and bonds increases, prices go up and yields drop because demand is so strong that a higher yield is no longer necessary to lure in investors. And because the 30-year fixed...

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### Wait, Home Buying Is the Cheapest It’s Been in 20 Years?

- Published: 2019-07-31
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/wait-home-buying-is-the-cheapest-its-been-in-20-years/
- Categories: Housing Market, Mortgage News

If you happen to be in the market to buy a home, you’re probably not giddy with delight over today’s sky-high listing prices. After all, home prices continue to inch higher and higher from their near-term lows seen about a decade ago after surging for years. Knowing the home seller purchased the property for 50% less than what they’re attempting to unload it for today, even though they bought it just five years ago, may also be hard to swallow. But what if I told you consumer house-buying power might reach its highest point in nearly 20 years if mortgage rates simply dip from around 3. 8% to 3. 7%. Forget the Home's Price Tag, Consider the Affordability It's not enough to look at listing prices over time You have to consider wage growth and interest rate movement This allows you to see real home prices adjusted for inflation To determine if they're a good deal or not First American, a large title insurance company, measures affordability using its Real House Price Index, or RHPI. It relies upon changes in income and interest rates to determine consumer house-buying power. Simply put, when average household income rises and/or mortgage interest rates fall, consumer house-buying power increases. Unadjusted home prices (the listing price you actually see) play a role as well, but you can’t just take the price at face value and look at it in a vacuum. One has to consider what those dollars are actually worth today once you factor...

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### Why a Low Down Payment Mortgage Might Be the Safer Move

- Published: 2019-07-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-a-low-down-payment-mortgage-might-be-the-safer-move/
- Categories: Mortgage Tips

If you ask most people, they’ll probably say you should save up a good chunk of money before buying a home, possibly even 20% of the purchase price. A mortgage underwriter might share similar sentiment, even if their very own loan programs allow for low or even zero down payments. The general thinking is that someone who puts down more money has skin in the game, and is therefore a lower default risk. They won’t want to miss their mortgage payments and in the process lose their home, the equity they’ve accrued, and the down payment they plunked down with it. But a new study from the JPMorgan Chase and Co. Institute reveals that liquidity appears to be more important than equity, income, or payment burden. Money in the Bank More Important Than Down Payment If you put a large amount down when buying a home Be sure not to overlook the many closing costs involved While the monthly payment will be cheaper if you put more down You might not have a lot set aside if things go wrong When you purchase a home, it comes with lots of closing costs, ranging from appraisal and inspection fees, title and escrow charges, lender fees, moving fees, new furniture, renovations, and so on. It can be quite the financial hit, which explains why mortgage lenders often require asset reserves to ensure you can make your mortgage payments for a few months if money gets tight. Those who put down say 20%...

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### One Quick Reason to Avoid the 30-Year Fixed

- Published: 2019-07-25
- Modified: 2019-07-25
- URL: https://www.thetruthaboutmortgage.com/one-quick-reason-to-avoid-the-30-year-fixed/
- Categories: Mortgage Tips

Here’s a hint – a moving van. While the 30-year fixed is the most common home loan program utilized by borrowers today, it might not be the most economical. Aside from taking three decades to pay off your mortgage in full, you’re probably also paying a premium for something you might not even benefit from. Are You Really Staying for 30 Years? Most folks have trouble committing to something for 30 days, let alone 30 years. And when it comes to homeownership, this is no different. Sure, you might think you found your forever home, but a year or two later, you could be itching to move on to greener pastures, or simply someplace else. We move for a lot of different reasons, whether it’s due to a job relocation, a growing family, or other miscellaneous scenarios. Whatever the reason, one thing is clear; homeowners on average don’t stay in their properties for anywhere close to 30 years. So why take out a 30-year fixed mortgage and pay a premium for it? Average Tenure Rising, But Still Nowhere Close to 30 Years A recent report from ATTOM Data Solutions revealed that those who sold a home in the second quarter of 2019 had owned it for an average of 8. 09 years. This is actually a new peak, up three percent from the first quarter and four percent from Q2 2018. It’s also much longer than the homeownership tenure seen prior to the Great Recession, where it averaged 4. 21...

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### Amazon TurnKey: Get Free Stuff If You Use a Realogy Agent

- Published: 2019-07-23
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/amazon-turnkey-review/
- Categories: Housing Market, Mortgage News

While they’re not yet directly involved in the mortgage industry, Amazon has now dipped its toes in the real estate pool via a new home buying program known as TurnKey. What is TurnKey you ask? Well, it’s essentially a link-up between Realogy, a consortium of real estate brokerages, and Amazon, the largest retailer on the planet. Together, they want to pair you with a top real estate in your area and then help furnish your house with all the latest gadgetry. Read on to learn more about this new initiative, and more importantly, if it's a good deal for the consumer. What Is Amazon TurnKey? A new partnership between mega retailer Amazon and Realogy Amazon will refer home buyers to Realogy's real estate agents And these home buyers will get free stuff from Amazon Realogy will pay for it in exchange for the new business earned In short, TurnKey is a real estate referral program that seems to be targeting first-time home buyers, and more specifically Millennials. Instead of asking your parents, colleagues, or friends who they used when they purchased a home, you turn to, well, TurnKey, to pair you up with an agent. They claim their service “seamlessly connects homebuyers to one of the best real estate agents within their city or neighborhood,” who are part of the expansive Realogy family of brands. That includes agents from Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Corcoran, ERA, and Sotheby's International Realty, to name just a few....

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### 37% of American Homeowners Are Now Free and Clear

- Published: 2019-07-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/37-of-american-homeowners-are-now-free-and-clear/
- Categories: Housing Market, Mortgage News

What a difference a decade makes. Back in 2009, it was a lot more common to hear about underwater mortgages than free and clear homeowners. In fact, a Deutsche Bank analyst warned at the time that 48% of U. S. homeowners would owe more on their mortgages than their properties were worth. Negative equity levels did indeed surge, thanks to plummeting home values and toxic zero down mortgages that allowed for negative amortization and interest-only payments. But times have changed. What Does Free and Clear Mean? A homeowner with no outstanding mortgages on their property Is considered to be "free and clear" It means there are no liens or encumbrances on title More importantly no additional mortgage payments are due! A new analysis from Zillow revealed that nearly forty percent (37%) of American homeowners are now “free and clear,” meaning they don’t carry a mortgage at all. That number is up from 29% back in mid-2012, when home prices were struggling to find a bottom and reverse course. This is the result of paying off a home loan, either on schedule or ahead of time thanks to a prepayment or extra payments, including biweekly mortgage payments. For those who took out 15-year fixed mortgages back in 2004 or so, they’d be free and clear too if they didn’t refinance or default during that span. It’s also possible some of these homeowners paid cash up front and never had a mortgage. Whatever the method, these homeowners are no longer borrowing money...

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### Mortgage Down Payment Requirements: What's the Minimum You Need to Put Down on a House?

> An overview of down payment requirements for a variety of different mortgages, including what's required for conventional and government-backed home loans.

- Published: 2019-07-15
- Modified: 2023-11-14
- URL: https://www.thetruthaboutmortgage.com/a-primer-on-mortgage-down-payment-requirements/
- Categories: Mortgage Tips

If you’re in the market to buy a new home or condo, you’ve undoubtedly thought (or stressed) about the required down payment. It's one of the biggest roadblocks to homeownership, and an obstacle that never seems to get any better over time. In fact, Zillow recently noted that it takes the average American over seven years to save up a 20% down payment. So much for instant gratification... But how much should you put down when buying a home? Better yet, how much do youneedto put down? Well, let's talk about that. How Mortgage Down Payments Used to Work It used to be common to put down 20% or more when buying real estate As home prices got expensive, lenders began offering zero down financing The mortgage crisis hit and low down payments were partially to blame But now we're back to allowing a relatively low 3% to 3. 5% down Before the mortgage crisis unfolded, perhaps in the late 1990s and early 2000s, it was quite common for homeowners to come up with at least 20% of the sales price for down payment. This was the traditional number banks deemed acceptable in terms of risk. So prospective homeowners took their time, saved up money in the bank, and when the time was right, made a bid on a property. The way the banks saw it, borrowers had “skin in the game,” and were therefore a pretty safe bet when it came to making timely mortgage payments. Even if they...

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### How to Get a Mortgage with a Low Credit Score

> If you’ve got a low credit score, but are determined to buy a new home (or looking to refinance your existing mortgage), you may be wondering how to get a mortgage.

- Published: 2019-07-08
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/how-to-get-a-mortgage-with-a-low-credit-score/
- Categories: Mortgage Tips

Mortgage Q&A: “How to get a mortgage with a low credit score. ” If you’ve got a low credit score, but are determined to buy a home (or are looking to refinance your existing mortgage), you may be wondering how to get a mortgage. Or if it's even possible. First things first though – how low is your credit score? Are we talking a 660 credit score or a 500 credit score? Everyone seems to have a different definition of low, so let's start there. You might even be pleasantly surprised to learn that your low score isn't really low at all, but instead just not absolute perfection. Mortgage lenders rely on FICO scores to make credit decisions. The FICO score range dips as low as 300 and rises as high as 850. The average credit score is somewhere around the high 600s to low 700s at any given time. I say somewhere because there are always different numbers being cited by different sources, and the data is often outdated. It's also a moving target that doesn't stay constant, but average scores don't stray too far from the high-600 to low-700 range. Home Loans for Bad Credit There are actually plenty of options for homeowners with questionable credit Including popular government home loans like FHA, USDA, and VA loans Along with non-government mortgages such as those backed by Fannie Mae and Freddie Mac However you might pay a premium for the privilege, so good credit should always be a priority...

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### How Soon Can You Refinance a Mortgage? Know the Waiting Periods

- Published: 2019-06-27
- Modified: 2021-09-02
- URL: https://www.thetruthaboutmortgage.com/how-soon-can-i-refinance-my-mortgage/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “How soon can I refinance my mortgage? ” With mortgage rates marching toward new all-time lows again, a lot of recent home buyers are probably asking this question, even those who just closed on their mortgage weeks ago. After all, if your mortgage interest rate is a half-point or more above today’s new low levels, you might be leaving a considerable amount of money on the table. And because you haven’t yet made a dent in your mortgage, there’s no fear of resetting the clock and starting all over. There are of course closing costs to think about, including those you may have paid on your previous mortgage such as discount points, along with third-party costs like title insurance and appraisal fees, and so on. But it could be a smart move to grab a new mortgage while rates are low, even if yours is still in its infancy. Why Do You Need to Refinance Your Mortgage Right Away? Interest rates went down considerably Your borrower profile improved dramatically You want a different loan product A life event such as divorce occurred You paid cash and want your money back First let’s talk about why someone would want to refinance their mortgage shortly after taking it out. The most common and topical reason is because mortgage rates fell, substantially. It’s impossible to time the market and buy a home at exactly the “right time” when it comes to mortgage rates. Ultimately, they might be low or high when...

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### Owning Review: Not Your Nana's Mortgage Company

- Published: 2019-06-21
- Modified: 2024-06-22
- URL: https://www.thetruthaboutmortgage.com/owning-review/
- Categories: Mortgage Tips

An online lender called "Owning" is looking to shake up the mortgage industry with what it refers to as "ridiculously low rates. " In the past, they doubled as a mortgage lender and real estate company, offering mortgage refinancing at low rates and a variety of home buying and selling tools including iBuying. But in early 2021, Owning was acquired by Chicago-based Guaranteed Rate, and will act as its lead generator going forward. The company now focuses on helping aspiring home buyers finance a property, and current homeowners interested in securing a lower rate on their existing home loan. Aside from attempting to make the process easier via new technology, they also offer an on-time closing guarantee. Read on to learn more. Owning Is a Direct-to-Consumer Mortgage Lender Direct-to-consumer mortgage lender offering home purchase loans and refinances Founded in 2018, headquartered in Orange, California Acquired by Guaranteed Rate in early 2021 Licensed to lend in 43 states and the District of Columbia Specialize in low-rate mortgage refinances and home purchases BBB accredited with an 'A+' rating at the moment 4. 9-star rating on Google based on over 2,100 customer reviews Not available in Alaska, Kentucky, Nevada, New York, Rhode Island, Utah, or Vermont What Owning Offers Home purchase loans Refinance loans (rate and term and cash out) Conventional loans backed by Fannie Mae and Freddie Mac Jumbo loans that exceed the conforming limit FHA/VA/USDA loans Fixed-rate and adjustable-rate options Lend on primary, second, and investment properties The Orange, CA-based company...

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### Freddie Mac CHOICERenovation Mortgage Review

- Published: 2019-06-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/freddie-mac-choicerenovation-mortgage-review/
- Categories: Mortgage News

Freddie Mac has just launched a new renovation loan product known as the “Freddie Mac CHOICERenovation Mortgage. ” While the name is a bit of a mouthful, the offering is expected to be more liberal than their existing plainly named Renovation Mortgage. The new loan program will go head-to-head with similar offerings from Fannie Mae (HomeStyle Renovation) and the FHA (203k loan). Let’s learn more about the CHOICERenovation Mortgage and what makes it different from their old product. What Is the CHOICERenovation Mortgage? An all-in-one single close home loan That includes renovation costs and permanent financing Similar to Fannie Mae's Homestyle Renovation and FHA's 203k Can be used by first-time home buyers and existing homeowners via refinance In light of the aging housing stock out there, Freddie Mac is stepping up their renovation loan offering to help more homeowners and home buyers fix up properties that need some TLC. Since the Great Recession ended in 2009, the renovation market has grown by more than 50% to more than $400 billion annually, per the Harvard Joint Center for Housing Studies. Perhaps more shockingly, 40% of the nation’s 137 million homes are at least 50 years old, while 80% are at least 20 years old. This might explain all those dumpsters you see lining the neighborhoods, and the incessant noise of table saws throughout the day. Anyway, like the FHA 203k and HomeStyle Renovation loans, the CHOICERenovation Mortgage features a single-close home loan that combines purchase and renovation costs into one. It...

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### A Startup Called ZeroDown Just Launched to Help Home Buyers Lease to Own

- Published: 2019-06-12
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/startup-zerodown-lease-to-own/
- Categories: Housing Market, Mortgage News

It’s starting to feel a little like 2006 again. Recently, we’ve seen mortgage lenders launching interest-only mortgages, 40-year mortgage terms, and now a company by the name of “ZeroDown” has launched in San Francisco. Before we worry that it’s the coming of yet another housing crisis, let’s learn more about this startup that aims to tackle the ongoing “affordability crisis” taking place in the Bay Area. While the name appears to say it all, ZeroDown actually offers even more than a home with no down payment requirement, with a twist. They let customers make all-cash offers on homes of their choosing and help them close in less than a week. How ZeroDown Works Bay Area residents can buy homes on a lease-to-own basis With no required down payment Can purchase the home after 2 years and up to 5 years later Or simply cash out purchase-credits earned during that time First off, this program is only available in the San Francisco Bay Area, similar to the POPPYLoan that launched a few years back for similar reasons. Anyway, to get started prospective home buyers fill out an online application to determine eligibility, with a soft credit pull and typical income/asset stuff verified. Assuming the applicant qualifies, they choose a home to purchase, which ZeroDown pays for in cash. Customers then have five years to “build up credit toward their down payment” via regular fixed monthly payments that do not change. With each payment made, borrowers earn so-called “purchase-credits,” which the company...

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### What Is Home Equity?

- Published: 2019-06-03
- Modified: 2022-12-07
- URL: https://www.thetruthaboutmortgage.com/what-is-home-equity/
- Categories: Mortgage Tips

Mortgage Q&A: “What is home equity? ” You've probably heard the phrase "home equity" get thrown around, likely during a fast-paced radio or TV commercial urging you to pull the equity out of your home NOW! So what the heck is it, and why do mortgage lenders keep bringing it up?   It must be important, right? Let's learn more about it so you can determine if it's something you should be tinkering with. I'll also show you the formula to calculate how much you've got and discuss various ways to tap into it. How to Calculate Home Equity: Your Property Value Minus Loan Balance(s) In short, home equity is your ownership in an underlying property, minus any liens (mortgages) a bank or lender may have against it. To calculate your home equity, simply take the current market value of your property and subtract any outstanding liens/mortgage balances. It's actually pretty easy to figure out how much equity you've got in your home, as long as you know what your home is worth. But that's often the sticking point. A home value estimator like Zillow's Zestimate or the Redfin Estimate, or your own personal opinion, might not align with what the bank or lender feels your home is worth. Let's look at a quick home equity example:Current property value: $500,000Existing liens: $350,000 first mortgage, $100,000 second mortgageHome equity: $50,000In the scenario above, you'd have total outstanding liens of $450,000 on a property currently worth $500,000. The $50,000 difference would be...

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### Young Homeowners Are Having More Mortgage Regrets

- Published: 2019-05-30
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/young-homeowners-are-having-more-mortgage-regrets/
- Categories: Housing Market, Mortgage News

While homeowners of all ages are mostly happy they purchased a property, younger borrowers seem to be regretting their mortgages more than the rest of the population. Per the semiannual survey titled, “Zillow Housing Aspirations Report,” Millennial and Generation Z homeowners are more likely to have qualms about their home loan compared to those aged 55 and older. But don’t call them lazy – Millennials contacted an average of 2. 8 mortgage lenders before choosing one, versus just 1. 7 for Gen X, 1. 8 for Boomers, and 1. 3 by the Silent Generation. The Mortgage Payments Are Too High The biggest regret for the 18-34-year-old cohort was “mortgage payments are too high. ” Some 30% cited this as a regret compared to just 12% of the 55+ crowd. This might have something to do with all those hidden costs of homeownership. In reality, they aren’t really hidden, but if you’ve been renting, you might be unfamiliar with things like property taxes, homeowners insurance, mortgage insurance, and so on. The mortgage payment itself might look appealing, especially with mortgage rates as low as they are, but once you consider the total housing payment, your feelings could change. Seasoned homeowners will already know about the total housing payment, not to mention the many other costs that go into homeownership like costly utilities and maintenance. So if you’re thinking about buying, look at everything that goes into a mortgage payment! I Rushed the Process The second most common regret (29% vs. 12%...

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### Why You Should Live in Your Home Until It Sells

- Published: 2019-05-21
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/why-you-should-live-in-your-home-until-it-sells/
- Categories: Housing Market, Mortgage Tips

A new study from Redfin proved what we probably all assumed was the case; vacant homes sell for less than those filled with stuff. There’s something slightly unappetizing about a vacant home, whether it’s the emptiness of it all, or the desperation knowing someone is losing money each month it sits on the market. Homes are also simply more exposed when there aren’t area rugs, couches, tables, and beds covering up minor (or major) defects. Vacant Homes Sell for Less and Take Longer to Sell Empty homes sold for 3. 6% less than occupied ones in 2018 That's about $11,000 less on average They also took an extra six days to sell So you may want to stick around (or at least make it appear that way) As suspected, vacant homes often sit on the market longer than their occupied counterparts and fetch lower prices. On average, such properties spent an additional six days on the market and went for $11,306 less when they finally did sell. This is according to a survey of homes listed and sold in 2018, conducted by real estate brokerage (and mortgage lender and iBuyer) Redfin. The biggest discounts were seen in Omaha, Nebraska and Greenville, South Carolina, where vacant properties sold for 7. 2% less than occupied homes on average, a haircut of about $15,000. Similar discounts were seen in El Paso, Texas, where the average vacant home sold for 6. 6% less, or roughly $10,000, compared with occupied homes. Discounts were smaller in...

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### Redfin Direct: Buy a Redfin-Listed Home Without a Real Estate Agent

- Published: 2019-05-14
- Modified: 2023-04-06
- URL: https://www.thetruthaboutmortgage.com/redfin-direct-buy-a-redfin-listed-home-without-a-real-estate-agent/
- Categories: Housing Market, Mortgage News

First Redfin brought us the 1% listing fee, which disrupted the traditional 2. 5% to 3% listing agents charge(d) to sell a home. But that still meant the home seller was on the hook for 3. 5% or so if they elected to use an outside buyer’s agent, who needed to be paid 2. 5% commission for their end of the deal. Now they’ve upped the ante by launching “Redfin Direct,” which is being pitched as a service to buy a home without a real estate agent. The upside is that the 2. 5% commission is removed entirely, and only a 2% listing fee remains. That should result in savings for both home buyers and sellers, with less money going to third parties. How Redfin Direct Works The program was initially piloted in just a few metros nationwide, including Boston, Northern Virginia, and Texas on properties listed by a Redfin agent. It has since been rolled out to the Inland Empire, Los Angeles, Orange County, Sacramento, San Diego, and the rest of Virginia. Like a typical home purchase, a prospective buyer visits the Redfin website and browses the available inventory. This inventory only includes Redfin-listed homes, which ideally (as far as Redfin is concerned) will increase over time as the company gets a larger share of listings via its lower 1% commission. Next, this hypothetical buyer can book tours and visits the properties he or she is interested in viewing. Assuming they want to proceed with an offer, they can...

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### What Credit Score Do You Need to Get a Mortgage? Learn the Key FICO Thresholds

- Published: 2019-05-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-credit-score-do-i-need-to-get-a-mortgage/
- Categories: Credit Scores, Mortgage Tips

Mortgage Q&A: “What credit score do I need to get a mortgage? ” If you're thinking about purchasing a new home or refinancing an existing mortgage, you should know that your credit score is going to be a huge factor. In fact, it can make or break your loan approval and carries the most weight when it comes to determining your mortgage rate. Why are credit scores so important to mortgage lenders, you ask? Well, they use credit score(s) to measure your payment default risk, coupled with things like down payment, income, assets, and property/occupancy type. While credit scores aren't perfect, and were even partially blamed for the mortgage crisis of the early 2000s, they do tell lenders a lot about you. Simply put, the higher your credit score, the lower your interest rate, all else equal. And the more loan options you'll have. So be sure to get it right! Which Credit Score Do Mortgage Lenders Use? Mortgage Credit Scores Credit bureau Equifax Experian TransUnion FICO score version FICO Score 5 FICO Score 2 FICO Score 4 Also known as Equifax Beacon 5. 0 Experian/Fair Isaac Risk Model v2 TransUnion FICO Risk Score 04 (Classic 04) Are mortgage credit scores different? Mortgage lenders use FICO scores just like other finance companies But they pull one version from each of the three major credit bureaus This creates what is known as a tri-merge credit report The middle score is used for qualifying and mortgage rate purposes First and foremost, you...

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### Why You Might Want to Skip the Starter Home

- Published: 2019-04-30
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/why-you-might-want-to-skip-the-starter-home/
- Categories: Housing Market, Mortgage Tips

Some 45 million Americans are expected to reach the typical first-time home buyer age in the next decade, which is a fresh 34 years old. This is 7. 4% more than the 41. 8 million individuals currently aged 35-44, per a new analysis from Zillow. In short, this means there’s the potential for even more demand than usual in the starter home market as those aged 24-33 transition from renting to owning. But it also means you might want to skip the starter home completely and just go for the forever home, or at least a property you can keep for the long haul. A Shortage of Starter Homes The lower-third of the market has appreciated 57. 3% in the past five years While for-sale inventory has fallen 23. 2% during that time With 45 million more potential buyers coming of age in the next decade It could get even more competitive and unaffordable Over the past five years, so-called “starter homes” (those in the least expensive third of the market) gained 57. 3% in value. While that’s great news for those who purchased such homes back in 2013-2014, it’s terrible news for those still renting. Another unfortunate truth is that many of the homes in this tier weren’t purchased by young couples with a dog that were planning to have a baby. Instead, they were purchased by institutional investors and later turned into single-family rentals. So they’re effectively off the market, perhaps for decades to come if that nascent...

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### Study: Open Houses Result in Faster, More Expensive Home Sales

- Published: 2019-04-25
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/study-open-houses-result-in-faster-more-expensive-home-sales/
- Categories: Housing Market, Mortgage News

Aside from tracking mud through your beautiful home, it turns out open houses actually lead to higher sales prices and less time on market, per a new analysis from Redfin. The real estate brokerage, which studied 2018 for-sale listings, noted that properties featuring an open house sold for $9,046 more on average and spent seven less days sitting on the market. They discovered this by looking at sale-to-list price ratios and time on market of homes that held an open house within their first week on the market versus those that never had one. There’s certainly a lot of controversy regarding open houses, with some critics saying they do more for the listing agent than the homeowner (in the way of new leads for the agent). But they’re also pretty customary in many regions of the country, with some home sellers probably assuming they’re obligatory. However, it turns out they’re fairly rare in some parts of the U. S. In fact, just 24% of 2018 for-sale listings held an open house in the first week, which seems lower than you’d expect. They also aren’t held if the property is unique (think a multi-million-dollar mansion owned by someone famous who only wants serious buyers snooping around). Will Your Home Sell for More If You Hold an Open House? Homes sold for more in nearly all metros studied by Redfin When an open house took place in the first week of listing This was also the case in places where open houses...

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### Zillow Home Loans Is Now Live

- Published: 2019-04-10
- Modified: 2023-11-15
- URL: https://www.thetruthaboutmortgage.com/zillow-home-loans-review-live/
- Categories: Mortgage News

Following the announcement made last summer to acquire Mortgage Lenders of America, “Zillow Home Loans” is now officially open for business. The new division of Zillow, which is 300 employees strong and operating out of Overland, Kansas, complements the company’s Zillow Offers platform, which acts as an iBuyer of homes in various regions of the country. But the use of Zillow Home Loans is not restricted to just Zillow Offers' home sales, per a company press release. This means they’ll act as a full-scale mortgage lender, ostensibly offering both purchase and refinance loans to borrowers nationwide, regardless of whether they're buying or selling a Zillow-owned home. As to why they entered the competitive space, Zillow notes that obtaining a mortgage is often the “most complicated part of buying a home,” and so it’s eliminating that pain point. Or at least taking more control of it. Doing so makes their business of buying and selling homes a lot more certain, seeing that they’ll control the financing piece if the customer chooses to use Zillow Home Loans. They might even be able to get the home seller to use them for financing the replacement home purchase, while snagging the buyer's financing of a Zillow Offers’ property at the same time. There's clearly a lot of upside here. What Zillow Home Loans Offers At the moment, they’re advertising four main types of home loans on their website, including: - Conventional loans (those backed by Fannie Mae and Freddie Mac) - FHA loans -...

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### PITI: Find Out All That Goes Into Your Mortgage Payment

- Published: 2019-03-04
- Modified: 2024-05-28
- URL: https://www.thetruthaboutmortgage.com/what-does-a-mortgage-payment-consist-of/
- Categories: Mortgage Tips

More fun and exciting mortgage Q&A: “What does a monthly mortgage payment consist of? ” Have you ever been curious what you’re paying each month to live in your shiny new (or possibly dingy old) home or condo? Or how much it might cost per month to acquire such real estate? Let's learn more about what goes into a home loan payment so you can better estimate your total monthly outlay, or if you're a first-time home buyer, narrow down an appropriate purchase price. Knowing what it all costs is a cornerstone to the rent vs. buy question, and also key to knowing how much house you might be able to afford if you decide to dive into the real estate market. What a Typical Mortgage Payment Includes A monthly home mortgage payment, assuming it's not an interest-only loan, generally consists of four key components: a principal portion an interest portion property taxes homeowners insurance Mortgage Payment = PITI There’s a handy acronym to sum up the four parts of a mortgage payment known as "PITI. " When you say it, it sounds like "pity. " And I suppose it is a pity that we have to make mortgage payments every month, often for a staggering 30 years... or 360 months, but I digress. Anyway, mortgage lenders typically want "X" number of months of PITI for cash reserves if you’re verifying assets when you apply for a home loan. In short, this tells the mortgage underwriter you can actually pay...

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### loanDepot’s Mello Smartloan Can Shorten Mortgage Closing to Just 8 Days

- Published: 2019-02-21
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/loandepot-mello-smartloan/
- Categories: Mortgage Tips

In yet another effort to push mortgage lending firmly into the 21st century, loanDepot has debuted its proprietary “mello smartloan” technology, an end-to-end digital mortgage loan intended to cut out the paperwork and lengthy turn times. It should also make the process a lot more secure, with less sensitive information floating around the web via email from borrower to lender. loanDepot claims it made history with this launch, so let’s learn more about it. mello smartloan Can Generate a Real Loan Approval in Just 7 Minutes loanDepot claims its new proprietary loan engine technology is really fast With real loan approvals generated in as little as seven minutes The process is less paperwork-intensive and more secure It can reduce fraud, lower costs to both lender and borrower, and create a better overall customer experience Aside from being a more secure lending platform, mello smartloan is built for speed, similar to many of the other new offerings we’ve seen lately in this space. The mortgage loan process can be very lengthy as it often takes anywhere from 30-45 days to close a mortgage, something that just won’t do in today’s era of instant gratification. Coincidentally, the company claims it can provide a customer with a full loan approval in as little as seven minutes, which happens to be a minute faster than Quicken’s Rocket Mortgage. So if you’re short on time (or patience), this might be just the ticket for you. Of course, timing isn’t everything. We also have to consider...

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### Is the 30-Year Fixed Mortgage Going Extinct?

- Published: 2019-02-14
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-the-30-year-fixed-mortgage-going-extinct/
- Categories: Mortgage Tips

It’s that time again when we fret about the viability of the 30-year fixed mortgage. This last occurred in 2014 when Dick Bove warned that the Fed’s tapering of mortgage purchases would mean curtains for the popular loan program. Say Goodbye to the 30-Year Fixed? It seems to happen every few years as folks start speculating about the future of Fannie Mae and Freddie Mac. The pair have been under government control since 2008 after the mortgage crisis basically tore them to shreds. Today, the Senate Banking Committee is going to hear from Mark Calabria, who has been nominated to become the next Federal Housing Finance Agency (FHFA) director. Assuming he replaces current director Mel Watt, some worry the very well-liked and widely used 30-year fixed mortgage may cease to exist. The basis for that argument is he might unwind Fannie and Freddie, which back the majority of 30-year mortgages out there. They’re able to play “middleman” as the WSJ puts it, by linking the loans with outside investors who are willing to take on the risks associated with a three-decade long fixed-rate loan. But if Calabria gets elected and decides that he doesn’t want the government to purchase 30-year fixed mortgages anymore, he could direct Fannie and Freddie to stop buying or backing such loans. This could make the mortgage market a lot less liquid for home loans with 30-year fixed terms, thereby pushing them to extinction or greatly increasing their price. If fewer investors are willing to buy...

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### Is the Real Estate Market Going to Crash in 2019?

- Published: 2019-02-13
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/is-the-real-estate-market-going-to-crash-in-2019/
- Categories: Housing Market, Mortgage Tips

There have been a lot of unpleasant headlines regarding the state of the real estate market lately. Earlier this week, Redfin noted that only 1 in 8 offers written by their agents faced competition from other prospective home buyers in January. That was down 53% from a year earlier, allowing Redfin to proclaim that “bidding wars have nearly vanished. ” The End of Bidding Wars? I guess that’s somewhat true if only around 13% of homes are getting multiple offers. A year ago, hot spots like Seattle and San Francisco were getting multiples on about 7 out of 10 and 8 out of 10 homes, respectively. This January, less than 20% of homes for sale in those cities faced any sort of competition. Home Prices Are the #1 Barrier to Entry Nowadays Meanwhile, the National Association of Home Builders (NAHB) noted that home prices are just too high for buyers these days. When they asked active buyers who hadn’t found a home in 3+ months of searching, the most common response (49%) was they couldn’t find an affordable home. Now this isn’t to say that there aren’t affordable homes out there, just not the homes these particular buyers would purchase. So nearly half of would-be buyers are struggling with prices, up from 42% a year earlier. This might explain that precipitous decline in bidding wars. A larger percentage of buyers also indicated that they couldn’t find a home with the right features, or in their desired neighborhood. Still, 63% said...

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### What Is a Good Price for a First-Time Home Buyer?

> How to figure out a good price to pay for a home as a first-time home buyer, and ensuring you qualify for that loan amount.

- Published: 2019-02-12
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/what-is-a-good-price-for-a-first-time-home-buyer/
- Categories: Housing Market, Mortgage Tips

Buying your first home can be pretty nerve-wracking. Regardless of what you pay, whether it seems like a little or a lot, there are going to be some sleepless nights early on. The first time I bought a place, I threw the bed sheets over my head and didn’t emerge until morning, night after night. It was stressful. I even turned to a friend to talk about it, and he said if you’re worrying about the what-ifs, you’re already there. So chill out. Okay? Got it. The Lender Will Let You Know the Most You Can Afford Your first stop might be a bank or mortgage lender For a free no obligation pre-qual or pre-approval letter To determine the maximum you can afford based on your finances This can at least set the price ceiling to limit your home search We know there isn’t a universal answer here, but we can discuss the underlying stuff to come up with a suitable answer depending on your unique situation. Per the National Association of Realtors, the national median existing single-family home price in the third quarter of 2020 was $313,500, up a whopping 12% percent from a year earlier. First-timers might shoot for a price around these levels because starter homes tend to be on the cheaper side of things, but it's not that easy. Home prices in individual housing markets nationwide will run the gamut, with many cities well above the median. Additionally, one's finances will come into play because they...

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### The Cost of Property Taxes and Hazard Insurance

- Published: 2019-01-29
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/the-cost-of-property-taxes-and-hazard-insurance/
- Categories: Mortgage Tips

As home prices continue to flirt with record highs nationwide, the cost of property taxes and hazard insurance can be the tipping point. For example, if you purchase a one-million dollar home these days, you can expect to pay around $15,000 or more annually for property taxes and insurance in certain states. Ouch! On a monthly basis, you're looking at an additional $1,250, which is what a total monthly mortgage payment might cost folks in other, less expensive parts of the country. That’s a large chunk of change, especially considering million-dollar homes in California are the norm for many popular metropolitan areas. Factor in that most people buying these caliber homes aren’t necessarily multi-millionaires either and things can get unaffordable in a hurry. Simply put, if and when you buy a home, you need to consider these additional costs instead of merely looking at the mortgage payment. Taxes and Insurance Can Account for a Big Chunk of Your Mortgage Payment Let's look at a hypothetical $500,000 home purchase in California. Yes, there are still homes offered at that price, I think? Anyway, assuming our imaginary borrower could muster a 20% down payment, they'd be left with a $400,000 loan amount. If they obtained a mortgage interest rate of 4. 5%, their monthly principal and interest payment would be $2,026. 74. Not too bad, right? But wait, there's more! We have to dial in the property taxes and homeowners insurance, which will change the equation. Let's add $6,250 annually for property...

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### 15 Things to Do After Your Mortgage Funds Besides Buy New Furniture

- Published: 2019-01-22
- Modified: 2023-10-18
- URL: https://www.thetruthaboutmortgage.com/15-things-to-do-after-your-mortgage-funds/
- Categories: Mortgage Tips

Getting a mortgage can be pretty exciting, especially if it's your first time. It can also be a very daunting process fraught with the potential for errors and missteps. I've already discussed what to do before applying for a mortgage. Now let's talk about what to do after. 1. Make sure it actually funded! First things first, make sure your home loan really funded! Never assume anything in this world, especially when it involves a six- or seven-figure number. There have been countless stories of folks going out and buying big-ticket items days before their mortgage was set to fund, only to find out that it was a big no-no. Just because you signed loan docs doesn’t mean your mortgage funded. For example, refinance transactions generally require a 3-day rescission period from the day you sign to the day they fund. The last thing you want is for your lender to receive an alert about an undisclosed new debt, which could force them to re-run your numbers and delay your loan closing. 2. Look at all your paperwork While you should have gone through all your paperwork line by line before you signed and the loan ultimately funded, it doesn’t hurt to glance at it again now that the dust has settled. It can be a bit of a whirlwind while meeting deadlines and feeling high levels of stress. So once that’s all done, it can be a good time to sit down and review at your own pace, with...

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### Chase Launches Free Biweekly Mortgage Payment Option

- Published: 2019-01-22
- Modified: 2019-01-22
- URL: https://www.thetruthaboutmortgage.com/chase-launches-free-biweekly-mortgage-payment-option/
- Categories: Mortgage News

In an effort to make life a little easier for its mortgage customers, Chase has launched a new suite of “flexible automatic payments,” including a biweekly option. If you happen to have a home loan serviced by the banking giant, you should receive information regarding the new payment options, all of which are free. Chase now provides customers with three payment options that are automatically deducted either once a month, twice a month, or every two weeks. That last option is a biweekly setup, with 26 half payments resulting in 13 total monthly payments annually. Customers can also continue to make payments manually as well. Chase’s Flexible Automatic Mortgage Payments If you had been interested in a biweekly payment program, you can now do it hassle-free thanks to this change. You can also choose to make payments automatically and/or split your monthly payment into two to correspond with a paycheck. Once a month option: Choose any date within your mortgage payment grace period and monthly payment is automatically deducted. Twice a month option: Split your mortgage payment into two to be withdrawn twice monthly, paid once the total amount due is remitted. Every two weeks option: Make half a mortgage payment every two weeks, funds applied once total monthly payment collected. Results in at least two extra half payments annually with extra applied to principal. The first two options just allow borrowers to make automatic payments, which can be handy to avoid missing a mortgage payment. But neither actually save...

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### What Is a Non-Conforming Mortgage Loan? And How Does It Affect You?

- Published: 2019-01-16
- Modified: 2021-09-02
- URL: https://www.thetruthaboutmortgage.com/what-is-a-non-conforming-mortgage-loan/
- Categories: Mortgage Tips

If you’ve been doing some mortgage shopping/research lately and happened to come across the phrase “non-conforming loan,” you might have some questions. At first glance, you probably understand that the loan in question doesn’t conform, but to what exactly? Well, what they mean is that it doesn’t adhere to the standards of Fannie Mae and Freddie Mac, which together back the majority of mortgages in the United States. The pair essentially keep the mortgage market liquid by buying the loans lenders originate, or by packaging them into mortgage-backed securities (MBS). But if your particular loan doesn’t meet their underwriting criteria for one reason or another, it does not conform and therefore can’t be backed or purchased by them. As such, there’s a good chance it’ll be more difficult to find financing, and potentially more expensive as well, essentially because there are fewer lenders willing to fund your loan. For the record,many lenders only originate conforming loans, so your options can shrink in a hurry if your loan is non-conforming. Why Are Mortgages Deemed Non-Conforming? A loan is non-conforming if it doesn't meet Fannie Mae or Freddie Mac's guidelines There are numerous loan requirements that must be met Including maximum loan amounts, which vary by area/property type Mortgages that exceed these limits are known as jumbo loans The most common reason for a mortgage to be non-conforming is loan amount. Fannie Mae and Freddie Mac only accept loans up to a certain size, known as the conforming loan limit. This limit...

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### 2019 Mortgage Rate Forecast: We Could Be in for a Big Surprise

- Published: 2018-12-19
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2019-mortgage-rate-forecast-we-could-be-in-for-a-big-surprise/
- Categories: Mortgage Rates, Mortgage Tips

Just like that another year has passed, well almost, so it’s time once again to look forward to what the next 365 days might bring. Will 2019 be a winner for mortgage rates, or will home buyers and refinancers face more agony like they did in 2018? As always, I compile predictions and data from the leading mortgage and real estate industry groups to come up with the annual forecast. This year I’ll also include my own prediction to provide even more insight (or confusion) to the situation. Let’s dive in! 2019 Mortgage Rate Prediction Chart The chart above shows 2019 mortgage rate predictions from the MBA, Fannie Mae, Freddie Mac, and NAR. They're basically the biggest players in the residential mortgage space so they should have a good idea as to where rates may go, though like any other prediction, it might turn out that nobody gets it right. Note that these predictions come from the last release of 2018 from these trade groups, and that they update their forecasts throughout the year, often monthly. MBA 2019 Mortgage Rate Forecast We’ll start with the Mortgage Bankers Association and their monthly Mortgage Finance Forecast. Each month, they adjust their expectations for things like housing starts, home sales, home prices, mortgage origination volume, and most importantly, mortgage rates. Specifically, they detail where they think the 30-year fixed rate will land each quarter, based on Freddie Mac's average rate, which is based primarily on home purchase transactions. This is what 2019 looks...

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### 2019 FHA Loan Limits Rise: Floor Climbs Above $300k

- Published: 2018-12-17
- Modified: 2018-12-27
- URL: https://www.thetruthaboutmortgage.com/2019-fha-loan-limits-rise-floor-climbs-above-300k/
- Categories: Mortgage News

Following the release of the 2019 conforming loan limit, HUD announced the 2019 FHA loan limits, which like the former will move higher next year. Similar to conforming loans, FHA loans have loan amount limits set either at the floor, the ceiling, or somewhere in between. The big difference is that the FHA floor (also the maximum loan amount in many counties) is much lower than the conforming limit, the latter of which is set to rise to $484,350 in 2019. This can be pretty important depending on the metro in which you’re buying or refinancing a home loan to ensure it is eligible for backing by the FHA. 2019 FHA Loan Limit Increasing to $314,827 New maximum FHA loan amount for low-cost areas is $314,827 Up roughly 7% from $294,515 in 2018 This means a home buyer in Phoenix, AZ can use FHA financing For a slightly larger home purchase, up to $326,000 vs. $305,000 currently Nationwide, this floor will increase to $314,827 from $294,515 come January 2019, which is 65% of the national conforming loan limit of $484,350. It represents a roughly seven percent increase from 2018, which is a reflection of rising home prices nationwide. A quick example of the impact would be the Phoenix, Arizona metro, which is set at the floor despite having a very wide range of home prices both high and low. The max FHA loan limit will climb from $294,515 to $314,827 in 2019, meaning a prospective home buyer could soon use...

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### Home Prices vs. Recessions

- Published: 2018-12-13
- Modified: 2023-01-09
- URL: https://www.thetruthaboutmortgage.com/home-prices-vs-recessions/
- Categories: Housing Market, Mortgage Matchups

There have been three recessions since the 1990s, including the Great Recession, which took place from 2007 and 2009 and lasted about a year and a half. Earlier, a recession took place in 1990 thanks to growing inflation and debt, followed by the Iraqi invasion of Kuwait, which exacerbated oil prices. Just about everyone knows what happened a decade later, the infamous dot-com bubble, where any old (actually very new) tech company was valued at billions of dollars, despite failing to turn a profit. Or even having a business to speak of. Feels Kind of Like the Year 2000 Again... Your electric scooter company is worth how much? What's a unicorn? Why does every new company use a single word for its name? This is starting to feel a little bit fishy Reminds me of when every website was worth a billion dollars Interestingly, it’s beginning to feel a lot like the year 2000 when you look at the many tech companies raising millions of dollars and grabbing billion-dollar valuations. Just look at those ubiquitous scooter companies, which are somehow worth billions... I anticipate those things being obsolete in 10 years, or at least relegated to bike paths at popular tourist attractions. Remember Segway? Ironically, they do the tech on some of these very scooters. Anyway, it’s clear that we seem to be heading back down a dark path, with fears of another recession right around the corner. So much so that there’s talk the Fed might stop raising rates,...

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### 2019 Mortgage and Real Estate Predictions

- Published: 2018-12-11
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2019-mortgage-and-real-estate-predictions/
- Categories: Housing Market, Mortgage Tips

First off, here are my 2018 predictions in case you want to see how they panned out. Overall, I think I did alright, though my call for the 30-year fixed to end 2018 at 4. 5% didn't quite materialize. There's actually still time for that to happen thanks to a late rally, but it's doubtful. Anyway, let's get to those 2019 predictions... 1. Mortgage rates will only rise moderately, if at all Sure, mortgage interest rates will probably increase somewhat in 2019, but it’s doubtful we’ll see anything close to the carnage we saw in 2018. The silver lining to all the movement this year is less next year, or at least that’s the hope. We’ve already seen some pullbacks in late 2018 thanks to the ongoing trade war and concerns of an impending recession, which could force the Fed to pump the brakes on future rate hikes. Similarly, traders may ditch stocks and head for safe haven bonds, which would push down yields and ideally trickle down to lender rate sheets too. Regardless, mortgage rates remain attractive when you look at historical levels, especially since home prices are still below peaks in many metros seen during the last boom. I personally don’t see higher mortgage rates being a roadblock for most folks, though it’s obvious they can reduce overall home purchasing power. That just means looking for cheaper homes, such as those in the suburbs instead of the big city. Or hoping for a raise at work. Or a...

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### 2019 Conforming Loan Limit Will Be $484,350 for Mortgages Backed by Fannie and Freddie

- Published: 2018-11-27
- Modified: 2018-12-27
- URL: https://www.thetruthaboutmortgage.com/2019-conforming-loan-limit-will-be-484350-for-mortgages-backed-by-fannie-and-freddie/
- Categories: Mortgage News

As expected, the conforming loan limit for 2019 has increased thanks to an ongoing rise in property values, according to a news bulletin released by the Federal Housing Finance Agency (FHFA) this morning. Beginning in 2019, the maximum loan amount for a one-unit property will be $484,350, a $31,250 increase from the current $453,100 limit. Per the FHFA's seasonally adjusted, expanded-data home price index (HPI), property values increased 6. 9% between the third quarters of 2017 and 2018. As a result, the conforming loan limit in 2019 will rise by the same percentage. For reference, home prices rose by 6. 8% in the same period a year earlier. So despite some negative press regarding the housing market recently, it’s still humming along just fine. Higher 2019 Conforming Limit May Help Homeowners Secure Lower Mortgage Rates Home prices increased 6. 9% between Q3 2017 and 2018 As a result the conforming limit will rise by same percentage This could benefit new and existing homeowners Since conforming loans are generally priced lower and easier to qualify for This so-called “baseline conforming limit” is the maximum loan amount acceptable for residential mortgages eligible for purchase by Fannie Mae and Freddie Mac. It also applies to VA home loans, which are offered to active duty military and veterans. Generally, conforming mortgages price cheaper than non-conforming ones, such as jumbo loans. However, this isn’t always the case. Still, if you can keep your loan amount at or below the conforming limit, you should have the...

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### Guaranteed Rate Mortgage Review: A Fast-Growing Top-10 Lender

- Published: 2018-10-31
- Modified: 2024-08-17
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-mortgage-review/
- Categories: Mortgage Tips

If you haven’t heard of "Guaranteed Rate," there’s a good chance you’ve never applied for a home loan before. Or maybe you just don’t live in the Midwest, where they’re headquartered. Despite being from Chicago, they offer home loans to borrowers in all 50 states and Washington D. C. , so they can be included in your mortgage search if and when it comes time to apply. Their goal is to become the top retail mortgage lender in the country, which while ambitious, isn’t necessarily out of reach given their tremendous growth in such a short period of time. The Relatively Short History of Guaranteed Rate The retail mortgage lender was founded in the year 2000 Its headquarters are in Chicago, Illinois They have roughly 4,000 employees and nearly 350 offices nationwide One of the top-10 largest retail mortgage lenders in the country Funded nearly $50 billion in home loans during 2020 While they’re a pretty big name in the mortgage world, they only got started back in the year 2000. That means they’re less than 20 years old, which is pretty short stint for a such a successful lender. In 2020, they originated more than $48. 8 billion in home loans, which should put them in or close to the top 10 in terms of total volume for all mortgage lenders. Part of their growth can be attributed to acquisitions, including Manhattan Mortgage in 2012, and Sun State Home Loans, Nationwide Direct, Arbor Mortgage, and Firstrust Mortgage in 2014. They...

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### What Is Verification of Employment for a Mortgage? Proving Your Job History

- Published: 2018-10-31
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/what-is-verification-of-employment-for-a-mortgage/
- Categories: Mortgage Tips

When you apply for a mortgage, underwriters will comb through your finances to determine if you’re a good candidate for a loan. This includes verifying a lot of personal information, including your income, assets, credit history, and employment. Without these important details, it would be impossible for the lender to assess your default risk, or chances of missing a mortgage payment, or worse, being foreclosed upon. This is known as “capacity,” which is one of the three C's of underwriting and basically your ability to repay the loan. When You Apply for a Mortgage You’ll Provide Employment Information First you simply input your employment information on the loan application Including job position and time on the job Along with your salary and any overtime/bonuses This is later verified with financial documents and verification of employment During the initial stages of the home loan process, you’ll simply input or tell the bank or broker what you do for a living, how much you make, and how long you’ve done it. As a rule of thumb, mortgage lenders generally want a minimum of two years in the same position or line of work. This shows them a history of earnings, that you have consistently been employed, and have the ability to maintain employment, all of which are important to ensure timely mortgage payments are made in the future. Once your home loan application arrives at the underwriter’s desk, they’ll dig into the details a bit more and connect all the dots. This...

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### Wells Fargo the Top Mortgage Lender in 2017, Quicken Tops for Number of Loans

- Published: 2018-10-30
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-the-top-mortgage-lender-in-2017-quicken-tops-for-number-of-loans/
- Categories: Mortgage News

Despite closing a higher number of mortgage loans last year, Quicken Loans was unable to wrestle the coveted top spot away from Wells Fargo, per HMDA data parsed by iEmergent. During 2017, the under-fire San Francisco-based bank managed to fund $93 billion in total residential mortgage volume, claiming a 5. 6% share of the total mortgage market in the process. It’s pretty impressive when you consider the many scandals they’ve had to face in the past couple years. Apparently customers weren’t all that concerned about their questionable practices, even some involving their mortgage processes like that lock scandal. The company handily beat out its closest rival, Quicken Loans, which managed only $81. 3 billion in total volume throughout the year. While a healthy number for sure, it was about $12 billion shy of Wells Fargo, which makes it clear that the megabank isn’t quite ready to give up its mega lead. Quicken Closed the Most Mortgage Loans in 2017 However, what was interesting was total number of loans originated. Quicken and its highly successful Rocket Mortgage platform mustered a higher number of originated loans during 2017. Per iEmergent, the Detroit-based nonbank lender closed 395,648 loans, besting Wells Fargo by more than 100,000 loans (Wells closed just 272,938 loans). If we break that down by loan size, we’re looking at an average loan amount of $205,601 for Quicken and $340,844 for Wells Fargo. That’s a difference of roughly $135,000 per loan, with Wells’ loans about 66% larger on average. Wow! In...

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### PrimeLending Mortgage Review: Committed to Customer Satisfaction

- Published: 2018-10-25
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/primelending-mortgage-review-committed-to-customer-satisfaction/
- Categories: Mortgage Tips

Today let’s talk about PrimeLending, a PlainsCapital Company, which is a top-10 mortgage lender that does business in all 50 states. Perhaps their biggest claim to fame is their 96% customer satisfaction rating given to their fleet of 1,500 loan officers. They certainly seem to pride themselves on making their customers happy, with the slogan “Home Loans Made Simple. ” They also have a mascot named "Mo," short for momentum, that is a real live buffalo living near Fort Worth, TX. Let’s learn more about who they, what types of loans they offer, and why you might use them on your next purchase or refinance transaction. Who Is PrimeLending? A direct-to-consumer mortgage lender owned by the PlainsCapital Company that has been around since 1986 A wholly owned subsidiary of PlainsCapital Bank (that is also a wholly owned subsidiary of Hilltop Holdings Inc. ) Publicly traded under the symbol (NYSE: HTH) Funded more than $22 billion in home loans during 2021 Most active in the states of California and Texas but licensed nationwide First a little bit about their history – PrimeLending started out back in 1986, which if you’re good at math, is just over 35 years. Back then, they had just 20 employees. Today, they’ve got more than 3,000 employees throughout the nation. And since that time, they’ve apparently helped more than 500,000 Americans purchase a home, fix up a property, or refinance an existing mortgage. They seem to excel in home purchase lending, as evidenced by the fact...

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### Sell Your House or Rent It Out? The Pros and Cons

- Published: 2018-10-15
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/sell-your-house-or-rent-it-out/
- Categories: Housing Market, Mortgage Tips

If you already own some real estate, perhaps a house or a condo, and are looking to move on, you might ask yourself if it’s better to sell it or rent it out. This is an especially pertinent question when home prices appear to be peaking and are at/close to all-time highs. Similar to how they are now, maybe? Like most things in life, the answer to this question isn’t universal – there are lots of different factors and scenarios to consider that will vary widely by individual situation. But we can at least discuss some of the pros and cons of keeping a property versus selling it. Some of wealthiest folks out there got that way by investing in real estate, holding onto their properties, and building an empire. So there’s clearly a lot of potential upside. But there are risks as well. Buy a Primary Residence Then Eventually Rent It Out Instead of buying a rental property outright It might be possible to buy a primary residence that you live in initially Then eventually rent out once you’re ready to move on This can result in better financing terms and greater knowledge of the property Personally, I like the idea of purchasing real estate, living in it for a while, and then renting it out. This way you get to know the property, the neighborhood, the neighbors, and so forth. You should also get the best financing terms available because mortgage rates are cheapest for primary residences. Buying...

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### How to Get Cash Out of Your Home in a Rising Rate Environment

- Published: 2018-09-27
- Modified: 2018-09-27
- URL: https://www.thetruthaboutmortgage.com/how-to-get-cash-out-of-your-home-in-a-rising-rate-environment/
- Categories: Mortgage Tips, Refinance

In a perfect world, you could tap into your home equity and lower your mortgage interest rate at the same time. But because interest rates rise and fall over time, this simply won’t always be the case for homeowners in need of cash. This is especially true these days as the great bulk of existing homeowners out there locked in mortgage rates at all-time lows. This has created an interesting problem - homeowners are sitting on the most available home equity in history, yet very few are tapping into it. The reason being is that most don’t want to give up their 3. 5% 30-year fixed mortgage in exchange for one closer to 4. 75% or even higher. After all, doing so will hit their monthly housing payment twice – once via the higher interest rate, and a second time via the larger loan amount associated with the cash out refinance. For some, this could create qualification issues if DTIs are maxed out. And for others it’s just not an attractive option. At the same time, there are few other places (if any) where you can borrow money more cheaply than via your home. Clearly credit card interest rates are sky-high, as are any personal loan options. So even if rates have risen since you last purchased your property or refinanced, cashing out will likely still be the cheapest option. So what are you to do if you need cash and interest rates are unfavorable? Open a Second Mortgage If...

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### Redfin Launches the Owner Estimate to Give Homeowners Control

- Published: 2018-09-26
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/redfin-launches-the-owner-estimate-to-give-homeowners-control/
- Categories: Housing Market, Mortgage News

Are you sick and tired of your Redfin Estimate or Zillow Zestimate being too low? Do you feel your property is worth much, much more than they say it is? Well, I’ve got great news for you! Redfin has introduced the “Owner Estimate,” a new tool that gives the appraiser reigns to the homeowners themselves. Instead of letting that pesky algorithm scare off potential buyers, you can get your hands dirty and tell the company (or its computer) why your property is actually worth a whole lot more than the “most accurate online estimate for on-market homes,” per an independent study by SSRS. Of course, it’ll still rely on some “core machine-learning” to get the job done, but there’s a chance you can generate a higher value than what the company yields on its own. And best of all, you can feature the Owner Estimate on your property page for all to see, right above the Redfin Estimate (which you can incidentally hide). Even better, you don’t have to make the Owner Estimate publicly visible if you don’t like what it comes up with, so it’s basically a win-win. How to Generate a Redfin Owner Estimate It’s a pretty simple and straightforward process. Once logged in at Redfin, you begin by searching for your property on their website. This will populate a Redfin Estimate for said property, along with some public facts like square footage and number of bedrooms and bathrooms. Simply click on “Create an Owner Estimate” to get...

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### The Largest Nonbank Home Purchase Lender in the Nation Is a Wholesaler

- Published: 2018-09-11
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/the-largest-nonbank-home-purchase-lender-in-the-nation-is-a-wholesaler/
- Categories: Mortgage News

Everyone wants to be #1 these days. I guess that’s no different than any other days, but the battle to be on top is growing more and more contentious, especially as overall home loan volume wanes. Rather surprisingly, a nonbank lender that also happens to be a wholesaler took the second spot for home purchase lending in the second quarter of the year. United Wholesale Mortgage Beat Out Everyone But Wells Fargo The wholesale lender originated $11. 2 billion in the second quarter Of which $8. 3 billion was home purchase loans Overall loan volume up 68% year-over-year compared to the six-month mark of 2017 Highest growth rate among top 25 mortgage lenders in the country I’m referring to United Wholesale Mortgage, or UWM for short, which issued a press release to celebrate the accomplishment this morning. It’s the latest in a string of “we’re bigger than you” announcements in the mortgage industry, with a prior notable one being Quicken Loan’s declaration that it was the largest home loan lender in America back in February. Of course, all of these proclamations come with a little fine print, or perhaps some very specific categorization. For example, Quicken was the top mortgage lender in the fourth quarter of 2017, but Wells Fargo was still the top lender for 2017 overall. And UWM was simply the largest nonbank purchase loan lender in the nation during the second quarter. If we remove the nonbank part from the equation, Wells Fargo was once again king,...

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### Quicken Launches Rocket Homes to Compete with Zillow and Redfin

- Published: 2018-09-11
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/quicken-launches-rocket-homes-to-compete-with-zillow-and-redfin/
- Categories: Housing Market, Mortgage News

Following the recent trend of real estate and mortgage link-ups, Quicken Loans has launched “Rocket Homes” to fill in the real estate gap and simultaneously compete with the likes of Zillow and Redfin. The company actually isn’t new, but is a rebrand of Rock Holding Inc. ’s In-House Realty, aligning it with its very popular and successful Rocket Mortgage home loan lending unit. In-House Realty Becomes Rocket Homes The company has been around for more than 10 years Rebranding to align with other Quicken brands Already one of the nation’s largest real estate referral networks With more than 25,000 agents in nearly every neighborhood nationwide In-House Realty, now Rocket Homes, has been around for more than a decade, and is actually one of the largest real estate referral networks. They’ve already helped some 500,000 clients buy and sell homes via the assistance of 25,000+ licensed real estate agents. Now they want to go a step further by creating a seamless home buying experience from start to finish that combines the online home search, real estate agent selection, and the mortgage process. Together, the hope is to create a one-stop shopping experience for home buyers who can find a home via the Rocket Homes portal and then get financing for their home purchase via Quicken Loans, which will be the preferred lender. On the consumer side of things, Rocket Homes will probably look similar to Zillow, with a home search feature and tons of information on properties like number of bedrooms...

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### 5 Things Home Buyers Are Doing If They Haven’t Found a Property After 3 Months

- Published: 2018-08-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/5-things-home-buyers-are-doing-if-they-havent-found-a-property-after-3-months/
- Categories: Housing Market, Mortgage News

If you’re a prospective home buyer, life isn’t fun right now. The real estate market remains red hot (despite those headlines about it cooling) and quality properties are few and far between. Adding to this frustration is the notion that with every passing day, mortgage interest rates are inching higher and higher, putting further strain on eroding affordability. Meanwhile, existing homeowners are having a field day, getting top dollar for homes that just a few years ago may have been underwater and worth half as much. The Home Search Is Often Taking 3 Months or Longer While 90 days isn't necessarily such a long time to find a home Today's buyers are spending a good amount of time house hunting And it's often ending with either few or no prospects Or concessions such as paying more than budgeted or buying outside the desired locale A new poll from the National Association of Home Builders (NAHB) found that the home search isn’t a quick one these days, even though homes seem to get scooped up instantly once they’re listed. Some 14% of adults who responded to their prior poll in the second quarter of 2018 said they planned to purchase a home in the next 12 months, with 49% "actively engaged" in the search. More than half of those who indicated that they had started the home searching process said they’ve been spending three months or longer attempting to find the right home. This has been the case for the past...

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### Zillow Enters the Mortgage Originating Business

- Published: 2018-08-06
- Modified: 2023-11-15
- URL: https://www.thetruthaboutmortgage.com/zillow-enters-the-mortgage-originating-business/
- Categories: Mortgage News

In what seemed like a pretty inevitable move, Zillow has gotten into the mortgage originating business via its acquisition of Mortgage Lenders of America, which is expected to close in the fourth quarter of 2018. I say inevitable because just about every other major real estate or mortgage player is taking steps to ensure they’re involved in all (or many) aspects of the transaction. In fact, Zillow noted in its second quarter 2018 shareholder letter that it’s their goal to become “more of an end-to-end provider for housing-related services. ” Obviously, it’s synergistic to do so and creates a new way to cross-sell and perhaps streamline the home buying process. It’s kind of like how real estate agents have a “mortgage person” in-house to quickly dole out home loan pre-approvals and to ensure their would-be home buyer can actually make it to the finish line. Zillow Was Already in the Mortgage Business Zillow has been in the mortgage business for many years Selling mortgage leads to lenders via its Mortgage Marketplace And it owns a company called Mortech That provides mortgage pricing, online rate quoting, and rate sheet generation For the record, Zillow isn't at all new to the mortgage industry, with its Mortech arm that provides mortgage rate pricing and related tools, and its Mortgage Marketplace, where they sell borrower leads to lenders. So they're not entering the mortgage business, they're entering the mortgage origination business. They will actually be making mortgages instead of staying on the periphery. It's...

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### Don’t Make the Mistake of Calling the Housing Top Too Early

- Published: 2018-08-02
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/dont-make-the-mistake-of-calling-the-housing-top-too-early/
- Categories: Housing Market, Mortgage Tips

It’s that time of year again, when we enter the housing doldrums and everyone in the industry begins to panic. Further exacerbating things this time around is the fact that mortgage interest rates are in uncharted territory. Yes, I’m being facetious, they’re a mere percentage point above their all-time lows. And last time I checked, a 30-year fixed mortgage in the 4% range is a pretty decent rate, even if it isn’t the lowest rate ever offered in history. But sure, it doesn’t help matters that financing is more expensive and clearly does nothing to boost eroding affordability. Though it probably won't hinder the market much either. It’s Typical for Things to Slow Down This Time of Year If you've been seeing reports of slowing home sales And headlines warning that we could be headed toward another bubble Know that it's normal for housing to sputter out in the heat of summer Before repeating its spring fling next year The housing market is more or less predictable, with a quiet winter, followed by a busy spring home buying period, followed by a waning summer and less busy fall. So it’s not unusual for market watchers and everyday Joes to begin questioning the housing market this time of year, wondering if this is the last great year for real estate. After all, if the market isn’t absolutely crushing it, something must be seriously wrong, right? We’re already starting to see the articles about the housing market “cracking. ” Or beginning to...

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### Freedom Mortgage Review: Specialize in VA Loans But Offer Everything Else Too

- Published: 2018-07-30
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/freedom-mortgage-review-specialize-in-va-loans-but-offer-everything-else-too/
- Categories: Mortgage Tips

While "Freedom Mortgage" might not be a household name like Quicken Loans or Wells Fargo, the company often finds itself in top-10 lists when it comes to mortgage lending. In fact, they were the top VA lender during 2020, funding a whopping $72 billion in VA loans, and the top FHA lender with $35 billion in FHA loan volume. Freedom Mortgage also set a new monthly record in December 2020 with nearly $15 billion in total volume, which is a testament to how large they have become. So they’re clearly no slouch in the home loan space. In fact, they recently celebrated their one millionth borrower, who happened to be a veteran living in Fishers, Indiana. The borrower being a veteran was no coincidence because Freedom Mortgage specializes in government lending, including both VA loans and FHA loans. It also wasn’t surprising that the borrower resided in Fishers, seeing that Freedom Mortgage is the second largest employer there thanks to its 2006 acquisition of Irwin Mortgage. Table of Contents - Freedom Mortgage History - #1 VA Loan Lender in the United States - What Freedom Mortgage Offers - Freedom Mortgage Rates - Freedom Mortgage Reviews - Thoughts on Freedom Mortgage - Pros and Cons of Freedom Mortgage - Freedom Mortgage vs. Veterans United The History of Freedom Mortgage They were founded all the way back in 1990 (they are industry veterans) Refer to themselves as 5th largest mortgage provider in the United States The company's main headquarters are in Boca...

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### Getting a Mortgage with a Gig Economy Job

- Published: 2018-07-25
- Modified: 2019-10-22
- URL: https://www.thetruthaboutmortgage.com/getting-a-mortgage-with-a-gig-economy-job/
- Categories: Mortgage Tips

If you’re one of many people out there who happens to bring in money from a so-called “gig economy” job, you might be wondering if such income can be used to obtain a home loan. Most mortgage lenders will verify your income to determine how much mortgage you can afford. But if it can’t be documented, or is unusual in any way, you may run into trouble when attempting to use it. While the kinks are still being worked out for on-demand workers, seeing that it’s such a new trend, the good news is mortgage financiers like Fannie Mae and Freddie Mac are already discussing options and beginning to take action. This means it should get easier to use gig economy income when it comes time to get a mortgage, even if it isn’t totally clear at the moment. The cooling mortgage market may also result in a more expeditious effort on this front to get more customers in the door as millions could benefit from clearer rules. What Is the Gig Economy? While temporary employment isn't a new thing by any means The ability to work remotely and get hired quickly Often just with a smartphone and no direct boss Is a relatively new concept that is changing the way we look at working First things first, let’s discuss what exactly the gig economy is. Put simply, it’s the workforce behind companies like Uber, Lyft, Postmates, Airbnb, Amazon Flex, Etsy, TaskRabbit, and many others. It’s basically a job that...

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### Redfin Compete Score: How Hard Is It to Win That Home?

- Published: 2018-07-24
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/redfin-compete-score-how-hard-is-it-to-win-that-home/
- Categories: Housing Market, Mortgage News

Redfin just launched its so-called “Compete Score,” a tool designed to help prospective home buyers determine how hard it’ll be to “win a home” in a particular city or neighborhood. Is this the beginning of the end? The late stages of a housing market rally that began nearly six years ago depending on the region of the country? It feels a little ominous, but let’s learn more about this new tool for home buyers and sellers that complements their existing Redfin Estimate. What Is Redfin Compete Score? A new housing market competition tool from Redfin That measures now competitive a city or neighborhood is Based on things like average number of offers received Along with sale-to-list price ratio and days on market At the moment, Compete Score is available in some 8,200 cities and 13,000 neighborhoods across the United States. In short, it measures how many offers a home typically receives in a certain region, along with what price a home tends to sell for relative to its list price. Additionally, days on market and number of waived contingencies is calculated. This results in a Compete Score ranging from 0 to 100, with the higher numbers representing more competition and the lower numbers signifying less interest. When you browse a specific listing on Redfin’s website or app, you’ll see a section about market competition under the neighborhood tab. You can also see a Compete Score for an entire city or neighborhood on the new “Home Values” tab when searching in...

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### Flagstar Mortgage Review: Tons of Loan Programs to Choose From

- Published: 2018-07-11
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/flagstar-mortgage-review-tons-of-loan-programs-to-choose-from/
- Categories: Mortgage Tips

One of the larger, but perhaps lesser-known mortgage lenders out there is Flagstar Bank, which was just acquired by New York Community Bancorp in late April 2021. The savings bank, which has been around since the late 1980s, is based out of Troy, Michigan and publicly traded on the NYSE. They’ve also got billions in assets so they probably aren’t going anywhere anytime soon. Flagstar survived the Great Recession in the early 2000s, albeit with some bruises and scratches thanks in part to their strong mortgage presence. Despite a series of settlements related to their mortgage business, they remain also a top home loan originator, with the company self-proclaiming itself to be a “top 5 bank mortgage originator. ” Notice they said bank because many of today’s largest mortgage lenders aren’t banks, and are in fact non-banks, meaning they don’t take in deposits like Flagstar does. Not only is Flagstar a bank, but they have aspirations to become an even bigger one. The company recently acquired 52 banking branches from Wells Fargo in a bid to double its customer base, and it just happened to purchase them from the nation’s largest mortgage lender. And their logo is being featured on the front of the Detroit Pistons jerseys, representing the franchise's first-ever sponsor. So it sounds like Flagstar is on a mission to grow even larger in the home loan space and become more of a household name nationwide. Let’s learn more about them to see if they should be included...

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### Average Home Seller in 2017 Made Only $39,000

- Published: 2018-06-27
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/average-home-seller-in-2017-made-only-39000/
- Categories: Housing Market, Mortgage News

While all the headlines paint a really rosy picture for the real estate market where sellers are cashing in mega gains, the average takeaway isn’t all that great. A recent analysis from Zillow revealed that the typical home seller in 2017 earned just $38,856, which was actually slightly below the figure seen a year earlier. And while the past two years have been the best since 2007, when the median gain was $47,500, it’s not all that fantastic. A $15k Gain for Home Sellers After Inflation? You can look at the before and after sales price and think Wow! But once you factor in inflation And other costs like staging, moving, and other fees The actual return on investment could be quite poor Adjusted for inflation, the number falls to just $15,000 for the average home seller. And if you look at it as an annualized return, it’s just 2. 94%. For the record, those who sold their homes last year owned them for a median 8. 5 years. So before you think you’re missing out, ask yourself exactly what you expect to miss. Some Sellers Are Cashing In Big Time There will always be big winners in real estate Just like there are with any other investments Like the stock market where individual names skyrocket But understand returns will vary tremendously Sure, other areas saw much bigger returns. For example, San Jose home sellers led the nation with a staggering $296,000 median dollar gain, which adjusted for inflation was...

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### Should You Pay Off Your Mortgage Before Retirement? There Are Pros and Cons

- Published: 2018-06-13
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/should-you-pay-off-your-mortgage-before-retirement/
- Categories: Mortgage Tips

If you speak to any financial planners or so-called experts on the matter, they’ll probably say, “Yes, pay off your mortgage before you retire. ” But is it fair to make the same conclusion for all individuals? Probably not. And times are changing... Homes are a lot more expensive than they used to be.   And mortgage rates are a lot lower. Contrast this to the 1980s, when mortgage rates were double-digits and home values were sub-$100k. This, along with eroding affordability and lower savings for the average American, and it's a question that has taken on new life. Carrying a Mortgage Into Retirement Most experts will tell you to extinguish the mortgage before you retire from your job The rationale is that you'll be on a fixed income with reduced cash flow But with mortgage rates so cheap, one could argue to keep the mortgage And put money toward other things, like funding a retirement account The logic to burning the mortgage before you retire is that you’ll be on a fixed income and you’ll need to stick to a strict budget to ensure you have cash on hand for all your living expenses. And potentially even more money to pay for expensive medical care as you get really old. There’s also the fear of losing your home because you can’t keep up with mortgage payments, the last thing any older retired individual would want to deal with. Others may go even go a step further in saying that...

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### Laurel Road: Truly Digital Mortgages Built Entirely Online

- Published: 2018-06-13
- Modified: 2024-08-01
- URL: https://www.thetruthaboutmortgage.com/laurel-road-truly-digital-mortgages-built-entirely-online/
- Categories: Mortgage News

Another Millennial or even Gen-Z focused mortgage lender has come online, literally, to offer you a mortgage. I’m talking about Laurel Road, which sounds like a really neat place to get a home loan. They claim to “offer an end-to-end digital experience,” meaning you can go through the entire home loan process without leaving your couch, maybe. The use of technology like data verification and the policy of human interaction only when needed can speed up the loan process and potentially cut costs for the borrower. It’s a pretty common claim these days as up-and-coming disruptors emerge in the space and the old guard scurry to update their stale practices. Let’s learn more about the company to see what they’re all about and if they’re any different than what’s already out there. Laurel Road Began in the Student Loan Space Originally known as Darien Rowayton Bank Their online lending division began offering student loan refinancing in 2013 They’ve done over $3 billion in loan origination volume since then And now wants to dive into the mortgage space They are a Darien, Connecticut-based FDIC-insured bank and direct lender formerly known as “Darien Rowayton Bank,” which is the name of two cities near Stamford, CT. They appear to have three physical bank branches in that area of Connecticut, but seem to be making the move primarily to online lender. They offer home loan products in all 50 states, including Washington D. C. Laurel Road’s online lending division launched a student loan refinancing...

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### PNC Mortgage Review: Low Rates Maybe, and Now a Digital Application Process Too

> If you haven’t heard of PNC Mortgage before, you probably will soon. They’re a rapidly growing mortgage lender just outside the top-10 list.

- Published: 2018-06-05
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/pnc-mortgage-review-low-rates-maybe-but-not-much-else/
- Categories: Mortgage Tips

If you haven’t heard of PNC Mortgage before, you probably will in the near future. They’re a rapidly growing depository bank and mortgage lender with 2,600 branches across 19 states nationwide. PNC is also one of the top 10 largest banks in the United States based on total assets. However, most of their retail operations tend to be in the Midwest and Northeast regions of the country. But you can still apply for a home loan with the company from just about anywhere in the United States because they let you apply online, by phone, or in person at a branch. Let’s learn more about PNC to see if they should be included in your home loan search. Who Is PNC Bank? A depository bank and mortgage lender with roots in Pittsburgh The name is based on two former predecessors (Pittsburgh National Corporation and Provident National Corporation) They acquired National City Mortgage during the housing crisis in 2008 to become a major mortgage player A top-20 mortgage lender nationally that funded about $20 billion in home loans during 2022 The history of PNC Bank can be traced all the way back to the mid-1800s, though it’s unclear when they first began offering mortgages on residential properties. But one thing is certain – they’ve been around a while and look to be growing larger as time goes on, especially in the home lending space. One major catalyst in their growth story had to do with their timely acquisition of National City...

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### Citi Is Offering .50% Off Your Mortgage Rate If You Deposit a Million Bucks

- Published: 2018-05-31
- Modified: 2018-05-31
- URL: https://www.thetruthaboutmortgage.com/citi-is-offering-50-off-your-mortgage-rate-if-you-deposit-a-million-bucks/
- Categories: Mortgage News

Okay, it sounds a little silly, but it’s not a bad deal if you happen to have a million dollars lying around the house. CitiMortgage has so-called “relationship pricing” that affords its customers certain discounts on home loans they take out with the bank, which I know a lot of other banks offer as well. They just seem to be upping the ante when it comes to the discount, going beyond the boring old . 125% off your mortgage rate. CitiMortgage Offers Tiered Rate Discounts Depending on What You Deposit As you can see from this handy chart, even if you deposit just one dollar, you can get $250 off your closing costs when taking out a home loan with Citi. These tiers are available to both new and existing Citi customers, so if you already meet requirements, it's a no-brainer to at least consider them when looking for a mortgage. The caveat with any of these discounts is that you must agree to have the money automatically transferred from your Citi checking or savings account each month to make your mortgage payments. Banks favor autopay when it comes to receiving mortgage payments because there’s probably some data point out there that says it lowers default rates. It's unclear how long the money actually has to remain with Citi once your mortgage is funded. They certainly wouldn't require it to be there for a full 30 years... Anyway, if you’re able to muster a deposit of $50,000 or more, you...

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### Freddie Mac HomeOne Mortgage: New 3% Down Mortgage with No Income Restrictions

- Published: 2018-04-30
- Modified: 2018-04-30
- URL: https://www.thetruthaboutmortgage.com/freddie-mac-homeone-mortgage-new-3-down-mortgage-with-no-income-restrictions/
- Categories: Mortgage News

A new home loan program is being rolled out this July by Freddie Mac, known as “HomeOne Mortgage,” which features a 3% down payment and no income restrictions. While Freddie Mac already offers a similar 3% down program via its Home Possible Advantage loan, this new product doesn’t restrict borrower eligibility by income or geography. To accompany this launch, the existing Home Possible line of mortgages will see their income limits revised (capped) to 100% of area median income (AMI) for all loans other than those in low-census income tracts. This is being done to better serve low- and moderate-income borrowers via that program. In other words, HomeOne will be a broader 3% down home loan program, though the underwriting requirements are fairly similar. Let’s learn more about this exciting new home loan financing option. Freddie Mac HomeOne Requirements Must be an owner-occupied property Includes 1-unit single-family residences, condos and townhouses Must be a purchase transaction or rate and term refinance (no cash out) At least one borrower must be a first-time home buyer If all borrowers first-timers, must complete homeownership education Max loan-to-value ratio (LTV) of 97% Must be a fixed-rate mortgage At least one borrower must have a usable credit score The highlight of the new HomeOne loan program is its 3% minimum down payment, along with the lack of income restrictions. They actually allow a combined loan-to-value (CLTV) of 105% if you use an Affordable Second mortgage to go with it. But most home buyers will probably...

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### Mortgage Rates Vary by Lender, So Take the Time to Shop Around

- Published: 2018-04-18
- Modified: 2025-03-11
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vary-by-lender-so-shop-around/
- Categories: Mortgage Rates, Mortgage Tips

While mortgages are largely a commoditized product, unlike perhaps a TV or a smartphone with unique technology, their cost can still vary considerably by lender. The reason mortgage rates are different across banks and lenders could be a result of operating costs, risk appetite, desire to dominant a certain region, and so on. If one bank’s strategy is to be the most competitive on rate in California, they might be able to smoke the competition. But you won’t know that if you only speak to one company and it happens to not be that bank. Even One Additional Quote Can Save You Thousands! Here's why one mortgage quote simply isn't enough Borrowers who gather two mortgage quotes can save between $966 and $2,086 over the life of the home loan The savings jump even higher if you take the time to get 5+ quotes With the average expected savings a whopping $2,914! I get it – no one wants to do it, it’s painful, it’s annoying, it can be time-consuming. Who wants to be badgered by multiple salespeople? No one. But you need to change your mindset and look at that time spent as an investment. What is your ROI for spending a few additional hours speaking to other banks, credit unions, and mortgage brokers? A new analysis from mortgage financier Freddie Mac found that the ROI could be sky-high, seeing that 80% of borrowers who obtained just one additional mortgage rate quote will save between $966 and $2,086 over...

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### Carrington Mortgage Launches Line of Subprime Mortgages

- Published: 2018-04-05
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/carrington-mortgage-launches-line-of-subprime-mortgages/
- Categories: Mortgage News

Here we go again? Maybe, maybe not. Regardless, Carrington Mortgage has launched a new line of subprime mortgages available to the 100 million odd U. S. consumers who have less than perfect credit. For the record, Carrington already offers subprime loans via government channels, like the FHA and VA, since both permit credit scores in the 500s, which is well below the typical 620 FICO score subprime cutoff. What makes this more interesting is that the loans aren’t backed by Fannie Mae and Freddie Mac, or Ginnie Mae, so they appear to a be a proprietary loan solution offered up by Carrington. Home Loans for Credit Scores Down to 500 FICO scores as low as 500 Loan amounts as high as $1. 5 million Cash out as high as $500,000 Recent credit events are OK Bank statements acceptable to verify income My assumption is that the new line of mortgages will be considered non-QM, which means they don’t comply with the Qualified Mortgage rule. Among other things, the QM rule requires a max DTI ratio of 43% and no excessive upfront points and fees, with a 3% cap in place. It’s possible some of the loans may still earn the QM stamp of approval, but it will probably depend on the loan in question. Anyway, Carrington says they are an “ideal solution” for those who have lower credit scores, high debt-to-income ratios, a recent credit event, or just happen to be self-employed. Carrington’s Non-Agency Loan Products They are portfolio loan...

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### Getting a Mortgage on a Duplex, Triplex, or Fourplex

- Published: 2018-04-04
- Modified: 2023-01-19
- URL: https://www.thetruthaboutmortgage.com/getting-a-mortgage-on-a-duplex-triplex-or-fourplex/
- Categories: Mortgage Tips

One trend I’ve been seeing lately is buying a multi-unit property, such as a duplex, and renting out one unit while living in the other. The cool kids are referring to this as “house hacking” because you essentially get someone else to pay your mortgage, or at least a portion of it. Sweet bro! While that might be true, there are different underwriting guidelines applied to multi-unit properties, so it might not be as simple as it appears. First, What Is a Duplex? A duplex is a two-unit residential property Located on the same lot adjacent to one another With separate entrances (doorways) And completely exclusive living quarters Let’s start by defining what a duplex is . As the name suggests, it consists of two units, as opposed to one. So you wind up with two attached living units. This differs from a townhouse, which may have two floors but only one unit. The theory here is that you’d live in one and rent out the other, collect the rent from your tenant, and apply it to your mortgage payment each month. In effect, they pay off your mortgage for you. In that sense, you could lower your net housing expense while making an investment for your future. Sounds like a win-win, right? On the one hand, living right next to your tenant is a good thing – you can keep your eye on things and make sure they don’t destroy the place. On the other hand, living directly adjacent...

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### What Will Happen to Home Sales If Mortgage Rates Rise to 9%?

- Published: 2018-03-21
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/what-will-happen-to-home-sales-if-mortgage-rates-rise-to-9/
- Categories: Housing Market, Mortgage News

There’s been a lot of hubbub about mortgage rates since the start of the year. It’s not unwarranted, given the fact that 30-year fixed rates increased from 3. 95% to 4. 46% from January through early March, per Freddie Mac data. But they also dropped last week for the first time all year – so it’s possible we’re beginning to see a plateau after a few stressful months. And history tells us that periods of rapid increases are often followed by declines, meaning relief might be in sight for those affected by the supposed carnage. Forget 5%, How About a 9% Mortgage Rate? While 5% mortgage rates are within reach Let's talk about what would happen if they increased to 9% A doubling of current interest rates Actually wouldn't do much to dent the housing market Now let’s talk about that headline - what would happen to residential home sales if 30-year fixed mortgage rates doubled from around current levels of ~4. 5% to 9%? This assertion comes from First American (a title insurance company) and its chief economist Mark Fleming. He compares the unlikely scenario to actual events that took place between 1977 and 1981. During that period, mortgage interest rates rose from 8% to 18%, which is actually a 125% increase. It was the most “dramatic increase” in rates in 50 years, and in 1980 alone, rates shot up 50% year-over-year. As a result, single-family home sales plummeted 36% between 1979 and 1981. Could the same thing happen...

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### Guild Mortgage Review - A Mortgage Lender Big on Customer Satisfaction

- Published: 2018-03-19
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/guild-mortgage-review/
- Categories: Mortgage Tips

Guild Mortgage is one name you may have come across lately while searching for a mortgage. They’re a rapidly growing independent mortgage banker with over 350 physical, retail branches nationwide. Those branches are located in 49 states nationwide, with their employee headcount around 4,200 at last glance. New York seems to be the one state missing. In years past, they beat out Rocket Mortgage (formerly Quicken Loans) for the number one spot in customer satisfaction for primary mortgage originations by J. D. Power, which was a very big deal given Quicken's hold on the top spot. Let’s learn more about this privately held company to determine if they might be a good choice for your home loan needs. Guild Mortgage Got Started in San Diego in the 1960s Founded in 1960, originally known as Guardian Mortgage Initially offered FHA loans and financing for homes built by American Housing Guild Now a top-30 mortgage lender nationwide focused on retail lending Offers all types of home loans including mortgage refinances and renovation loans A publicly traded company under the symbol NYSE: GHLD Funded $15 billion in home loans during 2023 Licensed to do business in 49 states and the District of Columbia Originally known as Guardian Mortgage, the company launched in 1960 in San Diego, California, founded by Martin Gleich. In the beginning, they offered FHA loans to first-time home buyers and home purchase loans to buyers of homes built by American Housing Guild. Today, they are a top-10 mortgage lender by...

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### MassHousing Launches Zero Down Mortgage

- Published: 2018-03-19
- Modified: 2021-09-02
- URL: https://www.thetruthaboutmortgage.com/masshousing-launches-zero-down-mortgage/
- Categories: Mortgage News

There is yet another zero down mortgage option available to prospective home buyers, the latest being offered by The Massachusetts Housing Finance Agency (MassHousing). The quasi-public agency already offers 30-year fixed-rate mortgages up to 97% loan-to-value (LTV), but launched its Down Payment Assistance (DPA) program to extend financing to 100% combined loan-to-value (CLTV), meaning no down payment is necessary to purchase a home. Like similar home loan programs, there are maximum income limits, and it’s only available to home buyers in the state of Massachusetts. First-Time Home Buyers Can Get a Property with Zero Down MassHousing is offering a rare zero down home loan option To first-time home buyers Generally defined as those who haven't owned real estate in the past 3 years The property must be your primary residence First things first, the single-family home or condo needs to be your first. Generally, this means no ownership in real property in the past three years prior to application. It also means the home should be your primary residence, one that you occupy. But in reality, you may have owned a home several years ago and could still be eligible. Additionally, it might be possible to purchase a 1-4 unit property via this program. On top of the occupancy requirement, there are income limits, which vary by county. The maximum area median income is $103,4000 or less in eastern Massachusetts, $85,700 in Worcester County, and $67,200 in Berkshire County. Assuming you meet those requirements, you also have to meet minimum...

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### USAA Mortgage Review: VA Loans, Jumbo, and More

- Published: 2018-03-14
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/usaa-mortgage-review-va-loans-jumbo-and-more/
- Categories: Mortgage Tips

USAA Mortgage, technically known as USAA Bank Home Loans, is one of the larger mortgage lenders out there, though not quite in the top 10. They’re probably best described as a top 25 mortgage lender, but they’ve got a great website (per my opinion) and good customer service, per J. D. Power, so I figured it would be prudent to take a closer look. For the record, USAA stands for United Services Automobile Association, an outfit based out of San Antonio, Texas. The company has that name because they started out in the insurance business, helping military members get auto insurance coverage, then gradually began offering more financial services, including auto loans, personal loans, credit cards, and home loans. They're basically a full-fledged bank today, but let’s learn more about those mortgage offerings, including USAA's mortgage rates, shall we. What USAA Mortgage Offers Mainly conforming loans that meet Fannie/Freddie guidelines Also VA loans for military and their families Don't offer FHA or USDA loans Must be a USAA member to get a mortgage from them First off, USAA offer plenty of loan options, including conforming loans that meet the underwriting guidelines of Fannie Mae and Freddie Mac, along with VA loans, which are available for active duty military and veterans and their families. Additionally, they offer jumbo loans on loan amounts as high as $3 million, which should satisfy most home buyers, and even jumbo VA loans. Notably absent from their mortgage product lineup are FHA loans and USDA loans,...

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### Amazon Mortgage Might Be a Thing Soon

- Published: 2018-03-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/amazon-mortgage-might-be-a-thing-soon/
- Categories: Mortgage News

There have been a lot of so-called mortgage disruptors entering the space of late, but this might be the biggest yet. Could Amazon Mortgage be in the works? One recent clue says yes. Earlier this week, HousingWire noted that Amazon appears to be in the process of setting up a mortgage shop, and is apparently hiring talent from a nonbank in the top 10 HMDA lenders. I believe that includes the likes of Quicken Loans, loanDepot, and Caliber Home Loans, though it’s unclear if any of their former employees are actually involved. All the publication could say beyond that is Amazon is looking for someone to head up their “newly-formed mortgage lending division. ” A 1-Click Mortgage Sounds Kind of Nice, But... Amazon makes shopping really easy Allowing millions of customers to buy millions of items with one click But mortgages are a different beast Though the hope is technology will make them a lot easier and faster If you use Amazon, which I’m going to assume you do, you’re probably familiar with how easy they make everything. For example, you can setup 1-click ordering that allows you to purchase items you see on the site with a single click of the mouse. Or you can use a Dash Button to quickly reorder an item you use on a regular basis. You can also get most items delivered to your door in two days, though getting a mortgage in two days is another story. While home loans will inevitably never...

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### Ideal Credit Union Is Offering a Zero Down Mortgage with a Catch

- Published: 2018-03-05
- Modified: 2018-07-17
- URL: https://www.thetruthaboutmortgage.com/ideal-credit-union-is-offering-a-zero-down-mortgage-with-a-catch/
- Categories: Mortgage News

Ideal Credit Union, which has six locations scattered across Minnesota, is the latest mortgage company to offer a no down payment mortgage. But theirs is a little different than the rest. Instead of pitching the portfolio loan product to those who can barely afford a mortgage payment, they seem to be targeting prospective home buyers who make plenty but don’t necessarily have the assets to show for it (yet). Skip the Down Payment A Minnesota-based credit union Has launched a zero down home loan With a unique catch It isn't offered in a 30-year fixed product Their pitch for the new zero down mortgage product is “skip the down payment,” which I’m sure a lot renters would be thrilled to do if they could. But before you skip anything, you have to make sure you qualify for the mortgage. And you’re not getting a 30-year fixed mortgage via this program. That would be way too easy, apparently. Instead, you can choose from either a 20-year or 15-year fixed mortgage, both of which are usually suited for borrowers with more-than-adequate incomes. I say that because many borrowers struggle with maximum debt-to-income ratios even when applying for 30-year fixed mortgages. After all, the monthly mortgage payment will be about 50% higher for a 15-year fixed and roughly 25% higher for a 20-year fixed mortgage versus a 30-year loan. The upside is lower mortgage rates on both products relative to the 30-year fixed. Targeting the Well-Paid, Cash Poor You can get either a...

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### What Is a Gift Letter for a Mortgage? Know the Key Requirements

- Published: 2018-03-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-a-gift-letter-for-a-mortgage/
- Categories: Mortgage Tips

Mortgage Q&A: “What is a gift letter? ” A reader recently inquired about mortgage gift letters, so instead of simply answering their question, I figured I’d write an entire post on the subject to help others better understand this topic. If you’ve been browsing real estate listings lately and have big plans to buy a big house, but your down payment isn’t so big, you might have heard that you can get a gift for the down payment. You may also opt for a gift simply to get the loan-to-value ratio (LTV) down to 80% to obtain a favorable mortgage interest rate and/or avoid private mortgage insurance on a conventional loan. The same strategy might help you win a bidding war if the sellers aren’t all that impressed with your 3% down payment. Whatever the reason, you’ve got options if you have a wealthy donor willing to help you out. But gifting money isn't without its own requirements. Gift for Down Payment If you don't have your own down payment funds It's possible to get a gift from a qualified donor Such as a family member or domestic partner This option is available on many different types of loans, but rules vary While mortgage loan underwriting requirements vary, most mortgage lenders will allow you to use gift money for a down payment if you’re purchasing an owner-occupied property, one you plan to occupy as your primary residence. It can also be an option for a second home, such as a...

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### 2017 Was the Best Year for Home Purchase Mortgages Since the Market Peak

- Published: 2018-03-01
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2017-was-the-best-year-for-home-purchase-mortgages-since-the-market-peak/
- Categories: Housing Market, Mortgage News

It turns out 2017 was a banner year for mortgages, just not all of them. A total of $1. 148 trillion in home purchase mortgages were funded last year, the highest total since 2006, per new data from Inside Mortgage Finance. I guess if we consider inflation, and the fact that it has been over a decade, the numbers aren’t as peachy as they look. Still, the 2017 home purchase mortgage origination tally was up a sizable 10. 7% from 2016, thanks in part to first-time home buyers, who appear to be replacing real estate investors in what might be the later stages of this massive real estate rally. If you recall, home prices peaked in 2006, and then tanked, hard, before beginning to recover in 2012. We’re now flying high again, and some folks are worried we might be headed toward another housing crash. More on that in a minute. First-Timers Accounted for Half of Purchase Mortgages Nearly half of purchase mortgages went to first-timers Which tells you who's buying a home these days The investors seemed to have mostly disappeared Let's just hope the newcomers don't get burned like the group before them These first-timers accounted for nearly half (48. 6%) of purchase mortgages backed by Fannie Mae, Freddie Mac and Ginnie Mae (FHA loans and VA loans). Loan volume for first time buyers was up 4. 1% from 2016, while volume for repeat buyers inched up a mere 0. 3%. This might be a testament to the...

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### HUD Homes: Buy a Foreclosed Home for a Potential Discount

- Published: 2018-02-27
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/hud-homes-buy-a-foreclosed-home-for-a-potential-discount/
- Categories: Mortgage Tips

With the red hot real estate market showing no signs of letting up, prospective home buyers need to get increasingly creative in order to land their dream home, or any home for that matter. The fact of the matter is housing inventory is extremely limited, regardless of whether mortgage rates are going up or down. And that probably won't change anytime soon. One such overlooked program for a potential home buyer is “HUD Homes,” also known as HUD Homestore, which is the Department of Housing and Urban Development’s real-estate owned (REO) inventory available for purchase. In short, these properties were lost or forfeited, and are now ready to be purchased by a new homeowner. As such, a discount and/or less competition might work in your favor. What Is a HUD Home? The Department of Housing and Urban Development’s (HUD) real-estate owned inventory Foreclosed properties where the former occupant was an FHA loan holder Can be any residential 1-4 unit property including single-family homes, townhouses or condos Sold by HUD to the public as a means to cut their losses and move on First off, you should know what you’re buying if you go this route. Put simply, a HUD home is a 1-to-4 unit residential property that was acquired by HUD after an FHA borrower was foreclosed on. Once an FHA borrower loses their home, HUD becomes the property owner. Since they aren’t in the business of acquiring and selling homes, they look to offload the properties as soon as...

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### There Are Still Nearly 90,000 Borrowers Who Could Benefit from a HARP Refinance

- Published: 2018-02-19
- Modified: 2018-07-17
- URL: https://www.thetruthaboutmortgage.com/there-are-still-nearly-90000-borrowers-who-could-benefit-from-a-harp-refinance/
- Categories: Mortgage News, Refinance

Before mortgage rates began their recent upward trajectory to start off 2018, quite a few mortgage refinances squeaked through the door. Some 446,295 refinances were completed by Fannie Mae and Freddie Mac in the fourth quarter of 2017, up considerably from 362,934 in the third quarter, according to the Federal Housing Finance Agency (FHFA). The FHFA's Refinance Report for the fourth quarter also revealed that 6,309 loans were refinanced through the Home Affordable Refinance Program (HARP). Nearly 3. 5 Million Homeowners Have Refinanced via HARP While 3. 5 million homeowners already took advantage of HARP Another 88k still stand to benefit from the program You may want to act quick if it's you Because mortgage rates are on the rise With the latest quarter’s numbers now on the books, the total number of HARP refinances completed via the program since inception in 2009 stands at 3,484,025. It’s oh-so-close to 3. 5 million, which even if it doesn’t get that high, would be seen as a very successful campaign to help underwater homeowners take advantage of lower mortgage interest rates. Speaking of getting to that number, there are still 88,841 borrowers who stand to benefit financially from a HARP refinance, per data from September 30th, 2017. Sure, mortgage rates have increased since then, but who knows what these near-90,000 borrowers are currently paying. Many borrowers who haven't refinanced post-mortgage crisis still have fixed rates of 6% and up. The 30-year fixed is closer to 4. 5% today as opposed to the...

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### loanDepot Has a 150-Day Rate Lock for Those Who Want Today’s Rates This Summer

- Published: 2018-02-14
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/loandepot-has-a-150-day-rate-lock-for-those-who-want-todays-rates-this-summer/
- Categories: Mortgage News

I came across a flyer today from loanDepot advertising a 150-day rate lock for borrowers interested in today’s mortgage rates, who are worried (like everyone else) that they’ll be a lot higher later this year. It’s not unusual for mortgage lenders to offer 60- or 90-day rate locks for those just beginning the loan process, but a full five months is certainly noteworthy. It’s also a testament to the current fear and panic in the mortgage market, with just about everyone believing it’s a sure thing that mortgage rates will go up from here. As it stands, they’re already significantly higher than they were at the end of 2017. The 30-year fixed could be had for around 4% in December, but is now closer to 4. 5%. On a $400,000 loan amount, we’re talking about a difference of roughly $120 per month. It shouldn’t necessarily sway someone’s decision to rent or buy, but it’s still one more negative to contend with seeing that home prices are lofty themselves. You Can Lock Before You Find a Home loanDepot is offering a crazy 150-day rate lock And you can lock your rate before you even find a property They're also tacking on a float-down option To cover all bases What makes this offer even more compelling is the fact that you can lock your rate before you actually find your dream home. Yep, no purchase contract is necessary to get today’s rate written in stone. And to make the deal even sweeter...

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### Higher Mortgage Rates Likely to Have Little Effect on Housing Market

- Published: 2018-02-12
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/higher-mortgage-rates-likely-to-have-little-effect-on-housing-market/
- Categories: Mortgage News

Well, it’s been a stressful couple of weeks, and the way the stock market is swinging at the moment, it doesn’t appear to be abating. Grab your Tums, buckle your seat belt, and hang on. Don’t you love waking up to the Dow rising 400 points, only to check in after lunch and find that the index is 500 points in the red? It should provide for a nice chuckle. The current atmosphere is reminiscent of the fast and loose days prior to the Dotcom bubble crash. I recall it vividly – mega gains followed by mega losses for months on end. Up down up down until the ups went away. We might not be “there” quite yet, but it is feeling eerily familiar. Meanwhile, those low mortgage rates (remember those? ) we’ve all come to rely on are starting to drive off into the sunset. What was once a sub-4% 30-year fixed is now closer to 4. 5%, depending on the mortgage lender in question. And quite frankly, that’s no fun for prospective home buyers or even lenders for that matter. It hurts both parties in terms of affordability and profitability, respectively. But is it as bad as it seems? The answer is probably not. In times like these, I wait patiently for cooler heads to prevail, and fortunately, some have. Mortgage Rates Have Seen 1%+ Increases More Than 10 Times in the Past 43 Years Using similar data from the past We know that rates have increased at...

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### Airbnb Income Can Officially Be Used to Qualify for a Mortgage Refinance

- Published: 2018-02-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/airbnb-income-can-officially-be-used-to-qualify-for-a-mortgage-refinance/
- Categories: Mortgage Tips

Call it a sign of the times, or perhaps the power of the sharing, or “gig” economy. You can now officially use Airbnb income to qualify for a mortgage refinance with select lenders. Yes, if you’ve been renting out your home, or a part of your home via the short-term rental company Airbnb, you might be able to use that income to help qualify for a mortgage. This could be especially helpful now that mortgage rates have shot up from recent lows, giving homeowners that extra little bit of income to ensure their DTI ratio doesn’t exceed the maximum. What's more, you're able to rent out your primary residence and still qualify for a home loan as if it's owner-occupied. That too can lead to a lower mortgage rate, as interest rates are higher on second homes and investment properties. Airbnb Mortgage Pilot Program Backed by Fannie Mae Airbnb has teamed up with Fannie Mae on a new pilot program It involves three large lenders: Quicken Mortgage, Better Mortgage, and Citizens Bank Will make it easier to use Airbnb income to qualify for a home refinance Can use rental income to lower your DTI if you've been renting your primary residence for at least 12 months Initially, three mortgage lenders will take part in the pilot project backed by Fannie Mae, with others likely to join in the future if all goes well. They include the likes of Quicken Loans, currently the largest home loan lender if you consider the...

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### Top Reverse Mortgage Lender AAG Now Offering Forward Mortgages

- Published: 2018-02-07
- Modified: 2018-07-17
- URL: https://www.thetruthaboutmortgage.com/top-reverse-mortgage-lender-aag-now-offering-forward-mortgages/
- Categories: Mortgage News

File this one under: why didn’t we (they) think of this sooner. While it might seem like a no-brainer in hindsight, top reverse mortgage lender American Advisors Group (AAG) will now start serving up forward mortgages to its customers. Reverse vs. Forward Mortgage In what seems like a strange turn of events No pun intended, honest! Top reverse mortgage lender AAG Will begin offering forward mortgages to customers A forward mortgage is just a fancy way of calling a home loan a mortgage if the context is reverse mortgages. A reverse mortgage, on the other hand, is a home loan where the borrower doesn’t have to make monthly payments but receives cash via the home equity they have accrued. They are popular among seniors who need dough, want to keep their homes, but might be on fixed income and unable to afford monthly payments that come with a mortgage. Or unable to qualify for a typical mortgage refinance. Anyway, AAG, which bills itself as the “nation's leader in reverse mortgage lending,” realized a reverse mortgage wasn’t the “right fit” for all homeowners. But they were getting in contact with to a ton of homeowners with a massive amount of combined home equity. At some point a lightbulb went off and they realized a lot of potential leads were going out the door. Apparently, AAG interacts with 400,000+ “older Americans” each year, thanks in part to their TV advertisements featuring Magnum P. I. aka Tom Selleck. By the way, he’s 73!...

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### Quicken Loans Is the Largest Home Loan Lender for the First Time Ever

- Published: 2018-02-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-is-the-largest-home-loan-lender-for-the-first-time-ever/
- Categories: Mortgage News

Anyone watching this space knew it was going to happen, but perhaps not this fast. Quicken Loans officially became the largest mortgage lender in the country during the fourth quarter of 2017, surpassing its long-time rival Wells Fargo. Quicken Loans Largest Mortgage Lender in Fourth Quarter of 2017 Quicken Loans quietly became the largest home loan lender nationwide The non-bank managed $25 billion in retail origination volume during Q4 2017 Surpassing Wells Fargo by about $2 billion from October through December But the San Francisco-based bank was still the largest lender for all of 2017 The Detroit-based residential direct-to-consumer home loan lender mustered around $25 billion in loan origination volume during the final quarter of the year, outpacing rival Wells by some $2 billion, according to Crain’s Detroit. Bank of America and Chase, which are far larger banks, only managed $13 billion and $11 billion during the quarter, respectively. Of course, we’re only talking about a three-month period here. Quicken Loans CEO Jay Farner confirmed to Crain’s that it didn’t beat out Wells Fargo throughout 2017. The San Francisco-based bank and mortgage lender, which had a rough year and change thanks to scandals aplenty, reportedly did $114 billion in residential home loans last year. Quicken didn’t disclose its total annual figure, but confirmed it wasn’t as high as Wells’ 2017 calendar year numbers. Wells also apparently had its worst quarter in the final three months of the year, which might explain how Quicken was finally able to overtake the megabank....

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### Better Mortgage Is Giving Home Buyers Pre-Offer Appraisals to Help Them Compete

- Published: 2018-02-01
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/better-mortgage-is-offering-pre-offer-home-appraisals-to-its-customers/
- Categories: Mortgage News

In a bid to get a leg up on the competition, Better Mortgage is allowing prospective home buyers to get an appraisal on a property before actually making an offer. Ideally, this gives them the power to go head-to-head with all-cash buyers, who are often favored because of the relative risks involved with obtaining a mortgage. One of those risks centers on the home appraisal, which may not come in at value. If it happens to fall short of the purchase price, the buyer and seller would need to renegotiate, and it’s not always a positive outcome. How the Pre-Offer Appraisals Work Better Mortgage is offering complimentary pre-offer appraisals Which are exactly what they sound like A home appraisal conducted before you make an offer on a home Conducted by a local appraiser or Appraisal Management Company (AMC) In a nutshell, Better Mortgage has so-called “appraiser panels” in select markets, which are made up of independent local appraisers or Appraisal Management Companies (AMCs). Like other home appraisers, they will visit the subject property, inspect it, and provide a value. The difference is that they come up with a valuation range, not a specific home value. Once the home buyer executes the purchase contract, the same appraiser will return to the property and complete the appraisal, fine-tuning the valuation as they would on a normal appraisal. They are basically at the ready if and when a prospective home buyer is interested in making an offer. Per Better, they were developed to...

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### PHH Mortgage to Provide Borrowers with $30.4 Million for Improper Loan Servicing

- Published: 2018-01-03
- Modified: 2018-06-12
- URL: https://www.thetruthaboutmortgage.com/phh-mortgage-to-provide-borrowers-with-30-4-million-for-improper-loan-servicing/
- Categories: Mortgage News

It’s 2018 and the mortgage settlements continue. As part of an agreement reached today with 49 states and Washington D. C. , PHH Mortgage Corp. will pay out $30. 4 million to borrowers impacted by so-called improper mortgage servicing. PHH Is a Top-10 Home Loan Servicer Because PHH is one of the largest residential loan servicers A lot of customers have been affected By their alleged loss mitigation abuses Which could mean you're eligible for a cash payment The company, which is the ninth largest non-bank residential mortgage servicer in the country, was accused of improperly servicing home loans from January 1st, 2009 through December 31st, 2012. The complaint filed by the state attorneys general alleged that PHH “threatened foreclosure and conveyed conflicting messages” to some homeowners who were taking part in loss mitigation efforts. This was a common issue during the aftermath of the housing crisis, whereby some lenders would engage in dual tracking, which simultaneously pushes a borrower toward foreclosure while their loan modification is being processed. The practice has since been outlawed, and lenders are required to pump the brakes on foreclosure if another loss mitigation option is being administered. PHH was also accused of charging “unauthorized fees for default-related services,” along with failing to maintain adequate documentation pertaining to the foreclosure. They also apparently failed to respond to borrowers’ complaints in a timely manner, or apply payments made by certain borrowers. In addition, the complaint claims that PHH didn’t properly oversee its third-party vendors or preserve...

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### Guaranteed Rate Launches New Jumbo Loan with Interest-Only Option

- Published: 2018-01-02
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-launches-new-jumbo-loan-with-interest-only-option/
- Categories: Mortgage News

Well, it’s a new year, and with that comes new and exciting home loan programs to help borrowers purchase homes or refinance existing mortgages. The newest one comes courtesy of Guaranteed Rate, which launched its “GR Flex Power” mortgage that requires as little as 10% down on loan amounts as high as $3 million. Additionally, those who are able to muster a 15% down payment can take advantage of an interest-only option on both fixed mortgages and ARMs. And despite the down payment being less than 20%, the GR Flex Power loan does not require private mortgage insurance to be paid. That’s a good thing seeing that it’s no longer tax deductible. Of course, the mortgage rate will probably be higher to compensate for the lack of PMI. Whether that turns out to be a net positive or negative will depend on how you pay your taxes. GR Flex Power Is Underwritten In-House It's starting to feel like the old days in the mortgage world The GR Flex Power home loan combines jumbo with interest-only Loan amounts as high as $3 million and DTIs up to 50% A portfolio loan product to be sure It should be noted that this new jumbo loan program is a portfolio loan, meaning it is proprietary to Guaranteed Rate. This allows them to underwrite the loan program in-house, instead of being at the mercy of third-parties such as Fannie Mae, Freddie Mac, or the FHA. As such, they’re able to waive the PMI requirement...

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### 2018 Real Estate and Mortgage Predictions

- Published: 2017-12-29
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2018-real-estate-and-mortgage-predictions/
- Categories: Housing Market, Mortgage Tips

Just like that, another year has gone by, well, almost. There are still a few days left and anything can happen. In the meantime, I present my latest installment of real estate and mortgage predictions for the year 2018, which I hope will be a fantastic one for all. As always, you can see my prior predictions to see how well I did in the past. Here are the ones from 2017 and 2016. You can search my site for even older ones if you’ve got nothing but time on your hands. Speaking of 2017, I think I did alright, though I was slightly wrong about mortgage rates and missed the mark on the FHA premium cut, though that one was a bit of a curve ball. Anyway, let’s forget about the past and look ahead to the future. 1. Mortgage rates will rise moderately I always like to start with the mortgage rate prediction first since it tends to be the most interesting (and the most in demand). A couple weeks ago, I penned my 2018 mortgage rate forecast post, which is a compilation of several prominent real estate and mortgage groups’ predictions. I’m going to go with Freddie Mac in 2018 and bank on a slow rise throughout the year that ends with the 30-year fixed mortgage close to 4. 5%, up from the current 4% or so. It’s probably not enough to dent anyone’s homeownership dreams, though if home prices rise as well, and you can’t get...

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### See How Exuberant Your Housing Market Is

- Published: 2017-12-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/see-how-exuberant-your-housing-market-is/
- Categories: Housing Market, Mortgage News

Back in the mid-1990s, former Federal Reserve Board chairman Alan Greenspan used the phrase “irrational exuberance,” which served as a warning that the stock market may have been overextended. This was around the time of the dot-com bubble and there was increasing worry that investors were piling into tech stocks with no regard for their actual value. It turns out this was indeed a reason to worry. The housing market in the early 2000s mirrored this atmosphere, with everyone and their mother buying houses for the sole purpose of turning a quick profit. If they already owned a home, they were refinancing their mortgage early six months (in serial fashion) and pulling cash out each time they did to purchase Hummers and other luxuries, all the while banking on further home price appreciation to absorb the cost. I’ve mentioned before that I was renting a house with some friends during that time and was told by the owner that, “Oh, I refinance every six months, I have my rep at Countrywide, no worries. ” This was in response to me fretting about the state of the housing market – but she had it fully under control. Because why wouldn’t you refinance every six months, right? Now we’ve come a long way since then, but the housing recovery isn’t exactly equal across every market, this according to new research by Kate Seabaugh, Manager, and Danielle Nguyen, Research Analyst, of John Burns Real Estate Consulting. One Housing Market Is Still in Recovery...

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### 2018 Mortgage Rate Forecast: Overall It’s Looking Pretty Good

- Published: 2017-12-13
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/2018-mortgage-rate-forecast-overall-its-looking-pretty-good/
- Categories: Mortgage Rates, Mortgage Tips

It’s that time of the year again, when we take a look at what’s in store for mortgage rates the following year. So without further ado, here is the “2018 mortgage rate forecast” from a variety of different housing and mortgage groups. Note that these forecasts generally apply to conventional loans backed by Fannie Mae and Freddie Mac. Typically, rates are slightly lower on FHA loans. 2018 Mid-Year Mortgage Rate Update We're now roughly midway through 2018 Let's take a look at which mortgage rate predictions are the most spot on The 30-year fixed has risen from around 4% to 4. 625%-4. 75% so far this year The MBA and NAR are doing the best, but a lot can change in no time at all Now that we're about halfway through the year, I figured I'd check in to see which forecast is most on point. It appears that with the 30-year fixed averaging close to 4. 625% and 4. 75% as of early August, the estimates from the Mortgage Bankers Association and National Association of Realtors are the most accurate. The MBA predicted a rate of 4. 7% by the third quarter of 2018 and they've basically nailed it on the head, which is somewhat unwelcome news for the prospective homeowners and existing borrowers looking to refinance their home loans. The NAR expected a rate around 4. 6%, which is also pretty close to what's being offered by mortgage lenders these days. Fannie Mae's prediction of 4. 1% is...

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### Will 2018 Be the Last Great Year for This Real Estate Boom?

- Published: 2017-12-11
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/will-2018-be-the-last-great-year-for-this-real-estate-boom/
- Categories: Housing Market, Mortgage Tips

A new survey of housing experts and economists led by Zillow sees home prices rising 4. 1% in 2018 before annual gains normalize at around three percent per year. So far this year, home prices have risen about 6. 5% (through October), though this same group of panelists estimated a 5. 6% annual gain on average. A year ago, the group expected home prices to rise just 3. 61% in 2017 and 2. 97% in 2018. In other words, they’ve been surprised by the exponential growth just like everyone else, and have constantly revised their estimates skywards. We’ve Been Hearing This Tune for a While It seems every year the real estate market does well We hear that it could be the last good year Until another year comes along And home prices rise yet again It reminds me of the mortgage rate predictions, which each year point to higher rates, and in recent years, have been wrong year after year. But as I warned with rates, they’ll eventually be right, and when that time comes, it could catch some folks out if they opt for an ARM over a fixed mortgage. Back in 2014, we were told that home prices would peak in 2016, yet another prediction we all know fell flat. That same forecast had home prices doing nothing for six years once they settled in during 2016. Oops. Wrong again. I don’t blame them – I think just about everyone felt home price gains were unsustainable back...

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### 2018 FHA Loan Limit Floor Increased to $294,515

- Published: 2017-12-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2018-fha-floor-loan-limit-increased-to-294515/
- Categories: Mortgage News

Just like the 2018 conforming loan limits, the FHA will see its 2018 loan limits increase as well, which is welcome news for home buyers in more expensive areas of the country. For FHA case numbers assigned on or after January 1st, 2018, the new loan limit floor for FHA loans will increase to $294,515 from $275,665. The floor, which is the FHA's minimum loan limit, is set at 65 percent of the national conforming loan limit of $453,100, which is a requirement under the Housing and Economic Recovery Act of 2008 (HERA). It applies in regions of the country where 115 percent of the median home price is less than the floor limit. FHA Loan Limit Ceiling Rising to $679,650 FHA loans limits will rise just like the conforming limit The new loan limit floor will increase from $275,665 to $294,515 The new loan limit ceiling will be $679,650, up from $636,150 This should allow more home buyers to take advantage of FHA financing Additionally, the FHA's loan limit ceiling, which is the max loan amount the FHA will insure, will increase to $679,650 from $636,150, in line with the high-cost conforming loan limit. There are several dozen metros that will enjoy these new, higher limits, including places like Los Angeles, San Francisco, New York City, Breckenridge, CO, areas in Virginia, and Washington D. C. While the FHA isn’t really geared toward high-income borrowers, it can still be a solution for some who lack a large down payment and/or...

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### Can You Pay the Mortgage with Bitcoin?

- Published: 2017-11-30
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/can-you-pay-the-mortgage-with-bitcoin/
- Categories: Mortgage Tips

Mortgage Q&A: "Can you pay the mortgage with bitcoin? " First off, I apologize for writing an article about bitcoin. I know it’s all the rage right now and I’m just adding to the hype, but it’s newfound relevancy warrants this post, maybe. U. S. Mortgage Lenders Accept U. S. Dollars At the moment U. S. dollars are the only form of payment accepted by U. S. mortgage lenders Any so-called bitcoin payment option will likely be through an intermediary service that converts bitcoin to USD before it reaches your lender/servicer The same goes for credit card payments, which only work via third-party processors But that could change if the technology allows for easier and cheaper crypto transfers As far as I know, all U. S. mortgage servicers only accept U. S. dollars for mortgage payments. So the simple answer would be no, you can’t use your bitcoin to pay the mortgage. But I have heard of third-party companies offering the service in the past, perhaps working as an intermediary between bitcoin holders and loan servicers. At that point though, you have to question what the benefit of such a service would be. If anything, it might just cost you money in conversion fees and so on. And even delays! I’ve also heard of individuals buying real estate with bitcoin, but that’s a different story because it’s an agreement between buyer and seller, and it’s effectively a cash-alternative transaction. In other words, they’re probably buying a property outright with bitcoin...

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### New Program Allows Renters to Get a Mortgage with as Little as a Security Deposit

- Published: 2017-11-29
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/new-program-allows-renters-to-get-a-mortgage-with-as-little-as-a-security-deposit/
- Categories: Mortgage News

Home Partners of America and New Penn Financial have joined forces to offer renters the ability to get a mortgage with as little as their security deposit. The joint venture aims to alleviate one of the main obstacles to owning a home, the down payment. It’s not the first time we’ve seen this in recent history, with HomeFundMe launching a crowdfunded mortgage down payment just last month. But this new program brings together a rent-to-own company with a mortgage lender to bridge the financing gap. The Ownership Conversion Pilot: Rent-to-Own with a Twist It's structured like a typical rent-to-own deal Where once a buyer finds a home to purchase It is purchased by the company and leased to the individual What makes it unique is the fact that they've partnered with a mortgage lender to facilitate the move from renter to owner The so-called “Ownership Conversion Pilot” has the same objective as others that came before it, but it’ll work a little differently. First, an approved applicant works with a licensed real estate agent to find a home that meets Home Partners' criteria, then the company purchases the property on their behalf. Home Partners of America currently buy homes in more than 50 markets nationwide, including places like Portland, Oregon and Stockton, California. Once the home is purchased, it is then leased to the applicant in a typical rent-to-own scenario, whereby the renter is given an option to buy the property in the future. There are both pre-determined rents and pre-determined...

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### 2018 Conforming Loan Limit Jumps to $453,100

- Published: 2017-11-28
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2018-conforming-loan-limit-jumps-to-453100/
- Categories: Mortgage News

It’s that time of year again, when the FHFA announces the conforming loan limit for the upcoming year. And like last year, it’s going up! This marks just the second increase in the past decade thanks to that pesky housing crisis that happened. But this year-over-year increase is a lot more significant than last year’s more nominal rise from $417,000 to $424,100. Because home prices have been on a tear lately, loan limits are getting a major boost. And it could be enough to put a lot of borrowers back in the conforming zone, which could amount to some savings. The conforming loan limit is the max loan size accepted by Fannie Mae and Freddie Mac, so it’s important for borrowers to stay at or below this level to receive the most favorable mortgage rate pricing. Home Price Gains Give Loan Limits a Big Boost Due to a 6. 8% rise in home prices Between the 3rd quarter of 2016 and 2017 The conforming loan limit will jump to $453,100 from $424,100 The high-cost loan limits will also rise to $679,650 from $636,150 The FHFA found that property values increased by 6. 8% between the third quarter of 2016 and 2017, which will lead to an increase in the baseline maximum conforming loan limit by the same percentage. That means homeowners will be able to borrow as much as $453,100 come January 1st, instead of the current $424,100. Additionally, the high-cost loan limits are also going up. The new ceiling...

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### Are Mortgages Simple Interest and Compounded Monthly?

- Published: 2017-11-21
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-mortgages-simple-interest-and-compounded-monthly/
- Categories: Mortgage Tips

People seem to be fascinated with how mortgages are calculated and paid off, but when it comes down to it, there’s nothing too mind-blowing happening. Each month, a portion of principal and interest are paid off as mortgage payments are made. Over time, the loan balance is reduced, as is the total amount of interest due. Mortgages Are Simple Interest Simple interest means it's not compounded So you don't pay interest on top of interest What you owe in interest is pre-determined on a home loan And paid over the life of the loan Here in the United States, mortgages use simple interest, meaning it is not compounded. So there is no interest paid on interest that is added onto the outstanding mortgage balance each month. Conversely, think of an everyday saving account that offers you compounding interest. If you have a balance of $1,000 and an interest rate of 1%, you’d actually earn more than 1% in the first year because that earned interest is compounded either daily or monthly. Put another way, you earn interest on your interest each day or month, which allows your money to grow more quickly. Mortgages don’t do that because the total amount of interest due is already calculated beforehand and can be displayed via an mortgage amortization schedule. For example, a $300,000 mortgage set at 4% on a 30-year fixed mortgage will have total interest due of $215,610 over the life of the loan. We know this beforehand because mortgages are amortized....

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### Flagstar Offering Zero Down Mortgages to Michigan Home Buyers

- Published: 2017-11-13
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/flagstar-offering-zero-down-mortgages-to-michigan-home-buyers/
- Categories: Mortgage News

Flagstar Bank is the latest mortgage lender to offer a home loan with zero down payment requirement. They even go a step further by offering to pay the borrower’s closing costs too. Sounds pretty sweet, doesn't it? Unfortunately, the new loan program is only available to select borrowers in the state of Michigan, where most of the company’s physical bank branches are located. However, Flagstar does have retail locations in 27 states, and offers mortgages to borrowers nationwide via their wholesale and correspondent channels. Flagstar Gift Program Provides 3% Down Payment and Closing Costs While not available to all home buyers nationwide Borrowers with limited income who purchase properties In low- and moderate-income areas of Michigan Can get a home with no down payment or closing costs thanks to Flagstar's gift program The so-called “gift program” from Flagstar Bank is intended to help low- and moderate-income home buyers in low- and moderate-income areas throughout Michigan. The company will promote homeownership in these areas by removing one of the major hurdles, the pesky down payment. It seems to be building off the Fannie Mae and Freddie Mae 97% LTV loan program that is widely available nationwide because borrowers will be gifted a 3% down payment. That means they’ll wind up with a loan for 97% of the value of the home, instant equity, and no cash out of pocket required. There is no obligation for borrowers to repay this 3% gift either, though they will apparently receive an IRS form 1099,...

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### Capital One to Stop Offering Mortgages

- Published: 2017-11-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/capital-one-to-stop-offering-mortgages/
- Categories: Mortgage News

It’s feeling a little like 2007 today. Back then, I was writing posts like this on a daily basis. Capital One has announced that it is exiting the mortgage business, seemingly surprising given the current real estate climate that is red hot. If you attempt to visit the Capital One Home Loans website, you’ll be greeted by a “Down For Maintenance” message. It also says they’ll “be back online shortly,” for whatever that’s worth. Mortgage Competition Too Fierce In what was seen as a surprising move Capital One exited the mortgage business entirely Thanks to increased competition that dented profitability 1,000+ jobs will be lost as a result Per Bloomberg, Capital One chose to exit the mortgage origination business entirely because increased competition meant it wasn’t a profitable venture. They will also cease making home equity loans, and more importantly, 1,100 employees will lose their jobs. Some 905 positions will be cut in Plano, Texas, St. Cloud, Minnesota, and Melville, New York. An additional 200 jobs are being eliminated at an undisclosed call center in what is apparently an unrelated move. Capital One president of financial services Sanjiv Yajnik told employees in an internal memo that the affected business lines “are in a structurally disadvantaged position, given the challenging rate environment and marketplace. ” And added that those “factors do not allow us to be both competitive and profitable for the foreseeable future. ” I’ll take that to mean that mortgage rates are now about three-quarters of a percentage point...

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### OfferPad Home Loans: iBuyer Links Up with loanDepot to Provide Bridge Financing

- Published: 2017-11-07
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/offerpad-home-loans-ibuyer-links-up-with-loandepot-to-provide-bridge-financing/
- Categories: Housing Market, Mortgage News

A so-called direct home buyer by the name of OfferPad that agrees to purchase homes in as little as 24 hours has announced a new joint venture with loanDepot to provide financing to those who use its platform. Specifically, the link up will look to solve one of the more common problems home sellers face – financing a new home purchase while they still own their old home. This can present all types of issues, with loans typically falling through thanks to debt-to-income ratios being too high with two mortgages to account for, or because sellers don’t want an offer that is contingent on a sale of the buyer’s existing home. This apparently resolves those issues by combining a bridge loan from loanDepot with a guaranteed purchase from OfferPad. What OfferPad Home Loans Provides A direct home buyer called OfferPad Is linking up with mortgage lender loanDepot To provide short-term bridge financing for a subsequent home purchase When you sell your existing home to them In a nutshell, a homeowner can agree to sell their existing home to OfferPad and also receive short-term financing for their next home purchase via OfferPad Home Loans. The loan will bridge the gap that occurs when the home seller is finalizing their old home sale. Instead of having to sell first, then find a new home to buy, they can do both things at once and still qualify for mortgage financing. All without the obligation of finding temporary housing. Once they close on their...

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### The Five Most Common Uses of Home Equity Lines of Credit

- Published: 2017-11-01
- Modified: 2018-07-17
- URL: https://www.thetruthaboutmortgage.com/the-five-most-common-uses-of-home-equity-lines-of-credit/
- Categories: Mortgage News

In case you hadn’t heard, home equity lines of credit are expected to get a lot more popular in coming years as homeowners take advantage of all that recent home price appreciation. A new TransUnion study reveals that some 10 million borrowers are expected to take out a home equity line of credit (HELOC) between 2018 and 2022. If that happens, it would be more than double the 4. 8 million HELOCs originated during the previous five-year period between 2012 and 2016. HELOCs Expected to Surge in Popularity Thanks to a combination of rapidly rising home prices Coupled with higher mortgage interest rates Second mortgages like HELOCs should become a lot more popular As a means to tap into all that newfound home equity You can thank rising home prices, which have increased aggregate home equity to levels above those seen in the mid 2000s. Back in 2005, when collective home equity stood at $13. 3 trillion, there were an astounding 4. 9 million HELOCs originated. Then HELOC volume tanked as the housing crisis stripped away trillions in home equity, leaving homeowners with just $6. 3 trillion to play with. That resulted in a dismal 600,000 in HELOCs during 2011, and similarly low numbers in the years that followed. In 2016, collective home equity surged back to around $13. 3 trillion, but just 1. 2 million HELOCs were taken out, clearly a sign that many more are on the horizon. Keep Your First Mortgage Intact One benefit to a HELOC...

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### 10 Takeaways from the Annual Realtor Survey

- Published: 2017-10-31
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/10-takeaways-from-the-annual-realtor-survey/
- Categories: Housing Market, Mortgage News

The National Association of Realtors just released its 2017 Profile of Home Buyers and Sellers, and there are lots of interesting tidbits. Let’s explore 10 of them. 88% of Recent Buyers Financed Their Home Purchase First things first, an overwhelming share of recent home buyers used a mortgage to finance their home purchase, as opposed to buying a home with all cash. Typically, this is out of necessity not preference. And for those who did use a mortgage, they generally financed 90% of the home purchase, meaning they put down just 10%. Doing so means they must pay mortgage insurance. Mortgage rates are also less favorable if you put down less than 20%. Down Payments Getting Lower for First-Timers Speaking of down payments, they’re going down for first-time home buyers thanks to higher listing prices. The typical down payment for first-timers was just five percent, down from six percent a year ago and matching the lowest point since 2013. Repeat buyers were a different story, benefiting from higher sales prices by putting down 14% on subsequent home purchases, up from 11% in 2016. Mortgages Easier to Get, Conventional Is King Fewer home buyers indicated problems obtaining a mortgage, with only 34% saying the mortgage application and approval process was somewhat or much more difficult than they had expected. That number was down from 37% a year earlier, thanks to the improved financial health of borrowers and an easing in credit standards. Some 58% of borrowers went with a conventional home...

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### New Bill Aims to End FHA Mortgage Insurance Premiums for Life Policy

- Published: 2017-10-27
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/new-bill-aims-to-end-fha-mortgage-premiums-for-life-policy/
- Categories: Mortgage News

Back in 2013, FHA home loans became a lot less attractive because most newly originated mortgages required mortgage insurance to be paid for the entire life of the loan. Instead of paying mortgage insurance premiums for say 5-10 years, or until the loan-to-value (LTV) fell to 78%, many new FHA borrowers were stuck paying the annual mortgage insurance premium (MIP) for the entire mortgage term. This reversed an earlier policy set forth in 2001 that cancelled MIP on FHA loans when the outstanding balance reached 78% of the lower of the sales price or appraised value, based on the original amortization schedule. FHA Annual MIP Chart Most FHA loans require MI for life Other than those under 90% LTV which isn't their target market This bill would change that And bring the policy closer to its original state While most will argue that mortgage insurance is only necessary on a high-LTV loan, and thus unnecessary once the LTV falls to a low enough point to provide a safe equity cushion to the lender, the FHA thought otherwise. In their mind, they were still insuring these loans long after the borrowers were paying the mortgage insurance. As such, the agency’s Mutual Mortgage Insurance (MMI) Fund lost billions in foregone revenue while putting the American public (taxpayers) at risk of a bailout. The change certainly coincided with an MMI Fund deficit, which explains why the FHA also increased mortgage insurance premiums at that time as well. It was a one-two punch for...

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### Imagine Getting a Mortgage with Just a Couple Clicks

- Published: 2017-10-24
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/imagine-getting-a-mortgage-with-just-a-couple-clicks/
- Categories: Mortgage News

Wouldn’t it be nice if your mortgage lender could gather your income, asset, and employment information from a single digital document, similar to a credit report? And instead of asking you to send over bank statements (all pages, even the blank ones! ), recent pay stubs, two years of W-2’s, and employment information, simply asked you to verify a single bank account. That’d probably make it a lot easier to get a mortgage, right? And perhaps a lot less frustrating too. Single Source Validation Can Make Getting a Mortgage a Lot Easier A new technology called Single Source Validation Makes it faster and easier to verify borrower data Such as income, assets, and employment That look and feel similar to credit reports Well, Fannie Mae has actually rolled out this technology via “Single Source Validation,” which as the name suggests, allows lenders to validate a variety of borrower attributes from one data source. They’ve partnered up with a vendor called Finicity, a Salt Lake City-based company that can generate asset verification reports within Fannie Mae's Desktop Underwriter (DU). Another company called FormFree has also linked up with Fannie, and has a similar product called AccountChek, which facilitates the transmission of bank, retirement and investment account data. These asset reports are then used to automatically verify three important items: income, assets, and employment. Aside from being a lot easier on borrowers, this single source of data will also increase efficiency for mortgage lenders and speed up the loan process. One early...

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### FHA 203k Loan Program: The All-in-One Renovation Mortgage

- Published: 2017-10-24
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/fha-203k-loan-program-the-all-in-one-renovation-mortgage/
- Categories: Mortgage Tips

In a nutshell, the FHA 203k loan program allows prospective home buyers to finance the cost of a property and improvements in one convenient mortgage. Instead of buying a fixer-upper, taking out a mortgage, and then later taking out a home equity line or executing a cash out refinance to fund necessary improvements, home buyers can apply for a single FHA 203k loan at the time of purchase and get all the money they need in one shot. This means they can finance the property and get funds to repair or improve/upgrade their home in a single mortgage loan. This is both convenient and at other times necessary to qualify for FHA financing. An FHA 203k loan can also benefit existing homeowners looking to improve upon their homes – they can get funds for improvements based on the after-improvement value of the property, helpful if they’ve got limited equity. The value of the property is determined by using the lower of the value of the property before renovations plus the cost of those fixes, or 110% of the appraised value of the property after it has been rehabbed. Like a traditional FHA loan, it is a government-backed loan that must be originated by an FHA-approved lender, making it easier to qualify for in some instances and also attractively priced. They are also advantageous to the originating lender because they can get insurance for the loans before the improvements to the underlying collateral are actually made. FHA 203k Loan Requirements Property...

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### While Mortgages Go Digital, People Still Matter, a Lot

- Published: 2017-10-19
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/while-mortgages-go-digital-people-still-matter-a-lot/
- Categories: Mortgage News

The latest buzz in the mortgage world is e-mortgages, or digital mortgages, or paperless mortgages. Or mortgages that don’t require human interaction, or the painstaking process of getting dressed in the morning. But it turns out people still matter, despite the obvious and unstoppable shift to online, and soon (already happening now) to mobile. This Blog Is Alright, I Guess Wondering who influences mortgage shoppers the most? It's a close race between mortgage lenders And real estate agents Both interested parties to the transaction so consider independent research! A survey released by Fannie Mae today found that while prospective home buyers are increasingly turning to online sources for mortgage and real estate information, they still trust in people. Fannie Mae asked folks who had purchased a home in 2016 with a Fannie-backed mortgage which source of information was the “most influential” while researching and gathering advice. And it turns out it wasn’t this blog. Shoot! Instead, it is mortgage lenders and real estate agents who are the most influential. If you’re wondering why, it’s because they, along with friends and family, are seen as “more trustworthy and credible” than online sources, aka my blog and others like it. I’m fine with that, though as I’ve pointed out in the past, real estate agents can often determine where their borrower will get a mortgage, better or worse. And really, I think my blog and others like it simply fit into the new ecosystem to provide additional sources of information, different perspectives,...

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### Freddie Mac Revises Student Loan Guidelines

- Published: 2017-10-19
- Modified: 2023-10-16
- URL: https://www.thetruthaboutmortgage.com/freddie-mac-revises-student-loan-guidelines/
- Categories: Mortgage News

It’s one of the more common dilemmas these days – you graduated college and you’re ready to start a family (or at least buy a home for your dog), but student loan debt is holding you back. Further complicating this is the fact that student loans are paid off in all types of different ways, with some loans deferred and others containing repayment terms that are income-driven. Whatever the case, these student loans have proven to be yet another roadblock to homeownership, with down payment probably still the number one hurdle. Of course, with a wider availability of zero down home loans, 1% down mortgages, and 3% down mortgages available today, down payment is becoming less of an issue. Freddie Mac Student Loan Guidelines Might Get Tougher Freddie Mac used to allow the actual student loan payment Listed on the credit report for qualifying purposes But now they'll use the greater of the actual payment or 0. 5% of the original balance Whichever figure is higher At the moment,student loans in repaymentmust use the actual monthly payment listed on the credit report. If a payment isn’t listed for whatever reason, the lender must obtain documentation to verify the payment. Going forward (January 18th, 2018 or sooner if adopted earlier), lenders will need to use the greater of the monthly payment listed on the credit report or 0. 5% of the original student loan balance (or outstanding balance), also whichever is greater. The good news is that the lender will no...

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### Millennials Are Buying Homes to Give Their Dogs Room to Roam

- Published: 2017-10-05
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/millennials-are-buying-homes-to-give-their-dogs-room-to-roam/
- Categories: Housing Market, Mortgage News

Curious what’s driving Millennial homeownership? Is it marriage or the prospect of a little one crawling around? Nope. Aside from more living space and building equity, dogs are motivating young folks to buy homes. And as a dog lover myself, I’m okay with that. This was discovered in a survey conducted by SunTrust Bank that polled 18 to 36 year olds who recently purchased their first home. Must Love Dogs One of the most highly cited reasons for buying a home Is to give Fido a yard to run around in Only bested by more living space for the owner And the desire to build home equity While it wasn’t the top response, it was in the top three. Specifically, 33% of these buyers said “the desire to have a better space or yard for a dog influenced their decision to purchase their first home. ” That’s pretty amazing. Beating out the dogs was the need for more living space, which ranked #1 and was cited by 66% of these Millennial home buyers. It was followed by the desire to build home equity (cited by 36% of buyer-respondents), no surprise given it’s a great way to acquire wealth. Funnily enough, it beat out marriage (25%) and the birth of child (19%) as the other reasons to own a home. For those who hadn’t yet purchased their first home, 42% still said their dog (or desire to have one) was a “key factor” in their plan to buy a property in...

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### Mortgage Originations by Product Type: What’s Most Popular?

- Published: 2017-10-04
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-originations-by-product-type-whats-most-popular/
- Categories: Mortgage Tips

Ever wonder what share of borrowers are taking out a 15-year mortgage as opposed to a standard 30-year fixed? Or an ARM instead? Well, I was, and so I went looking for the data. Fortunately, I was able to track down some of the details thanks to the Urban Institute, which provided me with some great statistics since the year 2000. As you might expect, the 30-year fixed is the king of mortgage originations, though its dominance has been tested over the years. And it does depend if we’re talking about all originations, or just purchases. Mortgage product type choice definitely varies if we’re talking about a refinance as opposed to a home purchase since borrower needs change over time. Put simply, it’s more common for a borrower to choose the 15-year fixed when refinancing a mortgage, and a lot less likely to use one to buy a home. Why is this? Well, generally borrowers will go with a 30-year term because it increases affordability, meaning they can buy more house at the outset. Later, once they’ve built some equity (hopefully), they can refinance into a shorter-term fixed loan, such as the 15-year fixed, to save on interest and also ensure their loan term isn’t extended from the original maturity date. Nearly 90% of Purchase Mortgages Were 30-Year Fixed Mortgages The 30-year fixed is easily the most popular type of home loan available It has been for decades and probably will be for the foreseeable future Largely because it's the...

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### Synovus Mortgage Offering 100% Financing via Affordable Mortgage Program

- Published: 2017-10-02
- Modified: 2018-07-17
- URL: https://www.thetruthaboutmortgage.com/synovus-mortgage-offering-100-financing-via-affordable-mortgage-program/
- Categories: Mortgage News

You’ve probably heard of HAMP, otherwise known as the Home Affordable Modification Program, which was very popular post-housing crisis. But what about AMP? Probably not. It stands for "Affordable Mortgage Program," and is the loan program offered by Synovus Mortgage Corp. (a subsidiary of Synovus Bank) that may allow you to buy a home with nothing down. Synovus Mortgage’s AMP Allows Up to 100% Financing Synovus Mortgage Corp. has launched a zero down mortgage option Known as the Affordable Mortgage Program or AMP Available to home buyers in Alabama, Florida, Georgia, South Carolina and Tennessee They've committed $100 million toward the special program so act fast! If you happen to reside in Alabama, Florida, Georgia, South Carolina and Tennessee, you may want to look into Synovus Mortgage’s AMP if you have little set aside for a down payment on a home. While you’re at it, you can also look into crowdfunding your down payment... Anyway, the company just announced that they had committed $100 million to AMP for first-time home buyers and others in need of financial assistance when purchasing a primary residence. In a press release, Synovus Mortgage Corp. director of residential mortgage Steve Shoemaker commented on the flexibility of AMP, noting that it has “the ability to layer on down payment assistance programs. ” Per their website that explains the program to some degree, this seems to mean using state bond programs and federal agency assistance, along with AMP’s flexible qualifying guidelines, to purchase a home with no...

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### HomeFundMe: Now You Can Crowdfund a Mortgage Down Payment

- Published: 2017-10-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/homefundme-now-you-can-crowdfund-a-mortgage-down-payment/
- Categories: Mortgage News

Don’t have the required down payment to purchase your dream home? No problem. There’s now a service that lets you crowdfund your mortgage down payment. Whew! A company by the name of HomeFundMe, not to be confused with GoFundMe, claims to be the “first industry approved crowdfunding service” to allow prospective home buyers to “crowdfund a mortgage down payment. ” In case you weren’t aware, down payment continues to be the biggest hurdle to homeownership, despite the wide array of loan programs that allow down payments as low as 3% (or even 1%! ). Can I Please Have Some Down Payment Money? Thanks! In an effort to address the biggest roadblock to homeownership A new company called HomeFundMe allows prospective home buyers To crowdfund their down payment from friends and family Similar to how individuals can raise funds for any purpose via existing services like GoFundMe What this all means is that you can now ask people to donate money to help you make a down payment on a home, using the HomeFundMe platform. For the record, HomeFundMe is a service of a mortgage lender by the name of CMG Mortgage Inc. And in order to take part, you are required to get pre-qualified for a mortgage with the company. Only then can you start your crowdfunding campaign. That means CMG Mortgage is likely wanting to be your mortgage lender. It’s a clever marketing tactic to obtain more purchase-money mortgage business as refis wane. Anyway, the HomeFundMe campaign operates on...

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### Lennar Offers to Pay Your Student Loans If You Buy a New Home

- Published: 2017-09-26
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/lennar-offers-to-pay-your-student-loans-if-you-buy-a-new-home/
- Categories: Housing Market, Mortgage News

One of the more common problems young home buyers face these days is student loan debt, which can complicate a mortgage approval (and a successful home purchase). Lenders are well aware of this, as are home builders and the GSEs (Fannie Mae and Freddie Mac). To alleviate this issue, they recently eased guidelines related to student loan debt so more young folks can qualify for mortgages. Now one lender is going a step further by offering to pay off some of your student loan debt if you buy a home from their associated home builder. Eagle Home Mortgage's Student Loan Debt Mortgage Program Some 44 million Americans have student loans With average outstanding debt of $34,000 Lennar will pledge 3% of the purchase price to pay off that debt Making it easier to qualify for a home loan while putting homeownership within reach Apparently some 44 million Americans have student loan debt, which represents seven out of 10 graduates of both public and private colleges, this according to Fannie Mae. And these recent graduates have an average of $34,000 in debt thanks to their costly college education. To ease that burden, home builder Lennar is now offering to direct up to 3% of a home’s purchase price to pay off student loans when a borrower uses their affiliated lender Eagle Home Mortgage. Put simply, Lennar contributes the 3% and it does not increase the price of the home or add to the mortgage loan balance. Of course, if your mortgage...

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### A 30-Year Fixed Mortgage That Is Adjustable, Self-Refinancing, and Ideally Paid Off Early

- Published: 2017-09-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/a-30-year-fixed-mortgage-that-is-adjustable-self-refinancing-and-ideally-paid-off-early/
- Categories: Mortgage News

Confused yet? Yeah, me too. Let’s dive in. For a while now, the 30-year fixed-rate mortgage has been under attack. In short, opponents of the popular loan program argue that it builds equity far too slowly and requires government support to even exist, what with that interest rate locked in for three decades. They’re right. It’s true that mortgage payments on the traditional 30-year fixed are mostly interest, especially during the first decade and change. Very little of the principal balance is paid off, even though the borrower is making fully-amortized mortgage payments month after month. This explains why homeowners can get into trouble even if they’re doing the right thing – if home prices fall and the borrower has only accrued a small amount of equity, they can easily find themselves in an underwater mortgage position. Enter the "Fixed-COFI Mortgage" A pair of researchers have come up with a 30-year fixed alternative Known as the Fixed-COFI mortgage That addresses flaws with the traditional 30-year fixed Including slow repayment of principal and the need to refinance should rates drop Say what? A pair of researchers at the Federal Reserve, Wayne Passmore and Alexander H. von Hafften, have come up with an alternative known as a “Fixed-COFI mortgage. ” In their working paper titled, “Improving the 30-Year Fixed- Rate Mortgage,” they argue that the 30-year fixed is “flawed” for three main reasons. First, equity accumulation is very low during the first decade of the loan, which they equate to essentially renting...

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### ZHome Lets You Sell Your Current Home in 24 Hours So You Can Buy a Brand New One

- Published: 2017-08-31
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/zhome-lets-you-sell-your-current-home-in-24-hours-so-you-can-buy-a-brand-new-one/
- Categories: Housing Market, Mortgage News

A company called ZHome, which can apparently generate an offer to buy your home within 24 hours, is also making it easier for existing homeowners to buy brand news homes. There are several issues with unloading one home and acquiring another, especially in a red-hot housing market. Most sellers don’t want to deal with any major contingences from the buyer, like the ability to sell their existing home before buying theirs. At the same time, if all the equity is tied up in the existing home, it’s difficult for a homeowner to go anywhere. Enter the ZHome EZ Trade-Up Program It's difficult to buy and sell a home at the same time Especially when there is limited inventory on the market ZHome's EZ Trade-Up Program gives homeowners a cash offer And a flexible closing date that aligns with the closing of their new home With ZHome’s new EZ Trade-Up Program, homeowners can get a guaranteed cash offer for their existing homes, along with a flexible closing date that aligns with that of the new home. The company has partnered with William Lyon Homes in Southern Nevada to help homeowners trade in the old for the new. Because really, who wants to live in a used home? Just kidding, that phrase is silly. Can homes really be used? Anyway, this is how it works. You provide some basic information about your property to ZHome, set up a time for them to inspect your property, and then they'll send you a free,...

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### Wells Fargo Hit with Lawsuit Related to Improper Mortgage Lock Fees

- Published: 2017-08-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-hit-with-lawsuit-related-to-improper-mortgage-lock-fees/
- Categories: Mortgage News

It’s been a tough year or so for Wells Fargo, the undisputed king of mortgages. While they continue to lead the nation in home loan origination volume, they seem to be getting hit from every angle thanks to some alleged unscrupulous behavior. Their mortgage business seemed to survive the big fake account scandal relatively unscathed, but now they’re dealing with another potential embarrassment related to mortgages. I guess it was only a matter of time. Did Wells Fargo Make Customers Pay Lock Extension Fees Unfairly? A lawsuit alleges that Wells Fargo improperly charged lock extension fees When borrowers ran out of time on their mortgage rate locks Due to delays caused by the bank itself Which normally would be covered/waived by the bank if it's their fault A new lawsuit brought forth by a Nevada borrower named Victor Muniz claims Wells Fargo charged him a rate lock extension fee after his loan was delayed due to the bank’s own issues. In other words, it wasn’t his fault that the bank didn’t close the loan before the lock expired, yet they still charged him a $287. 50 extension fee. Apparently, Muniz was told by an employee that the bank would cover the charge, only to have that decision reversed by a regional manager. That may have turned out to be a big mistake because now the Consumer Financial Protection Bureau (CFPB) is investigating the bank’s lock practices. It’s common for locks to run out if a mortgage gets tied up in...

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### 360 Mortgage Group Touting 15-Minute Mortgage Approval Sans Loan Officer

- Published: 2017-08-29
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/360-mortgage-group-touting-15-minute-mortgage-approval-sans-loan-officer/
- Categories: Mortgage News

A mortgage bank by the name of "360 Mortgage Group" is making some lofty claims, one being a 15-minute full mortgage approval. The company says its customers can “receive a true loan approval in 15 minutes on average,” which sounds shockingly fast. Their claim is even more bold in that they don’t rely upon mortgage loan officers. In fact, they refer to their new proprietary fintech system as the NOLO platform, which is short for No Originating Loan Officer. Ouch, loan officers. The company goes on to say that LOs can actually slow things down and cause problems when they have “interfered with the process, as is standard in the industry. ” How the NOLO Platform Works: Data Mining 360 Mortgage Group is pitching an entirely-online loan approval That it can generate in as little as 15 minutes Without the need for a loan officer to guide the borrower All thanks to data mining technology The 360 loan approval is generated entirely online, without the need to speak to anyone during the process, namely a loan officer earning a commission. So you might be wondering how borrowers can get real home loan approvals in a quarter of an hour without getting any sort of guidance from a professional. It sounds too good to be true, but 360 Mortgage Group seems to take a lot of pride in their tech-driven platform that is driven by data mining. Basically, prospective borrowers input some basic personal information to complete an authentication process, then...

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### Jay-Z and Beyoncé Take Out $52.8 Million Mortgage on Bel Air Home

- Published: 2017-08-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/jay-z-and-beyonce-take-out-52-8-million-mortgage-on-bel-air-home/
- Categories: Housing Market, Mortgage News

Think you can’t get a jumbo home loan these days? Think again. Power couple Jay-Z and Beyoncé somehow managed to get a $52. 8 million-dollar mortgage from the bank to finance their home in Los Angeles. Per the LA Times, the pair purchased the $88 million-dollar property in a Bel Air neighborhood via blind trusts and came in with a 40% down payment. That's 60% LTV, which seems like a good amount of skin in the game. Largest Mortgage Ever? While it might not be the largest home loan ever originated It's got to be pretty close at a whopping $52. 8 million That's a monthly payment of roughly $250,000 Which is more than the total mortgage balance of many Americans I’m not sure what constituted the largest mortgage ever, but $52. 8 million is probably way up there. To put it in perspective, a $52,800,000 loan amount on a 30-year fixed set at 4% equates to a monthly payment of $252,075. 28. Yes, more than a quarter-million a month. As the Times pointed out, the monthly payment alone is nearly half the median sales price ($610,000) of a single-family home in Los Angeles. The monthly payment also happens to be $50,000 more than the median home value in the United States. The good news is the sprawling two-acre estate includes four swimming pools, a spa, full-size basketball court, and a wellness center. It’s also 30,000 square feet, so there’s plenty of room for the in-laws. Why Did They Take...

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### Mr. Cooper Mortgage Review: The Lender Formerly Known as Nationstar

- Published: 2017-08-23
- Modified: 2025-03-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-lender-nationstar-becomes-mr-cooper-will-offer-home-rewards-credit-card/
- Categories: Mortgage Tips

Nationstar Mortgage, which was once on the brink of failure, officially announced its name change to “Mr. Cooper” in August 2017. The move appeared to be an effort to make a fresh start with a more appealing, modern, and consumer-friendly image. Back in late 2007, the company nearly went under along with other big-name lenders at the time. But they persevered have now reinvented themselves completely. Mr. Cooper Fast Facts Publicly traded mortgage company (NASDAQ: COOP) founded in 1994 A top-15 mortgage originator headquartered in Coppell, Texas Originally began as the in-house mortgage lender for home builder Centex Homes Funded over $6 billion in home loans via retail channel in 2023 Also operates a correspondent lending channel (shuttered its wholesale division in 2020) Third largest home loan servicer in the United States (and #1 non-bank loan servicer) Rocket Companies announced plans to acquire Mr. Cooper in March 2025 At first glance, the name Mr. Cooper sounds strange for a mortgage lender, but it kind of aligns with the hipster mortgage lenders that seem to be making their way to the forefront these days. Some examples include Clara, SoFi, and Homie, all of which are appealing to Millennials instead of baby boomers, with fresh marketing tactics and less of that stale, serious financial stuff no one seems to be interested in anymore. Heading down to the bank and sitting down with an associate at a big oak desk doesn’t really fly these days for most people. They’d rather sit at their...

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### Primary Residence vs. Second Home vs. Investment: Know the Key Differences

- Published: 2017-08-22
- Modified: 2023-06-12
- URL: https://www.thetruthaboutmortgage.com/primary-residence-vs-second-home-vs-investment/
- Categories: Mortgage Matchups, Mortgage Tips

Sometimes I’m surprised I miss the most basic of mortgage definitions, seeing that this blog has been around for more than a decade, but alas, I’ve never written about occupancy specifically. So without further ado, let’s talk about the three main types of occupancy with regard to qualifying for a mortgage because they're pretty important. Mortgage Occupancy Type Primary Residence (Where you live) This is the property you live in all or most of the year Underwriting guidelines are easiest for this property type And mortgage rates are the lowest This is your standard owner-occupied property, a home or condo you plan to live in full time. Or at least the majority of the time. It may also be referred to as your principal residence. It can be a single-unit property or a multi-unit property, but you must live in it most of the year. The property should also be reasonably close to where you work, if applicable, and you must sign a form that says you plan to occupy said property shortly after closing. Now the good news. Since it’s your primary residence, mortgage rates are the lowest, and it’s also easier to get a mortgage because guidelines are more flexible. This means you can potentially put less down or refinance at a higher loan-to-value (LTV). We’re talking a 3% down payment mortgage, which is pretty much the lowest down payment you can get away with unless the lender has a zero down program, which again would likely only...

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### Soon You May Be Able to Buy a House Without an Appraisal

- Published: 2017-08-18
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/soon-you-may-be-able-to-buy-a-house-without-an-appraisal/
- Categories: Housing Market, Mortgage News

Here’s something that may finally speed up the typically slow home loan process: an appraisal-less home purchase. Yep, it’ll be a reality for some folks come September thanks to a new initiative by Freddie Mac. First a little background. The dreaded home appraisal, which can take weeks to complete, is often an item that turns what could be a two-week process into a month-long one. Of course, buyers and sellers aren’t always in that big of a rush. And one could argue that an independent valuation is good for all parties. That stuff aside, an appraisal waiver will save the homeowner money because they won’t have to pay for one in certain situations. How much they save depends on what the lender charges, but it could be $500 or more. Freddie Mac’s Automated Appraisal Alternative Freddie Mac has rolled out ACE Their automated collateral evaluation Which can determine if an appraisal waiver is a possibility Using big data like public records, MLS data, and so on You might be wondering how Freddie Mac will be able to forego an appraisal, seeing that it’s a pretty important piece of the mortgage qualification pie. After all, lenders are lending out a lot of money, so they can’t just take the seller’s or borrower’s word for it that the home is worth X. That’s where big data comes in. The government-sponsored enterprise refers to their tool as an “automated appraisal alternative. ” What that means in layman terms is that Freddie will use...

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### These Six Things Will Happen If Mortgage Rates Go Up

- Published: 2017-08-14
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/these-six-things-will-happen-if-mortgage-rates-go-up/
- Categories: Mortgage Tips

We’ve been worrying that mortgage rates would go up for years now, but it just hasn’t happened yet. Sure, they’re up a little bit from record levels, but not by as much as expected. The 30-year fixed still sits firmly around 4%, while the 15-year fixed is in the low 3% range. Both have been slightly lower at different points in the past five years. This prolonged period of low rates has kept the mortgage business humming along while also propelling the housing market to record heights. But what happens when mortgage rates start to really take off higher? Well, six main things, this according to a working paper by Laurie Goodman over at the Urban Institute. Mortgage Volume Will Fall This one is inevitable If mortgage rates rise Mortgage loan application will fall There's just no way around that What goes up will cause something else to go down, and we’re talking about mortgage origination volume. As rates rise, fewer mortgages will be made because there will be less of an incentive to refinance. Fannie Mae, Freddie Mac, and the Mortgage Bankers Association all expect mortgage lending volume to decrease significantly from last year to this year. And they anticipate an even slower 2018. Of course, we’ve been hearing this for years, only to see these groups revise their estimates higher. But they’ll probably be right eventually... The Mortgage Industry Will Consolidate Because higher rates lower application volume Mortgage industry consolidation is also likely With smaller players absorbed by...

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### Millennials Favor Conventional Mortgages Over FHA

- Published: 2017-08-10
- Modified: 2018-07-17
- URL: https://www.thetruthaboutmortgage.com/millennials-favor-conventional-mortgages-over-fha/
- Categories: Mortgage News

I’ve got more Millennial mortgage data for you, courtesy of the monthly Ellie Mae Millennial Tracker. This is a heavily watched group because they’re expected to carry the housing market to the next stage, hopefully higher. While the word Millennial gets thrown around a lot, Ellie Mae defines it as an individual born between 1980 and 1999. Some have wider date ranges, and other shorter. Anyway, we already know that Millennials favor adjustable-rate mortgages, but it turns out they’re also pretty keen on conventional loans too. 63% of Millennial Mortgages Were Conventional Most young home buyers are using conventional financing Such as loans backed by Fannie Mae and Freddie Mac As opposed to government loans backed by the FHA One reason might be because the down payment requirement is just 3% In June, nearly two-thirds (63%) of mortgages made to Millennial borrowers were conventional home loans, aka non-government loans. The overwhelming remainder (32%) were FHA loans, which require just a 3. 5% down payment, and for that reason, are favorable to young cash-strapped borrowers. The rest were probably a combination of VA and USDA loans, which allow for zero down payment, but aren’t as widely issued. The share of FHA loans peaked in February and March of this year at 36%, but has since fallen steadily. Meanwhile, the conventional share rose from 60% to 63% during that time. Ellie Mae executive vice president of corporate strategy Joe Tyrrell said this either means Millennials can afford more house without a government...

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### What Will Happen to Your Mortgage When the LIBOR Goes Away? Hello SOFR!

- Published: 2017-08-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/what-will-happen-to-your-mortgage-when-the-libor-goes-away/
- Categories: Mortgage Tips

If you have an adjustable-rate mortgage, I’ve got some important news for you. The London Interbank Offered Rate, or LIBOR as it’s known to most, is going to be phased out over the next five years. After 2021, it won’t exist because banks no longer want to take a role in setting it. If you recall, the LIBOR was at the center of a scandal back in 2012 after it was discovered that bankers were manipulating the price for decades. Unfortunately, this meant innocent consumers, including many homeowners with adjustable-rate mortgages, were receiving inaccurate (perhaps higher) pricing once their loans became adjustable. Check Your Mortgage Paperwork First Find out if you're affected by the LIBOR switch By first asking yourself if you have an ARM And if so, checking your mortgage index On your Closing Disclosure (CD) form If you have an ARM, go ahead and check to see what index it’s tied to. Pull out your Closing Disclosure (CD) and look for the Adjustable Interest Rate (AIR) Table. As you can see, it will detail the initial interest rate on your loan, along with the index and margin in question. You may something like the image above, which stands for 12-Month LIBOR, or 1-year LIBOR. Many ARMs are attached to LIBOR, meaning once they become adjustable after the first three, five, or seven years, the rate will be determined by the margin plus the associated LIBOR index. So if your margin is 2. 25, and the one-year LIBOR index...

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### 1% Down Payment Mortgages Come Under Fire

- Published: 2017-08-03
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/1-down-payment-mortgages-come-under-fire/
- Categories: Mortgage News

While we’ve come a long way since housing bottomed, the memories of how we got there still don’t feel very distant. A lot of things contributed to the complete breakdown of the real estate market, with exotic financing being one of them. So it’s no surprise that the new hot trend of “1% down mortgages” is now coming under the microscope. Update:UWM has re-launched the 1% down payment mortgage. Freddie Mac Is Changing the Rules Pertaining to 1% Down Mortgages While 1% down mortgages have been all the rage lately Freddie Mac is cracking down on the higher-risk home loans Requiring a minimum 3% borrower contribution That can't come via the transaction itself via lender credits, points, etc. Over the past couple years, many large lenders have introduced home loan programs that require just 1% down from the borrower, including big names like Quicken, Guaranteed Rate, Guild Mortgage, and even wholesaler United Wholesale Mortgage. In fact, just this week another lender joined the party, Garden State Home Loans, giving home buyers in Connecticut, Florida, New Jersey, and Pennsylvania the chance to achieve the American Dream with just a 1% down payment. As far as I can tell, most if not all of these programs rely upon Freddie Mac’s Home Possible Mortgage program, which is its 97% LTV offering. However, it turns out that some lenders may have taken it a little too far because Freddie Mac doesn’t seem comfortable with their interpretation of the program. Last week, Freddie Mac released...

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### Ally Home Launches Price Match Guarantee for Mortgages

- Published: 2017-07-26
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/ally-home-launches-price-match-guarantee-for-mortgages/
- Categories: Mortgage News

Mortgage industry newcomer Ally Home is getting into the price match game with its just launched promotion called, you guessed it, “Price Match Guarantee. ” If you’re not familiar, Ally Home got into the mortgage business late last year, essentially rising from the ashes of GMAC Bank/ResCap. Now they want to separate themselves from the crowd by ensuring you get the best price on your mortgage, or at least equal to what you may have found elsewhere. They’ll Match Rates and Points Ally Mortgage is offering a Price Match Guarantee Like several other mortgage lenders out there Where they'll match the offer of another bank or lender But is matching enough? And what about lender fees? In a nutshell, Ally Home will match the interest rate and points (if applicable) of another lender if it happens to better what Ally Home offers you. All you have to do is let your Ally Home loan advisor know you’ve got a better offer and they’ll match it. That entails sending over the competing lender’s completed Loan Estimate, which must be dated within the past five business days, at the time you wish to lock your loan with Ally. In order to be eligible, the loan programs have to be the same too, obviously. There is a bit of a gotcha here, at least in my opinion. Ally Home will only match the mortgage rate and points. There’s no mention of fees. So it’s possible, if I’m interpreting this correctly, that Ally Home...

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### How Long Does It Take to Get a Mortgage? Think a Month, Not Minutes

- Published: 2017-07-20
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-long-does-it-take-to-get-a-mortgage/
- Categories: Mortgage Tips

Mortgage Q&A: “How long does it take to get a mortgage? ” This is a fairly common mortgage question because we humans aren’t very patient. This is compounded by the fact that we’re asking for a very large sum of money for something we just must have. Because of that, the process does take time. After all, you’re not buying an ice cream cone, you’re buying a house or asking one lender to take on your old loan and present you with a new one (refinance). Back in the day, around the mid-to-late 2000s, mortgages could close really quickly. This was partially because underwriting guidelines were pretty flexible, and also because lenders were well-staffed and very competitive. In fact, it was common to get approved for a mortgage in 24 hours, or even the same day. Yes, you could submit a loan package in the morning and get a conditional approval from an underwriter that same afternoon. Then the mortgage crisis happened and things slowed down a lot. The fast and loose days were over and banks and lenders were a lot more careful about doling out hundreds of thousands of dollars. Average Time to Close a Home Loan Expect a range of 30-45 days from start to finish It can be quicker on some occasions if things are slow or a lender is super fast But it's best to expect a longer timeline and give yourself a buffer To avoid an expired rate lock and/or per diem interest Today,...

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### For Some Reason, Homeowner Regrets Are on the Rise

- Published: 2017-07-19
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/for-some-reason-homeowner-regrets-are-on-the-rise/
- Categories: Housing Market, Mortgage News

Despite the red-hot real estate market, more Americans are regretting their home purchases, per a new Trulia survey. It’s a bit odd because home prices have been rocketing higher throughout much of the nation since they bottomed in 2012. So even if you absolutely hated your home, you’d think all that equity would be enough to keep you happy. But that’s seemingly not the case. More Regrets Since Housing Bottomed Trulia says home buyer regrets are on the rise With recent buyers more regretful than those who purchased before the crisis One reason is today's buyers don't feel as financially secure Perhaps because they lived through the Great Recession and know things can unravel again For whatever reason, recent home buyers are more regretful than those who purchased homes prior to 2012. If you look at a chart of home prices before and after 2012, you’d probably be scratching your head. Somewhat amazingly, half of those who found their homes after the housing market bottomed in 2012 said they had regrets, compared to just 42% who found their home before 2012. Trulia pointed out one distinction between the two groups – feeling financially secure. Some 12% of recent buyers said they wished they had been more secure before buying a home, compared to 6% of the pre-2012 buyers. But that doesn’t do it for me. There has to be something else because anyone who didn’t have to go through the housing crisis and/or deal with negative equity shouldn’t feel worse...

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### Millennials Seem to Like Adjustable Rate Mortgages

- Published: 2017-07-11
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/millennials-seem-to-like-adjustable-rate-mortgages/
- Categories: Mortgage News

It's not just avocado toast. A new anecdotal report from the WSJ reveals that Millennials who are buying homes are increasingly choosing adjustable-rate mortgages to get the job done. While the data isn’t definitive by any stretch, John Walsh, the chairman of a large mortgage lender by the name of Total Mortgage Services, told the publication that interest in 7/1 ARMs jumped 18% from a year ago. He tells the WSJ that these home buyers aren’t “going to work at GE for the next 30 years,” which explains why they would choose an ARM instead of a fixed-rate mortgage. In a word, they’re “mobile. ” The argument is basically that they won’t be staying in the home for 30 years, and as such won’t be keeping the mortgage very long either. It Doesn’t Take Long to Outgrow a Home Today's young home buyers realize they may not stay long Either because of increased job mobility Or simply because they'll outgrow their homes and need larger ones This makes an ARM a compelling mortgage choice over a FRM It’s a pretty safe bet to make because these first-time buyers will likely outgrow their homes within a decade or less, especially if they advance in their careers and increase their purchasing power (and start families). Of course, that’s the simple way of looking at it. We could have made the same argument about 10 years ago. Back in 2006, a young home buyer could have (and probably did) take out an ARM...

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### RedfinNow: Get an Offer on Your Home Within 24 Hours (Shut Down Nov. 22)

- Published: 2017-07-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/redfin-now-get-an-offer-on-your-home-within-24-hours/
- Categories: Housing Market, Mortgage News

Are you the impatient type? Well, have I’ve got news for you. A new service dubbed “RedfinNow” will get you a “top offer” for your property within 24 hours of it being viewed. That’s pretty fast. Instead of dealing with the hassle of finding an agent, listing the property, getting a buyer to bite, then waiting weeks for it to sell, you can just turn it over to RedfinNow instead. RedfinNow Lets You Move in a Week RedfinNow is an expedited home selling program You can sell your property to Redfin in a matter of days As opposed to listing it, staging it, then waiting potentially months to sell it It could come in handy if you need a quick sale to purchase a new home This new venture is the latest in a string of new services rolled out by Redfin in a bid to “offer a complete solution. ” That is, everything you need to buy and sell a home, including a mortgage and title and escrow services. Yep, in 2016 they launched their title and settlement business “Title Forward” in eight states, and about half of their customers used the company. And in early 2017, they began originating and underwriting mortgages for their customers via Redfin Mortgage in the state of Texas. With the introduction of RedfinNow, they’ll be able to market themselves as an “end-to-end solution for customers buying and selling a home. ” How Redfin Now Works First you request an offer from Redfin Then...

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### One Third of Home Buyers Made Offers Without Actually Visiting the Property

- Published: 2017-06-28
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/one-third-of-home-buyers-made-offers-without-actually-visiting-the-property/
- Categories: Housing Market, Mortgage News

Is the housing market getting stupid again, or is technology changing the way we buy homes? That’s still up for debate, but there are some troubling signs out there. The latest is that one-third of home buyers made an offer on a property they didn’t even see in person, this according to a new survey from Redfin. That's up from 19% a year earlier and 21% two years ago. The company polled nearly 3,500 individuals in 11 metropolitan areas that bought or sold a home in the past year, attempted to do so, or plan to do so in the near future. Amazingly, 33% of buyers decided they were okay with buying a home they had never physically seen, touched, smelled, etc. That’s pretty bold. Millennials Most Likely to Make Offers from Afar There appears to be a new trend of making offers on homes Without actually seeing them in person It seems to be most common with Millennial home buyers Just know that purchasing a home is a big decision not to be taken lightly so put in the time! Rather surprisingly, or perhaps not surprisingly, it was Millennials who were the most likely to make an offer sight unseen. This group indicated to Redfin that they made an offer on a home they hadn’t seen at some point during their home search more so than any other demographic. Nearly half (41%) of Millennial buyers made at least one offer from afar. I say surprisingly because chances are it’s...

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### Fannie Mae Increasing Max DTI to 50%, Upping LTVs for ARMs

- Published: 2017-06-27
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-increasing-max-dti-to-50-dti-upping-ltvs-for-arms/
- Categories: Mortgage Tips

There’s been a lot of talk lately about mortgage lenders easing credit standards as refinance volume wanes and purchase activity remains constrained by limited inventory. Because more and more new entrants (many so-called disruptors) have joined the fray, and there’s a smaller pool of eligible mortgage borrowers, risk appetite is expected to rise in coming months. In fact, a Fannie Mae survey released yesterday found that the share of lenders expecting to ease credit standards over the next quarter hit new all-time highs. Fannie Mae Increasing Max DTI to 50% Fannie is making it easier for borrowers To get approved for a mortgage with a high DTI ratio Via their automated underwriting system Which should usher in more of these types of loans First off, we’ve got Fannie Mae’s Desktop Underwriter (DU) Version 10. 1 release slated for the weekend of July 29th. The biggest change is that this version of DU will allow debt-to-income ratios as high as 50%, up from 45% currently. For the record, you can get approved at the moment with a DTI as high as 50%, but Fannie requires additional compensating factors to support a DTI ratio between 45-50%, such as lots of assets and an excellent credit score. With this release, that 50% DTI will be good to go because the DU risk assessment will automatically consider “a broad range of loan characteristics and borrower credit factors. ” In plain English, this means it’ll be easier to get approved for a mortgage with a...

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### Homie: A Startup Is Eliminating Real Estate Agent and Loan Officer Commissions

- Published: 2017-06-26
- Modified: 2024-08-16
- URL: https://www.thetruthaboutmortgage.com/homie-a-startup-is-eliminating-real-estate-agent-and-loan-officer-commissions/
- Categories: Housing Market, Mortgage News

There’s a new startup out there called “Homie” that transforms the old way people buy and sell homes by harnessing today’s technology and (kind of) ditching real estate agents. Well, in some cases the real estate agent will remain (at least one of them), but the service aims to help save buyers and sellers money by letting them go it alone. The service is currently available in the states of Arizona and Utah, with plans to expand to other states in the near future. Be Your Own Real Estate Agent with Homie Instead of paying the typical 5-6% real estate commission Home sellers can unload their home for less than $2,000 Which depending on the sales price Could amount to thousands in savings In short, you can get help from Homie to list your property (including on the MLS) and save on the typical 5-6% real estate agent commissions in the process. This could be helpful since real estate commissions can't be financed into the loan. For a flat fee of $199, Homie will help you list your home on Homie’s own site, Trulia, Zillow, and other websites. Included in that price is a home value report to help you determine a good listing price, a custom phone number, a yard sign, attorney legal assistance to navigate paperwork and negotiations, a tour scheduler, an offer generation tool, automated contract reminders, and professional photos of your home. You basically get a full suite of for-sale-by-owner tools to assist you in selling...

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### Guild Mortgage Latest to Offer a 1% Down Payment Mortgage

- Published: 2017-06-14
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/guild-mortgage-latest-to-offer-a-1-down-payment-mortgage/
- Categories: Mortgage News

It seems 1% down is the new zero down in the mortgage world, with San Diego-based Guild Mortgage the latest to join the fray. The independent mortgage bank, like others before it, will take advantage of a grant to give homeowners instant equity, while requiring just 1% from the borrower’s own funds. The 1% down home loan program is a new form of down payment assistance, though unlike similar programs that preceded it, the gift doesn’t need to be paid back and the borrower actually gets some skin in the game. Guild Mortgage's 97% LTV with a 2% Grant and 1% Down Payment Like other 1% down mortgage options available Guild is relying on a 2% grant that doesn't need to be paid back But there are lots of guideline restrictions Including income limits and credit score minimums Aspiring homeowners who take advantage of the Guild 1% Down loan program can instantly acquire 3% equity in the property they purchase despite only putting down 1% thanks to a two percent grant that doesn’t need to be repaid. Quicken has a similar program, as does United Wholesale Mortgage if you go the mortgage broker route. Guild Mortgage refers to it as “3-for-1” equity with “no strings attached,” and say it’s ideal for those with good credit who lack the necessary down payment funds, a common problem these days. This gifted grant money is subject to income limits, required homebuyer classes and other criteria, though income limits don’t apply in census tracts...

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### Movement Mortgage Launches Zero Down Mortgage Called MAP

- Published: 2017-06-07
- Modified: 2024-08-08
- URL: https://www.thetruthaboutmortgage.com/movement-mortgage-launches-zero-down-mortgage-called-map/
- Categories: Mortgage News

Movement Mortgage is the latest of many mortgage lenders to offer a zero down option for prospective home buyers, referred to as the Mortgage Assistance Program, or MAP. Before we get into the details of that loan program, let's learn more about this growing mortgage company, which refers to itself as "a national top 10 retail mortgage lender. " Who Is Movement Mortgage? A national nonbank direct mortgage lender That is licensed in 49 states With nearly 800 offices nationwide And a former NFL player is their CEO If you haven't heard of Movement Mortgage, know that they're a rapidly growing direct mortgage lender based out of Fort Mill, South Carolina, founded back in 2008. They're a nonbank, meaning they don't collect deposits and pay interest like other big banks such as Wells Fargo or Chase. However, the company recently purchased Danville, Virginia-based First State Bank, which they've morphed into Movement Bank. So it's possible that the ultimate game plan is to make Movement Mortgage a depository institution going forward. What's interesting about the company is they were founded during the housing crisis, basically right around the time home prices had begun to fall after peaking a year or two earlier. Their CEO is Casey Crawford, who played tight end for the Carolina Panthers and Tampa Bay Buccaneers, and won a Super Bowl with the latter. So they've got a certain cachet. They do about $13 billion in annual home loan volume and are now licensed in 49 states (the...

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### Magilla Lets You Shop Mortgage Lenders Anonymously

- Published: 2017-06-05
- Modified: 2018-07-18
- URL: https://www.thetruthaboutmortgage.com/magilla-lets-you-shop-mortgage-lenders-anonymously/
- Categories: Mortgage News

There’s a new disruptor in the mortgage space called Magilla that lets you shop for a mortgage anonymously, assuming you don’t want lenders to bug you. They refer to themselves as the “search engine for loans” because you can shop for a mortgage (or dozens of other types of loans) online and receive real offers from actual loan officers who work at FDIC-insured lenders. A common issue while shopping for a mortgage is being badgered by a lender once you make contact. Even if you’re no longer interested, you might continue to receive phone calls, e-mails, etc. To combat this longstanding problem, companies like Zillow gave mortgage shoppers the ability to search without giving up their private info. Magilla seems to be doing the same thing, though it’s a little different than the Zillow Mortgage Marketplace. The company also notes that their system is an effective way to see who is being most aggressive in a certain space. They claim that once a lender hits its quota for a certain type of loan, it directs its attention to a different type of loan to keep their loan portfolio balanced. This means one bank might be able to get extra competitive and offer something other banks can’t. Instead of running around calling each bank to see who this is, you can let them all come to you. The theory is that the top offer will present itself because they all know they need to offer their best to get you in...

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### Zillow Offers: For Those Who Want to Sell Their Home Fast

- Published: 2017-05-24
- Modified: 2023-11-15
- URL: https://www.thetruthaboutmortgage.com/zillow-instant-offers-for-those-who-want-to-sell-their-home-fast/
- Categories: Housing Market, Mortgage News

The online real estate marketplace Zillow has just launched a new feature called “Zillow Offers,” formerly known as Zillow Instant Offers, aimed at helping seemingly impatient sellers quickly offload their homes. In short, their research has found that some homeowners want a “faster, simpler selling option” to part ways with their property. What might make it different from other quick-sale services is that it comes with a free comparative market analysis (CMA) from a local real estate agent, which is likely intended to help sellers come to grips with what their home should sell for. There’s also a good chance that agent providing it will wind up representing them, so they aren’t on their own. Ideally, this means they won’t get ripped off by some real estate investor looking to make a quick buck. It also creates a new advertising stream for Zillow. Update:Zillow Offers shuts down because their iBuying unit wasn’t profitable and is too risky. Zillow Offers and COVID-19 On March 23rd, 2020, Zillow Offers was paused in all 24 housing markets where it was operating due to the COVID-19 pandemic. Other iBuyers like RedfinNow and Opendoor did the same in light of the uncertainty surrounding the outbreak. Simply put, companies that buy homes practically instantly weren’t too confident about the direction of the housing market, so it’d be tough to put a price on a home. But fast forward just two months to mid-May and they’re making their way back. Zillow announced on May 18th that it...

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### Traditional 20% Mortgage Down Payment Could Be Cut in Half

- Published: 2017-05-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/traditional-20-mortgage-down-payment-could-be-cut-in-half/
- Categories: Mortgage News

I recently wrote about the need to put down 20% when buying a home, which although often recommended, isn’t a necessity these days. There are programs from both the FHA and Fannie Mae and Freddie Mac that allow much lower down payments. In fact, one only needs 3% of the purchase price to buy a home today thanks to newer offerings like Freddie Mac’s Home Possible Advantage. Under 20% Comes with a Price While there are plenty of home loan options For those unable to muster a 20% down payment There is a cost in the way of mortgage insurance And a higher mortgage interest rate But despite being a widespread option, anything under a 20% down payment comes with price, literally. We’re talking a higher mortgage rate to account for increased risk if/when you default, and the need for mortgage insurance to protect lenders willing to offer low-down payment loans. At some point, the late 1950s per Wikipedia, one company by the name of Mortgage Guaranty Insurance Corporation (MGIC) decided that it would insure the first 20 percent of a defaulted mortgage. This allowed lenders to offer mortgages to borrowers lacking that key 20% down payment, and seemingly ushered in a new era of low-down payment loans. Several decades later, the Homeowners Protection Act of 1998 was enacted to allow borrowers to drop PMI after their loan-to-value (LTV) reached 78% or 80%. Now, all that might change, assuming some form of regulatory reform takes place and lowers the standard...

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### Can Credit Card Churning Hurt Your Chances of Getting a Mortgage?

- Published: 2017-05-18
- Modified: 2025-02-13
- URL: https://www.thetruthaboutmortgage.com/can-credit-card-churning-hurt-your-chances-of-getting-a-mortgage/
- Categories: Mortgage Tips

These days, it’s not uncommon for individuals to open a bunch of credit cards in a short span of time to acquire lots of points and/or cash back. Those who do it on a serial basis are known as churners. They basically open and close credit cards constantly to take advantage of the benefits without having to deal with the drawbacks, namely annual fees and finance charges. But you’ll often hear even the most hardcore churner say they’re pumping the brakes because they plan to buy a home, or they’re thinking about refinancing the mortgage (next year). Next year? Seriously? To Risk It or Not Risk It While the fears of credit card churning might be overblown You do have to tread cautiously here Ultimately a mortgage approval will outweigh any credit card bonus you might receive So it could make sense to wait until your home loan has funded So, does credit card churning put your mortgage approval at risk, or is the whole thing overblown? There are probably two camps on this one, but I generally think churning itself isn’t a huge problem, though it might be a nuisance. Allow me to explain. When you churn, you’re often asked to spend X amount in the first few months. This means racking up spending and increasing your outstanding debt, even if only for a limited time. As I’ve mentioned before, your credit scores can plunge simply from spending a lot on your plastic, even if you pay it off...

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### The Best Time to Buy a Home Is in August and September

- Published: 2017-05-11
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/the-best-time-to-buy-a-home-is-in-august-and-september/
- Categories: Housing Market, Mortgage Tips

Wondering when the best time to buy a home is? And the worst time? Well, thanks to data science, we no longer have to guess whether it's fall and winter, or spring and summer. I'll save you the suspense: the very best time to buy your dream home is late summer, namely August and September, this according to a new study from real estate listing website Zillow. Apparently prospective home buyers will find the most home inventory and a greater number of price cuts during these temperature-hot months, giving them better odds of finding that perfect home. This means it might be easier to negotiate prices and perhaps even snag a lower price if the property stays on the market for a prolonged period of time. Inventory Remains a Problem An inventory glut in late summer Could be the perfect time to buy a home Because home sellers will be getting desperate And there might be fewer competing buyers at that time As you probably know (if you’ve been house hunting), inventory is scarce. It’s slim pickings out there and hasn’t gotten any better, despite predictions telling us otherwise. They were wrong about mortgage rates going up too... Overall, inventory is off 5. 3% from a year ago, meaning you’ll have to buckle your seatbelt and prepare for another tough year if you’re in the market to buy a home, or getting ready to be. Real estate investing is also getting a lot less attractive, and not so easy. Conversely,...

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### Chase Is Offering 75,000 Ultimate Rewards Points When You Take Out a Mortgage

- Published: 2017-05-08
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/chase-is-offering-100000-ultimate-rewards-points-when-you-take-out-a-mortgage/
- Categories: Mortgage News

It’s not very common for mortgage lenders to offer cash back or some other sort of reward for taking out a mortgage. Generally, you might get some sort of closing cost guarantee or some assurance that if they screw up, you’ll be compensated. Really, that’s just making you whole. But Chase is looking to change that by offering a very healthy 100,000 Ultimate Rewards points (their own rewards currency) for those who apply for a mortgage (and close the sucker). Update:They have lowered the bonus to 75,000 Ultimate Rewards points, but now offer a bonus across multiple different credit cards. Chase Is Targeting Sapphire and Other Credit Card Customers Get 75,000 UR points if you have Chase Sapphire Reserve 50,000 UR points if you have Chase Sapphire Preferred 25,000 UR points if you have Chase Sapphire (no fee version) 25,000 UR points if you have Chase Freedom or Freedom Unlimited 75,000 United Miles if you have Chase Mileage Plus Club 50000 United Miles if you have Chase Mileage Plus Explorer In order to be eligible for this rather handsome bonus, you need to be an existing Chase credit card customer with either the Chase Sapphire Preferred card or the Chase Sapphire Reserve. It has since been opened up to those with a Chase Sapphire (no fee version), a Freedom or Freedom Unlimited card, and those with Chase co-branded United credit cards. Assuming you've got one of those, you need to take out a “new, residential first mortgage” with the bank....

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### What Is Mortgage Protection Insurance? And Do You Actually Need to Buy It?

> You just closed your home loan and now a company is trying to sell you "mortgage protection insurance." What is it and should you buy it?

- Published: 2017-05-02
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-is-mortgage-protection-insurance-and-do-you-need-it/
- Categories: Mortgage Tips

So you just closed on your mortgage and you’re beginning to settle into your new home (and your new loan). You’re assessing the many things that will need to be fixed and changed to make your house a home. Then you receive an urgent notice in the mail regarding something called “mortgage protection insurance” or MPI for short. Or maybe it’s referred to as mortgage payment protection insurance or mortgage life insurance protection. In any event, it looks pretty serious and your blood pressure rises instantly. Mortgage Protection Insurance Looks Very Official, But Isn't... Once you move into your new home You'll likely be bombarded by very official-looking solicitations Warning you to purchase mortgage protection insurance To ensure you and your loved ones are financially secure The seemingly important document might have come in an official-looking envelope that bears some sort of message like “final notice,” despite being the first and only notice you've received. Once nervously opened, you’ll be presented with a sales pitch that includes a lot of personal information, such as your name, your lender's name, loan amount, record date, and a form that you’re urged to complete and return as soon as possible. There’s also a good chance it’ll be printed on pink paper, which for some reason makes it all the more urgent. But what you might not know, or what the company trying to sell you the insurance might not make very clear, is that it’s an entirely optional third-party coverage, just like a...

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### Today’s Mortgages Are Not Your Older Sibling’s Mortgages

- Published: 2017-03-22
- Modified: 2018-07-18
- URL: https://www.thetruthaboutmortgage.com/todays-mortgages-are-not-your-older-siblings-mortgages/
- Categories: Mortgage News

While pundits and fusspots continue to question whether we’re headed for another housing bubble, consider this: The most recent mortgages were among the highest quality (lowest risk) since 2001. Indeed, mortgages originated during the fourth quarter of 2016 were of the utmost quality, exhibiting even less risk than those funded a year earlier, this according to the latest CoreLogic Housing Credit Index (HCI). The Housing Credit Index (HCI) Factors Include: Credit score (the higher the better) Loan-to-value ratio (LTV) Debt-to-income ratio (DTI) Documentation type (generally only one game in town nowadays: full doc) Occupancy status (owner-occ is the best occ) Condo/Co-up share (SFRs are safer) While the mortgages look pretty darn good, the company did note that the reduction in risk from both a year and a quarter earlier could be partially attributed to a higher refinance share. Per CoreLogic chief economist Frank Nothaft, refinance borrowers tend to have lower loan-to-value ratios (LTVs) and debt-to-income ratios (DTIs) than their home purchase counterparts. And because mortgage rates have since moved higher from late last year, default risk could increase as lenders loosen underwriting guidelines to accommodate “harder-to-qualify borrowers. ” Nothaft added that fraud could also rise as the mortgage market becomes more purchase-heavy. Credit Scores Up, DTIs and LTVs Steady Credit risk remains very low in the housing market Relative to what was seen a decade earlier Thanks to very high borrower credit scores And DTIs and LTVs that are in a healthy range As you can see from the chart...

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### Credit Bureau Experian Launches Real-Time Asset and Income Verification for Mortgages

- Published: 2017-03-21
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/credit-bureau-experian-launches-real-time-asset-and-income-verification-for-mortgages/
- Categories: Mortgage News

Mortgage lenders have come a long way in the past decade. They used to approve loans without the need for income, asset, or employment documentation, and now they can verify all those things in seconds. Yes, that was half a joke about the recent crisis and half a jab at the mortgage industry for continuing to reside in the Stone Age when it comes to underwriting and approving mortgages. But it appears the sea change we’ve all been waiting for is well underway. Instead of printing out stacks of paperwork and faxing in documents, mortgage borrowers can now verify many key items digitally. Perhaps this will shrink the average mortgage application from 500 pages to something a little more manageable. Maybe just 450 pages? It could also speed things up, as Experian notes some loan approvals can take as long as 70 days. Oh, and let’s not forget the $42 billion price tag to process all these mortgages each year. Experian Teams with Finicity to Automate Mortgages In an effort to speed up mortgage applications And make them less susceptible to fraud Experian and Finicity launched a real-time Verification of Asset (VOA) Report Along with a Verification of Income (VOI) Report to complement credit reports The latest step forward in this department comes via a partnership between credit bureau Experian and real-time financial >loan officers can spend more time originating mortgages, as opposed to chasing down customers for their latest bank statement, including ALL pages. And there’s no need for...

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### The 5/5 ARM Is an Adjustable-Rate Mortgage for the Faint of Heart

- Published: 2017-03-06
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/the-55-arm-is-an-adjustable-rate-mortgage-for-the-faint-of-heart/
- Categories: Mortgage Tips

There’s a popular new loan in town that a lot of credit unions seem to be offering known as the “5/5 ARM,” which essentially replaces the more aggressive 5/1 ARM that continues to be the mainstay at larger banks and lenders. The San Francisco Federal Credit Union offers it via their POPPYLOAN, Caliber Home Loans has it, and PenFed also includes the product in its stable of loan programs. How the 5/5 ARM Works It's an adjustable-rate mortgage with a 30-year term That has a fixed interest rate for the first 60 months It then adjusts in year six and every five years thereafter With adjustments in year 6, 11, 16, 21, and 26 First off, you should know that the 5/5 ARM is an adjustable-rate mortgage. However, you get a fixed rate for the first five years of the loan term, just like a 30-year fixed. After that five years, the mortgage experiences its first rate adjustment, either up or down, based on the combination of the margin and the underlying mortgage index. The initial rate cap tends to be 2% on this program, meaning the rate can’t rise more than two percentage points from its starting rate, or fall by more than that in year six. Let’s look at an example of a 5/5 ARM to illustrate: Starting rate: 3. 125% Index: 1-year LIBOR Margin: 2% First adjustment: Year 6 Initial cap: 2% Periodic cap: 2% Lifetime cap: 5% If the starting rate is 3. 125%, the rate...

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### Warren Buffett Just Listed a Home for $11 Million That He Paid $150,000 For

- Published: 2017-03-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/warren-buffett-just-listed-a-home-for-11-million-that-he-paid-150000-for/
- Categories: Housing Market, Mortgage News

At first glance, I’m wondering why he didn’t list it for $10,999,999, but shoot, he probably has a reason. Legendary investor Warren Buffett has finally listed his vacation home located at 27 Emerald Bay in Laguna Beach, CA for $11 million. It seems he’s finally ready to take some profits after breaking even – oh wait, he’s up $10,850,000. Never mind. Yep, he bought the beach house back on April 6th, 1971 for $150,000. If we adjust for inflation the price would be $900,000 today, still a massive bargain to the astronomical listing price. Buffett Put Just 20% Down and Took Out a 30-Year Mortgage If you’re wondering how he financed the property way back then, he said he “probably only had $30,000 of equity in it,” meaning 20% down payment and 80% loan-to-value, which was common at the time. He took out a 30-year fixed mortgage from Great Western Savings and Loans, which was later acquired by Washington Mutual and then JPMorgan Chase. Per Freddie Mac, 30-yr fixed mortgage rates were around 7. 31% at the time – incidentally, it was the first month they began tracking 30-year fixed mortgage rates. Buffett apparently still holds the loan, remarking that “it’s the only mortgage I’ve had for fifty years,” meaning he must have refinanced once or twice to take advantage of either a lower rate or perhaps tapped some equity. Why would one of the world’s richest men still have a mortgage, let alone a tiny one? Wouldn't he have...

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### Pay Down Your Debts Before You Apply for a Mortgage to Increase Purchasing Power

- Published: 2017-02-23
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/pay-down-your-debts-before-you-apply-for-a-mortgage-to-increase-purchasing-power/
- Categories: Mortgage Tips

With home prices (and interest rates) on the rise, it’s getting more and more difficult to qualify for a mortgage. One simple strategy you can employ to boost your purchasing power is to pay down existing debts. I’ve already warned prospective mortgage applicants to avoid swiping their credit cards before and during the mortgage process, but this approach goes a step further. Less Debt = Lower DTI While a higher income is great It might not mean much if you have a ton of expenses If you can keep your debt to a minimum More of your income can be used to qualify for a home loan Put simply, if you have less debt, your debt-to-income ratio will be lower, even if your income doesn’t rise. For example, if you’ve got $2,000 in monthly debts and $10,000 in monthly income, your DTI is 20%. Lower that monthly debt down to $1,000 and you’ve got a DTI ratio of 10%. Once we add the proposed housing payment into the mix, your DTI will shoot up to account for that new monthly obligation, so it’s important to ensure you’ve got “room” to take on a new mortgage. If you’ve already got lots of existing debt that is reported on your credit report, and not much income, it’ll be difficult to qualify for a large mortgage and stay below key lender thresholds, such as the 43% max DTI ratio for Qualified Mortgages. Say you’ve got a slew of credit cards with balances on...

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### BurkeyLoan: A 120% LTV Mortgage That’s Portable and Can Pay Off Student Loans

- Published: 2017-02-21
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/burkeyloan-a-120-ltv-mortgage-thats-portable-and-can-pay-off-student-loans/
- Categories: Mortgage News

It sounds like magic, doesn’t it? A mortgage that allows for a loan-to-value ratio as high as 120%, portability, and can be used to pay off student loans. Oh, and it can be tapped into when you need cash or put on pause when you require a “Life Refresh. ” Wow. Well, it’s a very real thing now thanks to BurkeyLoan, a Miami-based portfolio lender that offers the “BurkeyLoan Millennial Choice Mortgage. ” What Is BurkeyLoan? You might be wondering what on earth BurkeyLoan is? Well, Burkey is simply the name of the company’s founder, John Burkey, who seems to think his last name has a nice ring to it. Name aside, his signature loan is looking to completely shake up the mortgage industry by offering features that aren’t traditionally available to homeowners. And he’s stuffing them all in one single loan program. For starters, the BurkeyLoan Mortgage allows an LTV as high as 120%, meaning the entire property value can be financed, and another 20% of it can be tapped to pay off any student loans a borrower is grappling with. The company does apparently require a 10% minimum down payment, which is based on the price of the home and the outstanding student loan debt together. For example, say the purchase price is $500,000 and the borrower has $150,000 in student loans. The borrower would have to come up with a $65,000 down payment and they’d wind up with a loan amount of $585,000 on a home valued...

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### Chase Wants You to Have a Digital Mortgage Experience

- Published: 2017-02-16
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/chase-wants-you-to-have-a-digital-mortgage-experience/
- Categories: Mortgage News

While they might be better known for credit cards at this point, Chase also offers mortgages. And now they want to offer digital mortgages, or at least a digital mortgage experience. In other words, they don’t want to be your boring old brick-and-mortar grownup bank anymore. Let’s explore what exactly that means. Self-Serve Mortgages from Chase Today, the NYC-based megabank unveiled its grand plan to launch a so-called “digital, self-serve mortgage platform” that will ideally make it quicker, easier, and more transparent to get a mortgage from Chase. Once launched later this year, customers will be able to track loan progress online or via a mobile device... how novel! Okay, I’ll stop mocking and provide some specifics to this new rollout. The technology platform relies on some help from Roostify, a company whose sole purpose is to make loan closings faster (and better). They provide software that allows consumers to apply for mortgages online (or on their smartphone), while letting them easily connect financial accounts for document verification, and track progress all within an app or webpage. See the screenshots above and below for more on that. The presence of this technology basically streamlines a once cumbersome process and reduces mistakes and hiccups that can often slow down the loan process. It also keeps the whole team in the loop the entire time. The technology should also minimize the need for human interaction, something people seem to be pretty fond of these days, even when it involves major decisions and...

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### Guaranteed Rate Affinity: Another Mortgage Lender and Real Estate Company Link Up

- Published: 2017-02-16
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-affinity-another-mortgage-lender-and-real-estate-company-link-up/
- Categories: Mortgage News

The mortgage and real estate marriage trend continues, this time with Realogy and Guaranteed Rate joining forces to create a new venture known as “Guaranteed Rate Affinity. ” This new partnership will result in a massive mortgage origination platform that pairs the nation’s eighth largest retail mortgage lender with the world’s largest franchisor of real estate brokerages. Under the agreement, Guaranteed Rate will provide its mortgage lending services to Realogy’s real estate brokerage company NRT, and to its relocation subsidiary Cartus. Some of Realogy’s NRT real estate brands include Climb Real Estate, Coldwell Banker, Corcoran Group Real Estate, Sotheby’s International Realty, and ZipRealty. Guaranteed Rate Replacing PHH as Lender of Choice The 8th largest retail mortgage lender in the U. S. Will provide home loan services to Realogy customers Which includes brands like Coldwell Banker, Sotheby's, and ZipRealty Follows the recent trend of mortgage and real estate companies linking up Part of the undertaking will involve the acquisition of four regional mortgage origination and processing centers previously belonging to PHH Home Loans, along with its relocation division and some of its employees. PHH used to provide these services to Realogy but has been reducing its mortgage footprint of late. The move should allow Guaranteed Rate to get its hands on a lot more purchase mortgage business, a trend that has grown in popularity as mortgage refinance activity continues to wane. Perhaps home buyers can take advantage of their “Double Match” loan program that only requires a 1% down payment. It’s...

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### Loftium Offers Mortgage Assistance If You Airbnb Your Extra Bedroom

- Published: 2017-02-08
- Modified: 2018-01-10
- URL: https://www.thetruthaboutmortgage.com/loftium-offers-mortgage-assistance-if-you-airbnb-your-extra-bedroom/
- Categories: Mortgage News

Here’s a strange one – a new company by the name of Loftium is offering down payment money and “monthly mortgage assistance” if you agree to Airbnb one your new home’s extra bedrooms. The details are pretty scant, but it appears Loftium is looking for more short-term inventory to rent out via Airbnb in exchange for some upfront mortgage help. Up to $20k Toward Your Mortgage Down Payment As noted, there’s barely anything about this company on the internet, including on their own webpage, which is surprising because even the most obscure companies will have some sort of footprint. All I could find was info on two co-founders, Adam Stelle and Yifan Zhang, both with backgrounds in tech startups, including an app called Pact that pays you to be healthy, paid by members who aren’t. And a Seattle-based phone number, which could be where the company will be headquartered. It would make sense given the housing boom up there, and the lack of available supply. It seems Loftium will pay up to $20,000 toward your new home’s (or condo? ) mortgage down payment if you agree to list your spare bedroom(s) on Airbnb for 12 to 36 months. I suppose it’s like buying a multi-unit property where you live in one unit and rent out the other unit(s), except you’re letting a third-party company run the show with another third-party company. Confused yet? You could potentially have hundreds of guests throughout the year, as opposed to just one tenant who...

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### 2017 Mortgage Rates Are Expected to Stay in the 4% Range

- Published: 2017-01-31
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2017-mortgage-rates-are-expected-to-stay-in-the-4-range/
- Categories: Mortgage Tips

Before you panic, take comfort in the fact that mortgage rates probably won’t do too much in 2017, just as they haven’t in recent years, despite stark predictions telling us otherwise. I went ahead and compiled the 2017 mortgage rate forecasts of Fannie Mae, Freddie Mac, the Mortgage Bankers Association, and the National Association of Realtors to determine what we might expect this year. Interestingly, these four groups all seemed to get a bit more conservative this year, perhaps learning from past mistakes when they made much bolder predictions. Well, aside from Fannie Mae, which seemed to get it right last year while the other three had called for 30-year fixed rates closer to 5% to close out 2016. Fannie predicted a rate of 4. 1% to end the year, which is pretty darn close to where we’re at today. As it stands now, the 30-year fixed is averaging around 4. 19%, this according to the weekly survey from Freddie Mac. The good news is all four of the forecasts expect the 30-year to stay within the 4% realm throughout 2017, and in fact, in 2018 as well. The only thing we have to worry about is them being wrong again, though this time they could prove to be too modest, only for us to be unpleasantly surprised to the upside. In any case, there’s a good chance we’ll see some choppiness in 2017, so it’ll be important to stay on top of rate movement to ensure you lock at...

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### Redfin Mortgage Now Available in 20 States and DC

- Published: 2017-01-26
- Modified: 2025-03-10
- URL: https://www.thetruthaboutmortgage.com/redfin-mortgage-just-launched/
- Categories: Mortgage News

Whoa. In an unexpected turn of events, online real estate brokerage Redfin has launched a new mortgage service called, you guessed it, “Redfin Mortgage. ” Well, maybe it wasn’t so unexpected, seeing that the mortgage trend is decidedly moving from refinances to purchases. Just ask Motto Mortgage... So it’s a very smart move for Redfin to get their hands on all that mortgage business, while also gaining more control of the many moving parts involved in the typical home purchase. In announcing the news, and the new website, the company noted that Redfin Mortgage “is the next step in our mission to put customers first. ” Redfin Agents and Redfin the Lender Will Work Together Redfin's goal is to streamline the home loan process By creating a unified team from within the same company It can seamlessly integrate its lending platform with Redfin's home-buying service To both speed things up and provide a smoother loan closing The goal seems to be harmony, and also savings, something Redfin introduced as an online real estate brokerage many years ago. They only charge a 1. 5% commission to sellers, which they refer to as “half the usual listing fee. ” In reality, it might be a little less as 2. 5% is a typical fee these days, but still, they don’t charge as much as a full-service real estate brokerage. And with many, if not all, home buyers using Redfin to peruse homes for sale, Redfin-listed properties get prominence as they’re always found...

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### Black Knight Is Working on Its Own Mortgage Credit Score

- Published: 2017-01-26
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/black-knight-is-working-on-its-own-mortgage-credit-score/
- Categories: Mortgage News

Black Knight Financial Services is apparently working on its own “mortgage-specific FICO score” to better determine individual mortgage borrower risk, instead of simply looking at the overall credit profile of borrowers. The news came from a webinar that Black Knight participated in with the Consumer Bankers Association back in December titled, “Hidden Opportunities with Subprime Borrowers. ” Hat tip Inside Mortgage Finance. The gist is that there are a lot of homeowners out there with imperfect credit, more specifically subprime credit (sub-620 FICO scores) who could stand to benefit from a mortgage refinance to a much lower interest rate, instead of paying say 8-10% currently. But many are unable to do so using traditional credit scoring models, despite the fact that they actually pose less mortgage default risk than those credit scores might let on. For example, even if they have a random unrelated collection or miss a credit card payment here and there, they might never, ever miss a mortgage payment. A New Mortgage Score Is in the Works Black Knight Senior Modeler Wesley Winter fielded a question from the audience about developing a mortgage FICO score, and said “we are working on that right now. ” He added that they “have access to the full dataset from one of the credit reporting agencies,” and are looking at similar credit behavior elements for the basis of a mortgage score “that could be offered as a standalone product. ” Whether heavyweights like Fannie Mae and Freddie Mac would actually use...

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### The Pros and Cons of Trump’s FHA Premium Cut Freeze

- Published: 2017-01-25
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/the-pros-and-cons-of-trumps-fha-premium-cut-freeze/
- Categories: Mortgage News

You’ve heard the news. President Trump announced a freeze on the expected 25-basis point FHA premium cut just a week or so after it was announced. For most folks, it was an unexpected and sad ending to a seemingly positive announcement that would have saved the average FHA home buyer about $500 annually. That money would have ostensibly gone back into the economy, either through home improvement or general spending. It would have also made FHA mortgages more affordable and perhaps a stronger alternative to conventional financing. Instead, the premium cut has been put on ice, likely in an effort to reduce the government’s footprint in the mortgage industry. It should be noted that it’s not necessarily dead in the water, meaning the discussion is ongoing. Two major players have already weighed in on the move, so let’s look at the potential pros and cons of Trump’s action. The Pros of an FHA Premium Cut The obvious major advantage Is a lower PMI payment due each month Which will make FHA loans a better option than conventional in many cases Enough so that it might allow more people to buy homes It seemed most in the industry were in favor of a premium cut, including the all-powerful National Association of Realtors, which tends to be a fan of lower home buying costs. The National Association of Home Builders (NAHB) also indicated that it supported the proposed rate cut, saying it would “reduce the cost of housing for creditworthy borrowers, particularly...

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### Would You Rather Have a Low Mortgage Rate or Pay a Lower Price for a Home?

- Published: 2017-01-18
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/would-you-rather-have-a-low-mortgage-rate-or-pay-a-lower-price-for-a-home/
- Categories: Mortgage Rates, Mortgage Tips

My friend asked me the other day if I’d rather have a low mortgage rate or pay a lower price for a home. I paused briefly, then said I’d rather pay less for the home. My thought process was basically that the price you pay for a home will never, ever change, whereas mortgage rates can and do change quite often. Put another way, you can’t change what you paid for a home, but you can change the financing (mortgage rate) as often as you’d like via a mortgage refinance, assuming it’s favorable to you. In that respect, it makes sense to go with the lower price tag as opposed to the lower mortgage rate. A lower home price also means a lower down payment, something that is often more difficult to get around than a monthly payment. There are Lots of Scenarios to Consider... There isn't just one scenario here Let's look at a few different possibilities To see if low home prices or low mortgage rates Are more powerful What If Home Prices Fall 5% and Rates Climb 0. 5%? Let’s pretend home prices fall about five percent as mortgage rates climb a half a percentage point. It should be noted that there’s no direct correlation between rates and prices. They could both easily rise in tandem. But let’s just see how it might look. $237,000 purchase price 20% down ($47,400) $189,600 loan amount 3. 5% rate = $851. 39 monthly payment Total principal paid after 84 months:...

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### Mortgage Rates vs. Presidential Inaugurations: Is There a Correlation?

- Published: 2017-01-12
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-vs-presidential-inaugurations-is-there-a-correlation/
- Categories: Mortgage Matchups

Let’s get political – just kidding. Let’s talk about data that involves presidential elections and mortgage rates, more specifically, what happens to rates during an election year and the subsequent year to find out if there are any trends that pop out. I went ahead and scoured Freddie Mac’s 30-year fixed-rate mortgage data, which dates back to April 1971 and lined it up with every presidential election since then. Three pieces of data were plucked from their database: - Mortgage rates at the time of the election - Mortgage rates a month after the inauguration - Mortgage rates at inauguration year-end November 6th, 2012 Obama incumbent win (Democrat) The 30-year fixed averaged 3. 35% during the month of November 2012. It averaged aHIGHER3. 53% for the month of February 2013, the month after Obama’s inauguration. It ended the year 2013HIGHERat 4. 48%. November 4, 2008 Obama win (Democrat) The 30-year fixed averaged 6. 09% during the month of November 2008. It averaged aLOWER5. 13% for the month of February 2009, the month after Obama’s inauguration. It ended the year 2009LOWERat 4. 93%. November 2, 2004 Bush Jr. incumbent win (Republican) The 30-year fixed averaged 5. 73% during the month of November 2004. It averaged aLOWER5. 63% for the month of February 2005, the month after Bush’s inauguration. It ended the year 2005HIGHERat 6. 27%. November 7, 2000 Bush Jr. win (Republican) The 30-year fixed averaged 7. 75% during the month of November 2000. It averaged aLOWER7. 05% for the month...

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### 2017 Mortgage and Real Estate Predictions

- Published: 2016-12-28
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2017-mortgage-and-real-estate-predictions/
- Categories: Housing Market, Mortgage Tips

Well, another year has passed, and not just any year. Some have referred to 2016 as the worst year ever, though I’m a little more optimistic. Anyway, it’s time to look forward to see what the future holds for mortgages and real estate in 2017. But as always, you can view my prior year predictions for 2016 and 2015 and beyond. I think I did pretty well last year – I said mortgage rates wouldn’t go up much if at all, and that was true until the election. So I got burned late on that one. Otherwise, a lot of my predictions seemed to be on point, though I seemed to jump the gun on a couple that will probably come true this year. Without further ado, let’s talk about 2017... 1. Mortgage rates will pull back, but end up higher I’ll address the elephant in the room first; mortgage rates. My expectation is they’ll rise in 2017, but also pull back at some point, likely in the first half of the year. The incoming administration, along with a number of geopolitical events worldwide, will surely create the uncertainty necessary to drive rates lower. This means there will be opportunity to refinance and/or buy a home with a lower mortgage rate than what is currently on offer. The trick here will be timing it because I do think we end 2017 with higher mortgage rates, though hopefully still below 5% on the 30-year fixed. That would be less than a...

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### Home Prices Rise at Fastest Pace Since 2006

- Published: 2016-12-21
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/home-prices-rise-at-fastest-pace-since-2006/
- Categories: Housing Market, Mortgage News

Just when you thought things were cooling off, home prices surprised us with yet another killer year. Tomorrow, Zillow will release the November edition of their Real Estate Market Reports, which will show that home prices increased 6. 5% in November from a year earlier, the best year-over-year gain since 2006. Yes, you heard that right. It might be a seasonal blip, but still, best 12 months since 2006... that’s impressive. I Was Wrong I’ll be the first one to admit I was wrong about sustained, stellar home price appreciation. I actually thought things were overheating a couple years ago, yet home prices continued to defy expectations. I suppose we can thank low mortgage rates and scant inventory for that. The good news is I’ve learned something from all of this. Whenever you think things are about to top out, they’ve probably got a lot more time to keep going higher. This is probably even more true when you watch things really closely. The same thing happened in the stock market. It looked frothy a couple years ago, but now we’re on the cusp of Dow 20,000. And probably Dow 21,000 if history is any indication. Not long after, it might be time to worry, or least get slightly less bullish. The takeaway is that market tops take a long time to reach, just like market bottoms, and you'll doubt yourself along the way. I’ve been hearing chatter lately about how we probably have another good year or so, maybe...

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### Fannie and Freddie Launch Flex Modification Program: No Paperwork Required in Some Cases

- Published: 2016-12-15
- Modified: 2020-04-07
- URL: https://www.thetruthaboutmortgage.com/fannie-and-freddie-launch-flex-modification-program-no-paperwork-required-in-some-cases/
- Categories: Mortgage News

Fannie Mae and Freddie Mac have launched a new loan modification program for troubled mortgages known as “Flex Modification. ” In a nutshell, the new flexible loss mitigation tool is a combination of HAMP, the Standard Modification, and the Streamlined Modification, and will replace the trio as early as March 2017. Loan servicers are encouraged to implement the Flex Modification at that time, but aren’t required to do so until October 1st, 2017. The Home Affordable Modification Program (HAMP) is slated to expire at the end of the this. How Flex Modification Works It lowers your monthly mortgage payment by as much as 20% via interest rate and/or loan term adjustment Past due amount added to loan balance and payments recalculated over remaining loan term It makes your home loan current once the trial modification period is completed successfully Allows you to stay in your home and avoid foreclosure One of the things that stood out to me was the lack of borrower documentation needed to get a loan modification under this new program. A major issue after the mortgage crisis was the ability to modify mortgages without complicated paperwork and long, drawn out processes. That led to revisions of HAMP to make it easier for borrowers to get relief, and it appears those lessons have been applied to the new Flex Modification. Like its predecessors, the Flex Modification will aim to lower monthly housing payments to help at-risk, delinquent borrowers avoid foreclosure. Those who are less than 90 days...

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### Fairway Mortgage App: Close Your Mortgage with Your Phone

- Published: 2016-12-13
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/fairway-mortgage-app-close-your-mortgage-with-your-phone/
- Categories: Mortgage News

Fairway Independent Mortgage Corp. plans to launch a new smartphone app designed to make the home loan process a lot faster (and easier). The company will release its FairwayNOW mobile application in January, though some version of it already appears to be available for download in the App Store. The to-be-released app will let Fairway customers do anything from search for homes to calculate different loan scenarios, and of course apply for a mortgage or pre-qualification. There are built-in calculators for home purchases, refinances, and general affordability, all of which can be saved in the app for later use. Apply for a Mortgage in Less Than 10 Minutes If you’re interested in applying for a mortgage, you’ll be able to do so in under 10 minutes, per Fairway. This isn’t groundbreaking stuff, seeing that many competitors (Rocket Mortgage and others) already offer the same technology in a shorter amount of time. But there are a few cool features of note. For one, once you apply for a mortgage using the app, you’ll be able to scan necessary documents using your smartphone’s camera and upload them securely to the company. No need to break out the scanner or the fax machine, thankfully. This will save time and aggravation. Additionally, Fairway will send customers push notifications as their loan progresses from approval to funding. That means you’ll be notified the second anything changes, which plays into that quick 10-day close. Instead of wondering if anything has been signed off, or if loan...

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### Ally Home Loans: Bank Now Offers Retail Mortgages to Its Customers

- Published: 2016-12-12
- Modified: 2025-01-08
- URL: https://www.thetruthaboutmortgage.com/ally-home-bank-now-offers-retail-mortgages-to-its-customers/
- Categories: Mortgage Tips

You may remember GMAC Bank, which was taken down by its fateful mortgage arm Residential Capital (ResCap) before eventually requiring a government bailout. It wasn’t an uncommon story at the time; many other mega mortgage companies took a fall too, including the likes of Countrywide and IndyMac, to name but two. Anyway, ResCap was a big mortgage player back in the day, originating billions of residential home loans in the lead up to the housing bubble. Then it all came crashing down... Once the company recovered from the financial crisis, it rebranded itself as Ally Financial, offering auto loans and high-yield savings accounts. Those businesses seemed like a safe way to dip their toes back in the lending waters. The auto loan portion of the business actually runs deep in its history seeing that GMAC stood for General Motors Acceptance Corporation. So you knew they were going to get back into that business, but the mortgage business was still a big question mark. They’re Back... with a Brand New Name After the Great Recession it became common to rebrand if you made it through Seeing that many companies faced lawsuits and bad PR That explains why ResCap is now known as Ally Home It gives them a fresh start and lets them forget all those painful memories Somehow these large companies have a way of reinventing themselves, with fresh new names and logos that can make us all forget the ugly past very quickly. And so without further ado, say...

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### Caliber Home Loans Unveils Ultimate Homebuying Experience: Close Your Mortgage in 10 Days

- Published: 2016-12-09
- Modified: 2024-06-01
- URL: https://www.thetruthaboutmortgage.com/caliber-home-loans-unveils-ultimate-homebuying-experience-close-your-mortgage-in-10-days/
- Categories: Mortgage News

Caliber Home Loans out of Irving, Texas wants to close your mortgage faster than anyone else, and thinks it can accomplish the feat in less than 10 days. Yes, you heard that right. Less than 10 days. So just how does Caliber plan to reduce the typical mortgage funding timeline of 30-45 days down to less than 10 days? Finance Your New Home in Just 10 Days? With their new “Ultimate Homebuying Experience” of course, which they tout as a “streamlined application, approval and closing experience. ” To start, the full application will take “only minutes,” at which point a Caliber loan officer and/or account executive will guide through the rest of the loan process. In short, Caliber will rely on electronic verification, a growing trend in the mortgage world that has yet to be fully embraced by all lenders. Think Rocket Mortgage. This includes verifying key income, asset, and employment information without having to send paperwork back and forth with a fax machine. Instead, borrowers can grant the lender access to these documents using third-party verification tools and/or services to greatly speed up the process. As a result, the loan officer can order all the documents it needs, instead of waiting on the borrower to get around to sending them. However, borrowers must sign off to provide access, something that could still prove elusive if they go on vacation during the loan process (this is a common, hilarious problem in the mortgage industry). Caliber’s Ultimate Homebuying Experience Key Details...

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### Is the 30-Year Fixed Mortgage Actually a Lot of Work?

- Published: 2016-12-05
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/is-the-30-year-fixed-mortgage-actually-a-lot-of-work/
- Categories: Mortgage Tips

I typically refer to the 30-year fixed mortgage as a set-it-and-forget-it type of mortgage because it’s fixed for the entire duration of the loan. The mortgage rate in month one is the same as the rate in month 360. The mortgage payment never changes, though the total housing payment could vary thanks to things like taxes, insurance, and PMI. Put simply, it’s a very easy mortgage to wrap your head around, and for that reason the most popular and common choice for homeowners here in the United States. The same isn’t true elsewhere in the world, which is one of the reasons why the 30-year fixed has been questioned a lot lately by economists and mortgage pundits. The latest opinion comes from Benjamin Keys of The Wharton School of the University of Pennsylvania, who analyzed how monetary policy makes its way into households via the mortgages borrowers hold. During the most recent crisis, those with adjustable-rate mortgages actually “won” in a sense because their rates adjusted lower when the government stepped in and bought tons of mortgage-backed securities while lowering other borrowing rates. Meanwhile, those with fixed rates didn’t benefit at all, and in fact were trapped in their mortgages because of equity issues, namely underwater mortgages. This meant those who ostensibly took on more risk were rewarded when the wheels fell off. And those who were seemingly prudent in their mortgage choice were punished because they were unable to refinance until HARP came along. Does that mean we should...

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### Post-Election Mortgage Rate Surge Crushes Refi Candidates, Puts Home Prices on Watch

- Published: 2016-12-05
- Modified: 2016-12-05
- URL: https://www.thetruthaboutmortgage.com/post-election-mortgage-rate-surge-crushes-refi-candidates-puts-home-prices-on-watch/
- Categories: Mortgage News

It’s been an eventful three weeks or so since the U. S. presidential election took place, that is, if you keep an eye on mortgage rates. They’ve moved in only one direction since November 8th – up. Way up. Though thanks to their pre-election starting point, they remain historically low and cheap to anyone old enough to remember where they stood a decade ago. In case you forgot, the 30-year fixed averaged 6. 24% in November 2006, per Freddie Mac data, about two percentage points above current levels. So yeah, things are still pretty darn good. However, because most homeowners these days hold rates that are much lower, the benefits of refinancing have quickly diminished for millions thanks to the recent rate rise. 4. 3 Million No Longer In the Money There are times when it makes sense to refinance your mortgage, and times when it does not, often dictated by prevailing interest rates. Unfortunately, mortgage rates have risen about a half point since then, more than halving the number of potential refinance candidates, this according to the latest Mortgage Monitor Report from Black Knight Financial Services. The company said the refinance population dwindled from 8. 3 million borrowers pre-election to just 4 million today thanks to a 49 basis point (bps) rise in rates. That matches the lowest refi population in 24 months, with the most recent low set back in July 2015. In short, the mortgage rate increase means fewer borrowers can qualify for a refinance thanks to...

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### Is Now the Time to Slow Down Mortgage Repayment?

- Published: 2016-12-01
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/is-now-the-time-to-slow-down-mortgage-repayment/
- Categories: Mortgage Tips

Now that mortgage rates have jumped, it might be time to take a look at how you’re repaying your mortgage. Put simply, if your mortgage rate is fixed and lower than prevailing rates, it could make sense to slow things down to take advantage of your low rate for longer. Yes, you have to continue making your full mortgage payment each month to satisfy your credit obligations, but if you’ve been paying extra, it could be time to rethink your strategy. For a while, I've been asking myself why everyone was in such a big rush to pay down their mortgages with rates so low and only expected to go higher. I even questioned the the timing of a 15-year fixed at the moment. It’s Been Popular to Pay Mortgages Down Fast Lately With mortgage rates so low A lot of borrowers have been refinancing into shorter-term mortgages But doing so when mortgages are so cheap Means your money could be better served elsewhere Lately, it’s been pretty trendy to knock down those large mortgage balances, with the 15-year fixed gaining in popularity quite a bit post-mortgage crisis. A lot of folks took advantage of the spread on new 15-year fixed rates versus their old 30-year fixed rates that were in the 5-7% range. This meant they could pay off mortgages in half the amount of time for roughly the same monthly payment. But now anyone looking to refinance their mortgage will likely be faced with a higher interest rate...

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### President-Elect Trump vs. Mortgage Rates

- Published: 2016-11-14
- Modified: 2018-06-01
- URL: https://www.thetruthaboutmortgage.com/president-elect-trump-vs-mortgage-rates/
- Categories: Mortgage Matchups, Mortgage Rates

You may have already read the headlines. Things like Trump-fueled Treasury surge and the so-called Trump Effect, all driving mortgage rates higher. And it’s not just fodder, it’s true. Since the election results came in last Tuesday night, mortgage rates have been on an upward tear, which clearly isn’t good news for those looking to secure a mortgage. Of course, it’s been great for anyone with an investment account because stocks have surged during the same period. It may also be a boon for savers if depositories eventually raise the interest rates they pay out. Something above 1% would be nice... The crappy part is that the recent jump could affect new homeowners for the next 30 years if they have to go with a higher rate today and things don’t improve anytime thereafter. Why Are Mortgage Rates Higher with a President Trump? Start with the basics A strong economy leads to higher interest rates as a means to cool inflation Everyone expects an economic boost under Trump So with that there are expectations of higher mortgage rates Put simply, mortgage rates tend to go up when the economy improves. The basic premise is a stronger economy means more inflation, which calls for higher interest rates to keep things in check. When news broke of Trump winning, stock futures actually plummeted because there was a lot of uncertainty of what a Trump presidency would mean for America. That uncertainty meant an expected stock selloff the next morning, which would have...

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### SoFi Wants You to Pay Off Your Student Loans with a Mortgage

- Published: 2016-11-03
- Modified: 2023-04-03
- URL: https://www.thetruthaboutmortgage.com/sofi-wants-you-to-pay-off-your-student-loans-with-a-mortgage/
- Categories: Mortgage News

Often times student loans get in the way of a mortgage because of the tremendous monthly debt, but fintech lender SoFi wants to create the opposite effect. They’ve launched their so-called “Student Loan Payoff ReFi,” which as the name implies, is a way to get rid of student loan debt while refinancing the mortgage. The general idea is that mortgage rates (at the moment) are lower than the interest rates on student loans, meaning borrowers can save money by shuffling debt to their existing mortgage balance. Apparently 8. 5 million households have student debt obligations, so this mechanism could equal a lot of savings, and a lot of originations for SoFi. The program is being offered in conjunction with Fannie Mae, and is apparently cheaper than a traditional cash out refinance. How the SoFi Student Loan Payoff ReFi Works Say a student (or I suppose a parent) owns a home with a mortgage balance of $200,000 at 67% LTV, and there is also outstanding student loan debt of $40,000. This hypothetical homeowner can combine the two debts into one and enjoy a lower interest rate, despite a higher LTV. This example would push the LTV to 80%, likely the maximum under the program, but the rate would still be a competitive 3. 75% or so on a 30-year fixed. The payment would be even cheaper because student loans often amortize over a shorter period, such as 20 years. But the lower combined rate would offset the longer amortization period. SoFi...

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### HomeBridge Financial to Acquire Prospect Mortgage Loan Platform

- Published: 2016-11-01
- Modified: 2024-05-23
- URL: https://www.thetruthaboutmortgage.com/homebridge-financial-to-acquire-prospect-mortgage-loan-platform/
- Categories: Mortgage News

HomeBridge Financial Services announced this morning that it plans to acquire the operating assets of Prospect Mortgage, LLC headquartered in Sherman Oaks, CA. Specifically, HomeBridge is going to get their hands on Prospect’s loan production platform, with the intent of creating a mega mortgage lender. HomeBridge is already a pretty major mortgage player, so combining forces with Prospect should make them a household name... well, that’s probably the hope. Seeking to Become a Mortgage Giant HomeBridge expects to be one of the largest non-bank home loan lenders in the nation once the acquisition is completed in January 2017. Together, their combined operation will grow to 250 retail mortgage branches nationwide with around 900 retail loan officers. Additionally, HomeBridge has two separate wholesale operations, HomeBridge Wholesale and REMN Wholesale. Collectively, the entire conglomerate will employ more than 3,000 full-time workers, making it one of the larger mortgage operations nationwide. Prospect Mortgage offers all types of mortgages, including both conventional and FHA, while also specializing in 203(k) renovation loans. In fact, they were the top originator of such loans nationwide as of April. HomeBridge was the second largest 203(k) lender, so together they’ll really be number one. And by that I mean double their nearest competitor. Around 1% Market Share Combined Per the press release, Prospect Mortgage funded nearly $9 billion in home loans in 2015. HomeBridge said it originated around the same amount last year. Interestingly, per HMDA data, Prospect seemed to be the bigger of the two lenders last year....

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### FHA Lowers Owner-Occupancy Requirement to 35% for Certain Condos

- Published: 2016-10-27
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/fha-agrees-to-lower-owner-occupancy-requirement-to-35-for-certain-condos/
- Categories: Mortgage News

Effective immediately, the FHA will lower its owner-occupancy requirement for certain approved condominium complexes to just 35%. That means a given complex only needs about a third of the units to be owner-occupied, instead of the prior rule stating that 50% had to be primary residences. The rule change should increase FHA lending on condos, something the National Association of Realtors has been pushing for to help lower-income renters become homeowners. After all, condos tend to be a more affordable option than single-family homes. About a year ago, the FHA eased its occupancy requirement in a variety of ways to make that occupancy number easier to satisfy, but this change goes even further. In a nutshell, more investor-owned units means more risk for the building as a whole, something the FHA isn’t too fond of. Their position is that owner-occupants are less likely to default on their HOA dues compared to non-owner occupants. But The Housing Opportunity through Modernization Act of 2016 (HOTMA) directed the agency to issue new guidance to avoid harming the marketability of a building. For example, it might be more difficult to sell a condominium unit if the buyer was planning to finance it with an FHA loan. That could lead to a price drop or a failed sale. After some evaluation, HUD determined that the FHA's Mutual Mortgage Insurance Fund (MMIF) could allow for a lower percentage of owner-occupants in some complexes but not in others. Condos Must Meet Certain Conditions While the new rule...

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### Home Purchase Mortgage Volume to Exceed $1 Trillion in 2017

- Published: 2016-10-26
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/home-purchase-mortgage-volume-to-exceed-1-trillion-in-2017/
- Categories: Housing Market, Mortgage News

Good News for Real Estate Agents The Mortgage Bankers Association (MBA) expects home purchase lending to hit $1. 1 trillion next year, per their latest economic forecast released this week. That would mark an 11% increase from this year’s estimate and be the highest total since before the housing market took a turn for the worse nearly a decade ago. While things have largely turned around since then, inventory constraints continue to hamper home sales. Many first-time buyers are locked out of the market thanks to rising home prices and move-up buyers can’t move up because they lack the necessary equity and/or can’t find another home due to those inventory issues. That means fewer entry-level homes and essentially a logjam. Meanwhile, home builders have yet to fill the void left by fewer distressed sales such as short sales and foreclosures that dominated the housing market in recent years. Still, the MBA expects 2017 to be a banner year thanks to strong household formation, job growth, higher wages, and ongoing home price appreciation. Perhaps next year will the year of “not wanting to miss out,” coupled with the fear of not getting a rock bottom mortgage rate before they finally rise. We shall see. Purchase origination volume is expected to hit $990 billion this year, up from $903 billion in 2015. It is expected to rise to $1. 18 trillion in 2018 and $1. 25 trillion in 2019. Total Mortgage Volume Will Actually Fall Unfortunately, the uptick in purchase activity will...

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### Motto Mortgage Looks to Save the Mortgage Broker

- Published: 2016-10-25
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/motto-mortgage-looks-to-save-the-mortgage-broker/
- Categories: Mortgage News

Today, RE/MAX Holdings announced the launch of a new one-of-a-kind franchised mortgage brokerage known as Motto Mortgage. In a nutshell, the plan is to create a one-stop shop where home buyers can work with real estate agents and mortgage lenders all in one place. The hope is to create a more seamless home buying experience by putting loan originators in real estate offices nationwide. Well, they say in close proximity to real estate offices. But instead of pairing agents with loan officers from Bank X, they’ll have access to a wide variety of loan products because they’ll be working for mortgage brokerages. Motto Mortgage Wants to Disrupt and Innovate the Industry RE/MAX is launching the very first mortgage brokerage franchise model in the U. S. Plan is to create a one-stop shop for home buyers Where they can search for a home and a mortgage in one place And get financing options beyond just one lender partner The company claims its mortgage brokerage franchise model is the first of its kind here in the United States, and hopes to “disrupt and innovate the industry. ” They say they’re a “different kind of mortgage company,” presumably because they’re combining a franchise model with a mortgage brokerage. Generally, mortgage brokers are smaller independent shops that don't have a nationwide presence so I suppose it’s unique in that sense. The franchise model is also apparently new. As such, each location will be independently owned and operated. RE/MAX CEO, Chairman and Co-Founder Dave Liniger...

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### Your Mortgage Is About to Get More Paperless, Finally

- Published: 2016-10-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/your-mortgage-is-about-to-get-more-paperless-finally/
- Categories: Mortgage News

They say the average mortgage application contains some 500 pages, which explains part of the frustration mortgage borrowers feel when going through the loan process. But Fannie Mae and Freddie Mac want to ease that burden by finally digitalizing the mortgage experience. Both companies announced upcoming changes that will go live in December and next spring. Come December 10th, Fannie Mae will add both asset and employment validation to its stable of useful loan origination tools. That means borrowers will no longer need to provide work paystubs, bank statements, or investment account statements. Well, that’s the theory at least. We will see how it actually pans out... 'A Dramatically Better Mortgage Experience' Currently, borrowers are often asked to fax or e-mail these types of documents to verify income, assets, and employment. But as with most things, it can get complicated when pages go missing, are illegible, lost, etc. The most common complaint I hear about when attempting to get a mortgage is having to send the same document twice (or three times or more). At the moment, Fannie Mae is already validating income electronically, and in just over a month assets and employment will get the digital treatment too. Fannie expects these changes to result in “a dramatically better mortgage experience. ” Again, we’ll see how it turns out because technology has its own problems, but it’s certainly welcome news for both borrowers and lenders. Greater Certainty for Lenders While borrowers will be less burdened with paperwork demands, banks and...

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### Plastiq Lets You Charge the Mortgage for a Fee

- Published: 2016-10-14
- Modified: 2018-06-04
- URL: https://www.thetruthaboutmortgage.com/plastiq-lets-you-charge-the-mortgage-for-a-fee/
- Categories: Mortgage Tips

A company called Plastiq enables consumers to make payments with their credit cards that might not otherwise be accepted by the recipient. One such example that comes to mind is the paying of a mortgage with a credit card. I noted in a previous post that was it was possible with a little bit of engineering, but there’s a more straightforward way if you’re willing to pay a fee. How Plastiq Works If you want to pay your mortgage with a credit card Plastiq allows you to do just that However they charge a fee for the convenience And only MasterCard and Discover are accepted Plastiq refers to itself as a “first-of-its-kind online payment service” because it enables such transactions by processing your credit card payment then sending on payment to the payee in a form they actually accept. As far as I know, no mortgage servicing companies accept credit cards as a form of payment. To get around this, Plastiq allows you to pay them first with the credit card of your choice, at which point they pay the loan servicer or mortgage lender via check or electronic bank transfer. These latter two forms of payment are generally acceptable, so Plastiq is able to make the mortgage payments on your behalf once you’ve paid them. The company accepts MasterCard and American Express, but Visa and Discover seem to be left out. If for some reason your payment doesn’t arrive in time, but was submitted before the recipient’s deadline, Plastiq...

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### Check Out the Top 40 Mortgage Lenders in 2015

- Published: 2016-10-05
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/check-out-the-top-40-mortgage-lenders-in-2015/
- Categories: Mortgage News

If you’re wondering which mortgage company originated the most home loans last year, stop wondering and take a look. Most people know Wells Fargo is king when it comes to mortgages, and 2015 was no different. But what about the other top 39 lenders? Well, thanks to some great visualization software from Tableau and some generosity from

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### Why Your USDA Loan Just Got Cheaper

- Published: 2016-10-04
- Modified: 2016-10-04
- URL: https://www.thetruthaboutmortgage.com/why-your-usda-loan-just-got-cheaper/
- Categories: Mortgage News

After increasing the price of a USDA-insured mortgage last year, the Rural Housing Service has now slashed the associated fees to make them much more affordable and attractive to home buyers. Beginning October 1st, which not so incidentally is the start of fiscal year 2017, the USDA upfront guarantee fee will drop from 2. 75% to 1%. Yes, you read that correctly. Instead of having to pay nearly 3% of the loan amount to get a USDA loan, you’ll only have to pay 1%. That’s cheaper than the FHA’s 1. 75% upfront fee, and likely lower than the VA’s variable funding fee. Additionally, the RHS is lowering the annual fee it charges on USDA loans from 0. 50% to 0. 35%, which will keep more money in the pockets of rural home buyers. How Much Can You Save Thanks to This Change? 2. 75% 1% upfront guarantee fee 0. 50% 0. 35% annual fee Most folks who obtain USDA loan financing will roll the guarantee fee into the loan so it’s paid over time, instead of upfront at closing. This makes sense because these loans are often zero down mortgages that require little cash from the borrower. Let’s look at an example of the savings to illustrate how much of a difference this change will make. Imagine someone takes out a $200,000 USDA loan with zero money down. The guarantee fee is now 1% instead of 2. 75%. The guarantee fee is based on the total loan amount including the...

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### Why Don’t More People with High-Rate Mortgages Refinance?

- Published: 2016-09-29
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-dont-more-people-with-high-rate-mortgages-refinance/
- Categories: Mortgage News, Refinance

If you have a mortgage, you’ve undoubtedly had some company urge you to refinance, especially right now with mortgage rates being as low as they are. And hey, the bank or lender probably has a point if you received your loan several years ago because the interest rate is likely much higher. But for some reason, many homeowners don’t refinance despite the seemingly obvious benefit of a lower monthly mortgage payment. Interestingly, many borrowers with what would be considered “high” interest rates don’t refinance. So why would someone with a 5% mortgage rate not take advantage of a 3. 5% 30-year fixed rate? Well, because maybe they can’t. If You Have a High Mortgage Rate, You’ve Probably Been Late CoreLogic found that those who don't refinance Often missed a mortgage payment at some point Which would explain why they didn't bother Since it's very difficult to get approved with late payments An analysis performed by CoreLogic revealed that some 23% of mortgages had interest rates above 5% as of the end of May, which would appear “ripe for refinancing. ” Seeing that the 30-year fixed is averaging close to 3. 5% at the moment, these mortgages should generally be “in the money,” that is to say, where it makes financial sense to refinance. This appeared to be a perplexing situation so they drilled down some more to determine what was holding these homeowners back. It turns out many higher-rate mortgages are either seriously delinquent, or have been 30-days past due...

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### Mortgage Lender Offers to Share Servicing Income with Its LOs

- Published: 2016-09-28
- Modified: 2024-05-23
- URL: https://www.thetruthaboutmortgage.com/mortgage-lender-to-share-servicing-income-with-loan-officers/
- Categories: Mortgage News

A Virginia-based mortgage lender has launched a loan officer compensation plan that provides originators with a piece of the loan servicing fee. Typically, a loan officer closes a loan and gets paid a commission, then moves on to the next loan. In this respect, they don’t need to worry about the future performance of the loan. It’s a done deal and they can focus on bringing in more loans. However, the loan servicer (which is sometimes also the lender) will earn money throughout the life of the loan as monthly mortgage payments are made. Now one lender has decided to share a portion of this ongoing revenue with its top producing loan officers. Atlantic Bay's Progressive Earnings Plan Atlantic Bay Mortgage Group out of Virginia Beach, Virginia refers to this participation in the income stream of the loan as the “Progressive Earnings Plan. ” The way it works is fairly simple. If you’re able to muster $14 million in retail loan production in a calendar year, you can take part. For every loan funded that is retained by the company, Atlantic Bay will give a portion of the servicing fee to the loan officer who originated the mortgage. As you can see from the chart above, a loan officer able to produce $120 million annually could receive an additional $30,500 the first year, $60,000 the second year, and a whopping $197,000 in year seven. A more conservative figure of $15 million in annual production could net the LO an additional...

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### It's Now Easier to Get a Mortgage Without a Credit Score

- Published: 2016-09-26
- Modified: 2016-09-26
- URL: https://www.thetruthaboutmortgage.com/its-now-easier-to-get-a-mortgage-without-a-credit-score/
- Categories: Mortgage News

Fannie Mae has rolled out a new version of its automated writing system, known as Desktop Underwriter® (DU®) Version 10. 0. The new version has a number of important changes, two involving consumer credit scores. Firstly, this release will use

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### See Which Phase of the Housing Cycle Your City Is In

- Published: 2016-09-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/see-which-phase-of-the-housing-cycle-your-city-is-in/
- Categories: Housing Market, Mortgage Tips

Recently, I wrote about when the next housing crash might take place. For opportunists, it’s something to look forward to. For others, and frankly most people, it’s a disaster waiting to happen... though today’s mortgages are pretty boring and largely affordable, meaning homeowners should be able to ride the ups and downs a lot better than they did previously. In that post, I spoke about an “18-year rhythm” that basically points to home prices peaking again around 2024. Of course, that’s the entire housing market. As we all know, real estate is local... it doesn’t necessarily matter what’s going on in Florida if you live in California, or if the NYC condo market is overheated when you’re planning to buy in Chicago. That brings me to this colorful and handy graph from John Burns Real Estate Consulting. It breaks down the housing cycle into five key phases, while also showing you which phase major markets are in at the moment. Director of Research Rick Palacios Jr. breaks it down for us by looking at where the 20 largest new home volume markets stand at the moment. My assumption is we can judge existing homes in these markets somewhat similarly. Start at the Bottom Phase 1 is when home prices are bottoming and distressed inventory is king Phase 2 is when sales and prices begin to pick up with strong affordability Phase 3 sees a strong recovery and eroding affordability Phase 4 is your contraction period and Phase 5 is your...

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### Morty: The Mortgage Broker 2.0

- Published: 2016-09-20
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/morty-the-mortgage-broker-2-0/
- Categories: Mortgage News

There’s yet another mortgage disruptor in town, the latest goes by the name of “Morty. ” Sounds like a play on the word mortgage... or someone's last name, like Mortimer. Think Trading Places. Anyway, like many other new entrants to the home loan industry, they claim to offer the “modern, online mortgage. ” This means leveraging technology to make the home loan process a lot easier, and less painful. And hopefully cheaper too! Let’s find out more to see if they can change the mortgage landscape as we know it. How Morty Works You start by building a so-called “financial profile,” which includes things like your income, assets, employment, along with the subject property information. The Morty platform apparently allows you to automatically link this information, and doing so means you should receive accurate quotes. Kind of reminds me of how Quicken’s Rocket Mortgage works. The problem with the current setup is that standard quoting engines assume you’re telling the truth, or at least providing accurate details. Once all the paperwork comes in the quote might be higher, or entirely invalid depending on the differences. Ideally, Morty is able to catch all the gotchas during this information gathering process so you can go into underwriting with confidence you’ll actually be approved. I went ahead and filled out the form on the Morty website to get started and it asked a few basic questions, such as my name, e-mail address, transaction type, and property location. Unfortunately, that’s as far as I...

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### Women Are Better at Paying the Mortgage Despite Worse Terms

- Published: 2016-09-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/women-are-better-at-paying-the-mortgage-despite-worse-terms/
- Categories: Mortgage News

A new study from the Urban Institute reveals that women are better at paying the mortgage despite receiving less favorable terms than men. This despite the fact that they receive higher mortgage rates because of weaker credit profiles, which logic tells us would lead to higher default rates. Single Women Hold a Fifth of All Mortgages On average, just over a fifth of all mortgages consist of a female-only borrower, and it is this group that pays the most for a mortgage. Using HMDA data for mortgages originated between 2004 and 2014, the researchers found that the average mortgage rate for a female-only borrower was 5. 48% versus 5. 41% for male-only borrowers. It was also higher in situations where a female had a male co-borrower (5. 25%), compared to 5. 12% when the male had a female co-borrower (the most common scenario). But it appears lenders made out (or messed up) because females displayed lower default rates than their male counterparts. Women Default Less on the Mortgage The default rate for female-only borrowers between 2004 and 2007 was 24. 6% compared to 25. 4% for male-only borrowers. From 2008-2010, the default rates were 9. 6% versus 9. 7%, respectively, and the same pattern held steady from 2011-2014. In case you were wondering, default rates for couples are “considerably lower” than sole borrowers, as you can see above. For the record, women-only borrowers also get denied the most. Why Do Women Pay More for Their Mortgages? So we know women...

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### Permanent HARP Refinance Replacements Have Been Unveiled

- Published: 2016-08-30
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/permanent-harp-refinance-replacements-have-been-unveiled/
- Categories: Mortgage News

A little over a year ago, I wrote that HARP had received its final extension. I affixed the word “probably” to the end of it because the program kept getting extended over and over. It reminded me of one of those “final day to save” sales... that seem to gather dust as the sale never actually ends. Well, it turns out HARP has indeed been extended again, though this really is the last time. Seriously. We know this because Fannie Mae and Freddie Mac have introduced their permanent replacements, which will go live once HARP is finally put to rest on September 30th, 2017. In fact, HARP is only getting this bonus extension to bridge the gap to the new streamline refinance programs being offered by the pair next October. Update:I spoke too soon. The FHFA extended HARP once again until December 31st, 2018, but this is the last extension, for real this time. Honestly! That being said, let’s learn more about HARP's permanent replacements, which will now go live on November 1st, 2018. Fannie Mae’s High Loan-to-Value Refinance Option While the complete requirements have yet to be published, Fannie Mae did release a fact sheet regarding its so-called “High Loan-to-Value Refinance Option. ” The program, like HARP, will give underwater homeowners the opportunity to refinance their mortgages to take advantage of lower mortgage rates, assuming low rates are still around in late 2017 and beyond. There won’t be any LTV restrictions other than the fact that it must exceed...

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### Mortgage Recasting 101: How It Works and What It Does

- Published: 2016-08-30
- Modified: 2024-09-25
- URL: https://www.thetruthaboutmortgage.com/mortgage-recasting-101-how-it-works-and-what-it-does/
- Categories: Mortgage Tips

You may have heard that you can lower your monthly mortgage payment without refinancing via a "mortgage recast. " These two financial tools are quite different, which I’ll explain, but let’s first discuss recasting to get a better understanding of how it works. In short, a mortgage recast takes your remaining mortgage balance and divides it by the remaining months of the mortgage term to adjust the monthly payment downwards (or upwards). Let’s focus on the downward portion for now. The downside to mortgages is that the monthly payment doesn’t drop if the balance is paid faster. That’s right, even if you pay more than necessary, you’ll still owe the same amount each month because of the way mortgages are calculated. So if you made biweekly payments for a period of time, or contributed one big lump sum payment after some sort of windfall, you’d still be forced to make the original monthly payment until the loan was paid in full. In this case, you could benefit from recasting your mortgage to a lower monthly payment. Mortgage Recast Example Original loan amount: $250,000 Mortgage interest rate: 4% Original monthly payment: $1,193. 54 Balance after five years: $226,000 Lump sum payment: $51,000 New loan balance: $175,000 (it's lower but the payment doesn't change without a recast) Let’s assume you started out with a $250,000 loan amount on a 30-year fixed mortgage set at 4%. The monthly payment would be $1,193. 54. Now let’s pretend after five years you came upon some...

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### Airbnb Is Reportedly Messing Up Mortgage Applications

- Published: 2016-08-29
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/airbnb-is-reportedly-messing-up-mortgage-applications/
- Categories: Mortgage News

If you’ve been renting out your own house or condo via Airbnb, or a similar service like HomeAway or FlipKey, you might have more difficulty securing a mortgage. This is one of many unintended consequences related to the so-called “Sharing Economy,” whereby individuals turn their homes and cars (and whatever else) into profit drivers. The same hoopla arose when Uber and Lyft first got started, with insurance companies often balking at drivers who used personal insurance policies to conduct what is seen by some as commercial driving. With companies like Airbnb, “hosts” are able to rent out their properties whenever they like, whether it’s just when they’re out of town, seasonally, or full-time. It’s supposedly a great way to make some extra cash when you aren’t using your home. However, the issue that seems to be befuddling mortgage lenders is the occupancy of such a property. Is It Still Owner-Occupied If It’s Listed on Airbnb or Elsewhere? You see, mortgage lenders ask how you’ll use your property when extending mortgage financing. After all, they’ve got a huge ownership interest in your home when you take out a massive loan on it. If it’s simply your primary residence, you are entitled to the most flexible financing options and the lowest interest rates because defaults are lowest on owner-occupied properties. However, if it’s a second home (which doesn’t allow rentals of any kind) or an investment property, the mortgage financing options become a lot more limited, and the interest rates significantly higher....

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### Zillow: Homes Would Be Worth More Without the Housing Bubble

- Published: 2016-08-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/zillow-homes-would-be-worth-more-without-the-housing-bubble/
- Categories: Mortgage News

A new analysis from Zillow reveals that many homes would actually be worth a lot more today had there been no housing bubble back in the early 2000s. The basic premise is that historic home price growth year after year would have amounted to better overall gains than a few boom years followed by a bust and then a partial recovery. Of course, home prices don’t just climb steadily over time. They ebb and flow, dip and peak, just like the stock market. So it matters when you buy, though as I’ve mentioned before, time tends to heal all wounds if you stick with real estate long term. However, you might just be better off investing in stocks, which have gained 40% since the bust. Imagine No Housing Bubble While just about everyone complains about bubbles Home prices would actually be higher without them If you're an opportunist You can use bubbles to your advantage to find attractive entry points Let’s pretend the housing bubble never happened. Instead, let’s assume home prices increased at historic rates year after year. The median home in the United States would actually be worth 26% more today than where it currently stands. Using 1985-1999 home price growth rates, Zillow discovered that the U. S. median home price would be nearly $235,000 today, instead of the actual $187,000. But that’s not how history played out. Instead, home prices surged between 2000 and 2006, and by the first quarter of 2007 the median price was 22....

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### Quicken Loan’s 1% Down Mortgage Program

- Published: 2016-08-17
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-1-down-mortgage-program/
- Categories: Mortgage News

It seems just about everyone is lowering mortgage down payment requirements to deal with rising home prices, this despite the near-record low mortgage rates still widely available. You see, down payment is still the biggest hurdle to homeownership, and I suppose it was during the previous boom as well. That would explain why zero down mortgages were the norm back in 2006. The major problem then was that you could also state your income, your assets, and not disclose your job, so long as you had a decent credit score. No skin in the game and no disclosure equals no good. We’ve learned from those mistakes, I hope, and now underwriting is a lot more sound. Still, people want to buy homes, whether they’ve saved up a large down payment or not. And that would explain why Fannie and Freddie began offering 97% LTV mortgages. Building off those programs are mortgages with grants that still give the homeowner a 3% down payment, but without the borrower actually having to come up with the three percent in funds. Instead, many lenders are providing a 2% grant to homeowners and asking that they come up with the remaining one percent, which seems pretty fair. The use of a grant is allowed under both Fannie’s HomeReady program and Freddie’s Home Possible Advantage, and some banks dole outs funds in accordance with the Community Reinvestment Act. Quicken Loans 1% Down Payment Option Interestingly, the largest non-bank mortgage lender in the country, Quicken Loans, quietly...

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### Mortgage Origination Volume Expected to Hit $2 Trillion This Year

- Published: 2016-08-15
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/mortgage-origination-volume-expected-to-hit-2-trillion-this-year/
- Categories: Mortgage News

While many expected the mortgage market to cool off this year thanks to both rising home prices and higher mortgage rates, the complete opposite seems to have happened. Today, Freddie Mac released its latest monthly outlook report, noting that 2016 mortgage origination volume is now forecast to exceed $2 trillion for the first time since 2012. In case you don’t remember, mortgage rates hit an all-time record low in late 2012, which would explain why origination volume was so robust back then. It led to a massive refinancing wave as the 30-year fixed fell to a staggering 3. 31%. Total 1-4 Family Mortgage Originations (in Billions) Total residential mortgage volume four years ago was $2. 12 trillion, according to data from Freddie Mac. It wasn’t far off in 2013 either, at $1. 93 trillion, though it dropped off significantly in 2014 when volume totaled just $1. 35 trillion (thanks in part to higher mortgage rates). Last year, annual mortgage volume was slated to come in at $1. 75 trillion, and was expected to fall to $1. 58 trillion in 2016 and $1. 46 trillion in 2017. But no one expected mortgage rates to sink again as they have. Why Mortgage Volume Is Being Upwardly Revised That led the brains at Freddie to raise the origination forecast by $175 million over the previous month’s forecast, pushing it above $2 trillion. We aren’t too far from those record level rates now, and that’s one of the reasons why mortgage volume continues to...

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### Buy a Home in a Good School District Even If You Don’t Have or Want Kids

- Published: 2016-08-09
- Modified: 2023-10-12
- URL: https://www.thetruthaboutmortgage.com/buy-a-home-in-a-good-school-district-even-if-you-dont-have-or-want-kids/
- Categories: Mortgage Tips

Over the years, we’ve learned that buying homes near certain types of businesses can boost the value quite substantially. For example, homes near Starbucks tend to outperform those near a Dunkin’ Donuts, and you’re better off buying a condo next to a Target, not a Walmart. If there’s a Whole Foods or Trader Joe’s nearby, even better. Throw in a good school and you’ve hit the housing jackpot. Schools Matter Whether You Step Foot in Them or Not Plenty of homeowners purchase properties with kids in mind, particularly because of the nearby schools. After all, private school isn’t getting any cheaper. But aside from saving a ton of money on tuition costs, you can also gain a ton of home equity simply by choosing to purchase a property in a good school district. The new parent company of RealtyTrac, ATTOM Data Solutions, decided to analyze this phenomenon and discovered it’s pretty darn significant. They looked at 2015 average test scores from nearly 19,000 elementary schools nationwide across 4,435 zip codes that cover a combined 45. 9 million single family homes and condos. From that they found that of the 1,661 zip codes with at least one good school, the average estimated home value (as of July) was $427,402, a 77% premium compared to the $241,096 average in the 2,774 zip codes without any good schools. So you might be thinking wait, homes near good schools are a lot more expensive. While that might be true, the home price appreciation in...

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### This Blog Is 10 Years Old Today: What’s Different Today in the Mortgage Industry?

- Published: 2016-07-28
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/this-blog-is-10-years-old-today-whats-different-today-in-the-mortgage-industry/
- Categories: Mortgage News

A week or so ago, I was scanning through my archived posts and it occurred to me that my blog's 10-year anniversary was just days away. I found the first post I wrote and laughed a bit as I read it, thinking how naïve and young I was at the time. I was in my mid-20s, working for a wholesale mortgage lender and pondering a home purchase. But property values were sky-high at the time and I was aware of that. I couldn’t wrap my head around buying a place at those prices. And in hindsight, I’m glad I didn’t. I know a lot of people who did buy back then, and many no longer own their homes, while some actually stuck it through and are now sitting fairly pretty. Those Who Held On Since 2006 Are Doing Fine As mentioned last week, time tends to heal all real estate wounds. Even if you buy at a particularly bad time, if you hold onto your property and pay down your mortgage, you’ll likely come out ahead. The problem 10 years ago was that the mortgages tied to those expensive properties weren’t sustainable. Many borrowers couldn’t afford to hold them beyond their first rate reset, which may have come in just six months’ time. But for those with a fixed-rate mortgage, or the income to endure the ups and downs, it was possible to ride out the storm and wind up in a decent equity position. Let’s pretend someone purchased a...

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### New Guaranteed Rate Double Match Mortgage Gives You 2% of the Down Payment for Free

- Published: 2016-07-22
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/new-guaranteed-rate-double-match-mortgage-gives-you-2-of-the-down-payment-for-free/
- Categories: Mortgage News

No it’s not déjà vu, or Groundhog Day. Guaranteed Rate has launched yet another 1% down payment mortgage in the span of about a month. However, their new “Double Match” loan program is quite a bit different than their previously announced 1% down mortgage that relied on a grant from the City of Chicago and Chicago Infrastructure Trust (CIT). Guaranteed Rate Double Match Mortgage Available Nationwide This is yet another 1% down home loan That relies upon a 2% grant from the mortgage lender The result is a 97% LTV mortgage (3% down) That fits the agency guidelines of Fannie Mae and Freddie Mac For one, the Double Match program is available to home buyers nationwide, not just in the city of Chicago. One thing that is the same is the down payment requirement, which is set at a low, low 1%. That’s right, you just need 1% of the purchase price to get into the home. It’s a 97% LTV mortgage, meaning it qualifies for backing from Fannie Mae and Freddie Mac, but you only have to come up with 1% of the total 3% down payment. The other 2% is a “completely forgivable” grant that doesn’t need to be paid back, even if the buyer moves or refinances their mortgage. They claim this is unlike other down payment assistance programs. I asked Guaranteed Rate for specifics regarding the grant and was told the following via their communications department: Guaranteed Rate is providing the grant There is no waiting...

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### Unison Will Provide Half Your Down Payment in Exchange for Future Appreciation

- Published: 2016-07-21
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/firstrex-will-provide-half-your-down-payment-in-exchange-for-future-appreciation/
- Categories: Mortgage News

If you’re a little light on down payment funds, a company called FirstREX (now known as "Unison Home Ownership Investors") might be able to help you out, for a cost. Put simply, their "REX HomeBuyer" product (now called the "Unison HomeBuyer program") will give you up to 50% of the down payment you make on a home in return for an “equity investment” on your property. Unison Wants Shared Equity in Exchange for Down Payment Funds If you're unable to come up with a 20% down payment Unison HomeBuyer can help you out in exchange for future home price appreciation And they don't require any monthly payments for their investment This can reduce your mortgage payment and help you avoid PMI For example, if you’d like to purchase a home for $500,000 and want to put down 20% to avoid mortgage insurance and obtain a more desirable interest rate, but only have 10% available, they’ll give you the other 10%. So you’ll only need $50,000 in down payment funds and they’ll provide the additional $50,000, pushing the loan amount down to $400,000 at 80% LTV. When it comes time to sell your property, Unison will get a share of the change in value. If the home sells for $550,000 in the future, their stake would increase to $67,500. That’s a profit of $17,500 for Unison based on a 65/35 split in your favor. For a 25% down payment, the company typically takes 43. 75% of the change in value. Additionally,...

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### Time Heals All Real Estate Wounds If You Let It

- Published: 2016-07-21
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/time-heals-all-real-estate-wounds-if-you-let-it/
- Categories: Housing Market, Mortgage Tips

Let’s talk about real estate investment for a moment. A recent commentary from mortgage financier Freddie Mac revealed that those aged 54 and older control about two-thirds of the home equity in single-family homes throughout the United States. However, this age group only accounts for a little more than a quarter of the population. The takeaway is that old people (yes, you’re old) hold much of the housing wealth in this nation. The reason they possess most of the housing wealth is the fact that they’ve owned homes for a long time, and because real estate values tend to rise over time, they’re in pretty good shape. Long Term Real Estate Holdings Increased Nearly Four Fold Real estate is a proven long-term investment With returns of nearly 400% over time It's not about getting caught up in a 30-day flip And it's not a get-rich-quick scheme Meanwhile, classic senior citizens (those 65 and older) who purchased what Freddie called the “average” house at age 30 have seen its value increase 3. 7 times. And guess what. I’m sure a lot of these folks went through spells where their home values plummeted, then increased, then fell again. But if they actually held on and didn’t let the year to year stuff bother them, time would heal all wounds. That’s the thing with true real estate investment. It isn’t a 30-day flip or a TV show, it’s a long-term commitment to invest in a piece of property, and not worry about what...

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### You Probably Shouldn’t Go with the Mortgage Lender That Sends You Junk Mail

- Published: 2016-07-18
- Modified: 2024-01-16
- URL: https://www.thetruthaboutmortgage.com/you-probably-shouldnt-go-with-the-mortgage-lender-that-sends-you-junk-mail/
- Categories: Mortgage Tips

Look Familiar? This probably goes without saying, but I’ll say it anyway because I recently received a very pressing letter in the post. It said “Important Notice” on the top left and then something about there being “time sensitive information regarding your mortgage” across the front. If that wasn’t enough to make me stop what I was doing and open it immediately, it also had three perforated sides. When a letter is adorned with perforated sides you know it’s no laughing matter. Usually such a letter comes from the IRS or another major agency, and generally it’s not good news, so to delay the opening is not to be tolerated under any circumstances. Obviously I opened the thing instantly, carefully removing the perforated strips one by one as not to tear or damage the important document in any way. Once finally unfurled, it was, lo and behold, a mortgage solicitation telling me I could lower my interest rate. It even had my original loan amount on it to make it appear all the more official. Oddly enough, the mortgage refinance offer enclosed was pretty lackluster. The company said they could lower my rate by about a quarter percent from the existing rate. And perhaps even at no cost to me! While some might be happy enough to shave a . 25% off their rate, I wasn’t too impressed. When I glanced at the fine print, I noticed the mortgage APR was pretty sky-high too. That didn’t surprise me in the...

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### Create a Phone Number Just for Mortgage Shopping

- Published: 2016-07-18
- Modified: 2024-03-25
- URL: https://www.thetruthaboutmortgage.com/create-a-phone-number-just-for-mortgage-shopping/
- Categories: Mortgage Tips

I think just about everyone can agree that shopping for a mortgage isn’t fun. This would explain why few people actually shop around for a mortgage, or spend any significant amount of time researching loan options. Instead, they just tend to go with their real estate agent’s recommendation, or they simply visit/call the bank they do their banking business with. But another reason many existing and prospective homeowners only get one mortgage quote is because they don’t want to harassed by overzealous loan officers. Here’s the problem. Once you get in contact with a loan officer, there’s a good chance they’ll hound you until you close your loan with them. It’s for this very reason that Zillow created its Mortgage Marketplace, which allows individuals to shop anonymously. But eventually you’ll need to get on a call or shoot them an e-mail. There’s an App for That... To avoid unwanted contact, you can download a number of different apps for your smartphone that allow you to create phone numbers on the fly. One example is Burner, which allows you to create a temporary, disposable phone number that can be created and deleted in seconds. Another similar app called Hushed seems to do the same thing as far as I can tell. Both allow you to text and make phone calls via the app instead of using your actual phone number. The difference between the two might be that they offer different first-timer promos. So if you sign up for either, you...

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### United Wholesale Mortgage Launches 1% Down Home Loan for Brokers

- Published: 2016-07-13
- Modified: 2018-07-27
- URL: https://www.thetruthaboutmortgage.com/united-wholesale-mortgage-launches-1-down-home-loan-for-brokers/
- Categories: Mortgage News

Yep, it’s another post about a 1% down home loan, which seems to be the next big thing in the mortgage realm. That and zero down mortgages I suppose. I guess it’s a sign of the times, or more appropriately, sky-high home prices. But this new loan program from United Wholesale Mortgage is a tad different. It’s unique because it’s being offered by one of the largest wholesale lenders, meaning mortgage brokers now have a 1% down mortgage option to extend to their borrowers. It’s a game changer for brokers because up until now they’ve had to compete with loan officers at retail banks who had access to more low and no-down payment loan programs. It levels the playing field to some degree. United Wholesale Mortgage Equity Boost with Just 1% Down Borrowers only need to put down 1% of the home purchase price United Wholesale Mortgage contributes another 2% Which when combined results in a 3% down payment Enough to get a conventional mortgage loan backed by Fannie Mae or Freddie Mac Like some of the other recent 1% down offerings, such as the program offered by Guaranteed Rate, the lender covers a portion of the down payment so the borrower can come into the home purchase with very little down but still walk away with some built-in equity. It’s good to have some skin in the game, especially if home prices flatten out, and this program seems to accomplish that. Specifically, the borrower must come up with a...

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### BancorpSouth Has a No Fee 100% LTV Mortgage That Doesn’t Require Mortgage Insurance

- Published: 2016-07-06
- Modified: 2016-07-06
- URL: https://www.thetruthaboutmortgage.com/bancorpsouth-has-a-no-fee-100-ltv-mortgage-that-doesnt-require-mortgage-insurance/
- Categories: Mortgage News

While it might sound too good to be true, BancorpSouth out of Tupelo, Mississippi has a mortgage with virtually no fees and no down payment requirement. The bank’s “Right@Home” loan program gives qualified home buyers the option to purchase a property with just a $500 borrower contribution, making it one of the many low or no-down payment mortgage options available today. The list of these types of loan programs seems to be growing by the week, if not the day. And it might be the beginning of a scary trend that could usher in another crisis. At the same time, these loans are different than their predecessors, with virtually all of them plain vanilla 30-year fixed-rate mortgages that require a full documentation underwrite. In other words, we don't need to panic just yet, but we should pay attention to the emerging trend of new all-time high home prices and falling down payments. Right@Home Can Put You in a Home for $500 As mentioned, the Right@Home loan program from BancorpSouth only requires a $500 minimum borrower contribution. And the mortgage can be for the full purchase price at 100% LTV with “flexible sources” for any down payment and/or closing costs required. To make the deal even sweeter for prospective buyers, you don’t have to pay any loan origination fees (third-party closing costs such as appraisal and escrow/title likely still apply). And there’s no private mortgage insurance required. However, as I’ve said before, when the LTV is north of 80%, mortgage insurance...

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### Fifth Third Bank Offering No Down Payment Mortgage

- Published: 2016-07-06
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/fifth-third-bank-offering-no-down-payment-mortgage/
- Categories: Mortgage News

It appears the pesky down payment hurdle to homeownership is finally being swept aside. This week, Fifth Third Bank out of Cincinnati, Ohio announced the availability of a mortgage with absolutely no down payment requirement. Put simply, that means you no longer need to save up to buy a home, whether that’s actually a good thing or a bad thing. This seems to have been born out of necessity, not preference, especially as home prices reach new heights nationwide. Fifth Third’s Down Payment Assistance Program If you're light on down payment money You may want to check out Fifth Third's DPA program Which offers up to $3,600 in down payment assistance Combined with Freddie Mac's Home Possible Advantage mortgage to create a zero down home loan option The so-called "Down Payment Assistance Program" from Fifth Third relies upon Freddie Mac’s Home Possible Advantage, which allows for loan-to-value ratios as high as 97%. The remaining three percent of the home purchase price is covered by Fifth Third via down payment assistance. Fifth Third will allow up to $3,600 in down payment assistance, meaning the property price can’t exceed $120,000. That $3,600 doesn't need to be paid back, and it can used toward the down payment or closing costs depending on product type. So the loan program is clearly geared toward those with low or moderate income, not just anyone looking to forego the usual down payment requirement. The property must also be located in the following states: MI, IN, IL, KY,...

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### Is It Actually a Good Thing That a Home Is an Illiquid Asset?

- Published: 2016-06-30
- Modified: 2022-12-30
- URL: https://www.thetruthaboutmortgage.com/is-it-actually-a-good-thing-that-a-home-is-an-illiquid-asset/
- Categories: Housing Market, Mortgage Tips

Here’s yet another post on the rent vs. buy argument, one that never seems to go away. I’ve written extensively on the pros and cons, but a recent conversation provided me with another interesting nugget. I was speaking with a guy who happens to be a CFP (I think) and we were discussing investing and real estate and all that jazz. At one point we got on the topic of emotional stock trading, a common scenario that arises when things like Brexit happen. Stay the Course for the Best Results Whenever there's a stock market correction You're often told to do nothing (don't sell! ) Just stay the course and trust the process Or even buy more on the dip... Most CFPs and other financial advisors will generally tell you tostay the coursein the event of a major dip or correction, instead of panicking and selling. Why? Well it's simple. You shouldn’t try to time the market because you could lose your shirt. And let’s face it, you don’t really know what’s going on with Priceline or Apple's financials. You simply like their product. Just consider this most recent event with Brexit. It looked as if stock market indices were going to tumble thousands of points for days on end, but then they completely reversed course in the past few trading sessions. We’re now nearly back to where we were before Brexit, and some names are actually hitting new 52-week highs. So if you freaked out and sold, you might...

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### 25 Trade Groups Call for Elimination of Loan-Level Pricing Adjustments

- Published: 2016-06-27
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/25-trade-groups-call-for-elimination-of-loan-level-pricing-adjustments/
- Categories: Mortgage News

More than two dozen trade groups have called for the reduction or elimination of loan-level pricing adjustments (LLPAs) on Fannie Mae and Freddie Mac loans, a move that could push mortgage rates even lower than they already are. Put simply, mortgages lenders rely on risk-based pricing to set the eventual mortgage rate you receive. So all else being equal, a borrower purchasing a single-family home with 40% down will receive a lower interest rate than an investor purchasing a four-unit property with 20% down. It makes sense to charge borrowers a higher interest rate if they present more risk of default, despite the fact that a higher interest rate may actually lead to an increased risk of default. That’s just the way it is. But powerful groups like the Mortgage Bankers Association, the National Association of Realtors, and many more want to reduce or eliminate LLPAs going forward, per a recent letter to FHFA boss Mel Watt. LLPAs Can Raise Effective Mortgage Rates Significantly As mentioned, LLPAs affect the final mortgage rate a borrower receives. So a borrower with a 620 credit score purchasing a home with just 3% down via Fannie Mae’s 97% LTV offering may get hit with a 3. 5% pricing hit to compensate for that risk. That adjustment alone may increase their interest rate by around 1% or more. Generally, these pricing hits are built into the interest rate and a pricing hit of 1% may translate to a rate increase of 0. 25% or so....

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### UK Mortgage Lenders Offering 0.99% Mortgage Rates

- Published: 2016-06-27
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/uk-mortgage-lenders-offering-0-99-mortgage-rates/
- Categories: Mortgage News

While U. S. -based mortgage lenders (and borrowers) are expected to benefit from Brexit via lower mortgage rates, the opposite might be true across the Pond. Over in the UK, we’re already seeing a lot of risk mitigation related to the uncertainty of Brexit. I awoke to all types of headlines about LTVs being slashed, home buyers pulling out of their purchases, and more. It totally makes sense, but also illustrates the polarizing effect of Brexit. You Can’t Borrow as Much in Britain Two large UK mortgage lenders, Kensington Mortgages and Fleet Mortgages, withdrew “their higher LTV products” in order to protect homeowners (ha! ). The article I read didn’t have all the details, but apparently 90% LTV was withdrawn, ostensibly because these lenders expect home prices in the UK to be under pressure as a result of Brexit. Oh, and I like how they said the move was to protect the borrowers, when in reality, it’s to protect the bank from defaults related to underwater mortgages. But hey, that’s good marketing. Despite the product changes, lending was booming in the UK, with Fleet Mortgages saying it saw mortgage applications quadruple on Friday, making it their “busiest day ever. ” Meanwhile, Kensington is working on new products to replace the loss of their high-LTV offerings. You Can Get a Mortgage Rate of 0. 99% It’s no wonder business is booming despite Brexit because at least one lender, HSBC, is offering a “fixed” mortgage rate of 0. 99%. Yes, you read...

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### Brexit vs. Mortgage Rates: How Low Might They Actually Go?

- Published: 2016-06-24
- Modified: 2021-08-06
- URL: https://www.thetruthaboutmortgage.com/brexit-vs-mortgage-rates-how-low-might-they-actually-go/
- Categories: Mortgage Matchups

Bye Bye Britain Well, the unthinkable happened early this morning (or late last evening depending on where you live). The UK voted to leave the European Union, agreeing to Brexit instead of Bremain, as they say. So hold onto your cup of tea, it’s gonna be a bumpy ride. The initial reaction was one of shock, as most market pundits assumed the referendum wouldn’t pass, similar to the Scottish independence vote last year. But to the surprise of just about everyone, it did. And now the global markets are going haywire, as is the British pound. Here in the states, the Dow is down about 500 points (3%) as of the time of this writing, the Nasdaq is off nearly 200 points (3. 75%), and the S&P 500 has fallen roughly 64 points (3%). Meanwhile, the 10-year bond yield is plummeting because bond prices are on the rise. Put simply, a flight to safety occurs in situations like this, and safety is U. S. government bonds, not Facebook stock. As a result, the yield drops. The 10-year yield slipped nearly 10% today, and now sits around 1. 57%, it's lowest point since 2012 when the 30-year fixed hit its all-time low. The 10-year yield began 2016 over 2%, quickly declined, and then saw choppy action ever since. The good news is that when bond yields drop, mortgage rates also tend to fall because the same investors are interested in both types of securities. We already enjoy very low mortgage rates...

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### A Bank Is Offering Discounted Mortgage Rates Because Cleveland Won an NBA Championship

- Published: 2016-06-23
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/a-bank-is-offering-discounted-mortgage-rates-because-cleveland-won-an-nba-championship/
- Categories: Mortgage News

If you didn’t hear the news, LeBron James and his Cleveland Cavaliers won the NBA championship. It’s pretty amazing because they did so after being down 3-1 in the series, meaning they had to win three straight. It’s even more amazing because they had to beat the Golden State Warriors three times in a row, a particularly difficult feat seeing that the Warriors had an all-time best 73 wins during the regular season. And two of those three wins had to come in the Bay Area (they went 39-2 there during the regular season). Anyway, the Cavs did it and now an unlikely benefit has presented itself to homeowners. The 52 Year Drought in Cleveland Ends The historic win ended a 52-year drought in the city of Cleveland when it comes to a major sports championship. And what better to way to celebrate than lower mortgage rates? Well, there are probably many, many better ways to celebrate, but for the sake of this blog, lowering mortgage rates is a pretty good way to savor the victory. And that’s exactly what Cleveland, Ohio based mortgage lender Third Federal Savings & Loan is doing. From June 23rd through June 27th, 2016, the bank is reducing all its home mortgages rates in the states of Ohio and Florida by a quarter percent. Not sure why Florida gets to take advantage, but LeBron did play in Miami before heading back to his old digs in Ohio. The rates are being slashed by 0. 25%,...

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### Guaranteed Rate Launches 1% Down Payment Mortgage Program

- Published: 2016-06-13
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/guaranteed-rate-launches-1-down-payment-mortgage-program/
- Categories: Mortgage News

This seems to be a theme lately - super low or no down payment mortgages. The latest of these not-so-novel loan programs comes courtesy of Chicago-based bank Guaranteed Rate. The lender, which you may have heard of thanks to its commercials with crazy old Ty Pennington, is offering a 1% down payment home loan to Chicago area buyers. The loan is made possible via a partnership with the City of Chicago and Chicago Infrastructure Trust (CIT), and is designed to tackle one of the major hurdles to homeownership, the hefty down payment requirement. It appears to be open to all Chicago-area lenders, but hometown bank Guaranteed Rate is the first to officially launch the program. Chicago Home Buyer Assistance Program Guaranteed Rate has partnered with the City of Chicago To create the Chicago Home Buyer Assistance Program Which requires just $1,000 down payment And a forgivable grant for up to 7% of the loan amount The so-called “Chicago Home Buyer Assistance Program” allows both existing and prospective homeowners to take advantage of a low down payment mortgage via the use of a grant that doesn’t need to be paid back. The City of Chicago will provide home buyers with a forgivable grant, for up to seven percent of the final loan amount. The borrower must simply come up with 1% of the purchase price, or $1,000, whichever is lower. It’s unclear if reserves are also required, but if not, it means individuals can buy a home with just $1,000 in...

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### There’s a New ‘Lite Doc’ Loan in the Mortgage World

- Published: 2016-06-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/theres-a-new-lite-doc-loan-in-the-mortgage-world/
- Categories: Mortgage News

It feels a little like 2006, but it’s entirely different, or so they say. A lender by the name of Quontic Bank based out of Astoria, New York (Queens) has been offering its so-called “Lite Doc” loan to homeowners who can’t typically qualify for a mortgage. The problem comes down to income, which can be a roadblock for many would-be homeowners, even if they have plenty of assets and great credit. The beauty of Quontic Bank is that it’s designated as a Community Development Financial institution, or CDFI, meaning it is exempt from the Ability-to-Repay rule that generally applies to all home mortgages. The ATR means underwriters must verify a borrower’s income, assets, job status, and their DTI ratio, among other things. Because Quontic is a CDFI, which is supposed to generate “economic growth and opportunity” in the “most distressed communities,” it can bypass those stringent rules and make mortgages based on its own risk appetite. Before you get in a tizzy, note that this new seemingly high-risk loan has some pretty strict underwriting criteria. What Exactly Is Lite Doc? Perhaps most important, the Lite Doc loan from Quontic Bank reportedly requires a 40% down payment. Yes, you read that right. A whopping 40%. I don’t know if any mortgage would ever be delinquent if it required a 40% down payment. Today, home buyers are much more likely to put down 3% than they are 40%... and you know which ones will probably default first. That removes a ton of...

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### Borrowers with Mortgage Rates of 4.25% and Below Less Likely to Sell Their Homes

- Published: 2016-06-06
- Modified: 2016-06-06
- URL: https://www.thetruthaboutmortgage.com/borrowers-with-mortgage-rates-of-4-25-and-below-less-likely-to-sell-their-homes/
- Categories: Mortgage Tips

I had a nice little Sunday yesterday, strolling around a beach city south of Los Angeles with some friends of mine who were visiting from Portland(ia). They moved there about two years ago and bought a house without delay. I gave them (the wife) props for purchasing a home so quickly seeing that all I hear about are horror stories up there. It sounds like it’s close to impossible to find a home in Portland with the bidding wars and lack of inventory. I guess that’s pretty much true of most areas nowadays. Anyway, my friend and I discussed his other property in Dallas, which is currently being rented out. They moved from Texas to Oregon thanks to a job relocation. Home prices in the Lone Star State have surged in the past few years, putting him in a pretty healthy position there. I asked what he planned to do with the property and he told me was debating selling it to lock in those profits, or continuing to rent for a steady cash flow. He expressed some concern about missing out on said profit if home prices there were to take a turn, perhaps because they got a little ahead of themselves. I pointed out last week that prices in Dallas were above their outlier threshold, meaning they’re in unfamiliar and perhaps troublesome territory. That could cause one to panic and sell their investment property if they think prices will tumble in the near-term. But I said to him,...

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### 3 Signs Another Housing Crisis Is Just Around the Corner

- Published: 2016-06-02
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/3-signs-another-housing-crisis-is-just-around-the-corner/
- Categories: Housing Market, Mortgage News

Here’s yet another post in my growing series of wondering if home prices are too high. Earlier this week, Black Knight Financial Services noted that home prices increased to within 3. 8% of their all-time highs set back in June 2006. Other home price indexes (and specific metro areas) are spitting out new record highs. That may scare some folks, including myself, as I tend to be a bit more conservative when it comes to massive year-over-year home price increases. It has been about 10 years since home prices were defying expectations and now they appear set to finally surpass those old unsustainable highs. If you’re wondering why home prices have risen so much since bottoming around 2012, the answer is pretty simple. Home prices got way too cheap after the crash and inventory has remained very tight in spite of a flood of foreclosures. That, plus super low mortgage rates sprinkled in, has driven home prices higher and higher for months on end. Your Last Chance to Get In The fact that sentiment is still mixed Tells me that this housing recovery still has legs It's also important to remember that recoveries have ups and downs Just like downturns, and they play out longer than anticipated But now we’re getting a little irrational again, at least in my opinion. I’ve been hearing that ill-fated sentiment of “Buy a house now or you may never get the chance! ” SMH. Usually when people start saying things like that it isn’t...

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### Looking for 100% Mortgage Financing? Check Your Local Credit Union

- Published: 2016-06-01
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/looking-for-100-mortgage-financing-check-your-local-credit-union/
- Categories: Mortgage Tips

We all know home prices are getting more expensive every day, and as a result, you may be looking for 100% mortgage financing when it comes time to purchase a home. Perhaps not out of preference but more out of necessity, which is a scary thought but let’s not get into that. Let's just help you find these elusive mortgages. Check Your Credit Union’s Mortgage Programs Prospective home buyers often overlook local credit unions Which can offer some unique home loan programs You won't necessarily find with the big national banks And their mortgage rates tend to be competitive too! One perhaps overlooked place to look for a mortgage is a local credit union. Somewhat surprisingly, many of these not-for-profit organizations offer great interest rates and a wide variety of home loan programs. In fact, a lot of them actually offers 100% financing on home purchases, which beats the 3. 5% down required by the FHA and the 3% down required by newer conventional loans like the yourFirst Mortgage and the Affordable Loan Solution. If 97% LTV doesn’t quite do it for you, do a search in your area (or nationwide) for a credit union willing to provide a mortgage with no down payment. A simple google search should yield plenty of results for credit unions willing to let you buy a home with nothing down. Many Credit Unions Offer Home Loans with Zero Down For example, I searched California credit unions and found Travis Credit Union, which offers 100%...

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### Chase Also Launched a 3% Down Payment Mortgage

- Published: 2016-05-31
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/chase-also-launched-a-3-down-payment-mortgage/
- Categories: Mortgage News

It’s been a busy month for the launch of low-down payment mortgages... It turns out Chase also has a 3% down offering, though it wasn’t widely publicized like the Wells Fargo yourFirst Mortgage was last week. And there might be a reason for that. Chase Standard Agency 97% Program The new loan product from Chase is known simply as the “Standard Agency 97%,” which doesn’t sound nearly as innovative as the Wells product, or quite as nifty as BofA’s Affordable Loan Solution. But that could be the point here. Perhaps Chase doesn’t want to draw a lot of attention to the fact that they offer mortgages with just 3% down, unlike their competitors. That would explain the lack of a press release. If we dig into the details a bit more, we find that the minimum FICO score on this program is 680, well above the 620 required for the other bank’s programs. Clearly that makes it less attractive as a marketing piece, especially for first-time home buyers struggling in the credit score department. Why go with Chase if you can go to a competitor and get approved with marginal credit? And why would Chase boast about a loan program that is more conservative than its rivals? Chase’s program is based on Fannie’s 97% LTV offering, though it seems to come with overlays that make it less risky, such as that higher minimum credit score. It appears the Chase program is also more stringent on mandatory borrower funds, with LTVs...

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### The Surprising Mistake a Lot of People Make Before Refinancing

- Published: 2016-05-26
- Modified: 2018-07-02
- URL: https://www.thetruthaboutmortgage.com/the-surprising-mistake-a-lot-of-people-make-before-refinancing/
- Categories: Mortgage Tips

A new study from credit bureau TransUnion revealed that consumers still don’t get it when it comes to smart credit habits. Conventional wisdom tells us to halt or limit spending during the lead up to a mortgage application, whether it’s a purchase or refinance, but a lot of folks seem to ramp up spending during this critical time. The company discovered that those who refinance their mortgages greatly increase credit card spending in the month prior to loan payoff, a departure from long held assumptions about credit behavior. They found this out after combing through data from some 16. 7 million credit files where a mortgage was paid off and subsequently replaced with a new one between the first quarter of 2013 and the second quarter of 2015. Amazingly, consumers who refinanced managed to increase average monthly spend anywhere from 1. 7-3X their typical spend in the 30 odd days before closing on their refi. It’s as if they knew they were either going to get a lower interest rate, and thus a lower monthly housing payment, or were expecting some cash out, so they could go buck wild. Unfortunately, this is the last thing you want to do when applying for a mortgage. Can You Just Wait a Month! If there's any likelihood you might refinance your home loan Anytime in the next several months It's wise to pump the brakes on any unnecessary spending To ensure you don't jeopardize your mortgage approval Whatever happened to patience? I mean...

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### Wells Fargo yourFirst Mortgage: You Only Need a 3% Down Payment

- Published: 2016-05-26
- Modified: 2023-01-19
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-yourfirst-mortgage-you-only-need-a-3-down-payment/
- Categories: Mortgage News

The nation’s largest mortgage lender, Wells Fargo, is now offering mortgages to home buyers with just 3% down via their new “yourFirst Mortgage. ” I’m assuming the new loan program is based on Fannie and Freddie’s 97% LTV program announced back in late 2014. And it appears to be geared toward first-time home buyers seeing that the name is yourFirst Mortgage. That reads asyour first mortgage, meaning your first home purchase as well. The program is available for qualified first-time buyers, including low-to-moderate income applicants as well as the “diverse Millennial population,” which Wells points out is over two-thirds of first-timers these days. I believe anyone who can demonstrate their ability to repay the loan can qualify for a yourFirst Mortgage if they haven’t owned a home in the past three years, or if at least one borrower on the loan hasn’t. yourFirst Mortgage Only Requires 3% Down Wells Fargo's new 3% down home loan program No median area income limits Down payment assistance and gift funds permitted Only loan option is a fixed-rate mortgage The main selling point to this new mortgage is the 3% down payment requirement, which rivals the 3. 5% down required from the FHA. To make the deal even sweeter, and perhaps riskier if you like, your down payment and closing costs can come in the form of a gift or from a down payment assistance program. In other words, you don’t need any cash to qualify, other than maybe some reserves to show you...

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### If You Put Down Less Than 20%, You’re Paying Mortgage Insurance

- Published: 2016-05-24
- Modified: 2021-08-06
- URL: https://www.thetruthaboutmortgage.com/if-you-put-down-less-than-20-youre-paying-mortgage-insurance/
- Categories: Mortgage Tips

Here’s yet another anecdote involving some buddies who were arguing about their mortgages. This seems to be a trend lately. In short, both guys put less than 20% down on their respective home purchases, but one argued that he didn’t have mortgage insurance, while the other said that’s impossible. Essentially, the answer lies in how private mortgage insurance is presented to the borrower. Several Ways to Pay PMI Lenders often advertise no PMI on home loans as a benefit But if your LTV is above 80% (less than 20% down) It is being paid whether you realize it or not Perhaps indirectly via a higher mortgage rate There are a variety of ways to pay PMI, with some more obvious than others. And some so not obvious that it may appear that you’re not even paying PMI. For example, you can pay PMI monthly, a very common scenario where the borrower’s monthly payment consists of principal, interest, taxes, homeowners insurance, and mortgage insurance. Basically, you pay some small (or large) amount each month to satisfy the mortgage insurance until you can get rid of it, usually around the time your loan reaches 78-80% LTV. This is very obvious PMI in that the borrower sees it in their monthly payment, and their total housing payment is higher as a result. You’ll see this with the MIP on FHA loans as well. There’s also lender-paid mortgage insurance, which is a lot less obvious, and even confusing given the name. Does the lender...

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### Know Which Type of Mortgage You Want Before Speaking to Any Lenders

- Published: 2016-05-19
- Modified: 2016-05-19
- URL: https://www.thetruthaboutmortgage.com/know-which-type-of-mortgage-you-want-before-speaking-to-any-lenders/
- Categories: Mortgage Tips

So I was chatting with a couple buddies the other night about their mortgages, as I do sometimes, and the two of them were engaging in some light sparring. Basically saying their “mortgage guy” was better than the other’s “guy” and that they got a better mortgage and blah blah. In reality, I don’t know if either guy was very good but they both got mortgages and with them houses. Mission accomplished. But that brings me to a recent memory involving my own life, and my own wife (yes, someone married me). Can I Get Pricing? My wife called a lender to ask for pricing on an ARM (shocking, I know) and the loan officer basically talked her out of it and didn’t even provide pricing. Instead, he suggested a 30-year fixed mortgage and provided pricing for that. So to get this straight, she was interested in a certain product and asked for more information about said product and was basically told it’s no good for you. Because the guy who knows nothing about her situation or her goals thinks a 30-year fixed is the be all and end all. That got me thinking... maybe prospective mortgagors should know what loan product they want well before speaking with some guy or gal at a bank, or a credit union, or online. They say you can’t really steer people into mortgages any longer, that it was banned and is no longer incentivized, but I don’t believe that. There are still reasons...

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### A Return to Bubble-Era Home Prices Doesn’t Signal a Crisis

- Published: 2016-05-18
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/a-return-to-bubble-era-home-prices-doesnt-signal-a-crisis/
- Categories: Housing Market, Mortgage News

There’s renewed fear that another housing crisis is on the horizon because home values are inching closer and closer to their so-called “bubble-era prices. ” However, this line of thinking is flawed for a number of reasons, the most obvious being that it’s now a decade later. I was reading an article in the Orange County Register, which is certainly housing (and mortgage) central here on the West Coast and perhaps nationwide. The headline served as a warning, proclaiming a return to bubble-era prices in the ritzy county that’s home to places like Newport Beach and Corona del Mar. Get Ready for New Highs in the OC Apparently the median home price rose to $645,000 in the OC last month, its highest point since peaking in June 2007. As the article points out, the bottom dropped out a month later, thanks to subprime mortgages and bloated home prices. Over the course of 19 months, the median slipped to $275,000, leading to scores of mortgage delinquencies, short sales, and foreclosures. The OC is the first Southern California county to reach its pre-recession peak, per data from CoreLogic, with nearby counties such as Los Angeles and San Diego still off 5. 5% from their highs. In more outskirty places like Riverside and San Bernardino, prices are still way off their highs, 23. 6% and 28. 9% lower, respectively. Meanwhile, many Bay Area counties up in the north of California are enjoying new all-time highs and have been for some time. The same...

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### Paying Your Mortgage Faster So You Can Actually Sell Your Home

- Published: 2016-04-28
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/paying-your-mortgage-faster-so-you-can-actually-sell-your-home/
- Categories: Housing Market, Mortgage Tips

Most people seem to be obsessed with paying off their mortgage early, whether it’s good for them or not. Clearly it’s a psychological victory to tackle a giant debt and free yourself from the grips of your evil mortgage lender. I’ve already discussed the pros and cons, but let’s look at another reason why it could make sense to pay your mortgage more quickly. We know you can save a ton of money on interest by paying the mortgage faster, especially if you have a 30-year fixed mortgage, which by name alone tells us it’ll take a while to pay in full. Sure, you can wait three decades to burn your mortgage, but you can make extra payments early on and extinguish it a lot faster. Only Keeping the Mortgage a Few Years? You can also benefit even if you don’t actually keep the mortgage for the full term, or anywhere close to it. Let’s imagine a scenario where you buy a home and only keep it for three years before selling. This isn’t an uncommon scenario at all. It’s very typical for homeowners to buy a starter home, live in it for five years or less, and then move on to something bigger and better. This tends to work out fine in a normal housing market. You put down 20%, pay the mortgage for several years, and then sell at a profit and use the proceeds for your new home’s down payment. But the game has changed. Today, borrowers...

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### Can We Use These Charts to Predict the Next Housing Crisis?

- Published: 2016-04-26
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/can-we-use-these-charts-to-predict-the-next-housing-crisis/
- Categories: Housing Market, Mortgage Tips

The Urban Institute released its monthly chartbook today, which provides tons of data about the mortgage market. As I scanned through it, I came across three charts I felt kind of summed up where we’re at in the current housing cycle, and why despite high home prices relative to a few years ago, we are still OK. The first two charts display mortgage origination by product type, broken down into four categories: - 30-year fixed mortgage - 15-year fixed mortgage - Adjustable-rate mortgage - Other Look at how many mortgages are fixed as opposed to adjustable That is telling of the quality of today's mortgages It's certainly not everything though We also have to consider things like down payment, job market, etc. Both charts show the mortgage product mix since the year 2000, with the second chart displaying purchase activity only. As you can see, the bulk of mortgages continue to be fixed mortgages, with 15-year fixed mortgages also quite strong. The super low mortgage rates available have pushed borrowers to refinance into shorter term mortgages like the 15-year and even the 10-year fixed, which is great news for the housing market. Even if it’s not in their best interest, it means homeowners today are amassing a whole lot of skin in the game. With each monthly payment, borrowers are accruing more and more equity, putting them in a less levered position and easing concerns if home prices drop. Meanwhile, those with a standard 30-year fixed are building equity too,...

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### Should You Buy a Home Where the FHA Loan Share Is High?

- Published: 2016-04-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/should-you-buy-a-home-where-the-fha-loan-share-is-high/
- Categories: Housing Market, Mortgage News

Another one of those wonky Federal Reserve papers was released last week, which made the claim that government-backed mortgage insurance promoted a faster recovery post Great Recession. I had to read it about four times to understand it, that’s a government working paper for you, but the takeaway is basically that areas of the country with lots of FHA loans fared better than areas with other types of loans, such as those backed by the GSEs, or worse, portfolio loans and private-label securities. The researchers looked at things like unemployment rates, home sales, and home prices prior to and after the financial crisis and found that counties with a high concentration of FHA loans performed best. For example, by 2008, unemployment rates increased 26% in counties that had a low FHA share in 2005, compared to just a four percent increase in counties where the FHA share was high. A year later in 2009, the unemployment rate had risen by 106% and 58%, respectively, for those two groups. Once the crisis ended, around the end of 2012, the unemployment rate remained 79% higher in the low FHA-share counties but only 49% higher in high FHA-share counties. At the end of 2014, the unemployment rates were still 30% higher in the low-FHA share counties compared to 2005 levels, and just 19% higher in the high-FHA counties. Areas with loans backed by Fannie Mae and Freddie Mac (GSEs) also did fairly well, with smaller declines in home sales and home prices during...

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### Bernie Sanders Wants Every Homeowner to Get the Mortgage Interest Deduction

- Published: 2016-04-20
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/bernie-sanders-wants-every-homeowner-to-get-the-mortgage-interest-deduction/
- Categories: Housing Market, Mortgage News

It’s that time of the year again, when presidential hopefuls lay out their plans to save America and get the nation back on its feet. While a lot of it is just noise, I do enjoy reading about the candidates’ housing policies to see what they think about real estate, mortgages, and so on. It was especially important in the previous election, but has barely been mentioned this time around thanks to a resurgent housing market. This week, Bernie Sanders weighed in with a piece titled, “Fighting for Affordable Housing. ” It has a number of proposals along with six main areas of interest, including: - Expand affordable housing - Promoting homeownership - Helping underwater homeowners - Preventing homelessness - Getting lead out of our homes - Addressing housing and environmental justice First, Sanders wants to expand affordable housing by building more affordable rental housing units for extremely low-income households. Along with that, he wants to raise the minimum wage to $15 an hour by the year 2020, while also reinvigorating federal housing programs, repairing public housing, and defending the Fair Housing Act. When it comes to promoting homeownership, Sanders promises to fight to support first-time home buyer programs, including expanded HUD and USDA offerings, as well as pre-purchase housing counseling. Credit Score Reform? He also wants to enact some kind of “credit score reform,” which is confusing to say the least. The proposal points out that a “prime score” before the housing crisis was 640, and that it’s now...

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### Get a Fixed Mortgage If You’re Worried You Won’t Be Able to Get Another One

- Published: 2016-04-19
- Modified: 2016-04-19
- URL: https://www.thetruthaboutmortgage.com/get-a-fixed-mortgage-if-youre-worried-you-wont-be-able-to-get-another-one/
- Categories: Mortgage Tips

Recently, I wrote about how an adjustable-rate mortgage can make a lot of sense if you’re not planning on staying in your home (or condo) too long. Most ARMs have a fixed period for some years so you can take advantage of that and the lower interest rate for the short period you plan to stay. But what if you plan on hunkering down for a while? Or what if you’re simply concerned you may not qualify for a mortgage in the future due to some unforeseen or possibly semi-planned issue. Maybe you’ve never even thought about it, but it’s definitely something you need to consider if you choose an ARM. Self Employed? For example, say you’re self-employed and your income is unsteady at best. You know you’ll always be able to make your mortgage payments at today’s rates, but you might not earn as much next year or the year after that. If you had a great year or two recently it could make sense to lock in a fixed rate and hold onto it as your situation changes over time. You might even be able to buy more house now while your income is high, assuming you have the necessary down payment funds as well, though be reasonable here as not to overextend yourself if you think you won’t be able to replicate similar figures in coming years. Those who are W-2 borrowers aren’t exempt from wage decreases or layoffs either, so really anyone with a job has...

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### You Can Sell Your Home for More If It Looks Like a Barn

- Published: 2016-04-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/you-can-sell-your-home-for-more-if-it-looks-like-a-barn/
- Categories: Housing Market, Mortgage Tips

How to Boost Your Home's Value If you’re thinking about listing your home in the coming months (or this month), you might be wondering what last minute improvements you can make to boost the value without breaking the bank. Generally, a lot of big ticket improvements don’t actually benefit the home seller because they cost more than the value they create. For example, a swimming pool probably won’t add value. However, there are little things sellers can do to make their home more marketable and desirable to would-be buyers, some trendy and some timeless. Things like curb appeal are cheap (adding flowers, new sod, a mailbox, lighting) and can boost the asking price, along with a new coat of paint or some shiny new appliances. Heck, simply cleaning the place before you show it helps, as does staging if you’ve got no sense of style. Should You Follow the Trends? Then there are the trendy things, which Zillow highlighted in a recent analysis. If you go with the flow in terms of what’s cool, you might be able to boost your sales price and sell your property faster. After analyzing over two million listing descriptions, Zillow found that certain features make homes fly off the shelves, and some of these items are even pretty cost-effective if you do it right. The company discovered that homes simply mentioning “barn doors” went for a 13. 4% premium relative to what was expected, and sold a full 57 days faster. Another hot item...

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### LendingHome Declares Itself the Largest Mortgage Marketplace Lender

- Published: 2016-04-13
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/lendinghome-review-declares-itself-the-largest-mortgage-marketplace-lender/
- Categories: Mortgage News

LendingHome, a marketplace lender that claims it’s “the best way for borrowers to get a mortgage,” announced this week that it funded more than $550 million in mortgage loans during 2015. That represents a 600% increase from 2014 as marketplace lending continues to surge in popularity. If you’re wondering just what the heck marketplace lending is, it’s essentially a setup where individuals obtain and invest in mortgages at the same time. LendingHome refers to themselves as a “direct lender with a marketplace of investors who buy our loans. ” They close the loans with their own funds and then offer them to investors via a secondary sale. So Joe Investor backs a mortgage (via a fractional note) taken out by Jane Homeowner after LendingHome funds it.   Institutional investors are also involved in the process. To that end, some $200 million in principal and $20 million in interest has been doled out to investors in LendingHome mortgages. LendingHome Mortgage Products: Fix & Flip or Primary Residence If you’re a borrower seeking a mortgage, you have the ability to choose from either a “fix & flip” product or a standard owner-occupied mortgage. Let’s talk about the first option first. Assuming you’re an investor, you get the ability to apply for a purchase or refinance loan on a rental property. LendingHome will ask you a series of questions online about the property, including whether you’ve found it yet, and if an offer has been made. As far as the loan goes, you...

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### Why You May Want to Apply for That Mortgage Alone

- Published: 2016-04-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/why-you-may-want-to-apply-for-that-mortgage-alone/
- Categories: Mortgage Tips

Conventional wisdom tells us that two salaries are better than one, especially when it comes to qualifying for a mortgage. Put simply, the collective income should increase what you can afford in the way of a house, meaning you might be able to make an offer on a $500,000 house, instead of settling for a property going for $300,000. This is clearly an advantage for the prospective homeowner looking for more house, but it turns out co-borrowers are often added to mortgages unnecessarily. Even worse, when they’re added the resulting mortgage has a higher interest rate. So to get this straight, two people had to deal with obtaining a mortgage when only one was required to gain approval, and when it was all said and done, the monthly payment was higher. Talk about frustrating. The silver lining here is that these homeowners probably don’t realize this fact. One in 10 Mortgage Borrowers Could Benefit by Going Solo A new Federal Reserve study claims almost one in 10 prime borrowers who applied for their mortgages jointly could have lowered their mortgage rate at least an eighth of a point (0. 125%) if the mortgage was applied for by just the applicant with the higher credit score, assuming their income was high enough to qualify for the mortgage. The issue lies in the fact that mortgage lenders rely on the lower middle credit score of two applicants. So among the three credit scores of each borrower, they’ll take the middle one. From...

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### Get Up to One Million Credit Card Miles When You Apply for a Mortgage with Capital One

- Published: 2016-03-23
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/get-up-to-one-million-credit-card-miles-when-you-apply-for-a-mortgage-with-capital-one/
- Categories: Mortgage Tips

Are you looking to snag a boatload of credit card miles in a hurry? Well, you can score up to 1,000,000 simply by refinancing your mortgage, or by financing a new home purchase with Capital One. From now until the end of the month, Capital One Venture and VentureOne credit cardholders who apply for a mortgage with Capital One Home Loans can earn a massive amount of bonus miles. The amount of miles you can earn depends on the transaction type (purchase or refinance) and the loan amount. Bonus mile amounts range from 100,000 to 1,000,000 miles. Worth Up to $10,000 in Free Travel As you can see from the chart above, those who take out a loan up to the conforming limit will earn 100,000 bonus miles, regardless of transaction type. Those miles are worth one cent per mile when redeemed for travel purchases. So essentially $1,000 in free travel. If you happen to take out a super jumbo loan for $1,500,001, you’ll earn one million miles, worth $10,000 in free travel. Otherwise, refinances earn more bonus miles than purchases for loan amounts between $417,001 and $1,500,000. If you don’t redeem the miles for travel, and instead opt for cold hard cash, you’re looking at redemption values that are cut in half. So in the first example, just $500 in cash... for the second, $5,000 in cash, which is nothing to sneeze at. There are also other redemption options like gift cards and merchandise that may earn something in...

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### Use Your Tax Refund to Pay Down the Mortgage

- Published: 2016-03-23
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/use-your-tax-refund-to-pay-down-the-mortgage/
- Categories: Mortgage Tips

It’s that time of year again, unfortunately. We’re just a few weeks away from April 15th, a day no one really looks forward to. Well, this year it’s actually April 18th (or the 19th if you’re in Massachusetts) thanks to a Washington D. C. holiday called Emancipation Day. Anyway, most folks shouldn’t really fret about this date because the lion’s share of taxpayers will actually receive a refund. In 2015, some 109,426,000 tax refunds were doled out to taxpayers, similar to numbers seen a year earlier. And the numbers will likely be quite the same in 2016. The total amount refunded last year was just over $306 billion, with the average refund coming in at $2,797. That’s not a small amount of money by any measure, and actually pretty sizable if you consider that many individuals don’t even have $1,000 in savings. What to Do with That Tax Refund... Now, if you’re one of the many millions of people that gets a tax refund in the next month or so, you might be wondering what to do with it. Perhaps you have some bills to pay, or a large purchase you want to make. Or you're eyeballing a vacation. Maybe you’re renting and plan to use the money for a down payment. There are plenty of things you can do with thousands of dollars, some good and some not so good. One way to make that refund go even further is to invest it. This could involve putting it in...

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### Now You Can Trade Your House In for a New One Like a Car Lease

- Published: 2016-03-21
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/now-you-can-trade-your-house-in-for-a-new-one-like-a-car-lease/
- Categories: Housing Market, Mortgage News

How Real Estate Once Was Buying and selling real estate used to be really hard And very time consuming I remember driving around with a real estate agent It felt like a grueling process back then and hasn't really changed a whole lot Back in the 1980s, I vividly remember a day when my father took me along with him to a real estate agent’s office. He was looking to buy a new home and this was how the process began – by getting into a vehicle. We showed up to an office replete with ornate furniture and classic paintings (probably of old timey ships) to meet with an English expat wearing a smart suit and tie. It made sense that he had an accent because back then a real estate agent was meant to exude style and sophistication. After a brief chat, he grabbed some paperwork, we climbed in his car (probably a diesel Mercedes), and proceeded to drive around a neighborhood to look at potential properties to buy. This was how you purchased a home back then. The agent compiled a list of homes in a target neighborhood yet to be seen and invited the client to do a ride-along. Assuming you found one you liked, you’d make an offer and eventually the seller would counter or accept your offer. A few weeks after that you’d get your mortgage from a local thrift or savings and loan (while putting at least 20% down) and the home would be...

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### Buy a House Close to Target, Not Walmart

- Published: 2016-03-14
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/buy-a-house-close-to-target-not-walmart/
- Categories: Housing Market, Mortgage Tips

Finding That Perfect Location In my quest to find the perfect home location, as opposed to one poorly located, I was just given a new data point thanks to the folks over at RealtyTrac. We already know you’d be wise to select a property near a Starbucks, and in close proximity to a Whole Foods or Traders Joe’s. But to make your home buying decision even more foolproof, check to see if there’s also a Target nearby. By near, I mean a having a Target store in the same zip code as the subject property. That shouldn’t be too difficult... Homes Next to Target Increase in Value More Why? Well, RealtyTrac, similar to Zillow and the Starbucks phenomenon, discovered that home values appreciate more when they’re located next to a Target. And they actually base it on home sales versus what the homes were originally purchased for. They looked at 24 million homes nationwide and discovered that Target-adjacent homes turn out to be big winners. For example, homes sold in 2015 experienced a 27% price increase since they were first purchased if they were located near a Target store. The average price gain was $65,569, not to mention all that money those homeowners saved by shopping at Target. Meanwhile, the average price gain for all zip codes nationwide was 22%, with an average price gain of $40,626, which is still fairly solid but noticeably less than the homes in the Target market (lame pun intended). Homes Close to Target Come...

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### Zillow Says Early May Is Now the Best Time to Sell a Home

- Published: 2016-03-03
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/zillow-says-early-may-is-now-the-best-time-to-sell-a-home/
- Categories: Housing Market, Mortgage Tips

A previous study from Redfin found that winter was the best time to sell a home, which seemed a bit unconventional. Zillow is saying it's spring, a much more common answer. Let's learn why. When to List Your Home for Sale Spring has historically been the busy home buying season Because the weather is favorable Everyone wants to get situated before summer vacation And moved in before school begins in the fall It used to be common belief that the best time to sell a home was in mid-March or mid-April, around the beginning of spring. Speaking of spring, it’s coming up on Wednesday, March 20th. This is the traditional beginning of the home buying season, seeing that many areas of the country emerge from winter around this time. It doesn’t matter in places like Florida, Arizona, or California, where it’s generally always warm, but in the Northeast it may be more practical to wait until spring to ensure you attract the most buyers. Anyway, Zillow’s initial analysis found that homes listed in this period sold the quickest and fetched the highest price. So it was a no-brainer to list during this time. Low Supply Pushes Optimal Date into May If the housing supply is particularly low Home buyers might have trouble finding a property As the spring home buying season wanes They may become increasingly desperate and pay more But times have changed (literally) thanks to the low supply of homes on the market. Because would-be buyers will have...

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### Home Flippers in 2015 Were the Most Active Since 2007

- Published: 2016-03-03
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/home-flippers-in-2015-were-the-most-active-since-2007/
- Categories: Housing Market, Mortgage News

179,778 Properties Flipped in 2015 Is it time to worry? Home prices are surging, affordability is becoming a concern, and home flippers are back out in droves. Surely that’s a recipe for disaster, right? A new report from RealtyTrac revealed that the number of “active home flippers” in 2015 was the highest it has been since 2007, around the time things came crashing down, partly due to those very flippers. Last year, some 179,778 single-family homes and condos were flipped by flippers, with flips accounting for 5. 5% of total U. S. home sales. That was up marginally from the 5. 3% share in 2014, but it marked the first annual increase in the share of house flips after four consecutive yearly declines. And in 83 of 110 metros nationwide (75%) flipped homes increased from a year earlier. So it’s not just some markets seeing increased flip activity. California is the only noticeably cold state. For the record, RealtyTrac defines a “home flip” as a property sold a second time within a 12-month period. But if I had it my way, I’d expand that definition slightly seeing that some folks wait just over a year due to tax purposes. So the number of flips could be even higher if you move the definition to say 13 months, which is still clearly a fast turnaround intended to make a quick profit. 110,008 Flippers Flipped in 2015 Sorry for having fun with the word flipper. I can’t help myself. I think we...

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### Skupit Lets You Make an Offer on a Home in Five Minutes

- Published: 2016-02-25
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/skupit-lets-you-make-an-offer-on-a-home-in-five-minutes/
- Categories: Housing Market, Mortgage News

Looking to purchase a home and not waste any time doing so? Well, a new company called “Skupit” might be just the ticket. The website allows you to make offers on homes in your desired area in a matter of minutes, if not seconds if you’re really good with a keyboard. At first glance, Skupit looks like most other listing websites, such as Zillow or Redfin, but gives you the option to place an offer as well. The listing pages are actually a bit more bare bones than what you’ll find at the aforementioned sites (no Zestimates or Redfin Estimates, for example), but you do get the ability to make an offer. Redfin allows you to make an offer too, and Zillow allows you to contact an agent if you’re interested, but Skupit does it without the buyer’s agent. Skupit Relies on Single Agent Transactions Instead of having your agent call their agent, you can make an offer for a home all by yourself on Skupit. The listing agent will help you with the paperwork and connect buyer and seller, but it’ll be a one-agent deal, not the typical two agent situation most conventional home sales involve. Speaking of the listing agent, they can increase transparency by allowing the seller to receive a notification every time an offer is made online via Skupit. This way buyers get to review all offers, instead of being in the dark about who’s interested and who the agents think should buy your home. If...

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### Refinancing to an ARM If You Plan on Moving Soon

- Published: 2016-02-25
- Modified: 2018-07-12
- URL: https://www.thetruthaboutmortgage.com/refinancing-to-an-arm-if-you-plan-on-moving-soon/
- Categories: Mortgage Tips

I was looking at rates on hybrid adjustable-rate mortgages the other day and thought it could make sense for some folks to refinance out of their fixed mortgages if they plan on moving relatively soon. There are a variety of hybrid ARMs that have a fixed rate period, with the most common being three, five, and seven years. This means the rate won’t change for the first three, five, or seven years, respectively, giving the homeowner some peace of mind despite it being adjustable and at the mercy of market forces. Critics of such a move would probably point to the near-record low fixed mortgage rates currently available. Why refinance to an ARM when your fixed rate is 3. 75%? That would be foolish, wouldn’t it? Are You Staying for 30 Years? While most mortgages have 30-year terms Most homeowners don't stay in one place for that long The typical tenure is closer to a decade Meaning you could be overpaying for a 30-year fixed rate I’ve said it before – most homeowners don’t stay in their homes, or with their mortgages, for very long. It’s not uncommon for borrowers to sell just a few years after buying a home for a variety of different reasons. That means many folks don’t actually benefit from their fixed mortgage. In fact, they’re paying a premium for something they don’t even utilize. Of course, you can argue that they sleep better at night knowing their mortgage rate will never rise, but that day...

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### Bank of America 3% Down Payment Mortgage Being Rolled Out

- Published: 2016-02-22
- Modified: 2022-09-01
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-3-down-payment-mortgage-being-rolled-out/
- Categories: Mortgage News

Bank of America's Affordable Loan Solution The widely available 3% down home loan program Is being branded by individual banks and mortgage lenders Bank of America calls their version the "Affordable Loan Solution" But it's unique in that it's backed by nonprofit Self-Help Ventures Fund In what is looking a lot like a jab at the FHA, Bank of America is set to launch a 3% down payment mortgage nationwide with the help of Freddie Mac and nonprofit Self-Help Ventures Fund. The new loan program, known as the “Affordable Loan Solution,” aims to help underserved borrowers obtain homes with very little down. It counters the flagship FHA loan program, which requires 3. 5% down payment and marginal credit scores, and appears to be quite similar to Freddie Mac’s Home Possible Advantage loan program. Bank of America is rolling out the program as an alternative to the FHA, with many large lenders now shying away from the agency because of recent significant penalties. His comments likely relate to a number of recent lawsuits with the Department of Housing and Urban Development (HUD) over faulty FHA loans. Wells Fargo just agreed to pay $1. 2 billion to settle claims it made reckless FHA loans, and Quicken has a pending lawsuit involving the quality of the FHA loans it originated. Put simply, lenders are losing confidence in the FHA because they’re unsure of the potential liability/penalties they face if the loans are deemed defective. Update:Bank of America has launched a zero down mortgage!...

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### Lender Launches 7/1 ARM with 20-Year Amortization to Help Borrowers Own Their Homes Faster

- Published: 2016-02-18
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/lender-launches-71-arm-with-20-year-amortization-to-help-borrowers-own-their-homes-faster/
- Categories: Mortgage News

A national mortgage lender based out of Wisconsin just unveiled a new home loan product with some rather unique features. In short, it combines a hybrid adjustable-rate mortgage with a 20-year amortization period, a move designed to keep payments low while also sending more of that payment toward principal. Call it an attack on the 30-year fixed, which many criticize for consisting mostly of interest and doing little to actually build home equity. With the traditional 30-year fixed, homeowners’ payments are dominated by interest until nearly halfway through the 30-year term. That means borrowers don’t own much of their homes, especially if they put very little down. Waterstone’s Wealth Building Loan The so-called Wealth Building Loan (WBL) Is a 7/1 ARM with a 20-year term This means borrowers will pay down the mortgage a lot faster While keeping monthly payments relatively affordable To combat this trend and help homeowners build wealth, instead of simply paying interest, Waterstone Mortgage now offers the so-called "Wealth Building Loan," which is available in 18 states. It’s based on the work of Edward Pinto and Stephen Oliner of the American Enterprise Institute (AEI), the brains behind a similar loan program called the Wealth Building Home Loan (WBHL). This particular iteration is quite a bit different than the WBHL, a 15-year fixed loan with an ultra-low mortgage rate that serves the same purpose of building equity fast. As mentioned, it’s a 7/1 ARM, meaning it’s fixed for the first seven years before adjusting once annually. It’s...

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### Your Mortgage Has a Better Chance of Approval on a Sunny Day

- Published: 2016-02-11
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/your-mortgage-has-a-better-chance-of-approval-on-a-sunny-day/
- Categories: Mortgage Tips

Let’s forget about whether it’s okay for a mortgage to be easily obtained. Yes, I’m looking at you Rocket Mortgage. Thanks for riling everyone up. Instead, let’s talk about mortgage approvals and the weather. Yes, there’s apparently a correlation. When it comes to buying a home, spring is traditionally the big season because the weather thaws (in places that are cold) and people begin to list their properties as more folks begin to look. That doesn’t mean you should or have to list in spring, it’s just the busiest home buying season of the year. With regard to mortgages, the busy times tend to be when interest rates are the lowest. For example, loan applications have surged in the past several weeks because the stock market has taken a beating. As a result, mortgage rates have fallen for six consecutive weeks, including all five weeks this year. So much for those dark 2016 predictions, eh? Of course, most of the increase in apps is attributable to refinancing, with home purchases still pretty flat because we’re not yet into spring (even if it's in the 90s in LA). Oh, and inventory is still a problem. Anyway, not all of these applications will ultimately be approved. Plenty of mortgages get denied for all sorts of reasons. Should You Wait for a Sunny Day? But what if I told you’d have a better chance of approval if you applied for a mortgage while it was sunny outside? Well, a recent working paper by...

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### Mission Accomplished: Quicken Loans Super Bowl Ad Stirs Controversy

- Published: 2016-02-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/mission-accomplished-quicken-loans-super-bowl-ad-stirs-controversy/
- Categories: Mortgage News

A couple of weeks ago I wrote about Quicken Loan’s first Super Bowl ad, which was pre-released before the big game. My takeaway at the time was that a mortgage didn’t really need to be rushed, seeing that it’s a momentous decision that requires plenty of time and thoughtful research. Once the ad finally aired during yesterday’s game, the outrage surfaced online via scores of blog posts and angry tweets. Lots of folks likened the company’s Rocket Mortgage to the return of subprime lending, stated income underwriting, the year 2008, etc. Was Quicken’s Rocket Mortgage a return to loose underwriting? Were they ignoring the fact that these poorly underwritten mortgages got us in a heap of trouble just eight years earlier? How can a mortgage you apply for on your iPhone be of high quality? Well, it seems most critics kind of missed the mark here. In reality, Quicken is still underwriting their mortgages to agency guidelines. In fact, they say so time and time again on their Twitter feed in the wake of a barrage of questions and comments about their underwriting standards. The @QuickenLoans Twitter handle was busy fielding the same question all day, most of the time writing something like the following: “We adhere to strict guidelines for credit, assets and debt-to-income ratio. We thought the process was slow and confusing. ” It Might Be Easier to Get a Mortgage, Not Easier to Qualify Here’s where all the confusion seems to lie. Quicken’s attempt to simplify the...

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### HSBC to Provide $400+ Million in Consumer Relief to Homeowners

- Published: 2016-02-08
- Modified: 2018-02-02
- URL: https://www.thetruthaboutmortgage.com/hsbc-to-provide-400-million-in-consumer-relief-to-homeowners/
- Categories: Mortgage News

As part of an agreement between HSBC and the Justice Department, HUD, the CFPB, and 49 state attorneys general (and DC’s), $470 million will be paid out to settle mortgage origination and servicing/foreclosure abuses. The Justice Department noted that the settlement mirrors the $25 billion National Mortgage Settlement (NMS) agreed upon back in February 2012. The five largest mortgage servicers were part of that settlement, but HSBC was not. This settlement is the result of negotiations that took place after the announcement of the NMS in which HSBC was presumably found to have taken part in similar abusive mortgage practices. The agreement resolves violations related to HSBC’s so-called “deficient mortgage loan origination and servicing activities. ” The settlement will be overseen by Joseph A. Smith Jr. , who is also the independent monitor of the NMS. Like many other large banks at the time, HSBC was likely accused of underwriting faulty mortgages and then quickly foreclosing on the very same borrowers. The bank shut its wholesale subprime lending arm Decision One in 2007, ceased wholesale and correspondent lending in 2008, and shuttered its retail brands HFC and Beneficial in 2009. Nearly $60 Million in Cash Payouts to Affected Borrowers Some $40. 5 million of the proceeds will go to the settling federal parties, while another $59. 3 million will be deposited into an escrow fund managed by the states in order to make payments to borrowers who lost their homes to foreclosure from 2008 to 2012. It appears that homeowners...

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### Quicken Loans Just Paid a Lot of Money for a One Minute Super Bowl Commercial

- Published: 2016-01-28
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-just-paid-a-lot-of-money-for-a-one-minute-super-bowl-commercial/
- Categories: Mortgage News

The nation’s largest nonbank mortgage lender is going to the Super Bowl. Well, they’re not playing in the game, but they did purchase a very expensive one-minute ad slot. Apparently a 30-second advertisement for Super Bowl 50 runs at around $5 million, so perhaps Quicken Loans paid somewhere near $10 million for the honor. Hopefully it works out for them. The price of a 30-second spot is up from $4. 5 million last year and has reportedly increased 75% between 2005 and 2014 alone. I suppose it makes sense because some 114 million watched last year’s game and you can only expect that number to rise this year thanks to a final that features aging quarterback Peyton Manning and red hot Carolina. Oh, and the fact that Super Bowl commercials get all types of airplay online before and after the game, instead of only featuring once during the game. If you can get your ad to go viral you can boost the value of it tremendously. Quicken’s First Appearance at the Super Bowl It’s actually Quicken’s first ever Super Bowl ad, and comes at a time when they’re attempting to reinvent the cumbersome mortgage process via their Rocket Mortgage approach. The one-minute ad, which you can already watch here (now taken down), plays into the idea that if it were easier to buy a home (thanks to obtaining a mortgage more easily), more people would buy homes and fill them with stuff, which would spur the economy and make everyone...

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### Why You Should Buy a Home Next to Trader Joe’s or Whole Foods

- Published: 2016-01-26
- Modified: 2019-01-11
- URL: https://www.thetruthaboutmortgage.com/why-you-should-buy-a-home-next-to-trader-joes-or-whole-foods/
- Categories: Mortgage News

We all know the old adage: Location, location, location. It’s a real estate mantra that actually makes sense and one everyone should live by if they want their property value to rise. After all, you can’t move your house (in most cases), and decorating a home to perfection in the middle of nowhere will only get you so far. So if you’re hunting for a house, it’s important to find a good location first. Forget about the quartz countertops or the Viking range. You can put those in later. Find a home in a good school district, in a nice neighborhood with lots of pride of ownership and you should be fine. Oh, and make sure there’s a Trader Joe’s or Whole Foods nearby. A Ralphs/Kroger or Vons/Safeway just won’t do... nor will Albertsons. Homes Worth Double When Located by These Grocers Homes adjacent to certain grocery stores Including trendy Whole Foods and Trader Joe's Greatly outperform other properties If located within a mile of either, they're worth more than double the median home Yup, just like Starbucks, you’ll want your next home purchase to be in close proximity to one of these trendy grocery stores. Why? Well, Zillow discovered that homes near these two grocers tend to greatly outperform homes that aren’t located nearby. All the details can be found in the book Zillow Talk, but they provided several tidbits for us to chew on based on analysis from 1997 to 2014. The median home within a mile of...

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### Now You Can Get a Mortgage Without a FICO Score

- Published: 2016-01-12
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/now-you-can-get-a-mortgage-without-a-fico-score/
- Categories: Mortgage Tips

These days, pretty much all banks and mortgage lenders use FICO scores to determine your creditworthiness before approving you for a mortgage. It’s one of the most important steps a mortgage lender will take to determine eligibility. But one mortgage disruptor, SoFi Mortgage, is declaring a “FICO-free zone. ” Yup, they’re done with FICO, and apparently don’t need it to make credit decisions moving forward. When the recent housing crisis took hold, FICO wasn’t exempt from blame, as it appeared credit scores were relied on too heavily. In fact, the now infamous no doc loan was only possible with overreliance on credit scores. After all, it’s the only thing the lender could look at, aside from the property itself. We all know how that turned out... FICO Doesn’t Tell the Whole Story? SoFi took a shot at FICO on their blog this morning, noting that “a growing number of lenders” don’t seem to think FICO scores tell the whole story, and in some cases can even be “misleading. ” I’m sure tons of consumers would agree with that, having been “wronged” by FICO and other credit score providers over the years for seemingly small missteps. Or no missteps at all... The author of the post, Dan Macklin, ponders whether FICO scores are going the way of phone booths. Ironically, he’s from England where the ubiquitous red phone booth seems to be a mainstay. Anyway, he explains why SoFi is ditching FICO scores, using his own plight to highlight the many...

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### 2016 Mortgage Rates Forecast: They Could Climb to 5%

- Published: 2016-01-07
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/2016-mortgage-rates-forecast-they-could-climb-to-5/
- Categories: Mortgage News

2016 Mortgage Rate Predictions Well, another year is behind us and it’s time to look into the crystal ball to see what 2016 has in store when it comes to mortgage rates. I already posted my 2016 predictions for everything mortgage and real estate related, but I wanted to dig a little deeper into mortgage rates, which always seem to be a crowd favorite for existing and prospective homeowners. While we can never say with certainty which way mortgage rates will move on a given day, week month, or year, we can definitely make some educated guesses. Additionally, we can use the experts’ forecasts as a guide, though as I’ve mentioned before, they aren’t going to be accurate 100% of time, or even close to that. In fact, they could be completely wrong. Still, it’s good to get a variety of estimates from the pundits so we at least narrow things down. Below I’ll be listing all the estimates for the 30-year fixed-rate mortgage, which is by far the most popular mortgage type in existence today. Note that these estimates can change from time to time, but are the latest available. Fannie Mae’s 2016 Mortgage Rate Forecast Let’s start with Fannie Mae, a leading securitizer of residential mortgages on the secondary market. Clearly they know a thing or two about mortgage rates. They expect relatively flat mortgage rates in 2016, which is undoubtedly a good thing. First quarter 2016: 4. 0% Second quarter 2016: 4. 0% Third quarter 2016: 4....

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### 10 Predictions for Real Estate and Mortgage in 2016

- Published: 2016-01-06
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/10-predictions-for-real-estate-and-mortgage-in-2016/
- Categories: Mortgage Tips

It's time for another round of real estate and mortgage predictions for the coming year. Here are my 2015 and 2014 predictions in case you want to take a look back. 1. Mortgage rates won’t go up that much if at all Everyone is worried that 2016 will be the year mortgage rates finally rise. The problem is that this prediction isn’t new. These rate fears were present in 2015, 2014, and so on. Yes, there’s going to be a time when rates finally increase, but I don’t see them rising significantly in 2016. There’s just too much economic uncertainty at the moment. I’m glad the Fed finally raised rates... the world didn’t end and we can all move on. Sure, you’re HELOC rate will rise and could climb even higher if the Fed hikes rates again this year, but long-term rates should be just fine. Just look at how bad the stock market has been so far... clearly everyone is unsure about our economic recovery, so rates should stay lower for longer. The only thing I should add is don’t expect them to get much better... this could be as good as it gets for a long time. 2. ARMs will gain in popularity Related to the mortgage rate fear, I expect adjustable-rate mortgages to gain in popularity. Even though fixed-rate mortgages are still a great deal, people will be spooked into taking out ARMs. This could be a mistake if fixed rates rise and your ARM adjusts higher....

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### California Credit Union Launches 80/20 Piggyback Mortgage

- Published: 2016-01-04
- Modified: 2016-01-04
- URL: https://www.thetruthaboutmortgage.com/california-credit-union-launches-8020-piggyback-mortgage/
- Categories: Mortgage News

Could 2016 be the year that the piggyback mortgage returns? Well, one California credit union is taking things back to 2006 with their new “Premier Purchase Program. ” In a nutshell, the new program being offered by AltaOne Federal Credit Union is an 80/20 combo loan, or an 80% first mortgage and a piggyback second mortgage for the remaining 20%. Yes, that’s zero down if you’re following along. They aren’t the first to provide 100% financing again, but they’re unique in that you get two loans instead of one, a practice that was very common during the boom in the early 2000s. Similar and Different This new loan program, which was announced in late December, comes with a 30-year fixed first mortgage and a 10-year fixed second mortgage. It’s similar to the old offerings seen in 2006 but a little bit different because the second mortgage has a shorter term. To me it’s a compromise to offering zero down financing in an age when such loans are seen as toxic. The shorter term means the borrower will actually gain home equity at a decent clip despite putting nothing down at the outset. This differs from the old 80/20 loans that often permitted interest-only payments on both loans, relying on home price appreciation to gain equity. That didn’t work out over the long term so perhaps this will allow homeowners to keep their heads above water even if home prices remain flat or dip a bit. Lenders will be protected if...

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### Zillow Now Lets You Be Your Own Appraiser

- Published: 2015-12-16
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/zillow-now-lets-you-be-your-own-appraiser/
- Categories: Mortgage News

Everyone knows about the Zestimate, Zillow’s >home price appraisal. But they’ve now gone a step further with the launch of their so-called “Price This Home” tool. It’s aimed at would-be home sellers (buyers can use it too) who want a better idea about what their home might sell for if they were to list it today. And it’s very easy to use. How to Use the Price This Home Tool First, select a property on Zillow. You’ll see the basic info about the property, including its Zestimate, which should diverge from the price the new tool comes up with. The prices will be different because the Price This Home tool seems to focus more on recent comparable home sales. That means it will give you a more realistic idea of what the home would actually sell for on the open market. Similar to the Zestimate, the more like comps located next to the subject property, the more accurate the price should be. Anyway, scroll down to the “Price This Home” section of the listing page and then click on the “Choose comps” button. You then need to click on “Get comparables” after reviewing the property details of the home you selected. This is where you get to play appraiser, seeing that you can handpick comps for the home based on certain attributes such as location, number of rooms, and more. Zillow will get things started by filtering out nearby sales that didn’t seem to match the subject property as well...

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### The POPPYLOAN Is Here to Help San Franciscans Buy Really Expensive Homes with Nothing Down

- Published: 2015-12-08
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/the-poppyloan-is-here-to-help-san-franciscans-buy-really-expensive-homes-with-nothing-down/
- Categories: Mortgage News

Home prices are getting expensive out there, especially in the Bay Area (Northern California) where inventory is low and demand is red hot. But fear not, the San Francisco Federal Credit Union has a new product to help you buy a home there if you want in on the real estate boom. Today, they launched their so-called “Proud Ownership Purchase Program for You” loan, known simply as POPPYLOAN. What Is POPPYLOAN? A zero down home loan Available to those who work in San Francisco or San Mateo County Can purchase a property in any of the 9 counties in the Bay Area Loan amounts up to $2 million with no PMI requirement It’s more than just a snazzy name, it’s a home loan that allows those who work in San Francisco or San Mateo County to purchase a really expensive home with nothing down. While zero down isn’t completely unheard of these days, their upping the ante by allowing loan amounts as high as $2 million, and doing this without requiring private mortgage insurance (PMI). The POPPYLOAN can be used to purchase a home in nine Bay Area Counties, including Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, or Sonoma. So I suppose the hitch is that you need to work in one of two counties (where the credit union is chartered) and purchase a home in one of nine. And I assume the salaries are pretty stellar in those two counties given all the tech...

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### Introducing the Redfin Estimate

- Published: 2015-12-03
- Modified: 2018-06-07
- URL: https://www.thetruthaboutmortgage.com/introducing-the-redfin-estimate/
- Categories: Mortgage News

Watch about Zillow... your Zestimate now has company. Today, Redfin announced the availability of the so-called “Redfin Estimate,” which is the online real estate brokerage’s answer to the Zestimate. Similar to the Zestimate, the Redfin Estimate is an automated home-value estimate that is displayed on home listing pages throughout Redfin, both those for sale and those off the market. When viewing homes on Redfin, it will be listed next to the last-sold price for homes not on the market and below the list price for those currently on the market. Redfin Estimate Has Lowest Error Rate The Redfin Estimate is apparently more accurate Or at least yields a lower error rate relative to its competitors Thanks to the large amount of data that backs it up So you might find that the estimated value is more on point Redfin claims its new home value estimate has the lowest published error rate of any of its competitors because it’s driven by more data. That error rate is 1. 96% for homes that are currently for sale and 6. 23% for off-market homes. In other words, the Redfin Estimate will be within 1. 96% of the actual sales price half of the time for a listed home and within 6. 23% of the eventual sales price of non-listed homes. It’s more accurate for homes that are listed because more data is available on such homes. And while it might be the lowest, it can still be way off, as their own error...

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### Redeem Citi Points for a Mortgage Payment Reward to Reduce Your Mortgage Balance

- Published: 2015-11-30
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/redeem-citi-points-for-a-mortgage-payment-reward-to-reduce-your-mortgage-balance/
- Categories: Mortgage Tips

There are plenty of ways to pay off the mortgage early, which I’ve already highlighted here, but I wanted to add another I recently stumbled upon. A few months back I applied for two Citi credit cards to take advantage of the 50,000 ThankYou Points (TYP) both were offering for some relatively simple spending. Before long, I had well over 100,000 TYP but no real plans to use them. I figured I’d transfer them to an airline’s frequent flyer program and take a nice trip somewhere, maybe even splurge on first class. But plans changed and I began researching other ways to take advantage of all my points. I quickly discovered that using the points for a statement credit wasn’t the best value as you only receive 0. 75 cents per point for certain transactions. There’s also a cash reward that gives you an even worse valuation of . 50 cents per point, meaning 100,000 TYP would only yield $500. Citi also offers the typical stuff like gift cards and shopping options, but I didn’t feel like buying anything. I wanted to get good value out of all those points since I wouldn’t be using them for a transatlantic flight. Using Citi ThankYou Points for a Mortgage Payment While it's not easy to find on the Citi website There is a little-known redemption option That gives you 1 cent for each TYP you redeem toward a mortgage or student loan They'll make a check out to your bank if you...

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### Rocket Mortgage Review: Full Approval in Just 8 Minutes

- Published: 2015-11-24
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-launches-rocket-mortgage-full-mortgage-approval-in-8-minutes/
- Categories: Mortgage News

Do you know how long it takes for the space shuttle to reach orbit? Apparently it takes just eight minutes, the same amount of time it will take borrowers to get a full mortgage approval online via "Rocket Mortgage. " At least, this is the powerful claim the company is touting via a new online mortgage approval engine that promises to shake up the age-old, and very stale home loan process. They created quite a stir during their Super Bowl ad as well. The company launched (no pun intended, honest! ) the “end-to-end online product” in late 2015 in what appeared to be a direct response to the many online mortgage startups now in existence. Essentially, parent company Quicken Loans didn't want to get left behind, and in fact, wanted to be a leader in the new digital mortgage world. So far, it seems to be working. Jump to Rocket Mortgage topics: - What Is Rocket Mortgage? - The Rocket Mortgage Application Process - Loan Programs Offered by Rocket Mortgage - Affordable Home Buying Options - Rocket Mortgage Rates - Rocket Mortgage Partnerships - Should I Use Rocket Mortgage? - Rocket Mortgage Reviews - Rocket Mortgage vs. Quicken Loans - Rocket Mortgage FAQ They Want to Be the Cool and Easy Mortgage Rocket is a brand-name home loan that exudes speed and simplicity Relies on latest technology to target Millennials and Generation Z home buyers and homeowners Targets those who prefer to use smartphones and texts as opposed to speaking...

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### It Just Got Easier to Get an FHA Loan on a Condo

- Published: 2015-11-13
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/it-just-got-easier-to-get-an-fha-loan-on-a-condo/
- Categories: Mortgage News

Looking to buy a condo but need an FHA loan to get the job done? In the past this may have presented some challenges, but today it just got a bit easier. Nowadays, the FHA requires an entire building to be FHA-approved, not just single units (no spot approvals anymore). It’s an all or nothing approach to ensure FHA loans only finance units in quality projects, thereby avoiding unnecessary risk for the agency. But many prospective homeowners can only get approved for FHA loans because conventional financing is often out of reach for one reason or another. Additionally, many of these folks can only afford condos because homes are too expensive. This also presents challenges to condo sellers who are limited to unloading their properties to those able to obtain a conventional loan. Obviously this can reduce demand and force the seller to take a lower price for their condo. Apparently the Department of Housing and Urban Development (HUD) understood this was a problem and subsequently released temporary guidelines today aimed at easing condominium requirements so more borrowers can get FHA loans on such dwellings. They’ve basically made three changes, effective immediately, which they believe will increase affordable housing options for both first-time home buyers and those with low- to moderate-income. Streamlined Condo Recertification If a condo is already FHA-approved Recertification will be streamlined Assuming there haven't been any substantive changes since prior approval Making it less of a burden to keep a building in the FHA's good graces First,...

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### Trulia: Not a Bad Idea to Buy an Unaffordable Home

- Published: 2015-11-11
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/trulia-not-a-bad-idea-to-buy-an-unaffordable-home/
- Categories: Housing Market, Mortgage Tips

This headline may have caught your attention seeing that it sounds like terrible advice. But wait, let them explain. Well, let me explain Trulia’s rationale here so you aren’t up in arms. The company analyzed housing markets throughout the country where home prices are initially out of reach for Millennial households, but eventually affordable thanks to wage growth. In other words, buy a house today even if it’s not affordable by traditional measures because it will be in the near future. And do so because you may otherwise miss out. The company looked at metros where the median home was “feasibly unaffordable” to those aged between 25-34, where monthly mortgage payments exceed 31% of gross monthly income when putting down 10% and taking on PMI. But these payments didn’t exceed 43% of income, which is the QM limit most lenders abide by. Then they considered projected income growth of Millennials to determine how many years it would take for mortgage payments to fall below 31% DTI. Most Metros Are Still Affordable While 73 of the 100 largest metros are affordable Many of the hottest markets like LA, NYC, Denver, and Seattle are not But when considering wage growth projections These homes could become affordable quickly to borrowers with good jobs First off, they discovered that 73 of the 100 largest housing markets in the United States are already affordable. This includes places like Detroit, Pittsburgh, Indianapolis, Dayton, and other Midwestern cities. So that’s good news for many Millennials nationwide. But...

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### Why Most People Don’t Get Mortgages from Their Bank

- Published: 2015-11-10
- Modified: 2015-11-10
- URL: https://www.thetruthaboutmortgage.com/why-most-people-dont-get-mortgages-from-their-bank/
- Categories: Mortgage Tips

If you were to get a mortgage today, where would you go? Would you turn to your local bank or would you look elsewhere? I’d hope you’d take the time to comparison shop, seeing that many individuals do not, but that’s up to you. If someone were to ask you this question regarding another person you’d probably say “their bank. ” But that’s not the case. Most people don’t go to their bank to get a mortgage. The reason? Low engagement. This according to a Gallup poll, which found that few people are fully engaged with their bank. By engaged, they mean “emotionally and psychologically attached” to the banks in question. Put another way, loyal. Among those with a mortgage, 39% who were fully engaged with their primary bank or credit union actually used them when it came time to obtain a mortgage. Conversely, just 25% of actively disengaged customers used their existing bank/credit union to get a mortgage. Where’d They Get Their Mortgages? Well, it turns out most people got a mortgage from a bank they had no prior relationship with. But once they did, if they were fully engaged with that institution, they often (46%) became retail customers, taking out deposit accounts and/or credit cards. That compares to just 11% of actively disengaged mortgage-only customers. More importantly perhaps, these fully engaged folks were more than twice as likely to return to that same bank or credit union for a subsequent mortgage. In other words, take care of your...

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### Fannie Mae to Use Trended Data When Evaluating Your Credit

- Published: 2015-10-19
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-to-use-trended-data-when-evaluating-your-credit/
- Categories: Mortgage News

Beginning in mid-2016, Fannie Mae will incorporate "trended credit data" into its automated underwriting system Desktop Underwriter (DU). You’re probably wondering what trended credit data is. In short, it’s a two-year picture of a consumer’s credit history with regard to how they manage revolving accounts. Revolving accounts include credit cards and other credit accounts that allow borrowers to carry a balance over time or pay it off in full. These differ from installment accounts, such as mortgages and auto loans, which have a fixed amount that is paid off in equal installments until maturity. Banks and mortgage lenders are concerned about revolving accounts because they can provide clues about how a borrower might handle a mortgage, especially if they’ve never had one before. For example, if a borrower is constantly carrying a balance on their credit card(s), and never making more than the minimum payment, this could be a sign that they’ll become a risky homeowner. Conversely, a person who always pays down their debts in full each month, even if they aren’t required to do so, might send a signal to the banks that they’re ready for the responsibility of homeownership. Transactors vs. Revolvers While the two terms above might sound like heavy machinery, they’re not. They’re how the credit bureaus define us, based on our spending habits. Those who make lots of transactions using credit, but pay them off in full each month are known as “transactors. ” Those who make lots of transactions but only make the...

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### Faira Looks to Ditch the Real Estate Agent

- Published: 2015-10-13
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/faira-looks-to-ditch-the-real-estate-agent/
- Categories: Housing Market, Mortgage News

A new company called Faira, founded by a guy who designed business models for eBay and Microsoft, wants to sell your home with less stress and fewer costs. While they’re not promising to sell it in just three days, like some other companies, they are eliminating the standard 6% commission model and making the process more transparent. However, they will still support sellers in ways real estate agents do by providing an MLS listing, syndication to listing sites such as Zillow and Redfin, professional photography, signage, open houses, and more. Appraisal and Inspection Done First Additionally, Faira will coordinate a home inspection, conduct an appraisal using an independent third-party, and pull a preliminary title report. In exchange, they ask for a $500 refundable deposit from the seller to ensure they’re serious about listing their home, seeing that Faira will be spending “thousands of dollars” on that inspection, appraisal, and title report. Prospective buyers must also pony up a $500 refundable deposit if they wish to make an offer on a home listed on Faira, again, to ensure they’re serious and not just wasting everyone’s time. Assuming their offer is accepted, they must pay 0. 5% of the purchase price (non-refundable) within five business days to satisfy the Faira Platform fee, which is included in the price of the home. Faira decided to get an inspection and appraisal done before listing the home to determine the right sales price of the property and also eliminate the likelihood of a buyer asking...

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### Down Payment Protection for Your Home Purchase Is a Thing Now

- Published: 2015-10-07
- Modified: 2024-05-24
- URL: https://www.thetruthaboutmortgage.com/down-payment-protection-for-your-home-is-a-thing-now/
- Categories: Housing Market, Mortgage Tips

There seems to be a new trend regarding insurance and homes losing value. Perhaps the unfortunate part is that all these new services are arriving at a time when home prices are rising, not falling. The latest thing I’ve come across is so-called “down payment protection,” otherwise known as insurance for your down payment, offered by a company called ValueInsured. The refer to their product as +Plus Down Payment Protection. I dug into the details a bit on their website to see what it’s all about, and while it apparently won’t launch until January 2016, the product seem pretty straightforward. How Down Payment Protection Works It's kind of like an insurance policy For the down payment you make on a home purchase If you happen to sell your home for less than you bought it for You might be able to get some of that money reimbursed Put simply, you take out “coverage” on your down payment when you buy a home via the +Plus product from ValueInsured. Their pitch is that lenders are already protected via the homeowners insurance you pay, and the private mortgage insurance you must purchase if your down payment is less than 80%. However, you the homeowner don’t have any insurance if property values drop, unless you want to bite the bullet and sell short. With +Plus Down Payment Protection, you could get your full down payment back if you sell for a loss, though a couple of things will need to happen. First, you...

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### The BRED Mortgage: Combining a 30-Year Fixed, 15-Year FRM, and 5/1 ARM

- Published: 2015-10-06
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/the-bred-mortgage-combining-a-30-year-fixed-15-year-frm-and-51-arm/
- Categories: Mortgage News

Most homeowners these days rely on 30-year fixed-rate mortgages to finance their homes. But there are obvious drawbacks to the 30-year fixed, one being that it lasts a whopping 30 years. That means it takes three entire decades to pay off the mortgage, unless you employ some tactics to pay it off sooner. In any case, this means borrowers that select the 30-year fixed will have a tough time accruing home equity, as interest is front-loaded so payments for the first many years of the loan do little to attack the principal balance. Unfortunately, the 30-year fixed is often a necessary evil for homeowners because it’s more affordable than other products like the 15-year fixed, and a lot safer than say a 5/1 ARM, which while cheaper, can adjust higher. But what if you could get the best of all worlds? A mortgage that is one part 30-year fixed, one part 15-year fixed, and another part 5/1 ARM? Introducing the BRED Mortgage The so-called BRED Mortgage (blended rate equity driver) Is a single home loan made up of different loan programs Such as a 30-year and 15-year fixed, or a 5/1 ARM Designed to help homeowners build equity faster while keeping monthly payments low Well, the National Association of Realtors floated such an idea recently in their “BRED Mortgage,” which stands for blended rate equity driver. The name says it all – it’s a hybrid mortgage designed to build equity faster than a traditional fixed-rate mortgage. Here are some of...

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### A Mortgage Credit Certificate Can Save You Money on Mortgage Interest

- Published: 2015-09-24
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/a-mortgage-credit-certificate-can-save-you-money-on-mortgage-interest/
- Categories: Mortgage Tips

Whether you realize it or not, when you take out a mortgage you wind up paying a lot of money in mortgage interest. And that's probably an understatement. Generally, we’re talking hundreds of thousands of dollars over the full 30-year term of a mortgage.   This is the price we pay to leverage and avoid buying with cash. In fact, interest is often the largest component of your monthly housing payment, at least for the front-end of your mortgage until principal finally gets paid down at a faster rate. Aside from snagging a lower mortgage rate, there’s another relatively simple way to save money on mortgage interest if you’re eligible. Mortgage Credit Certificates Can Reduce Your Tax Liability A mortgage credit certificate (MCC) can save you money on taxes By providing a federal tax credit That can outweigh the savings of a simple tax deduction And potentially make it easier to qualify for a mortgage I’m referring to a “mortgage credit certificate,” or MCC for short. Put simply, an MCC allows home buyers to claim an annual federal tax credit for mortgage interest paid throughout the year. Let's look at one example from the California Housing Finance Agency (CalHFA). On a $200,000 mortgage set at a 5% mortgage rate, the total interest paid during the first year would be roughly $10,000. The mortgage credit certificate would allow this hypothetical homeowner to get a straight up tax credit (not a deduction) for a percentage of that total interest paid. Typically, an...

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### FHA Comes Under Attack, Again, This Time by the Big Banks

- Published: 2015-09-22
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/fha-comes-under-attack-again-this-time-by-the-big-banks/
- Categories: Mortgage News

Just over a month ago, it seemed as if the FHA was loosening up. They launched the Supplemental Performance Metric, a measure introduced to ensure a lender could offer FHA loans with low credit scores and not be unduly punished for their expected poor performance. Now, the big banks seem to be saying "no thanks" to the FHA. Last week, Wells Fargo raised its minimum credit score for FHA purchase loans originated via the retail channel to 640 from 600. It is now aligned with the minimum score required via the bank’s correspondent channel. This isn’t the first time Wells Fargo has tinkered with FHA minimum credit scores. In the past, they were actually pressured to lower it as the nation’s largest mortgage lender. As for this most recent move, Wells Fargo CFO John Shrewsbury said the change was intended to avoid making loans close to the “most accommodative end of the credit spectrum. ” In other words, loans at the low-end of what’s allowed in terms of credit score. Why? Because these are the loans that will default, he claims. And the very same loans they’ll be “arguing about 10 years from now,” vowing not to repeat the same mistakes made in the past. He has a point. You don’t wind up with a 500 credit score by mistake. And if you do, there’s a decent chance you might default on your mortgage, especially if you put next to nothing down. Yes, there are exceptions, but these types of...

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### I Wish I Could Buy a Home While Interest Rates Are So Low

- Published: 2015-09-15
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/i-wish-i-could-buy-a-home-while-interest-rates-are-so-low/
- Categories: Housing Market, Mortgage Tips

Continuing my series of “Things My Friends Say,” I had yet another thought-provoking conversation with a buddy about the current state of the housing market. I don't recall how we got on the subject, but we were talking about real estate and property values in Los Angeles and at some point my friend said the following: “I wish I could buy a home while interest rates are so low. ” Those may have not been the exact words, but it was something to that effect. Regardless, the point was very clear. He felt (or feels) that he is going to miss out on the low interest rates because he has no plans to buy a home anytime soon. It was noteworthy because he’s not totally into real restate, more of a casual observer. But obviously at some point he heard about the low mortgage rates on offer and it enticed him. Can’t Miss This Opportunity! One of the big catch-22s right now Is that mortgage rates are low But there are very few homes for sale This is creating some serious FOMO for would-be buyers I suppose he has some level of FOMO, or fear of missing out. What made the conversation more interesting was the fact that I was talking about how expensive homes in LA were at the moment. Despite that, he still seemed to be bummed that he wouldn’t be able to snag a 3% rate on a 30-year fixed mortgage. I immediately said to him, you...

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### Portland Residents Don’t Want Californians Buying Their Homes

- Published: 2015-09-10
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/portland-residents-dont-want-californians-buying-their-homes/
- Categories: Housing Market, Mortgage News

Anti-Californian sentiment has reared its ugly head in Portland, Oregon where home prices are apparently spiraling out of control. An article in The Oregonian points out that “no Californians” stickers are being slapped on real estate signs throughout the city. One realtor, Lori Fenwick, noticed the sticker (which looks like a no smoking sign but with the map of California in the crossed out circle) on one of her for sale signs and took to a real estate group on Facebook to see if others had experienced the same. She soon found out that another three agents had seen the stickers in the PDX. One agent who discovered the sticker on one of his listings said the house eventually sold to a man from New York. In another instance, Fenwick found that someone had covered her name with the phrase, “STOP THE BUBBLE. ” She pointed out that while they’re entitled to their opinion, the signs aren’t free. As you might expect, she chalks it up to rising home prices and limited inventory, which is the perfect recipe for bidding wars and intense frustration. And while both agents acknowledged the fact that they work with plenty of California buyers, they noted that buyers are coming from other places too. It just so happens that California sits right below Oregon, making it geographically convenient. Oh, and home prices in Oregon are a lot cheaper than in many parts of California. My California Native Perspective For the record, I’m a native of...

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### Sweden Will Force Homeowners to Pay Down Their Mortgages

- Published: 2015-09-09
- Modified: 2024-08-04
- URL: https://www.thetruthaboutmortgage.com/sweden-will-force-homeowners-to-pay-down-their-mortgages/
- Categories: Housing Market, Mortgage News

In an effort to cool off the white-hot real estate market in Sweden, the country's Financial Supervisory Authority (FSA) has been given permission to require homeowners to pay down the principal on their mortgages. The basic idea here is that the more you have to pay each month on your mortgage, the less you can afford. And if prospective buyers can afford less, home prices must come down. At least, that’s the hope. Mortgages that feature exotic characteristics such as interest-only periods allow borrowers to purchase more house than they normally would because no principal in due for the first 10 years on a 30-year mortgage. Instead, the entire payment goes toward interest, which makes the loan more affordable but doesn’t actually require the homeowner to pay down their mortgage. Unfortunately, this means the only way a homeowner can gain equity is via home price appreciation, which is particularly dangerous if home prices are already inflated and at risk of falling. That scenario actually played out here in the United States during the recent housing bubble, though it was even worse because of the prevalence of option arms, those that allow negative amortization. Both interest-only loans and negative amortization loans have been all but banned thanks to the Qualified Mortgage rule that doesn’t allow such features. Most loans now meet the QM rule meaning only specialized non-QM lenders offer things like IO. I’ve yet to see any banks offering negative amortization again. 70% of Swedes Have Interest-Only Loans In Sweden,...

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### Fannie Mae HomeReady Will Help Lower Income Borrowers Get Mortgages

- Published: 2015-08-25
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-homeready-will-help-lower-income-borrowers-get-mortgages/
- Categories: Mortgage News

In an effort to boost home loan lending to lower- and moderate-income borrowers, Fannie Mae has created a new program called “HomeReady. ” Fannie didn’t release all the details yet, but they expect to roll out the program later this year, integrating it with their automated underwriting system Desktop Underwriter (DU). What we do know is that the program will automatically flag potential borrowers for inclusion in the program by utilizing the DU findings. This means borrowers who would otherwise be denied a mortgage might actually qualify thanks to the expanded guidelines offered via HomeReady. Additionally, lenders will be able to underwrite the loans with more certainty knowing that they won’t violate Fannie’s guidelines, potentially leading to costly buybacks. HomeReady will eliminate or cap certain loan level pricing adjustments (LLPAs) such as those associated with credit score, LTV, and so on. That should translate to a low mortgage rate for a traditionally higher-risk borrower, which should actually boost their chances of staying current on the loan. That strange dilemma has always caught my attention and made me think – higher risk borrowers are charged higher interest rates, thereby creating costlier payments that are in essence more difficult to pay each month. But you can’t have it any other way, unless there are programs like this around. Maybe that’s the point. Anyway, in exchange for the lower rates, borrowers taking part in HomeReady will need to complete a mandatory online education course called Framework, which should prepare them for the home...

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### Jumbo Loans Now Available with Just 5% Down

- Published: 2015-08-25
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/jumbo-loans-now-available-with-just-5-down/
- Categories: Mortgage News

It sounds like the credit box is beginning to open up a bit more, maybe too much if the latest product announcements are any indication. This week, Parkside Lending launched a new jumbo mortgage that only requires a five percent down payment. Yes, jumbos up to 95% LTV. Generally, jumbo loans require much larger down payments (20-30% or more) than conforming loan amounts because the loan amounts are larger and may put more risk on the lender. They are also often kept on the lender’s books instead of being sold off immediately via the originate-to-distribute model. That’s what makes this product launch noteworthy. It also kind of reminds of me the loose lending days before the crisis, though things are quite a bit different at the moment. For example, despite only requiring a five percent down payment, a minimum FICO score of 740 is needed and the DTI ratio can’t exceed 35%. Additionally, borrowers need a full 24 months of reserves, or two years of mortgage payments on hand to qualify for the program. It’s also only available for purchases and rate and term refinances. This differs greatly from the 100% cash out refinances that were prevalent during the housing boom, many of which didn’t require full documentation. Or any real documentation... Parkside’s product is being offered on one unit, owner-occupied properties only with loan amounts up to $1 million. The company is also doing this without private mortgage insurance, which is required for all loans with a LTV above...

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### Is the Stock Market Correction Good or Bad for Homeowners?

- Published: 2015-08-24
- Modified: 2018-01-24
- URL: https://www.thetruthaboutmortgage.com/is-the-stock-market-correction-good-or-bad-for-homeowners/
- Categories: Mortgage News

So the inevitable happened – the U. S. stock market corrected after questions about the questionable Chinese economy sparked a global selloff. Over the past few trading days, the Dow, Nasdaq, and S&P 500 have all fallen by more than 10% from recent highs, the first time this has happened since 2011. Everyone will tell you it was a long time coming, yet when it actually came, it still sent shivers down many a spine. While everyone is generally freaked out, you might start to see some silver linings in the mortgage and real estate world, the most obvious one being lower mortgage rates. Lower Rates, Sweet? At first glance, most mortgage guys and gals will tell you it’s good news, that mortgage rates will be lower as a result of the correction that could eventually turn into a bear market (20% decline). The basic reasoning being the flight to safety, otherwise known as dumping stocks in favor of bonds, which pushes yields down and interest rates along with it. But how much are interest rates really going to fall from current levels? They were already pretty darn low. And is the decline enough to make up for your stock portfolio’s massive losses? More importantly, were you banking on those assets to qualify for a mortgage, to make your down payment? If so, you certainly don’t want to liquidate now, do you? Conversely, the lower interest rates can be locked in today for the next 30 years, while the losses...

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### New Real Estate Trend: Sell Existing Home Before Buying Another

- Published: 2015-08-19
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/new-real-estate-trend-sell-existing-home-before-buying-another/
- Categories: Housing Market, Mortgage News

A new survey from online real estate brokerage Redfin regarding home buyer sentiment found that existing owners are a lot more likely to sell before purchasing a new home. In fact, the percentage of survey participants who said they would sell before buying again nearly doubled from a year ago. Some 44% of current owners said they’d sell first, up from 23% a year ago. That made it the top response in the survey, with “buy, then sell” a distant second with a 21% share. Even fewer (15%) said they’d rent out their current residence in order to buy a new home, down from 30% a year earlier. Guess fewer folks want to be landlords. And another 20% indicated “other,” whatever that means. This seems to be directly related to the intense competition found in today’s real estate market. Essentially, these homeowners know that it will likely be impossible to get an offer accepted that is contingent on their existing home selling. After all, if there are plenty of other willing buyers, why would a seller want to take on the risk of another home selling before theirs does? There’s no need with inventory so low and demand so high, so I suppose it makes sense to sell first and then arrange some kind of temporary living situation. Or gasp, rent! Once an owner sells, they’ve also got plenty of cash in their pocket (hopefully) to throw around their weight if need be, pushing the low-down payment buyers out of...

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### Why It Might Get Easier to Obtain a FHA Loan with a Poor Credit Score

- Published: 2015-08-19
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/why-it-might-get-easier-to-obtain-a-fha-loan-with-a-poor-credit-score/
- Categories: Mortgage News

The Federal Housing Administration (FHA) already has some of most relaxed mortgage underwriting guidelines around, but many lenders don’t originate loans based on their standards. I often receive questions like, “I have a 600 credit score but they won’t approve me for a FHA loan. I thought you only needed a 580 score. ” Unfortunately, most banks apply overlays on top of the minimum FHA guidelines to ensure their default rates don’t get out of hand, thereby pushing them out of the program. The FHA has been tough on lenders that exhibit default rates above their peers, using the so-called “Compare Ratio” to determine how lenders in geographic areas stack up against one another in terms of early defaults and claims. If a lender’s performance is bad enough, their authority to originate FHA loans can be terminated. As a result, many lenders underwrite loans well above what is required, often asking for credit scores as high as 640 when only a 580 score is needed for a mortgage with 3. 5% down. In reality, only a 500 credit score is necessary for a FHA loan if a borrower can muster a 10% down payment, but the lowest I’ve seen from a larger lender is 550. Put simply, lenders don’t want to risk losing the ability to offer FHA loans because they took a chance on a handful of bad borrowers. Unfortunately, this means most FHA loans go to those who don’t need them most, more creditworthy folks. More Nuanced Approach...

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### How to Pay the Mortgage with a Credit Card (or a Debit Card)

- Published: 2015-08-07
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-to-pay-the-mortgage-with-a-credit-card-for-free-and-make-money-doing-it/
- Categories: Mortgage Tips

Mortgage Q&A: "How to pay the mortgage with a credit card. " First things first; banks, mortgage lenders, and loan servicers don't accept credit cards as a form of payment. Options for paying your home loan are typically limited to ACH or check, and perhaps debit card. In the past, there were various third-party payment processors that allowed homeowners to make their mortgage payments with a credit card. For this convenience, they often charged a percentage fee, such as 3%. Some still exist today. How to Pay the Mortgage with a Credit Card As noted, payment processors are able to provide workarounds for the long standing policy of not allowing credit card payments for mortgages. The way it typically works is you pay them first, then they cut a check and send it to your loan servicer. This way the payment method is deemed acceptable since credit card generally isn't permitted. However, these companies charge hefty fees for the convenience, often as much as 3%. If we're talking about a $3,000 mortgage payment, it's $90 per payment. Looking back, these services were probably only offered because people couldn’t keep up with their mortgage payments. Of course, not everyone was in financial distress. Some simply wanted an easy way to increase spend to earn credit card miles or points. Unsurprisingly, these services seemed to disappear as quickly as they surfaced. But there are still options to pay the mortgage with a credit card each month, even if mortgage lenders won't let...

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### 100+ Not So Great Places to Buy a Home

- Published: 2015-08-03
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/100-not-so-great-places-to-buy-a-home/
- Categories: Housing Market, Mortgage Tips

Below is an extensive and exhaustive (and silly but somewhat serious) list of places where it might not make the best sense to buy a house, assuming you want to realize healthy home price appreciation and enjoy a high quality of life. Obviously there are exceptions to the rule, and it's not always easy to find that perfect home. In fact, these days it's very difficult to find anything at all. In any case, this is just a general list I rattled off the top of my head. Feel free to chime in if you disagree. Or add one if you feel I’ve missed a spot... keep in mind that unique properties can also be more difficult to appraise and obtain financing on. (photo: Marcin Wichary) 1. Next to a major street – noisy, busy, unsafe for your children and your pets. 2. Next to train tracks or a train station – including trendy light rail. 3. Next to a freeway – loud, unsightly, unhealthy, and unrelenting. 4. Next to an airport – you thought the freeway was loud... 5. Next to a busway – buses are annoying too. 6. Next to an alley – nothing good ever happens in an alley. 7. Next to an apartment complex – do you really want hundreds of eyes staring at you, every single day? 8. Next to a commercial building – noise, workers, trash, eyesore, you name it. 9. Next to an ugly house – there’s a good chance it’ll remain ugly....

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### Four Million Homeowners Denied HAMP Loan Modifications, More Changes Coming?

- Published: 2015-07-30
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/four-million-homeowners-denied-hamp-loan-modifications-more-changes-coming/
- Categories: Mortgage News

Think it’s hard to get a mortgage? How about a loan modification via the Treasury’s Home Affordable Modification Program (HAMP). A new report from SIGTARP, which stands for Special Inspector General for the Troubled Asset Relief Program, the agency that oversees the program, claims about seven out of 10 troubled borrowers who applied for a HAMP loan mod got denied. Per the official HAMP database from the Treasury, from December 2009 until April 2005, some 5. 7 million homeowners facing the prospect of foreclosure applied and more than four million were denied by their loan servicers. There's a Good Chance You Were Denied The denial rate is actually 72%, which is pretty startling given it’s a government program designed to help homeowners avoid foreclosure by reducing their monthly payments. The denial rates are even worse at some of the largest banks in the nation, including Chase and Citi, which both turned down 80% or more who applied for a modification. Chase denied about 84% of applicants, while Citi somehow said no to 87% of homeowners. Bank of America also kicked 80% of applicants to the curb. Amazingly, Ocwen is the largest HAMP servicer in the nation despite denying 70% of all homeowners who applied. “All cannot be right when three of the largest HAMP servicers, Citi, JPMorgan Chase and Bank of America, turn down 80% or more of homeowners’ HAMP applications, and the largest HAMP servicer, Ocwen, turns down more than 70% of homeowners for HAMP,” the report reads. Top...

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### Why Your Mortgage Lender Asks for More Than Is Required

- Published: 2015-07-29
- Modified: 2015-07-29
- URL: https://www.thetruthaboutmortgage.com/why-your-mortgage-lender-asks-for-more-than-is-required/
- Categories: Mortgage Tips

It’s no secret that there is a lot of confusion surrounding mortgages. One of the main gripes is that requirements aren’t the same across different banks and lenders. See why every mortgage lender will disappoint you for more on that. Unfortunately, it’s very difficult for lending standards to be uniform from bank to bank because of the complexities of mortgage financing. First off, no two borrowers are the same, so just because your neighbor got approved over at Wells doesn’t mean you will. The same goes for properties – like snowflakes, no two are exactly the same... well, maybe some tract homes are, but their locations aren’t. There are also many different types of loans, including those backed by the government, such as FHA and VA, and those quasi-backed by the government, such as Fannie Mae and Freddie Mac. For the record, that latter group of mortgages is also backed by you, the taxpayer, thanks to the reckless lending that took place before the latest mortgage meltdown. The risk appetite of lenders is also quite variable. Overlays Add to the Confusion On top of this already confusing situation is the prevalence of credit overlays, which are additional requirements individual banks and lenders put in place above what is asked of them when receiving a guarantee from Fannie, Freddie, and Ginnie Mae. For example, even though you technically only need a 500 credit score to qualify for a FHA loan per HUD, most lenders ask for much higher scores. This is...

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### You Can Get Interest-Only Mortgages from Mortgage Brokers Again

- Published: 2015-07-21
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/you-can-get-interest-only-mortgages-from-mortgage-brokers-again/
- Categories: Mortgage News

Party like it’s 2006! Mortgage brokers are now able to peddle interest-only mortgages to qualified borrowers nationwide. Oh wait, that last part about being qualified isn’t really reminiscent of 2006, but I’ll get to that in a moment. This week, United Wholesale Mortgage announced a new offering, interest-only mortgages, those which happen to fall outside the ever-important Qualified Mortgage (QM) rule. That means they’re pretty hard to come by these days, especially via a smaller bank that isn’t dealing in jumbo loans to wealthy clientele. UWM also happens to be a wholesale mortgage lender, meaning they work with mortgage brokers who connect with homeowners. Here We Go Again? Both mortgage brokers and exotic loans types like interest-only mortgages were blamed for the most recent housing crisis, but this time things seem to be a little different, at least for now. The lender, which claims to be “one of the nation’s largest and fastest-growing wholesale lenders,” has some pretty tough requirements attached to the loans. For one, you need a minimum FICO score of 720, so there certainly won’t be any subprime interest-only stuff floating around. And perhaps more significantly, you need to bring at least 20% for a down payment, as the max LTV is 80% on this new program. That’s certainly important, given the fact that an interest-only loan only pays off interest, no principal. So if home prices are flat, or worse, fall, the borrower could wind up with little to no equity to serve as a buffer...

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### Home Prices vs. Gas Prices

- Published: 2015-07-06
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/home-prices-vs-gas-prices/
- Categories: Housing Market, Mortgage Matchups

With mortgage rates hitting 2015 highs last week, one might worry that the housing recovery will lose steam. The 30-year fixed climbed to 4. 08% per the latest survey from Freddie Mac, up roughly half a percentage point from the lowest levels seen earlier this year. Clearly this reduces home buying affordability, and could make it more difficult to both buy and sell a home. But as I’ve mentioned before, if you can’t afford a home you’re interested in thanks to an interest rate fluctuation, you might want to reassess the entire decision. The good news is that there doesn’t seem to be a strong correlation between homes prices and mortgage rates. In other words, just because rates rise doesn’t mean home prices will go down or stop going up. There’s actually data to support this. Should We Look at Gas Prices Instead? Perhaps a better indicator of home prices is what you pay at the pump, as evidenced by a recent study from Florida Atlantic University and Longwood University. The collaborative effort, which used data spanning over 10 years, found that for every $1 decrease in gas prices, the average selling price of a home climbed by 2. 4%. That’s about $4,000 more per sold property included in the study. Additionally, homes seem to sell more quickly when gas prices are low. Again, for that $1 per gallon decrease in gasoline price, the average time to sell a property falls by 25 days. There’s also a better chance of...

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### USDA Home Loans Are About to Get More Expensive

- Published: 2015-07-02
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/usda-home-loans-are-about-to-get-more-expensive/
- Categories: Mortgage News

While the government has been busy lowering costs for FHA loans, it seems the opposite will happen for USDA home loans, which are one of the few avenues left to obtain a mortgage with no money down. In a nutshell, the U. S. Department of Agriculture’s single-family housing program offers mortgages to borrowers in rural areas with limited incomes. The Section 502 Guaranteed Rural Housing Loan Program allows homeowners to borrow up to 100% LTV so long as their income doesn’t exceed 115% of the adjusted area median income (AMI). However, because the loans are clearly high-risk by nature, the USDA charges a 2% upfront guarantee fee, similar to how the FHA charges an upfront mortgage insurance premium. This fee is typically rolled into the USDA loan, so a borrower who purchases a $200,000 home will wind up with a $204,080 loan amount. As a result, the monthly mortgage payment will be higher, though not by a necessarily significant amount. But in order to keep the program alive, it seems this guarantee fee will need to be increased. USDA Guarantee Fee to Climb to 2. 75% Come October 1st, the upfront fee for USDA home loans will rise to 2. 75% from 2%, per Bloomberg. The publication cited an e-mail from USDA spokesman David Sandretti, who claimed the fee increase would allow the program to “sustain itself without a congressional appropriation to offset credit-related costs. ” So that same $204,080 loan amount will increase to $205,655, which obviously makes it...

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### The Greeks Aren’t Making Their Mortgage Payments

- Published: 2015-07-01
- Modified: 2024-03-14
- URL: https://www.thetruthaboutmortgage.com/the-greeks-arent-making-their-mortgage-payments/
- Categories: Mortgage News

And who could blame them... what with their entire financial system in complete disarray. The Greek situation is a mess, as you’ve probably heard. The government has fallen behind on its payments to creditors and citizens have made a run on the banks. There’s apparently no money left to lend (probably no new mortgages) and maybe very little to withdraw. In fact, the government limited cash withdrawals at ATM machines to 60 Euros per day for Greek residents. Tourists aren’t limited, but with lines around the block and tapped out cash machines, they’re effectively in the same boat. Can’t wait to visit soon! Greeks aren’t allowed to transfer money to foreign accounts either, and there are widespread reports of credit and debit transactions being declined. A Greek once told me (true story) that theydidn’t realize you actually had to pay credit cards back, which might explain why they’re in their current dire situation. In a word, it’s a mess and it doesn’t appear to be getting any better unless a deal is made. Given all the chaos, you might be wondering how Greek homeowners are handling the turmoil. Greek Mortgage Defaults Rising As you might expect, more and more Greek homeowners are falling into arrears. Kind of makes sense right? If your country isn’t even making timely payments, why should you? Per a new report from Fitch Ratings, 17. 3% of Greek mortgages were at least one month behind as of May. That number is up from 16. 9% in...

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### Harvard: Renting Is the New Buying, But It’s Unaffordable

- Published: 2015-06-25
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/harvard-renting-is-the-new-buying-but-its-unaffordable/
- Categories: Housing Market, Mortgage News

The Joint Center for Housing Studies of Harvard University released the 2015 edition of The State of the Nation’s Housing report this week and it wasn’t pretty. The report basically highlighted the fact that the homeownership rate has dropped to the lowest level in recent history, while renting has simultaneously surged. Last year, the U. S. homeownership rate fell to 64. 5%, which essentially erases all of the gains realized over the past two decades. We’ve basically returned to 1993 levels, as seen in the chart below. It has since continued to fall, dipping to 63. 7% during the first quarter of 2015. All Generations Affected Harvard noted that the fallout has been widespread, with all generations affected, especially generation X (born 1965-1984). Put simply, young gen-Xers picked a terrible time to be born, succeed financially, and then buy their first home. Because as we all know, home prices were grossly inflated about 10 years ago, and have yet to recover after falling back down to Earth. In fact, homeownership rates among those aged 35-44 and 45-54 have suffered the most, and now stand at rates 4-5% below those seen 20 years ago. The only group that hasn’t really seen a major hit is the 65 and over cohort, which despite a recent dip, has a homeownership that remains about 2% above 1993 levels. What’s the Rental Market Like? If there are far fewer homeowners, there must be a lot more renters, right? Right. From 2004 to 2013, renter household...

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### Realtor and Airbnb Team Up to Let People Try Before They Buy

- Published: 2015-06-24
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/realtor-and-airbnb-team-up-to-let-people-try-before-they-buy/
- Categories: Housing Market, Mortgage News

Consider this common scenario. You really like a house and decide to make an offer. After winning a bidding war and perhaps paying a little more than you wanted, that dream house is yours. Once it comes time to move in, you start to observe things you didn’t initially notice. Yep, it turns out you have an annoyingly loud neighbor that fires up his Harley every morning at 6am and idles it outside your window because he goes to great lengths to follow proper motorcycle care. At night another nearby neighbor is blasting bad music and throwing little midweek parties that seem to go on until the wee hours of the night. It also turns out that your commute to work, despite only being two miles, takes more than 30 minutes. It seemed alright when you visited the house in the middle of the day and on weekends. But it’s not so great anymore. Helping You Discover the Unknown Factors Upfront A new partnership between Realtor. com and Airbnb aims to help prospective home buyers avoid these types of scenarios. They refer to them as “unknown factors” that are typically associated with moving to a new hood. You might recall the age-old advice to visit the property you’re interested in buying during the day and late at night to see what the vibe is all about. Is it calm during the day but loud at night? Are there questionable characters having around after hours?   Is the street used as...

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### Owning a Home Costs Nearly $10,000 a Year Not Including the Mortgage

- Published: 2015-06-23
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/owning-a-home-costs-nearly-10000-a-year-not-including-the-mortgage/
- Categories: Housing Market, Mortgage Tips

A lot of folks I know who rent are still hot on the idea of homeownership, but it’s important not to overlook all the costs involved with purchasing a piece of a property. It’s not uncommon for prospective home buyers to simply look at the monthly mortgage payment, otherwise known as the principal and interest payment. But this wonderful figure (that is very low thanks to rock bottom mortgage rates) ignores the homeowners insurance and property taxes that must be paid, often monthly if there’s an escrow account. There’s also the costly HOA fee, which can be several hundred dollars a month for a condo. Or mortgage insurance if you put less than 20% down or go with an FHA loan. Once everything is calculated you might be wondering if buying a home is still worth it, or even something you can afford. Hidden Costs the Most Stressful Part of Ownership If the idea of all these costs stresses you out, you’re not alone. In fact, you’re the majority, per the Zillow 2015 Moving Survey, which found that extra or hidden costs were the most stressful aspect of ownership. Why? Because they aren’t insignificant costs. Zillow found that the average American homeowner pays $9,477 in annual hidden costs and maintenance. Broken down, $6,042 of that tally goes toward mandatory homeowners insurance, property taxes, and utilities. Yes, you’ll also need to foot the tab for water and trash, unlike when you rented and your landlord made those costs magically disappear. The...

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### Discover to Halt Mortgage Lending

- Published: 2015-06-17
- Modified: 2024-05-28
- URL: https://www.thetruthaboutmortgage.com/discover-to-cease-mortgage-lending/
- Categories: Mortgage News

If you’re wondering how difficult it is to enter the business of originating mortgages, just take a look at Discover. The credit card company turned mortgage lender is exiting the business after just three years. The departure coincides with a spike in mortgage rates, which should reduce the pool of borrowers eligible to refinance their loans, the bread and butter of Discover Home Loans. In fact, it was just a few months ago that Discover Financial CEO David Nelms called purchase-money mortgages a difficult nut to crack. Call it a failed experiment, or perhaps an unexpected breakdown for a company that seems to be making big gains in its primary line of business. Regardless, they’re done. They made an announcement on their website yesterday, saying they will focus on their “profitable direct banking products for which the company sees greater opportunities for growth. ” They also noted that the mortgage origination business Discover acquired in 2012 from LendingTree is no longer projected to meet their financial expectations as a result of “ongoing challenges” in their operating model. It’s unclear what that actually means aside from purchase mortgages being more challenging to acquire/originate, but Carlos Minetti, president of consumer banking for Discover, called it a “difficult decision. ” I can tell you from personal experience that a lot of people were unhappy with Discover Home Loans, as evidenced by the many comments on my blog. This didn’t really come as much of a surprise, given how unique the mortgage industry is....

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### The Mortgage Crisis Needed More Adjustable Rate Mortgages

- Published: 2015-05-28
- Modified: 2018-07-12
- URL: https://www.thetruthaboutmortgage.com/the-mortgage-crisis-needed-more-adjustable-rate-mortgages/
- Categories: Mortgage News

You know what the mortgage crisis needed more of? Adjustable-rate mortgages. Yep, we needed more loans with variable interest rates to both avoid such a disastrous downturn and recovery more quickly. Allow me to explain. James J. McAndrews, executive vice president and head of the Research and Statistics Group at the Federal Reserve Bank of New York, delivered the opening remarks during a panel about mortgage contract design last week. ARMs May Not Require Any Work While most probably think of ARMs as a lot of work and stress They can actually adjust with the economy So you don't necessarily need to do anything Assuming economic conditions are favorable and rates fall over time His angle was an interesting one, strikingly contrarian to the common belief that a fixed-rate mortgage is the smartest and only choice to avoid another housing meltdown. The basic premise is that ARMs naturally rise and fall with the economy, and thus any necessary interest rate adjustment can come with little action on behalf of the borrower or a government entity. So had everyone had ARMs prior to the mortgage crisis, they wouldn’t have needed to refinance via HARP or get a loan modification through HAMP. Instead, accommodative monetary policy would have pushed interest rates on ARMs lower automatically. After all, look at the mortgage indexes tied to ARMs, such as LIBOR, that are a fraction of a percent. Coupled with the margin on an ARM, the fully indexed rate would be very low today. In...

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### You Can Buy a Nice House in Houston for $1

- Published: 2015-05-20
- Modified: 2024-03-24
- URL: https://www.thetruthaboutmortgage.com/if-you-live-in-houston-you-can-buy-a-nice-house-for-1/
- Categories: Housing Market, Mortgage News

A family living in Sunset Heights, close to the center of Houston, Texas, is parting with their home for just $1. But in order to get your hands on the 1,056 square foot, 2-bedroom, 1-bath property, you need to write an essay and submit a $150 entry fee. So in total, you’re looking at $151 if your essay is selected and the $1 purchase contract is written up. The house is located at 213 E. 23rd Street, Houston, TX 77008. Per Zillow, it was actually sold on September 30, 2013, and currently has a Zestimate of $339,299. So the owner would only need about 2,267 entries to get that value. By the way, the home was sold for just $281,000 less than two years ago. About the Home The home was built in 1920 and sits on a 5,300 square foot lot across from “the adorable Halbert Park. ” I can’t vouch for its adorability seeing that I’ve never been to Houston. However, it does have a WalkScore of 78, meaning you should be able to get to trendy shops and restaurants without the need for four wheels. And the owner renovated the bathroom in 2014, adding new tile, a sink, and some plumbing work. Old carpets were also removed to reveal the original hardwood underneath. The kitchen received some upgrades in 2013 and washer/dryer connections were also added for convenience. Why They’re Doing It? If you’re wondering why the owner, Michael Wachs, is selling his home for just a...

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### HARP and HAMP Receive Final Annual Extension, Probably

- Published: 2015-05-11
- Modified: 2018-02-02
- URL: https://www.thetruthaboutmortgage.com/harp-and-hamp-receive-final-annual-extension-probably/
- Categories: Mortgage News

Since being introduced back in 2009, both and the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP) have helped millions either avoid foreclosure and/or save money on monthly mortgage payments. Both programs have been deemed pretty successful, though the numbers did fall short of original projections (as everyone probably expected) despite several annual extensions. I think the original estimate was nine million. HAMP Is Finished at the End of 2016 Since HAMP was launched in the spring of 2009, a total of about 1. 5 million homeowners have received permanent loan modifications through the fourth quarter of 2014. Nearly 2. 3 million trial modifications were started but fewer than one million are permanent and still active either because of a positive outcome such as loan payoff or alternative modification, or because of something negative like a short sale or foreclosure. This has resulted in aggregate savings of approximately $32. 7 billion compared with prior unmodified mortgage obligations. The goal of HAMP is to get the borrower’s front-end DTI ratio down to 31% by reducing the interest rate, extending the loan term, and potentially forgiving principal. About 95% of HAMP loans received an interest rate reduction, though those are temporary and subject to rise. Just over 60% of HAMP borrowers received a term extension and less than a third (30. 3%) received principal forbearance. HARP Probably Done After 2016 The Home Affordable Refinance Program (HARP) is a program that allows underwater borrowers with Fannie Mae- and Freddie...

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### Department of Justice Sues Quicken Loans for Faulty FHA Underwriting

- Published: 2015-04-24
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/department-of-justice-sues-quicken-loans-for-faulty-fha-underwriting/
- Categories: Mortgage News

The United States Department of Justice has filed a lawsuit against Quicken Loans for improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA). The DOJ filed the suit, United States v. Quicken Loans, Inc. , under the False Claims Act, alleging that Detroit-based Quicken knowingly submitted “claims for hundreds of improperly underwritten FHA-insured loans” from September 2007 through December 2011. The issue lies in the fact that Quicken is a direct endorsement lender (DEL), meaning they have the authority to underwrite FHA loans on their own, without any oversight from HUD or the FHA before the loans are closed and endorsed for FHA insurance. Therefore HUD puts trust in lending partners such as Quicken to underwrite loans properly to ensure they meet the standards of the FHA. This ensures the agency’s insurance fund won’t be depleted, leading to a potential taxpayer bailout. But it turns out many of the loans underwritten by Quicken may have been approved under suspect circumstances, only to default later and cost the HUD millions of dollars in insurance claims. The E-Mail Evidence One example of the alleged shoddy underwriting involves appraised values. Apparently Quicken had a “value appeal” process when after a low value came in, the company requested a “specific inflated value” with no justification for the increase. This was referred to in an e-mail from Quicken’s Divisional Vice President for Underwriting as “push back on appraisers,” a practice they weren’t keen on sharing with the media. For example, on one...

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### Mortgage Lenders In Europe Now Owe Their Borrowers Interest

- Published: 2015-04-22
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-lenders-in-europe-now-owe-their-borrowers-interest/
- Categories: Mortgage News

A very odd thing is happening over in Europe. Thanks to rock bottom interest rates, some homeowners are actually due interest from their mortgage lenders. Now this doesn’t apply to fixed mortgages because as the name suggests, they’re fixed and not subject to market fluctuation. But adjustable-rate mortgages are a different story. They are tied to benchmark rates like LIBOR or COFI here in the states, and similar indexes in Europe such as the Euro Interbank Offered Rate, or Euribor. Here’s the problem. The Euribor has gone negative. At least some of the shorter-term Euribor rates have. So for homeowners with mortgages tied to those indexes, it could mean a negative interest rate on their mortgage. How Low Can You Go? You thought 3. 5% was low? How about -0. 5%? Now there is typically a spread above the index because consumer lending demands a higher interest rate than bank-to-bank lending, but apparently the spread isn’t significant. And it’s not enough to keep the fully-indexed rate out of the red for some borrowers. The end result is that some lucky homeowners are enjoying negative interest rates on their mortgages. In other words, not only do they not owe interest on their mortgages each month, they’re actually due interest from the bank. However, banks facing this problem seem to be converting any interest due into principal reductions, thereby reducing what the borrower owes on the loan. One major Spanish bank, Bankinter SA, has been doing this for borrowers, though it’s unclear...

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### Green Tree to Pay Borrowers $48 Million for Loan Servicing Abuses

- Published: 2015-04-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/green-tree-to-pay-borrowers-48-million-for-loan-servicing-abuses/
- Categories: Foreclosure, Mortgage News

If Green Tree serviced your mortgage from 2010 to 2014, you might be due some compensation for alleged wrongdoings. Today, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) ordered Green Tree Servicing to pay $48 million in borrower restitution along with a $15 million fine to the CFPB’s Civil Penalty Fund. CFPB Director Richard Cordray said in a release that the company “failed consumers who were struggling by prioritizing collecting payments over helping homeowners. ” This meant borrowers who could have kept their homes instead lost them to foreclosure, despite being on payment plans to get back on track. Pay Your Mortgage or We’ll Arrest You Green Tree has been accused of some pretty bad stuff Including warning delinquent homeowners of imprisonment And doing little to help borrowers keep their homes Along with harassing phone calls and unresponsive customer service Green Tree has been accused of a number of abuses, including not honoring loan modification programs, delaying short sale decisions, and charging customers “convenience fees” when paying their mortgages. Apparently homeowners with prior foreclosure relief plans had their mortgages transferred to the company where they were not maintained, and instead asked that borrowers make their original, higher monthly payments. Additionally, the company supposedly charged customers $12 for its pay-by-phone service and pressured borrowers into using it to ensure their payments were received on time. Even worse, delinquent borrowers who called Green Tree were automatically routed to debt collectors rather than a loss mitigation specialist. The company’s...

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### Detroit Home Buyers Offered Zero Down Mortgages Up to 150% LTV

- Published: 2015-04-16
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/detroit-home-buyers-offered-zero-down-mortgages-up-to-150-ltv/
- Categories: Housing Market, Mortgage News

While this might sound like another exotic mortgage gone wrong, it’s actually a new program geared toward making the city of Detroit better, not worse. And somewhat ironically, it is a ridiculously high LTV mortgage with few underwriting requirements that is being utilized to get a downtrodden city back on its feet. I’m referring to the “Detroit Neighborhood Initiative,” launched today by the Neighborhood Assistance Corporation of America (NACA) and Bank of America. It’s basically a rehabilitation mortgage, similar to the FHA 203k loan, with a mortgage that exceeds the property value because renovation funding is included. In order to qualify for the 150% LTV funding, home buyers need to purchase a property through the Detroit Land Bank’s site, Buildingdetroit. org. Otherwise, the LTV is capped at 110%, which is still pretty solid. NACA’s Best in America Mortgage The new initiative works with NACA’s existing “Best in America Mortgage,” which doesn’t require a down payment, closing costs, points, fees, or credit score consideration. There’s also no income limit, despite the program being geared toward those with low-to-moderate income. And the interest rates are below market; 3. 5% on a 30-year fixed and 2. 875% on a 15-year fixed. It probably sounds too good to be true, but they claim to have $13 billion to lend to those interested. In fact, one lucky couple got a rate of 0. 062% on their 30-year fixed mortgage, which since I last checked, is the lowest interest rate known to both woman and man....

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### Soon Your Mortgage Lender May Pull Your VantageScore

- Published: 2015-04-07
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/soon-your-mortgage-lender-may-pull-your-vantagescore/
- Categories: Mortgage News

Last week, HUD Secretary Julián Castro and NAR President Chris Polychron told a room full of realtors that it was exploring alternative credit scoring models to expand access to mortgages. As it stands, FICO scores are the only game in town, used by pretty much every mortgage lender out there to gauge a borrower’s creditworthiness. So when you apply for a mortgage, your FICO score is pulled from each of the three main credit bureaus, including Equifax, Experian, and TransUnion. The problem is that millions of would-be home buyers don’t actually have FICO scores because their credit history is too limited. This doesn’t necessarily make them high-default risks, but without a score it’s impossible to gauge. This has always been the catch-22 of credit – you need credit to get new credit, but how do you get the ball rolling? Typically, someone without credit gains access via the authorized user route, or simply gets a chance via a credit card issued from his or her local bank or credit union. From there it becomes easier to establish a more robust credit history and eventually qualify for a mortgage. But not everyone wants a credit card, or credit in general, beyond a mortgage, which is often a necessity more than it is a preference. Enter the VantageScore Late last year, VantageScore, an alternative to FICO that was created by the three credit bureaus in 2006, revealed that Fannie Mae and Freddie Mac were looking into updated scoring models. And last month,...

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### Consumer Reports Bashes Mortgage Brokers, Receives Backlash

- Published: 2015-03-18
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/consumer-reports-bashes-mortgage-brokers-receives-backlash/
- Categories: Mortgage News

The latest issue of Consumer Reports magazine recommends that consumers avoid mortgage brokers when seeking home loan financing. As a result, the popular publication, which prides itself on neutrality and fairness, just angered a very large group of mortgage industry workers. So much so that the president of the National Association of Mortgage Brokers (NAMB) fired off a letter to Consumer Reports calling it simply bad mortgage advice. Let's learn about what was actually said. Consumer Reports Flip-Flopped on Brokers Their original article said consumers shouldn't use mortgage brokers Because they could be focused more on selling you a mortgage As opposed to getting you the best deal on your home loan Now it says brokers should be considered along with other mortgage providers The original article said, “We don’t recommend that you hire a mortgage broker to do that because he may be more focused on selling you a mortgage than getting you the best deal. ” At least, that’s how NAMB president John L. Councilman put it in his letter. The article on the Consumer Reports website included the word “generally,” which may or may not have existed before NAMB got involved. I don’t know if it was there or not, but that changes thing a bit. In any case, it is a pretty bold statement to make, not to mention blatant generalizing. Is It Okay to Generalize? Like everything else in this world, you can't generalize Especially when talking about a very large group of people It's...

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### An Open House Got Shut Down by the Cops

- Published: 2015-03-16
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/an-open-house-got-shut-down-by-the-cops/
- Categories: Mortgage News

The real estate market is starting to get really, really weird. Recently, an open house was actually shut down by the police after more than 100 people showed up in just 45 minutes, according to a recent article by CNBC. Channing Real Estate agent Catherine Luther told the publication that she got “shut down,” the first time that’s ever happened to her after 30 years in the business. The open house took place on a Saturday in suburban Belmont, which is in the Boston, Massachusetts area. After less than an hour, the sheer number of attendees was enough to block the street, prompting neighbors to call the police. Of course, after witnessing that kind of buzz, they might be better off calling their real estate agent instead... The next day, Luther was back at it (always be closing), but this time she hired an off-duty police officer to direct traffic flow and avoid another shut down. The officer apparently counted more than 150 cars. And just three days later, the 3-bedroom colonial home was under contract. I’m assuming there was a nice little bidding war, not to mention that it will probably go well above asking. What the Heck Is Going On? This might be the first time the police have had to intervene at an open house, at least for capacity concerns, but it’s not the first time an open house has looked more like a block party. The CNBC article cites another recent open house in Seattle, which...

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### Mortgage Lender Launches Six-Year ARM

- Published: 2015-03-09
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/mortgage-lender-launches-six-year-arm/
- Categories: Mortgage News

File this one under PR department. Or perhaps publicity stunt. Last week, First Savings Mortgage Corporation based out of McLean, Virginia launched a 6/1 adjustable-rate mortgage. While this might not sound very special, it is somewhat unique in the mortgage world. The most common types of hybrid ARMs you’ll find are the 3/1 ARM, 5/1 ARM and the 7/1 ARM, which are fixed for three, five or seven years before adjusting once each year for the remainder of the term. So that’s basically what makes the 6/1 ARM unique – it’s not the norm. In fact, it’s right smack in the middle of the norm. And I'm not sure any other mortgage lender offers it. Then again, I don't know of any restaurants that serve hamburgers in hot dog buns. Two Advantages to the 6/1 ARM The company noted in a press release that the 6/1 ARM has two main advantages. One, it has a longer fixed rate period than the 5/1 ARM, by one year to be exact. Hybrid ARMs like the 6/1 ARM have an initial rate that is fixed for the first six years before becoming adjustable annually, based on a variable index and a fixed margin. Yes, instead of five years of relative safety from interest rate adjustments, you get six years. For some, that could actually be important if mortgage rates rise by some significant amount between origination and adjustment, and the loan hasn’t been paid or refinanced. But the reality is that ARMs have...

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### BBVA Compass Launches No Down Payment Mortgage

- Published: 2015-02-26
- Modified: 2018-07-26
- URL: https://www.thetruthaboutmortgage.com/bbva-compass-launches-no-down-payment-mortgage/
- Categories: Mortgage Tips

Sure, Fannie and Freddie now allow LTVs as high as 97%, and the FHA only requires 3. 5% down, but why stop there? Today, BBVA Compass announced the launch of its “Home Ownership Made Easier” (HOME) loan program, which allows borrowers to snag 100% financing on a home purchase. The bank is offering the new product as part of its pledge to put $11 billion to work to help low- and moderate-income individuals realize the dream of homeownership. In order to qualify, the applicant(s) on the loan cannot have an income that exceeds 80% of the HUD median income for the area in which they buy. Assuming they fit within those limits, they can get a home with as little as $500 from their own funds. For the record, the program is also available to borrowers with higher incomes if they finance properties in low- and moderate-income census tracts. HOME Program Comes with a $4,500 Lender Credit The BBVA zero down mortgage is known as Home Ownership Made Easier (HOME) It's part of their pledge to put $11 billion to work for low/moderate income borrowers Aside from requiring just $500 from a borrower's own funds It comes with a $4,500 lender credit to cover closing costs Aside from requiring nothing down to purchase a property, the HOME program also comes with a lender credit of up to $4,500 to cover closing costs such as the loan origination fee, underwriting and processing fees, and title reports, to name a few. It...

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### Discover May Exit the Mortgage Biz

- Published: 2015-02-17
- Modified: 2021-09-02
- URL: https://www.thetruthaboutmortgage.com/discover-may-exit-the-mortgage-biz/
- Categories: Mortgage News

After only about three years, Discover might be looking to get out of the mortgage business, per a new interview with Discover Financial CEO David Nelms. The credit card company officially launched Discover Home Loans in June of 2012 after purchasing certain loan origination assets from LendingTree in mid-2011 for around $56 million. It seemed like a good time to get involved in the industry, what with the housing crisis subsiding and opportunities to offer purchase and refinance loans on the rise. But it sounds like the complexities of the mortgage industry might be too much for Discover, based on comments made by Nelms. All Options on the Table In the interview, he told American Banker that Discover is “considering all options” and added that the mortgage industry has “a lot of overcapacity. ” In other words, Discover may be willing to part with its home loan lending arm and focus on its bread and butter again, which is credit cards and perhaps basic banking services like checking and savings accounts. One of the issues is home purchase lending, which generally involves face-to-face interactions, or at least a referral (usually from a real estate agent) with a local bank or mortgage broker. Online mortgage shops have greater difficulty originating purchase loans because consumers are quite a bit more skittish when it comes to getting their initial financing. When it comes to a refinance, homeowners may not mind working with someone halfway across the country, but with refi volume generally on...

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### Google Launches Mortgage Calculator Within Search Results

- Published: 2015-02-04
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/google-launches-mortgage-calculator-within-search-results/
- Categories: Mortgage Tips

Looking to calculate a mortgage payment on the fly? Instead of searching for a mortgage calculator using Google, you can now do some calculations simply by typing a query in the Google search box on your browser. Yesterday, the search behemoth launched the shortcut and it’s already visible when using Chrome, Google’s browser, or if using a private window via Firefox. It can also be accessed from a mobile phone. In a nutshell, it allows you to plug in a loan amount, an interest rate, and an amortization period without visiting any other websites. It instantly spits out the monthly payment and the total cost of the mortgage as you enter the numbers. You can also see the maximum loan based on monthly payment. For example, if you pop in $200,00 for the mortgage amount, 4% for the interest rate, and select 30 years for the mortgage term, you’ll see $955 for the monthly payment. It’ll also display the total cost of the mortgage, which in my example is $343,739. That figure includes the principal balance and the interest paid throughout the 30-year loan term. But it doesn’t tell you what portion is interest, though you can easily subtract your loan amount from that total to figure it out. Advanced Mortgage Queries Also Work But that’s not all! You can also type in things like, “How much can I borrow at $1000 a month? ” or “At 4. 5% APR how much can I borrow over 15 years? ” Any...

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### Homes Next to Starbucks Are Worth More

- Published: 2015-01-28
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/homes-next-to-starbucks-are-worth-more/
- Categories: Mortgage News

Here’s an interesting, though not surprising data point from Zillow.  It turns out properties located next to Starbucks locations are bigger winners in terms of home price appreciation. The company found this out by comparing a database of Starbucks locations with its own housing data. They even paid Starbucks corporate a visit to get the skinny, or perhaps venti, on how it selects its lucrative locations. Specifically, Zillow analyzed historical home price appreciation in areas located within a quarter of a mile of a Starbucks coffee shop. What they discovered was that homes that are now near a Starbucks would have sold for $137,000 back in 1997, while those not near a Starbucks would have only sold for $102,000, on average. Okay, so homes not near a Starbucks actually started out considerably cheaper. But wait, what happened since then. Well, the homes located next to Starbucks appreciated 96% to $269,000, while the Starbucks-neglected homes only increased 65% to $168,000. So it sounds like the rich got richer. Find a Home Near Starbucks, or at Minimum a Dunkin’ Donuts Homes located next to Starbucks (within a 1/4 mile) fetch a premium Compared to those without a local Starbucks Prices have risen substantially higher for the Starbucks-adjacent homes And even the homes near Dunkin' Donuts locations Zillow also debunked the idea that it could just be a coffeehouse nearby that’s driving property values higher. They did so by looking at homes next to Starbucks vs. homes next to a Dunkin’ Donuts location....

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### The Mortgage Crisis Created Nearly 7.3 Million Potential Boomerang Buyers

- Published: 2015-01-27
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-mortgage-crisis-created-nearly-7-3-million-potential-boomerang-buyers/
- Categories: Mortgage News

It has now been roughly seven years since the devastating housing crisis rocked our great nation. Between 2007 and 2014, foreclosure activity ran well above historical norms after exotic lending and sky-high home prices eventually brought down the entire real estate market. But the foreclosure rate has since fallen to pre-crisis levels as problem loans were dealt with in one way or another. For some, a loan modification has meant a second chance to erase past mistakes. For many others, the outcome wasn’t as positive. Their homes were lost via short sale or foreclosure and they must start anew. Of course, this may have been deliberate in some cases thanks to a phenomenon known as strategic default. Regardless, many of those who lost their homes will now be able to get another crack at homeownership over the next several years. These folks are known as “boomerang buyers,” and are primarily Gen Xers or Baby Boomers. Why Now? Well, foreclosure waiting periods enforced by Fannie Mae, Freddie Mac, the FHA, and so on generally bar previously foreclosed homeowners from obtaining mortgages for seven years. For short sales, the wait is only four years in many cases. Yes, there are exceptions to the rule that shorten these windows, and even programs that allow for mortgages just one year after such a negative event (or even one day! ). There are also those who can buy a home with cash. But generally it takes a considerable amount of time to bounce back and...

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### Why Aren’t You Shopping Around for Your Mortgage?

- Published: 2015-01-13
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/why-arent-you-shopping-around-for-your-mortgage/
- Categories: Mortgage News

I’ve got a bone to pick... it seems you aren’t bothering to shop around for your mortgage? Instead, you’re just going with the first lender you come across, for better or worse. This is according to a new survey from the Consumer Finance Protection Bureau (CFPB). The agency claims in their National Survey of Mortgage Borrowers that nearly half of those who take out a mortgage to purchase a home only “seriously consider” a single lender or mortgage broker before applying. Equally troubling is that the mortgage borrowers simply rely on information from a lender/broker, followed by their real estate agent, as opposed to outside sources, such as websites, housing counselors, family/friends and so on. It makes me wonder why I bothered creating this site. If you’re not going to take the time to learn about mortgages or shop around for the largest purchase in your life, I’m concerned. But do take the time to comparison shop for your toaster. That’s important. No Time to Shop As you can see from the graphs, an overwhelming number of consumers only considered one candidate. And an even higher number (~77%) applied with just one lender. Interestingly, first-time home buyers were a bit more shop-happy, though not by much. The good news is that most consumers (51%) indicated that they’re “very familiar” with the loan options available in the marketplace. For those who said they weren’t, they’re more likely to rely on the real estate agent or a personal acquaintance for direction. See...

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### 10 Predictions for Mortgage and Real Estate in 2015

- Published: 2014-12-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/10-predictions-for-mortgage-and-real-estate-in-2015/
- Categories: Mortgage Tips

Here we go again. It’s that time of the year when I make 10 predictions for the mortgage industry and real estate market for the coming year. If you wish, you can take a gander at my predictions for 2013 and 2014. I fared pretty well last year, though I didn’t get the direction of mortgage rates right. Not sure if anyone did to be honest... Now let’s look on to 2015, shall we. 1. Mortgage rates will fall A year ago I argued that mortgage rates would inch higher. This was somewhat contrarian because many market pundits expected rates to rise significantly in 2014. Instead, interest rates slipped about a half a percentage point on the 30-year fixed over the past year and now price at or below 4%. I’m going to take a chance and say that mortgage rates will drop in 2015. With all the turmoil related to low energy prices and worries of slowing global growth, interest rates (and YOU) may be the beneficiary. Rates might not hit new record lows, but the 30-year fixed could remain below 4% for much of 2015 if we continue on our current path. 2. Refinance activity will rise Everyone wrote off refis in 2014 because mortgage rates were on the rise and everyone who could refinance already did in 2012 and 2013. But the refi numbers came in higher than expected this year and the same could be true in 2015. With lower-than-anticipated interest rates, refinance activity should also...

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### Fannie and Freddie Now Allow Purchases and Refis up to 97% LTV

- Published: 2014-12-09
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/fannie-and-freddie-now-allow-purchases-and-refis-up-to-97-ltv/
- Categories: Mortgage News

In an effort to make homeownership more accessible, seeing that down payment is often the biggest hurdle, Fannie Mae and Freddie Mac have announced that they will now allow loan-to-value ratios as high as 97%. Only 3% Down Needed to Qualify for a Mortgage Fannie Mae and Freddie now only require 3% down payment Which is slightly lower than the 5% minimum they used to require More importantly it means conventional home loan financing Requires a smaller down payment than government options like the FHA (3. 5% minimum) In other words, prospective home buyers can put down just 3% instead of the previous 5% down payment requirement that was in place for conforming mortgage loans. This should make it a little bit easier to qualify for a mortgage without going through the FHA. Additionally, if you already have a mortgage that is owned by Fannie Mae or Freddie Mac, you’ll be able to get a rate and term refinance up to 97%, as opposed to just 95%, assuming you don’t qualify for HARP. These new guidelines should make conventional loans a lot more popular than FHA loans, the latter of which require 3. 5% down and come with very costly insurance premiums. However, there are a few caveats to ensure loose lending doesn’t return just several years after the worst housing crisis in recent memory. For one, both programs require the subject property to be owner-occupied. So investment properties and second homes won’t be eligible. But condos, co-ops, and PUDs...

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### HAMP Participants Are Now Eligible for an Additional $5,000 in Principal Balance Reduction

- Published: 2014-12-04
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/hamp-participants-are-now-eligible-for-an-additional-5000-in-principal-balance-reduction/
- Categories: Mortgage News

It sounds like Christmas came early this year... borrowers who already received loan modifications via the Home Affordable Modification Program (HAMP) are now eligible for expanded benefits. As it stands, borrowers taking part in HAMP who stay good on monthly payments can earn up to $5,000 in principal balance reduction over the first five years of their modification. But now HUD and the Treasury are sweetening the deal. Under revised guidelines announced today, roughly one million borrowers are eligible to receive another $5,000, which will also be applied toward the principal loan balance in the sixth year of their loan mod. This means borrowers can shed a total of $10,000 off their outstanding loan balance, which will certainly help them get their heads above water, assuming they aren’t already. Additionally, borrowers will be given the opportunity to re-amortize the reduced mortgage balance, which will lower their monthly payment going forward. Under normal circumstances, making extra payments to the principal balance reduces the overall interest expense, but it doesn’t lower subsequent monthly payments. So this change will help borrowers build equity and lower payments even further. Changes Coincide with HAMP Payment Resets This change happens to come at a time when interest rates on HAMP loan mods are scheduled to increase. After five years of monthly payments via a HAMP loan mod, the interest rate will increase one percent or less per year for three or four years until it reaches the market rate at the time of the modification. Secretary...

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### Boost Your Tax Deduction by Making Your January Mortgage Payment This Year

- Published: 2014-12-03
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/boost-your-tax-deduction-by-making-your-january-mortgage-payment-this-year/
- Categories: Mortgage Tips

It’s that time of the year again... namely the end of the year, when year-end tax tips flood the web and our inboxes. With regard to the old mortgage, taxpayers might be able to get a larger write-off if they make their January mortgage payment this month, as opposed to in January when it’s actually due. In case you didn’t know, mortgages are paid in arrears, meaning you pay interest for the prior month after it accrues. Conversely, rent is paid in advance of the month in which you occupy a place. This means December’s mortgage interest can be tax deductible for the current year if it’s paid in December as opposed to in January. 13 Mortgage Payments in One Year The purpose of making an early mortgage payment at year-end is to create a larger tax deduction via the mortgage interest paid throughout the year. A homeowner might be inclined to employ this method if they think they’ll owe more in taxes this year than next. So if you had a “good year” and expect next year to be a little lighter in terms of income (and associated taxes), it could make sense to prepay your January mortgage payment sometime in December to offset this year’s higher income. Assuming this method wasn’t employed the year before, a homeowner can actually make 13 mortgage payments in a single year. Obviously this is only a benefit if you itemize your taxes and get a write-off for home mortgage interest via IRS...

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### Watch Out for the Old ‘No Mortgage Payments for a Year’ Gimmick

- Published: 2014-11-19
- Modified: 2024-01-11
- URL: https://www.thetruthaboutmortgage.com/watch-out-for-the-old-no-mortgage-payments-for-a-year-gimmick/
- Categories: Mortgage Tips

I came across a promotion today from a home builder out in Arizona. The press release mentions that the company is offering the “largest incentive for new homebuyers in its history. ” The details are as follows: Simply purchase a new home in X development before Christmas (yes, it’s your special gift from Santa) and the builder will pay your mortgage for the first year. It’s being referred to as a once in a lifetime opportunity, one that can’t possibly be passed up. But that’s where the problem lies. The fact that these types of offers are springing up again is a sign that trouble is brewing in the once white-hot real estate market, one that now seems to have run out of steam. As I’ve noted before, it’s no secret that home price appreciation has already begun to recede in many parts of the country. No, home prices aren’t necessarily dropping, but the rate at which they appreciate is falling. Some markets actually are down year-over-year, and definitely month-to-month, which could signal a shift after two solid years of appreciation. Fannie is already slashing max cash-out LTVs to mitigate risk. And now we’re seeing incentives from home builders, along with outright price cuts. For those offering incentives, you still have to pay full price for the home, which might be too expensive nowadays, but you’ll get stainless steel appliances, or granite countertops and fancy cabinets. Better yet, you won’t have to make mortgage payments for 12 months. But is...

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### Fannie Mae Reduces Max LTV on Cash-Out Refinances to 80%

- Published: 2014-11-11
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-reduces-max-ltv-on-cash-out-refinances-to-80/
- Categories: Mortgage News

Though it may soon become easier to purchase a home with less money down, assuming 3% mortgages return as Mel Watt has promised, extracting existing home equity could become more difficult. Yesterday, mortgage financier Fannie Mae released new guidelines related to cash-out refinances that limit how much equity a borrower can actually tap into. For fixed-rate cash-out refinance transactions secured by one-unit primary residences, the maximum loan-to-value (and CLTV) will be lowered from 85% to 80%, effective December 13th. Fannie Mae noted in the bulletin that it continually analyzes the profile of its mortgage acquisitions, particularly those that are high-risk, when making the change. However, the company believes the adjustment will have a limited impact due to the small number of cash-out refis with such LTVs currently being originated and delivered to Fannie Mae. For adjustable-rate mortgage (ARM) cash-out refis, the max LTV (and CLTV) will remain unchanged at 75%. The max LTV limits for cash-out refinances on second homes and investment properties will also remain unchanged at 75% for fixed-rate mortgages and 65% for ARMs, and 70%/60% if the investment property is 2-4 units. Freddie Mac already limits cash-out refinances to 80% LTV for one-unit primary residences. Change Comes as Home Price Gains Slow The timing of the change is interesting, given the fact that home prices have skyrocketed over the past year and change, and now appear to be slowing. In some markets, home prices are actually down year-over-year. In fact, the National Association of Realtors reported last...

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### Are Low Credit Scores More Dangerous Than Low Down Payments?

- Published: 2014-11-05
- Modified: 2018-04-27
- URL: https://www.thetruthaboutmortgage.com/are-low-credit-scores-more-dangerous-than-low-down-payments/
- Categories: Mortgage News

Ever since Mel Watt hinted at the return of 3% down mortgages, there’s been a lot of worry that we could be headed down another dark path. After all, it was a lack of skin in the game that caused all the carnage during the most recent housing crisis, right? Well, maybe not. An analysis from the Urban Institute seems to put the blame more on low credit scores than low down payments. They looked at Fannie Mae’s default rates for 30-year fixed mortgages before, during, and after the crisis to see what kind of impact ultra-low down payments had on mortgage performance. In 2001, the default rate on mortgages with a 3-5% down payment (95-97 LTV) was 3. 3%, compared to 3. 1% for loans with a 5-10% down payment (90-95 LTV). During 2007, the worst mortgage performance year in recent history, the default rate climbed as high as 27. 8% for 3-5% down mortgages, compared to just 22. 7% for the 5-10% down cohort. Post-crisis, the defaults numbers are super low for both groups, and were in fact the same in 2011 at 0. 4%. In 2012, the 95-97 LTV loans defaulted at a rate of just 0. 2%, compared to 0. 1% for the 90-95 LTV group. What About Borrowers with Excellent Credit? The data show that credit score is huge When it comes to predicting mortgage default Even if the borrower comes in with a low down payment A low credit score seems to be more...

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### There’s Now a .Mortgage Top Level Domain

- Published: 2014-11-05
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/theres-now-a-mortgage-top-level-domain/
- Categories: Mortgage News

If you’re a webmaster, a blogger, or just happen to own a domain name or two, you might be confused as to why there are so many new TLDs (top-level domains) these days. Back when, there were three main TLDs, including . com, . net, and . org. They were all pretty straightforward, though . net seems to have become a lost TLD with . com now the gold standard. Nowadays, there seems to be a TLD for just about every word in the dictionary, which begs the question, why? I’d like to think I know a little something about the Internet, but this domain game is getting really, really strange. The amazing part is that big companies are paying a ton of money to acquire these new TLDs, perhaps because they know individuals will buy them. For example, last month Amazon purchased the TLD . spot for $2. 2 million. It sounds pretty expensive, but Amazon’s market cap is nearly $140 billion. Register a few thousand domain names and they’re in the money. Another company by the name of Fegistry bought . realty for nearly $5. 6 million. Keep in mind that there is also the TLD . realtor and . realestate, not to mention . loan, and even . haus, the German word for house. Do we really need . ninja, . rocks, and . pub? I don’t think so. Introducing . Mortgage If none of the current TLDs work for you, perhaps . mortgage will. You can...

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### Your Personality Determines If You’ll Buy or Rent and What Mortgage You’ll Get

- Published: 2014-10-31
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/your-personality-determines-if-youll-buy-or-rent-and-what-mortgage-youll-get/
- Categories: Mortgage Tips

I came across an interesting study that explores real estate and mortgage preferences based on personality type (thanks WSJ). Whether you realize it or not, your temperament determines whether you’re more likely to rent or buy a home, what type of mortgage you’ll take out, and how much you might put down on a home. Of course, you need to have money to make any of these decisions, but there does seem to be some empirical evidence that the choices we make in the real estate world are tied to our personalities. The paper, titled, “Real Estate and Personality,” highlights the Big Five personalities: - Extraversion (versus introversion) - Agreeableness (versus antagonism) - Conscientiousness (versus lack of direction) - Neuroticism (versus emotional stability) - Openness (versus closedness) to experience Take a moment to pick one of the five, if you can. Personally, I see some overlap among the “Big Five,” and it also depends on what day it is, or the situation. That being said, it’s difficult for me to pick just one, so let’s continue on. Perhaps that makes me neurotic! Kidding. Maybe. If you happen to think of yourself as an extrovert, which is generally a good thing, you are probably sociable, energetic, adventurous, and outgoing. Unfortunately, the study didn’t find any positive correlation between extraversion and the real estate-related preferences examined. I guess it’s too much of a mixed bag. However, it did find that the tendency to prefer stock over real estate investments negatively correlates with...

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### HUD Has $412 Million in Uncollected FHA Mortgage Insurance Refunds

- Published: 2014-10-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/hud-has-412-million-in-uncollected-fha-mortgage-insurance-refunds/
- Categories: Mortgage Tips

If you’ve ever taken out an FHA loan, you may be eligible for a refund on that costly upfront mortgage insurance premium. Sure, the FHA is struggling at the moment and no longer so liberal about doling out refunds on newly originated loans, but they’ve still got over $400 million in their coffers from uncollected refunds from years past. Are You Eligible for a Refund? If you received an FHA loan after Sep. 1st, 1983 You might be due a cash refund For any unused portion of the upfront mortgage insurance premium Assuming you didn't default on mortgage payments The rules vary widely, but if you obtained your FHA loan after September 1st, 1983, paid an upfront mortgage insurance at closing, and did not default on mortgage payments, you should have received a refund for any unused portion of the premium that you paid upfront. Additionally, you might even be eligible for a “distributive share” of excess earnings from the FHA’s Mutual Mortgage Insurance Fund if your loan was originated before September 1st, 1983, paid for more than seven years, and FHA insurance was terminated before November 5th, 1990. However, many people move and/or don’t realize a refund is actually due, or throw away the notice, and that explains why millions of dollars remain unclaimed. There are exceptions to the rules as well. For one, if the FHA loan is assumed the insurance stays in place and the seller receives no refund. The owner of the property would be entitled...

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### Fannie and Freddie Will Offer 3% Down Mortgages Again

- Published: 2014-10-20
- Modified: 2014-10-20
- URL: https://www.thetruthaboutmortgage.com/fannie-and-freddie-will-offer-3-down-mortgages-again/
- Categories: Mortgage News

Some good news finally came out of Las Vegas today, and I’m not talking about someone winning a mega jackpot on an oversized one-armed bandit. During the Mortgage Bankers Association’s Annual Convention in Sin City, it was revealed that Fannie Mae and Freddie Mac will again accept mortgages with as little as three percent down. This is a reversal to an earlier policy change whereby the pair stopped buying loans with down payments of less than five percent. In fact, about a year ago Fannie Mae reduced its max loan-to-value ratio (LTV) from 97% to 95%, forcing those with little in assets to consider the FHA. Mel Watt Finally Comes Through Earlier today, FHFA chairman Mel Watt told conference attendees in prepared remarks that the agency is working with Fannie and Freddie “to develop sensible and responsible guidelines for mortgages with loan-to-value ratios between 95 and 97 percent. ” This is after months of him doing absolutely nothing since taking the job, at least as far as the public could see. While the specifics are unclear, he did say such lower-down payment mortgages would take into account “compensating factors,” which are generally things like a good credit score, solid job history, low DTI ratio, and so on. So you’ll actually have to be a good borrower to get a conventional loan with just three percent down, unlike the FHA, which allows 3. 5% down with really low credit scores. The change comes at a time when “access to credit remains...

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### The Rent vs. Buy Argument Depends on Mortgage Type Too

- Published: 2014-10-15
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/the-rent-vs-buy-argument-depends-on-mortgage-type-too/
- Categories: Mortgage Tips

Trulia releases a quarterly Rent Versus Buy report to determine if it makes more sense to buy a home or continue renting based on current metrics. Their latest report for the third quarter of 2014 revealed that buying isstill 38% cheaperthan renting nationally, which sounds pretty compelling. It’s also cheaper to buy than rent in the 100 largest metros nationwide. It’s better to buy now than it was a year ago (35% cheaper) because mortgage rates have moved lower and rents have climbed higher. However, they use some assumptions to come up with their calculations, including a 30-year fixed rate mortgage as the loan type and 20% as the down payment amount. In reality, many individuals these days put down a lot less and/or go with a different type of loan. So when determining if you should buy or rent, make sure you consider all the details, not just the home price in your desired area. For the record, Trulia also assumes that you’ll stay in your home for seven years and itemize your taxes to take advantage of the mortgage interest deduction. Oh, and that you’re in the 25% tax bracket. If you truly want to get an accurate apples-to-apples comparison, you must consider all of these factors before diving in. Otherwise you could be in for a nasty surprise. Mortgage Type Matters Beyond the Mortgage Payment When people consider what type of mortgage to get, they probably look mainly at the monthly payment. For some, it’s probably not even...

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### Man Offers to Sell Home In Exchange for an iPhone 6 or the 32 GB iPad

- Published: 2014-10-14
- Modified: 2018-01-09
- URL: https://www.thetruthaboutmortgage.com/man-offers-to-sell-home-in-exchange-for-an-iphone-6-or-the-32-gb-ipad/
- Categories: Mortgage News

So a guy, an Austrian fellow named Andreas Gindelhuber, with apparent dreams of making money in real estate here in the United States, resorted to selling his home in exchange for an iPhone 6 last week. He originally purchased the foreclosed 3-bedroom, 1. 5-bath Detroit home (you probably already knew it was in Detroit) for $41,000 in April 2010, per Zillow. Two weeks later, it was listed for rent at a seemingly reasonable $750 per month. After languishing on the market for two months, Gindelhuber lowered the rental price to $695 per month and finally found some tenants. But the neighborhood where the home is located was hard hit by the housing crisis, prompting nearby residents to move out and leave their properties behind. Eventually his tenants also headed for the exits, leaving the place vacant and in disrepair. He also had a $6,000 delinquent property tax bill to worry about, so he hired local real estate agent Larry Else to market the property. It’s unclear how the property got so badly damaged, but it’s supposedly missing all its doors and windows, and also has extensive smoke damage. I’ve heard about houses getting set on fire in Detroit... Anyway, it seemed no one wanted the thing, even for the price of FREE. Still, Gindelhuber listed the badly damaged property for $5,000, hoping to get some interest from somewhere, hopefully. Then reality set in, forcing him to lower the asking price twice in two months, first to $4,000 and then to...

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### Trulia Is Giving Away a House in Vegas via the Game of War

- Published: 2014-10-07
- Modified: 2018-01-09
- URL: https://www.thetruthaboutmortgage.com/trulia-is-giving-away-a-house-in-vegas-via-the-game-of-war/
- Categories: Mortgage News

I like to highlight contests that involve free houses and mortgage payoffs, and this one is a little stranger than most. Trulia, which should be a subsidiary of Zillow’s if all goes right on the regulatory front, is offering to give away a “freakin’ house” to one lucky person who enters their contest, gets selected for the finals, flies to Las Vegas, and wins a game of War. To enter the contest, you simply have to head over to their contest website and give up some personal info. Yes, you’ll probably receive some promotional e-mails from their sponsors, including Wayfair and KB Home. And they’ll ask you to download their app, obviously. But it’s fairly painless and quick. After that, you have to watch some cheesy videos that ask you to guess where the home is located, what type of kitchen it has, how many bathrooms it contains, and so on.   Fast forwarding is helpful here... Once you complete all five video challenges, you’ll be entered into the Finalist Drawing to win the home. But you don’t really win the home. Huh?   Yeah, you actually get a check for $350,000, which actually sounds a lot better than a home in Summerlin, Nevada. Hey, the house looks great, don't get me wrong, but I’d rather have $350,000 in my bank account, less taxes. The drawing will take place on or around October 13, 2014, and the video challenges must be completed by October 10th. So hurry if you want...

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### Ben Bernanke Claims He Was Unable to Refinance His Mortgage

- Published: 2014-10-02
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/ben-bernanke-claims-he-was-unable-to-refinance-his-mortgage/
- Categories: Mortgage News

While this might sound a little hard to believe, it has been reported that former Federal Reserve chairman Ben Bernanke was unable to refinance his mortgage.   Yup, he got straight up denied. You might be thinking, yeah right, why would a lender deny such a high profile individual who you’d think would be good for the money? After all, he did direct the monetary policy for the entire United States, so the prospects of him paying the mortgage on time are pretty darn high. But it’s true! He apparently shared the unfortunate news with Moody’s economist Mark Zandi at the National Investment Center for Seniors Housing & Care Conference in Chicago. When speaking of his attempt to refinance the mortgage, Bernanke said he was “unsuccessful in doing so,” at which point the audience burst into laughter. No Laughing Matter, Seriously The crowd was probably pretty surprised when Bernanke followed with, “I’m not making that up. ” He then went on to add that lenders may have gotten a little too conservative with their mortgage underwriting as of late, and that the tightening had become “excessive. ” Additionally, he noted that regulators, presumably the CFPB, haven’t seemed to get the housing market right. Perhaps they’ve made it too difficult for certain borrowers to get mortgages thanks to the new Qualified Mortgage rule, which among other things, doesn’t allow DTI ratios above 43%. So I got thinking why Bernanke would be denied a refinance, and then a light bulb went off...

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### Using a Home Equity Loan to Pay Off Your First Mortgage

> Learn how a home equity loan can be used to pay off your mortgage, along with the pros and cons involved.

- Published: 2014-09-30
- Modified: 2022-08-31
- URL: https://www.thetruthaboutmortgage.com/using-a-home-equity-loan-to-pay-off-your-first-mortgage/
- Categories: Mortgage Tips

In case you weren’t aware, people tend to be obsessed with the idea of paying off their mortgages. For many, it’s a major lifelong goal to pay off the mortgage in full. For others, it’s a nagging debt that they’d prefer to take care of sooner rather than later, for better or worse. Regardless of the reason, or whether it’s a good idea to prepay off the mortgage, many individuals seem to be all about it, even with mortgage rates near record lows. Fortunately, there are plenty of methods to chip away at the mortgage early to reduce the term from 30 years to 15 years or even less. One common way is via a home equity line of credit (HELOC), but the major drawback you’ll always hear about is the fact that HELOCs are adjustable-rate loans. They are tied to the prime rate, which currently sits at a low, low 3. 25%. However, it is widely believed that the Fed will raise rates soon, and prime will rise along with it. In other words, it’s a bit of a risky endeavor to go with a HELOC in a rising interest rate environment, especially since most homeowners these days have interest rates in the high 3% range already. So I got to thinking about an alternative that is potentially safer, yet still knocks out a lot of the mortgage interest while allowing one to pay off their mortgage slightly faster if they’d like. Consider a Home Equity Loan, Not Line...

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### Here Are the Many Reasons Why Renters Rent

- Published: 2014-09-11
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/here-are-the-many-reasons-why-renters-rent/
- Categories: Mortgage News

The whole rent vs. own argument can be pretty polarizing. There are those that liken renting to throwing money down the drain, while others think homeownership is a huge waste of time and money. The latter group will tell you that home prices don’t even appreciate that much if you consider inflation. Or they’ll warn you about the hidden costs of homeownership like ponying up for a new roof or brand new plumbing. But it’s not that black and white. There are a ton of reasons why individuals choose (or are forced) to rent, and they aren’t just financial. The Federal Reserve Bank of New York recently set out to determine why fewer renters are making the transition to owners, and the answers they received ran the gamut. Yes, Financials Are Most Important First off, a renter’s balance sheet is certainly a big reason why they rent. The survey indicated that the number one reason renters do not purchase homes is because they don’t have enough money saved and/or have too much debt (55. 7% of respondents). These tend to be the main reasons why borrowers get denied mortgage financing. Either their down payment isn’t sufficient, or their debt is too high, thereby exceeding max DTI ratio limits. Second on the list was not making enough money, which 52. 7% of respondents said was an issue. Again, low income means DTI ratios get exceeded, which can limit or prevent mortgage financing. Coming in third was the perception that credit wasn’t...

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### 97% of Teens Believe They Will Own a Home One Day  

- Published: 2014-09-09
- Modified: 2014-09-09
- URL: https://www.thetruthaboutmortgage.com/97-of-teens-believe-they-will-own-a-home-one-day/
- Categories: Mortgage News

Several months ago, I thanked Millennials for their faith in real estate, seeing that Gen X isn’t a huge fan at the moment. But looking back, it appears that Generation Z is even more promising. While there have been recent fears that homeownership is no longer a part of the American Dream, or even an aspiration for the young, a new survey reveals that it is indeed alive and well. Just ask 13 to 17 year-olds what they think... that’s what Better Homes and Gardens Real Estate did. Between July 18th and 29th, the company polled 1,000 teenagers to determine what they thought about buying a home in the future. And guess what, 97% of them are totally into the idea. That’s pretty good, though I am slightly curious about the 30 or so NO responses as well. Additionally, more than four out of five (82%) indicated that owning a home was the most important factor in achieving the American Dream. And 89% of respondents said homeownership was part of their interpretation of said dream, followed by going to college, getting married, and having kids. So yes, even kids that have never heard of Nintendos think a home you actually own yourself is a very necessary piece of the dream. Willing to Make Sacrifices to Do It Perhaps even more amazingly, these teens are actually willing to give up the stuff they love to make that dream purchase. More than half (53%) said they’d be willing to dump social media...

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### The Wealth Building Home Loan Makes the 15-Year Fixed Mortgage Affordable

- Published: 2014-09-08
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/the-wealth-building-home-loan-makes-the-15-year-fixed-mortgage-affordable/
- Categories: Mortgage News

Most homeowners opt for fixed-rate mortgages because there aren’t any surprises. Many of them go with a 30-year term because it’s the norm, and also because it allows would-be homeowners to buy a lot more home. The major downside is that a 30-year fixed mortgage takes 30 years to pay off. In other words, you pay a whole lot of interest over three decades, and you don’t really own much of your home for the bulk of the amortization period. In fact, it’s not until late in the loan period that payments go primarily toward principal, as opposed to interest. This can create problems down the road, especially for those who put little down on their home purchase. After all, without any home equity, lenders don’t have a buffer in place if borrowers fall behind on payments. And borrowers who don’t have much (if any) skin in the game can simply walk away if things don’t go their way. How About a 15-Year Fixed That Isn’t Super Expensive? The Wealth Building Home Loan (WBHL) Created by Edward Pinto and Stephen Oliner of the American Enterprise Institute Combines the affordability of a 30-year fixed With the equity building power of a 15-year fixed Unfortunately, 15-year fixed mortgages aren’t cheap, seeing that the borrower has half the amount of time to pay off roughly the same sized loan. This explains why 30-year loans continue to be a lot more popular, despite what I just said. But that may all change with the...

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### Should You Take Out a 30-Year Fixed Mortgage Before It’s Gone Forever?

- Published: 2014-09-04
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/should-you-take-out-a-30-year-fixed-mortgage-before-its-gone-forever/
- Categories: Mortgage News

Well-known banking analyst Dick Bove sounded alarm bells earlier this week after he warned of a mortgage crisis by winter. Yes, this winter, as in a few months from now. And by crisis, he means the 30-year fixed mortgage may cease to exist. Why? Because the Federal Reserve is expected to halt its purchases of mortgage-backed securities, which means it could get difficult to unload the underlying home loans on the secondary market. Last month, the Fed said it would add to its holdings of agency MBS at a pace of just $10 billion per month, down from the previous pace of $15 billion per month. At one time not long ago, the Fed was buying as much as $40 billion in Fannie/Freddie-backed MBS via their QE3 program, an initiative designed to push down mortgage rates and reduce borrowing costs. But Rates Are Better Today The ironic part is that mortgage rates have actually fallen as the Fed has tapered purchases, due in part to other issues that dictate the direction of interest rates, along with the fact that mortgage origination volume has plummeted (they don’t need to buy as much). But if there’s no willing buyer of long-term fixed mortgages (that happen to have really low rates that are unattractive to investors), banks and lenders may be forced to raise rates or offer short-term products instead, like adjustable-rate mortgages. Bove claims that banks have boosted their purchases of mortgages this year, but aren’t willing to risk their money on...

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### White House Asks Lenders to Offer Lower Mortgage Rates to the Military

- Published: 2014-08-27
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/white-house-asks-lenders-to-offer-lower-mortgage-rates-to-the-military/
- Categories: Mortgage News

There’s been a lot of news coverage lately concerning veterans not receiving proper medical care. Sadly, that’s just one area where our military isn’t being treated appropriately. Whether active duty military realize it or not, they’re also entitled to special mortgage rates and fees thanks to the Servicemembers Civil Relief Act of 2003 (SCRA). But many do not recognize this fact, and lenders haven’t been very forthcoming about notifying them of these financial protections afforded under that law. As a result, President Obama has announced a new voluntary partnership with banks and lenders to help spread the word about these important rights to the military community so they have every opportunity to pursue the American Dream. So far, Bank of America, Citi, Quicken Loans, Wells Fargo, and Ocwen Loan Servicing have partnered up with the White House to make it easier for the military to take advantage of benefits they might not be aware of. Here’s the plan of attack: - Lenders will proactively identify active duty service members no less than once per quarter by querying the Defense Manpower Data Center (DMDC) against their loan portfolio - They will contact service members that are eligible for mortgage benefits via phone, mail, and e-mail outreach - And simplify the application process to ease the burden of enrollment and satisfaction of the SCRA written notice requirement In simple terms, these participating lenders will actively search through their customer database to determine who is eligible for mortgage relief, instead of requiring active...

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### What You Can Afford Isn’t Necessarily What You Should Spend on a Home

- Published: 2014-08-21
- Modified: 2018-07-03
- URL: https://www.thetruthaboutmortgage.com/what-you-can-afford-isnt-necessarily-what-you-should-spend-on-a-home/
- Categories: Mortgage Tips

Most individuals shopping for a home will determine how much they can afford before beginning a property search. It’s the sensible thing to do. This could include back-of-the-envelope calculations, online calculators, and even a pre-approval letter from a bank or lender to determine exactly what’s within their budget. And while it’s very important to know this number beforehand (and also to know if you can actually qualify for a mortgage! ), it doesn’t necessarily mean it’s the number you should shoot for. If anything, I’d aim a lot lower. It’s Nice to Have a Cushion... While you might be allowed to borrow more A buffer can be helpful in times when money is tight Staying within budget and living below your means Might be a better strategy than buying a home at the top of your budget Think about it this way. Imagine every time you set out to buy something, you had someone calculate the most you could spend for said item. So if it was an engagement ring and someone looked at your income and finances and said you could spend $10,000. Or you were told you had $30,000 to spend on a car. Or $200 for a pair of designer jeans. Sure, it’s nice to set a budget, but wouldn’t you want the eventual price tag to be a lot lower than this maximum number? At the end of the day, just because you have the money doesn’t mean you should spend it, especially when it comes...

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### Some Homeowners Will Receive Permanent 2% Interest Rates Thanks to Bank of America Mortgage Settlement

- Published: 2014-08-21
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/some-homeowners-will-receive-permanent-2-interest-rates-as-a-result-of-bank-of-america-mortgage-settlement/
- Categories: Mortgage News

Today, Bank of America reached a historic agreement with the U. S. Department of Justice to pay the largest settlement in U. S. history related to toxic mortgage loans it knowingly sold to investors. In short, the company admitted that it misrepresented the quality of the loans it packaged and sold to investors via its Merrill Lynch and Countrywide Mortgage brands, as well as through Bank of America. Additionally, the bank has taken responsibility for its faulty loan origination practices that resulted in Fannie Mae, Freddie Mac, and the FHA taking on countless bad loans that eventually hurt American taxpayers (not to mention homeowners). The bank also settled a case with the SEC in which it knowingly “shifted the risk” of wholesale loans originated by mortgage brokers that were described internally as “toxic waste. ” Simply put, the bank and its affiliates made trillions of very bad loans that they tried to pawn off, and now they must pay. Speaking of payment, the company has agreed to pay $9. 65 billion in cash, including $5. 02 billion in civil monetary penalty and $4. 63 billion in compensatory remediation payments. Additionally, BofA will provide $7 billion in consumer relief, which will come in the form of loan modifications, including principal balance reductions, forbearance, and second mortgage extinguishments. How Does a 2% Interest Rate Sound? Thanks to a major settlement with the Justice Department Related to its questionable loan origination practices Bank of America will offer some lucky homeowners 2% mortgage rates...

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### Apparently It’s Not a Housing Bubble, But an Affordability Crisis

- Published: 2014-08-07
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/apparently-its-not-a-housing-bubble-but-an-affordability-crisis/
- Categories: Mortgage News

Here’s some good news, if you can call it that. Real estate experts at a recent housing forum in San Francisco determined that we are in the midst of an “affordability crisis,” not a housing bubble. Jed Kolko of Trulia fame and Tim Cornwell of the Concord Group told attendees at the SPUR Urban Center in SF that it’s more an issue of supply and demand, not necessarily an overheated housing market. In SF, which ranks #1 in terms of unaffordability for the 100 largest metros in the United States, only 14% of for-sale homes are affordable to the middle class. That compares to 34% in San Jose and 40% in Oakland, both of which are also in the top 10 in terms of unaffordability. Housing Bubble vs. Affordability Crisis But that doesn’t make it a bubble, at least not yet, despite Karl Case of S&P/Case-Shiller declaring one in certain cities a year ago. Kolko took time to explain the subtle differences between a bubble and an affordability crisis, as seen in the chart above. As you can see, high prices relative to incomes are an affordability issue, whereas high prices relative to the “fundamentals” spell bigger problems. Affordability is also more of a supply/demand issue, while bubbles are more irrational price divergences. Additionally, high prices AND rents point to an affordability issue, while high home prices relative to rents are more of your classic bubble territory. Finally, affordability can persist well into the future, and as we all know,...

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### Have Massive Home Price Gains Eclipsed the Benefit of Low Mortgage Rates?

- Published: 2014-08-06
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/have-massive-home-price-gains-eclipsed-the-benefit-of-low-mortgage-rates/
- Categories: Mortgage Tips

The new threat to those resisting the urge to buy real estate (how dare you) is the risk of rising mortgage rates. All the pundits believe interest rates are headed closer to 5% for a 30-year fixed, up nearly a full percentage point from current levels. The sales pitch is pretty straightforward – if you wait any longer you’re really going to be priced out of the market, what with home pricesandmortgage rates on the rise. If you think things are expensive today, worry about tomorrow, they say. But you have to question whether it’s a good deal to buy at this point, given the tremendous price increases over the past couple years. Are Low Interest Rates Really a Strong Enough Tradeoff? Sure, low mortgage rates are great. They make monthly mortgage payments more affordable, even if home prices are (a lot) higher than they once were. And despite wages being stagnant, people can afford to buy more expensive homes because interest rates are so cheap. That's the point, right? But if you look at things from a home price-to-income ratio perspective, property values look pretty inflated historically. So are the low rates still incentive enough to buy a home? And should you buy now because rates and prices are only going to climb higher? That’s the million-dollar question, and one nobody can really answer with absolute certainty. You could argue that we’re due for another correction after two solid (insane) years of gains. It’s clear home price growth is already...

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### Realtors’ Chief Economist Says FHA Loans Are a Rip-Off for Consumers

- Published: 2014-07-28
- Modified: 2018-01-09
- URL: https://www.thetruthaboutmortgage.com/realtors-chief-economist-says-fha-loans-are-a-rip-off-for-consumers/
- Categories: Mortgage News

Last week, Zillow hosted its fifth housing forum in the nation’s capital to discuss current real estate matters. The panel of reporters, real estate gurus, and policymakers discussed a number of issues, ranging from why people move to mortgage rates and affordability. But perhaps the most controversial comment came from Lawrence Yun, the outspoken chief economist of the National Association of Realtors. When the WSJ’s Nick Timiraos questioned whether the mortgage credit box was too tight, Yun took the opportunity to express his discontent with the FHA and its new sky-high premiums. Are FHA Loans a Bad Deal? He prefaced his comment by saying he might upset the lobbyists in Washington, but went ahead and said, “essentially they are ripping off the consumers,” when speaking of the FHA and its pricey premiums and fees. Yun noted that FHA loans have historically been aimed at first-time home buyers and moderate-income buyers, so charging premiums that he refers to as “outrageous” almost warrants action from the Consumer Financial Protection Bureau (CFPB). Sure, he was chuckling when he made that last comment, but it’s clear he’s not happy with their new premium structure, and has made it one of his priorities to whittle them back down to more reasonable levels. The FHA has raised the upfront and annual insurance premiums multiple times over the past several years, mainly because they had no other choice but to raise capital to stay in business. Additionally, many FHA borrowers now pay annual premiums for the life...

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### Zillow to Buy Trulia for $3.5 Billion in Stock

- Published: 2014-07-24
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/is-zillow-about-to-buy-trulia-for-billions-of-dollars/
- Categories: Mortgage News

There were several reports floating around today that Zillow is in talks to buy its smaller rival Trulia for a whole lot of money, despite spokespeople for both companies declining to comment.   But these rumors generally turn out to be true. Yesterday, Trulia was valued at about $1. 5 billion. Today, after the rumors surfaced, the stock climbed from around $40 to nearly $54 a pop, valuing it closer to $2 billion. This would be a pretty quick exit strategy for the company, which only went public back in late 2012. At the time, its shares traded in the high teens before climbing as high as about $50 a year later thanks to a broader stock market rally (and I suppose renewed interest in housing). Zillow also got a boost on the news, with its shares rising more than 15%, or $19. 29, to $145. 76. Shares actually climbed as high as $157. 61 on the merger rumors, but settled back down after an initial pop. The company is now valued at about $5. 8 billion, which in the world of tech stocks is nothing... Possibly a $2 Billion Price Tag Bloomberg reported that Trulia could fetch as much as $2 billion from Zillow, which wouldn’t give the stock much upside after it rocketed 32% higher today. But based on the astronomical prices being paid to acquire companies today, I wouldn’t be surprised if it’s sold for even more. It would create quite the real estate juggernaut, seeing that...

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### Home Prices Are Expected to Peak in 2016, Then Do Pretty Much Nothing Through 2022

- Published: 2014-07-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/home-prices-are-expected-to-peak-in-2016-then-do-pretty-much-nothing-until-2022/
- Categories: Mortgage News

Are you still looking to buy a place before time runs out? Don’t want to miss out on the next big housing boom? Well, it might already be too late, assuming you’re looking to turn a big profit, or any profit at all. A new report from two bond strategists at Bank of America Merrill Lynch, whose merger was a direct result of the latest financial crisis, predicts little upside from current levels. In fact, after a couple years of modest growth, home prices are basically expected to go nowhere for the foreseeable future. Home Prices Are Nearly 10% Overvalued Today The pair, Chris Flanagan and Gregory Fitter, contends that U. S. home prices are now 9. 7% overvalued relative to household incomes, using the S&P/Case-Shiller Home Price Index as the measuring stick. Simply put, incomes haven’t done a whole lot lately, but home prices (as we all know) have surged since the crisis abated. In fact, even after chalking double-digit gains from 2012 to 2013, asking prices in many hot markets are still more than 10% above year-ago levels. According to their math, home prices were about six percent below fair value at the end of 2011. So it looks as if we overshot the mark once more. Unfortunately, after stellar gains like that it’s pretty difficult to keep the momentum going, even with limited supply and low mortgage rates available. After all, affordability has its limits, and it’s finally being tested after a few silly good years. Not...

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### Opendoor Review: Get an Offer for Your Home in Just 24 Hours

- Published: 2014-07-14
- Modified: 2023-10-03
- URL: https://www.thetruthaboutmortgage.com/soon-youll-be-able-to-sell-your-home-online-in-just-three-days/
- Categories: Mortgage News

Life has gotten a lot more convenient over the past decade thanks to our friend the Internet. Today, we can shop for clothes, groceries, and just about anything else online, do our banking with text messages and smartphones, or hail a ride home with the touch of a button. But one area that still needs improvement is real estate, including the notoriously chaotic mortgage world where paperwork continues to be beyond burdensome in the digital age. Remember when MBA chief David Stevens claimed that the average mortgage file had grown to more than 500 pages? Well, hopefully the smart guys and gals up in Silicon Valley have a solution for that as well. Say Hello to Opendoor, the Instant Home Buyer Opendoor is one of the biggest iBuyers of residential real estate They want to help you sell your home quickly with the push of a button Instead of having to clean it, list it, show it, and wait for the offers to come in And make it easier to acquire a new home while getting rid of your old one A group of San Francisco-based tech disruptors (that’s the buzzword these days) have big plans to make selling your home a lot easier and faster. Their company, called Opendoor, has one mission. To make it easy to sell your home. To quote them exactly, their tagline appears to be, “The easiest way to sell your home. ” Note the wordeasy; nowhere on their one page website do they say...

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### The Daughter of Mortgage Bankers Association President David Stevens Doesn’t Want a Mortgage

- Published: 2014-07-11
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/the-daughter-of-mortgage-bankers-association-president-david-stevens-doesnt-want-a-mortgage/
- Categories: Mortgage News

You’d think that someone so heavily involved in the mortgage world would have a family full of homeowners, but that’s not the case with David Stevens. Despite being the president and CEO of the Mortgage Bankers Association (MBA), and formerly the FHA Commissioner, his 27-year old daughter still rents her place, per Businessweek. Sara Stevens is reportedly well aware of the favorable situation in housing at the moment, what with the near-record low mortgage rates, the increasing rents, and the ability to grow wealth through home equity. But that’s not enough for her and fiancé to give up their 765-square-foot one bedroom apartment in Arlington, Virginia, which runs at a hefty $2,195 a month. Sure, they’ve got some student loan debt, like most Millennials their age, but pops has already pledged to help her with the down payment if need be. And with combined income of nearly $108,000, the couple could most likely afford to purchase a fairly nice home or condo, even with home prices in the D. C. area pretty steep. The apparent issue is that they’re currently in a central location, close to a subway stop and within walking distance to popular bars and restaurants. If they decide to buy, they’d likely need to forego those perks for a longer commute and a home/condo that isn’t as nice as their current digs. Is She Like Any Other Person, or Is Dad Telling Her to Hold Off? On the one hand, it appears as if Sara Stevens has...

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### Hooray, Home Price Gains Are Slowing and Should Be Just Right by Year End

- Published: 2014-07-08
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/hooray-home-prices-are-slowing-and-should-be-just-right-by-year-end/
- Categories: Mortgage News

If we’ve learned anything from Goldilocks and the Three Bears, it’s that we should strive for “just right,” no matter if it’s porridge or home prices. After all, if they’re too hot, a correction surely looms, and if they’re too cold, it means something isn’t quite right with the housing market and the economy at large. Fortunately, home prices finally seem to be settling into long-term fundamentals, according to the latest edition of Trulia’s Bubble Watch. Homes Prices Still 3% Undervalued The real estate portal’s chief economist Jed Kolko noted in a blog post that home prices were only three percent undervalued in the second quarter, which tells us all is still good over at Bubble Watch. Yes, there were signs we were headed right back to 2006, seemingly forgetting lessons learned just years earlier, but then accelerating home price gains abated. Sure, home prices are still on the rise, but the pace is a lot more gradual, which as the title of this post suggests, is a good thing. At the worst of times, back in the first quarter of 2006, home prices were 39% overvalued according to Trulia. We all know what happened next. About five years later, we hit bottom as home prices were considered 15% undervalued in the fourth quarter of 2011. Since then, it’s been a white-hot housing market, that is, until the past few quarters as reality finally caught up with us. Now we’re on pace for a perfectly valued housing market by the...

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### Don’t Buy a House Because You Don’t Want to Miss Out

- Published: 2014-06-17
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/dont-buy-a-house-because-you-dont-want-to-miss-out/
- Categories: Mortgage Tips

I’m sure regular readers of this blog see me as a bit of a pessimist, perhaps a little cynical. After all, I bring the bad news and skepticism quite often on this blog, though I do try to sprinkle in good news as well. Aside from talking about mortgages and how they work, I like to touch on the state of the housing market, its direction, and whether it’s a good time to buy or sell. When it comes down to it, there are a lot of interested parties in the real estate world who all want us to buy houses, for better or worse. So it’s important to ask yourself why you want to buy now, and why you want to be a homeowner in general. Overall, I’d say I’m cautiously optimistic most of the time when it comes to real estate, especially today seeing that home prices have chalked double-digit gains just years after the worst crisis in recent history. I Don’t Want to Miss Out Buying real estate (or anything) because you don't want to miss out Might be an indication that it's a bad idea and/or poor timing And at the very least not grounded in rational thought It could also signal trouble down the road for prices This past weekend, I was watching the World Cup at a friend’s house who was hosting a little BBQ and viewing party for the Argentina match. His younger brother was visiting from Denver, and while we were chatting...

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### Mortgage Rates vs. the World Cup

- Published: 2014-06-12
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgages-rates-vs-the-world-cup/
- Categories: Mortgage Matchups

Happy World Cup opening day everyone. I like soccer (and mortgages) so I tried desperately to come up with a way to combine both subjects. After a little bit of thought, I decided to track mortgage rates over the years during past World Cups.   Let’s go back in time and take a look at where the 30-year fixed stood during the month of June in a World Cup year. As it stands today, the average interest rate on a 30-year fixed mortgage is 4. 20%, up from 4. 14% last week and 3. 98% a year ago, according to the latest survey from Freddie Mac. They’ve been tracking rates on the 30-year fixed since 1971. The earliest World Cup that corresponds with their data took place in West Germany in June 1974. And West Germany beat the Netherlands in the final to claim the FIFA World Cup Trophy, which was awarded for the first time during that edition of the WC. Prior to that, the Jules Rimet Trophy was permanently awarded to Brazil for dominating the rest of the world. I guess it made sense just to keep it with them seeing that they won so much. At that time, the 30-year fixed averaged 9. 09%... more than double today’s going rate. Fast forward to 1978 and once again the host country won the tournament. This time it was Argentina hosting and winning, taking out the Netherlands (again) in the final. During June 1978, rates on the 30-year fixed...

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### Mortgage Lending Standards Aren’t Too Tight, Really

- Published: 2014-06-10
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-lending-standards-arent-too-tight-really/
- Categories: Mortgage News

I’m getting sick and tired of hearing about how restrictive and constrained mortgage lending standards are these days. It’s really not that hard to get a mortgage, despite the massive financial failure that took place just a few years ago. In fact, you’d think it would be a lot harder to get a mortgage given the billion dollar losses that stemmed from loose lending over the past decade, but no. It continues to be easy to get a mortgage. Sure, the new Qualified Mortgage and Ability to Repay rules are now in effect, but most of those rules were already being voluntarily adhered to before they were implemented. The mortgage industry made it appear as if they were making some concessions, but banning 40-year mortgages and neg-ams when they were already pretty much nonexistent doesn’t mean a whole lot. Yes, the DTI limit of 43% is a very real thing, a legitimate rule that has the potential to limit mortgage lending. But it’s not being enforced for the next seven years if the loans are eligible for purchase by Fannie Mae, Freddie Mac, or the FHA. For the record, the overwhelming majority of mortgages made today are backed or sold to that trio. At the same time, there isn’t a minimum credit score associated with QM, nor is there a max loan-to-value ratio. It’s true that Fannie Mae got rid of their 3% down mortgage, but TD Bank brought it right back just a few months later. And Wells Fargo...

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### You Can Have an Adjustable-Rate Mortgage, But Only If You Educate Yourself First

- Published: 2014-06-09
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/you-can-have-an-adjustable-rate-mortgage-but-only-if-you-educate-yourself-first/
- Categories: Mortgage News

Homeowners opt for ARMs instead of fixed mortgages for a number of reasons, but it’s mostly to save money. After all, adjustable-rate mortgages are offered at a discount compared to fixed mortgages, and the level of discount varies based on how long the ARM is fixed. The shorter the fixed-rate period on an ARM, the lower the interest rate. So if you want the lowest rate, you need to go with a one-year ARM as opposed to a 7/1 ARM. Back in the mid-2000s, it wasn’t uncommon to see 1-month and six-month ARMs, which adjusted after just a month and six months, respectively. Clearly this made for a lot of uncertainty, especially for less sophisticated homeowners who were often aggressively pitched such mortgages. To make matters worse, lenders offered better pricing, or rather commissions, on ARMs with prepayment penalties. Long story short, a ton of naïve homeowners wound up with short-term ARMs and three-year prepayment penalties, meaning they couldn’t refinance (or even sell in some cases) once interest rates went up. As home prices tanked and monthly mortgage payments went up, the housing market imploded. The irony is that many of those who took out ARMs before the most recent housing crisis (to save money) lost their homes because of them. Could We Repeat History Again? But times have changed, right? Perhaps. The prepayment penalty is largely a thing of the past, and ARMs are a lot less popular these days thanks to ultra-low fixed rates. However, the ARM-share of...

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### Mr. Wonderful of Shark Tank Fame Thinks Real Estate Is a Crappy Investment

- Published: 2014-06-06
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mr-wonderful-of-shark-tank-fame-thinks-real-estate-is-a-crappy-investment/
- Categories: Mortgage News

If you watch Shark Tank, you’re quite familiar with Kevin O’Leary, the cynical money loving, yet somehow likable venture capitalist. Well, now he’s also a regular on CNBC, and he has no problem sharing his opinion on just about anything while also referring to himself as a “vampire” who has been around for 120 years. One of his latest areas of critique centered on residential real estate, which O’Leary unsurprisingly referred to as a “crappy investment. ” I say that because O’Leary never seems that impressed with any investment, that is, unless he can earn a royalty for perpetuity. Unfortunately, residential real estate doesn’t provide such certainty, though it’s pretty much guaranteed to rise in value over time. The question is will it outpace inflation or other investing options like stocks and bonds? Don’t Buy Real Estate. Don't Do It. O’Leary points out that a hypothetical couple who take out a $200,000 mortgage on a $250,000 house would need the property value to rise six percent a year to cover the interest on the loan itself, along with transaction fees and property taxes. And that’s apparently a tall order because O’Leary doesn’t even believe the home will be worth more than what the couple paid for it after five years. Now that’s clearly a pessimistic outlook, but real estate appreciation has seemed to top out recently. Home prices are still going up, but it’s pretty obvious that the big gains have come and gone and year-over-year gains are trending lower...

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### Netflix, iPhones, and Lattes Are More Important than Saving to Buy a Home

- Published: 2014-06-04
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/netflix-iphones-and-lattes-are-more-important-than-saving-to-buy-a-home/
- Categories: Mortgage News

A few months back, I noted that Millennials, those born between 1980 and 1995, purchased the most real estate between July 2012 and June 2013. It sounded like good news, a positive trend that should bode well for the housing market on into the future. After all, these first-time buyers are critical to the ongoing health of the real estate market. But there’s a problem. Nearly half of would-be Millennial home buyers today don’t have enough money saved up to purchase a home at today’s prices. For that reason, nearly half plan to ask mom and dad for the required down payment money (and some will even ask their grandparents), according to a new survey from Trulia. At the same time, 37% said they plan to work a second job in order to save the necessary cash, while 22% said they would turn to the state or federal government for help to achieve the American dream of homeownership. Down Payments Are an Issue for All Ages Either way, the message is clear – down payments continue to be an issue for prospective home buyers. Last week, I pointed out that nearly half of recent home purchases required mortgage insurance, so it’s not just the young that are struggling with down payments. Interestingly, Millennials aren’t even trying to buy McMansions, but rather modestly priced homes. In fact, 68% indicated that they were looking to buy a home under $200,000, which you think wouldn’t break the bank. But that would still require...

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### If You Can’t Pay the Mortgage, Live in Your Awesome Garage

- Published: 2014-06-04
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/if-you-cant-pay-the-mortgage-live-in-your-awesome-garage/
- Categories: Mortgage Tips

Here’s a novel idea. If you’re having trouble paying the mortgage, and you can’t get any assistance from your lender/servicer, you don’t need to give up your home. You just can’t live in the main house anymore. That’s what one guy did out in Palmdale, California, although he wasn’t actually struggling to pay his bills. He simply felt he had too much home and didn’t want to be wasteful. Chris Aune was looking for a smaller home for himself and his dogs, but found that most properties in the Antelope Valley were larger, single-family tract homes, something he wanted nothing to do with. So he opted for an older 1,400-square-foot home in a more central location. But even then, he thought it was too large for his purposes. Rent Out the “Front House” Because he didn’t need all that space, and partially for financial reasons, Aune decided to rent out the “front house,” aka his entire home less the garage. And thanks to recent zoning law changes, he was able to fully convert his spacious garage into a comfortable living space that was up to code, referred to as an Accessory Dwelling Unit (ADU). He pointed out that he didn’t need a “home for his car” because there was driveway parking and the neighborhood was safe. Aune spent about $30,000 converting his two-car garage into a 575-square-foot living space with all the essentials, including a bathroom, complete with toilet and shower, a washer/dryer, sitting room, bedroom, and a full kitchen....

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### Wells Fargo Vows to Fix the Flawed HELOC Product

- Published: 2014-06-03
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-vows-to-fix-the-flawed-heloc-product/
- Categories: Mortgage News

It’s not uncommon for homeowners to take out a home equity line of credit (HELOC) behind their first mortgage to pay for home renovations or to pay off other high interest rate debt. Or simply to take one out as a second mortgage to get the financing they need to purchase a home. But the way HELOCs are currently structured, homeowners have a tendency to get into a lot of trouble, especially if monthly payments rise significantly after the initial 10-year draw period. These days, most HELOCs allow for a 10-year interest-only period, followed by a 10- or 15-year repayment period. In other words, homeowners can make interest-only payments for a decade before actually paying back any of the money they borrow. Once the draw period ends, they must begin paying back all the debt over a shorter term (not 30 years), which will result in much higher payments. For example, a $25,000 line of credit set at 3. 25% (current prime rate) would cost about $68 per month when making the interest-only payment. Payment Shock = Payment Default That payment jumps up to over $175 a month once you’re required to make the full principal and interest payment and pay it off in just 15 years. And that’s assuming the prime rate remains at a super low 3. 25%. If interest rates rise during the draw period, which they probably will, the payment shock will be even greater. Many of these products don’t have any periodic interest rate caps...

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### Almost Half of Recent Home Purchases Required Mortgage Insurance

- Published: 2014-05-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/almost-half-of-recent-home-purchases-required-mortgage-insurance/
- Categories: Mortgage News

A new survey from TD Bank revealed that a large percentage of recent home buyers needed mortgage insurance to get the deal done. The bank surveyed 2,000 Americans who purchased a home over the past 10 years and found that 37% financed their homes with the help of mortgage insurance. If we consider just the past two years, the number was even greater, with 43% relying on MI to close their loan. In other words, nearly half of recent borrowers are unable or unwilling to put down 20% when purchasing a home, which makes the cost of homeownership a lot costlier. Are Home Prices Too High? It’s kind of a testament to how expensive homes are these days, despite mortgage rates and corresponding monthly mortgage payments being somewhat affordable to many. While the Fed has been able to drive down interest rates via efforts such as QE3, they haven’t been able to make the issue of large down payments magically disappear. Yes, there are options for those with little cash set aside, such as FHA loans, which only require a 3. 5% down payment, and conventional loans, which only require five percent down. There is even 100% financing still floating around, thanks to the Rural Housing Service’s popular USDA loan. But the down payment continues to be an issue for most Americans looking to buy a home, mainly because we have a tough time saving money. No wonder the typical renter needs an FHA loan in order to buy a...

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### Refinance Applications Remain 65% Below Last Year’s Pace Despite Lowest Rates of 2014

- Published: 2014-05-21
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/refinance-applications-remain-65-below-last-years-pace-despite-lowest-rates-of-2014/
- Categories: Mortgage News

You’d think mortgage applications would be humming given the recent sizable declines in mortgage rates. After all, rates haven’t been this low since last November. But the recent upticks in applications have been pretty lackluster. The Mortgage Bankers Association noted this morning that refinance apps were up four percent during the week ending May 16th from the previous week, which is a decent gain. However, they’re still lagging last year’s pace by a staggering 65%, according to MBA’s Chief Economist Mike Fratantoni. And purchase money mortgage apps aren’t holding up much better. Purchase apps were actually down from a week earlier and continue to lag year-ago numbers by more than 10%. And even if there are strong week-over-week gains, levels are so depleted that high percentage gains will look a lot better than they actually are. Rates Have Dropped About Half a Percent in Two Months Meanwhile, the 30-year fixed mortgage is pricing around 4. 125% to 4. 25% for good borrowers, not too far above record lows and much better than the 4. 625% average seen about two months ago. So why the heck isn’t volume improving more significantly? Well, rates have simply fallen back to 2013 levels. In other words, the people that wanted to refinance probably already did last year. Sure, some people might have only gotten the memo this time around, but most probably took care of business previously. This hasn’t really presented a new opportunity. There also seems to be low rate fatigue – people...

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### Joe Biden Is a Refinancing Machine

- Published: 2014-05-19
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/joe-biden-is-a-refinancing-machine/
- Categories: Mortgage News

Though HARP is often referred to as “Obama’s refinance program,” perhaps Vice President Joe Biden’s name should be in there as well. Why? Because the man refinances a lot, if his annual financial disclosure form released this past Friday by the White House is any indication. I wouldn’t go so far as to call him a serial refinancer, but he has refinanced his home mortgage several times since buying a Wilmington, Delaware residence for cash back in 1996. The home, now valued at nearly $1. 4 million according to its current Zillow Zestimate, was originally purchased for just $350,000. Yes, it has quadrupled in value in just 18 short years. And while Biden could have easily paid off his mortgage in full, he continues to carry multiple liens against the home, including a line of credit. Joe Biden's Mortgage Adventure His latest refinance took place in 2013, just a year after long-term fixed mortgage rates hit an all-time low. But he still seemed to snag the absolute lowest rate available, getting his hands on a new 30-year fixed-rate mortgage set at 3. 375%. Perhaps he paid points, or perhaps he “knows someone” who gave him an ultra-low rate. Either way, I guess it was too good to pass up, even with his busy schedule as Vice President of the United States. He also paid off two HELOCs in 2013, including one set at the prime rate, which he took out in 2005, and one set at 4. 49% that he...

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### It Turns Out the Qualified Mortgage Rule Is Pretty Flexible

- Published: 2014-05-15
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/it-turns-out-the-qualified-mortgage-rule-is-pretty-flexible/
- Categories: Mortgage News

Rules are inherently restrictive, but if there’s one thing the mortgage industry does well, it’s circumvention. For example, taking what appears to be a pretty small box and searching for openings to create a new niche product. That’s exactly what Banc of California has done via their Banc Home Loans correspondent line, despite the many rules that define a QM loan. Get a Mortgage One Day After Foreclosure or Short Sale While the concept of getting a mortgage one day out of foreclosure isn’t necessarily new, Banc Home Loans is offering some pretty aggressive terms while staying within the QM realm. For instance, they allow loan amounts of up to $1 million at 80% LTV for both purchases and rate and term refinances (owner-occupied only), even if you were foreclosed on yesterday. You can even get a mortgage if your bankruptcy was discharged just two years. In the $1 million to $2 million tier you can borrow up to 75% LTV, or as high as 70% between $2-$3 million. Not enough?   Borrow $3-$4 million up to 65% LTV. The only restriction is that you can only have one foreclosure or short sale on your credit report. So if you walked away from two properties, you’re out of luck. Now you might be thinking there’s a high credit score requirement for this program, given the generous LTV thresholds and the lack of foreclosure/short sale seasoning. But you’d be wrong – you can get this loan with a credit score as...

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### All-Cash Home Sales Hit New High as Mortgage Rates Fall to 2014 Low

- Published: 2014-05-08
- Modified: 2014-05-08
- URL: https://www.thetruthaboutmortgage.com/all-cash-home-sales-hit-new-high-as-mortgage-rates-fall-to-2014-low/
- Categories: Mortgage News

At first glance, the headline doesn’t make a lot of sense. Why would all-cash home sales increase if mortgage rates were hitting new lows for the year? Not only that, but why would all-cash sales rise when distressed homes sales are down and institutional buying is lower? Two separate reports came out today with the same basic message, that cash is still king despite the low rates and lack of investor activity. The National Association of Realtors noted today that all-cash purchases increased to 33% in the first quarter of 2014, up from 31% in 2013 to 29% in 2012. More than half of all homes purchased in Florida were paid for with cash, while roughly four out of 10 sales in Arizona, Nevada, and West Virginia were all-cash transactions. At the same time, the distressed home sale share fell to just 15% in the first quarter, down from 17% in 2013 and 26% in 2012. Over at RealtyTrac, all-cash sales hit a record high of 42. 7% of all residential property sales in the first quarter, up from 37. 8% in the fourth quarter and 19. 1% from a year earlier. That coincided with a large drop in institutional investor purchases, which fell to the lowest level since the first quarter of 2012. Such buyers, which are defined as those who purchased at least 10 properties in a calendar year, accounted for just 5. 6% of residential sales in Q1, down from 6. 8% a quarter earlier and seven...

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### Real Estate Agent Leaves Nasty Note for Homeowner Who Parks Car on the Front Lawn

- Published: 2014-05-07
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/real-estate-agent-leaves-nasty-note-for-homeowner-who-parks-car-on-the-front-lawn/
- Categories: Mortgage News

An interesting thing happened to a pair of Ocean City, New Jersey homeowners recently. Residents Bill and Barbara Doughten received an anonymous handwritten note from a real estate agent who took offense to them parking the car on the front lawn of their property. Apparently the elderly couple parked their car sideways on the front lawn instead of using their driveway, something that can be seen as crude to some. “I’m Trying to Sell Million Dollar Homes” Unfortunately, the real estate agent didn’t take the time to investigate the why of the matter, and instead left the scribbled note expressing his or her disgust for the seemingly tacky move. The agent expressed intense frustration in having trouble selling million-dollar homes because of the unsightly parking situation, writing, “You have a driveway – use it. ” But little did the individual know that the reason the homeowner parked on the lawn was because of their old age/health, with the lawn parking spot making for a shorter trip inside the home. After receiving the note, the incensed granddaughter of the couple took to Facebook to set the record straight. Stephanie Powley asked whether the agent actually took the time to think before writing the note, and called the person a “true coward” for staying anonymous. She added that her grandparents have been living in the home for longer than the agent has probably been alive, noting that the rest of the community understands the parking situation and has no problem with it....

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### Even Flippers Are Having a Hard Time Finding Homes to Buy

- Published: 2014-05-02
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/even-flippers-are-having-a-hard-time-finding-homes-to-buy/
- Categories: Mortgage News

If you’re currently in the market to purchase a home, you’re probably pretty frustrated. After all, it has become increasingly difficult to find a property thanks to ongoing inventory constraints. Factor in investors you have to compete with and renting starts to sound a lot more realistic. Over the past few years, investors have been leading the recovery, namely the big gun hedge funds buying up thousands and thousands of distressed properties. But they’ve been going with the buy and rent strategy, as opposed to the classic buy and flip approach. Still, classic flippers have been able to get back in the game thanks to the rebounding real estate market, though after a steady increase in business, numbers are on the decline again, according to RealtyTrac’s Q1 2014 U. S. Home Flipping Report released yesterday. During the first quarter, single-family home flips, which RealtyTrac defines as two sales that occur within six months, accounted for 3. 7% of all home sales.   That number is down from 4. 1% in the fourth quarter and 6. 5% a year earlier. However, flippers have gotten better at what they do because the average sales price of a flipped home during the first three months of the year was $55,574 higher than the average original purchase price, up from $51,805 a year ago. And the unadjusted return on investment was 30% of the average original purchase price, up from an unadjusted ROI of 28% a year earlier. House flippers appear to be benefiting...

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### Mortgage Rates Will Only Be Marginally Higher If Fannie and Freddie Disappear

- Published: 2014-04-28
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-will-only-be-marginally-higher-if-fannie-and-freddie-disappear/
- Categories: Mortgage News

Everyone seems to agree that Fannie Mae and Freddie Mac need to go away. Well, maybe not the hedge funds that hold their stock. Nevertheless, there are still plenty of concerns regarding their possible exit, one being the impact to mortgage rates. While still historically low, everyone agrees that interest rates would rise if the pair were to be replaced by a new housing finance system, something that could become a reality if the Johnson-Crapo housing reform bill eventually becomes law. This week, the bipartisan legislation will be discussed in front of the Senate Banking Committee, and opponents could point to unaffordable rates as a reason to shoot down the bill. Interest Rates Could Be 2% Higher? Last week, Fannie Mae and Freddie Mac released cost estimates if the legislation were to be enacted. They included low-cost, mid-cost, and extreme-cost estimates. Under the low-cost scenarios, interest rates would barely budge. But if Freddie’s extreme-cost scenario were realized, mortgage rates would rise more than 2%, enough to really turn housing affordability on its head. Of course, there’s a reason it’s referred to as “extreme. ” It probably won’t go down that way, though legislators do need to get the details right to avoid any uncertainty. Moody’s Analytics co-founder Mark Zandi weighed in on the subject, arguing that interest rates probably won’t rise all that much as long as capital requirements are ironed out beforehand. Long story short, raising the required level of capital will lead to higher interest rates, and how...

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### One in Four Homeowners Wouldn’t Buy Their Current Home Again If Given the Chance

- Published: 2014-04-24
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/one-in-four-homeowners-wouldnt-buy-their-current-home-again-if-given-the-chance/
- Categories: Mortgage News

Two words: Buyer’s remorse. Not a big deal when buying lunch, but a pretty huge deal when purchasing a home you don’t like. A new survey from Redfin and Harris Poll revealed that a good chunk of Americans aren’t too thrilled about owning their current homes. In fact, one in four surveyed (2,027 adults total) said they wouldn’t buy their home again if they were given the chance to go back in time. Redfin CEO Glenn Kelman said they included that question in the survey because of all the bidding wars, flash sales, price hikes, and the overall lack of inventory. Put another way, a lot of people might be rushing into buying homes just to “get in,” as opposed to actually thinking the whole thing through. Midwest Homeowners the Most Bitter However, it was those in the Midwest that were the most bitter about buying homes, an area that doesn’t really come to mind upon hearing the phrase “bidding war. ” There, a whopping 28% indicated that they had buyer’s remorse, beating out the Northeast slightly (27%), along with the South (25%) and West (20%). On the age front, the oldest homeowners seemed the least concerned about their home purchase. In the 65+ cohort, a solid 85% said they’d buy their home again if they had the opportunity. That compares to just 72% in the all-encompassing 18 to 64-year old category. I guess people really are more content once they get older... In terms of gender, women were more...

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### The 3% Down Payment Mortgage Has Returned

- Published: 2014-04-21
- Modified: 2024-03-12
- URL: https://www.thetruthaboutmortgage.com/the-3-down-payment-mortgage-has-returned/
- Categories: Mortgage News

Well that didn’t take long. Only about six months after we bid adieu to 3% down mortgages, they have resurfaced. Just in time for the 2014 spring home buying season. But this time things are a little different. Though Fannie Mae and Freddie Mac still don’t accept mortgages with less than five percent down, some individual lenders have loosened up guidelines in an effort to increase business. It’s no secret that loan origination volume is well below levels seen last year, and perhaps the best way to boost sales is to make it easier to qualify for a mortgage. One area that has been particularly troublesome for prospective buyers is coming up with a large enough down payment.   In fact, most renters have no other choice than a 3. 5% down FHA loan. Get a 3% Down Mortgage with No PMI On Friday, TD Bank reportedly began offering mortgages with down payments as small as three percent to certain low- and moderate-income borrowers via its Right Step program, per the WSJ. The program is reserved for borrowers who earn up to 80% of the median area income as determined by HUD, the parent of the FHA. While not everyone can qualify for such financing, it does represent a loosening from the original five percent down payment required a year ago. The loan program doesn’t require private mortgage insurance either, and the down payment can come in the form of a gift from family or a non-profit. However, the interest...

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### The Nation’s Most Expensive Short Sale Finally Sold This Week

- Published: 2014-04-15
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-nations-most-expensive-short-sale-finally-sold-this-week/
- Categories: Mortgage News

Sure, short sales have come to a relative crawl after carving out a decent slice of the real estate market over the past couple years, but there are still some stragglers gaining bank approval and closing. One of the more notable short sales to sell this week was in Greenwich, Connecticut. I say notable because it also happened to be the nation’s most expensive single-family home sale on record as well. The so-called “Copper Beech Farm,” the only 50-acre estate located along Greenwich’s waterfront, sold this week for a reported $120 million. Prior to the sale, the 12-bedroom, 7-bathroom (and two half-bathrooms) Colonial/Victorian residence was “enjoyed” by the Lauder Greenway family, who purchased it all the way back in 1904. I guess that makes it the world’s oldest short sale too... Original Asking Price Was $190 Million The seller originally listed the sprawling property for $190 million last spring, earning it the distinction of the most expensive single-family home to come to market in the United States. However, most realized it wouldn’t actually fetch that price, and after falling flat during its debut, the agent decided to get aggressive. The asking price was dropped twice, including an initial $50 million price cut, followed by another $10 million price reduction. That pushed the price down to $130 million, enough to garner a bite from a very rich buyer, who eventually paid $120 million. It had plenty of room to fall and still snag the record, seeing that the next most expensive...

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### Higher FHA Premiums May Have Priced Out 375,000 Potential Home Buyers

- Published: 2014-04-09
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/higher-fha-premiums-may-have-priced-out-375000-potential-home-buyers/
- Categories: Mortgage News

Earlier this week, the National Association of Realtors sent a letter to FHA Commissioner Carol Galante urging her to rethink the agency’s new mortgage insurance structure. Since 2011, annual mortgage insurance premiums have risen from 90 basis points to 135 basis points in an effort to shore up reserves at the FHA. Additionally, many borrowers must now pay the annual MIP for the life of the loan, instead of having it fall off once the loan dips to an LTV of 78%. As a result, NAR believes hundreds of thousands of renters are being priced out of the real estate market. They estimate that anywhere between 125,000 and 375,000 potential home buyers now have nowhere to turn for financing, with conventional loans also too expensive thanks to PMI and higher interest rates relative to the FHA. FHA Loan Payments Up 13% Since 2008 Even with a steady interest rate, FHA loan payments have risen markedly thanks to the new mortgage insurance structure. On a $150,000 loan set at 4. 5%, the monthly payment has increased from $834 to $942 over the past five years. The fees alone on an FHA loan account for nearly 20% of the mortgage payment thanks to the rising annual MIP and an upfront premium that nearly doubled from 1% to 1. 75%. Despite these increases, FHA loans tend to be cheaper than conventional loans at high LTVs. So these borrowers are effectively priced out if they have little to put down on a home. This...

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### Wholesale Mortgage Lender Drops Minimum FICO Score for FHA and VA Loans to 550

- Published: 2014-03-24
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/wholesale-mortgage-lender-drops-minimum-fico-score-for-fha-and-va-loans-to-550/
- Categories: Mortgage News

Update:Carrington Mortgage Services now allows FICO scores as low as 500 for both FHA loans and VA loans, which is the minimum credit score for an FHA loan. Recently, there has been plenty of moaning and groaning about the mortgage “credit box” being too tight. In a nutshell, banks and lenders have been accused of becoming too conservative, making it difficult for less creditworthy borrowers to obtain financing. But as home loan lending volume continues to plummet, the obvious “solution” is to expand offerings, namely, by easing guidelines.   That, after all, is the easiest way to increase your customer base in the mortgage biz. Carrington Plans to Serve the Underserved with Brokers For all intents and purposes, a 550 FICO score is pretty abysmal. In order for your credit score to sink that low you must have done something seriously wrong. Typically, it means missing a payment or three, whether just a credit card payment or a more major offense, such as a mortgage payment. Regardless, Santa Ana, CA-based Carrington Mortgage announced today that it would now accept FHA loan applicants with FICO scores as low as 550, down from their prior floor of 580. Perhaps there isn’t too much of a difference between a 550 and 580 score, but it’s still telling about the direction the mortgage industry is moving in. With less business to go around, those determined to stay in the game are getting more creative. Whether it’s a full-blown return to subprime lending remains to...

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### Forget Location, Location, Location, It's Water, Water, Water!

- Published: 2014-03-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/why-water-is-so-important-to-real-estate-values/
- Categories: Mortgage News

What a difference a city makes... in the uber-hot Bay Area, a staggering 43. 5% of homes for sale are priced at $1 million bucks or above, according to real estate listing website Trulia. Compare that to other major metros like Chicago, Dallas, and Philadelphia, where such listings account for fewer than five percent of listings. In fact, million-dollar listings account for fewer than five percent of all listings in 68 of the top 100 metros nationwide, which clearly illustrates the lopsided distribution of real estate wealth in this country. If you want to take it a step further, less than two percent of listings are million-dollar homes in 44 of the nation’s largest metropolitan areas. What Does $1 Million Get You in San Francisco? The saddest part about San Francisco’s real estate situation is that despite the ridiculous valuations, you don’t get very much for your money, unless you really like fog. That’s right, for $1 million or more, you only get a median sized home of 1,774 square feet. In other words, you’re probably looking at a townhouse or a condo in the city. And it certainly won’t be large enough to accommodate your family of four, unless you want to live on top of each other. Surprisingly, New York City wasn’t even in the top five in terms of percentage of million dollar listings.   The Big Apple secured the sixth spot with 20. 8% of listings in the $1 million plus category. It was surpassed by...

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### The Wind Down of Fannie Mae and Freddie Mac Gets Real

- Published: 2014-03-11
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-wind-down-of-fannie-mae-and-freddie-mac-gets-real/
- Categories: Mortgage News

Today, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) said they reached an agreement on housing finance reform. The pair is putting “finishing touches” on a piece of legislature they plan to release in a matter of days, which they plan to markup (debate and amend) in coming weeks. It’s based on the Corker-Warner Housing Finance Reform and Taxpayer Protection Act (S. 1217) released back on June 25, 2013. Sponsors of that bill include five Republicans and five Democrats from the Senate Banking Committee, giving it some added strength as a bipartisan effort. What Are the Goals of Housing Finance Reform? They’ve got a lot of goals, but I’ll focus on the more noteworthy ones and do my best to avoid the technical stuff. Their legislation will pretty much rely on S. 1217 for the base text and keep its overall architecture. - Wind down and eliminate Fannie Mae and Freddie Mac First and foremost, they want to do away with the “status quo” in which Fannie Mae and Freddie Mac rule the mortgage market, despite being in government conservatorship. The pair was taken over by the U. S. Treasury in September 2008, but continue to purchase and guarantee mortgages that meet their underwriting guidelines. Ironically, they gained an even larger market share of newly-originated mortgages after the government takeover, which makes it quite clear the move was only a Band-Aid solution at best. The bill would wipe them off the face of the Earth...

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### Thank You Millennials for Your Faith in Real Estate

- Published: 2014-03-11
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/thank-you-millennials-for-your-faith-in-real-estate/
- Categories: Mortgage News

It wasn’t long ago that real estate was deemed toxic, untouchable, whatever bad thing you want to call it. But times have changed, thanks to low interest rates and massive price cuts. And one group seems to be taking advantage, namely, the Millennials. If you’re not familiar, they are a group of youngsters born between 1980 and 1995, who also go by the name “Generation Y” and “Generation Next. ” Interestingly, it is this group that purchased the most real estate between July 2012 and June 2013, according to the 2014 NAR Home Buyer and Seller Generational Trends study released today. Gen Y = Largest Share of Recent Home Buyers Millennials don’t just text, play around on Twitter, and create cool Tumblr blogs. They also make money and buy things. In fact, the group accounted for 31% of recent residential real estate purchases, leading all other generational groups. At the same time, Generation Next had the smallest share of home sellers at just 12%, which makes sense given the young age. The median age of a Millennial home buyer was 29 and median income was $73,600. An overwhelming 75% were first-home home buyers. They were most likely to buy a property in an urban or central city area and stay in their homes for 10 years. Interestingly, they purchase homes primarily for the “desire to own” a home, not to get rich. In the home buying department, they were followed very closely by Gen X, which includes individuals born between...

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### Why Low Mortgage Rates Might Force You to Stay in Your Current Home Forever

- Published: 2014-02-26
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/why-low-mortgage-rates-might-force-you-to-stay-in-your-current-home-forever/
- Categories: Mortgage Tips

After the Fed steered mortgage rates lower via quantitative easing, the housing market got the boost it needed to get back on track. In fact, housing became so cheap that the buy vs. rent argument wasn’t even an argument anymore; buying a home was a no-brainer. At the same time, the low rates allowed scores of both above-water and underwater homeowners to refinance their existing mortgages, creating a bonanza for banks and lenders nationwide. So there was a lot of good that came of the low interest rates, but many are now wondering what the consequences will be. Unfortunately, that refinance boom has since come and gone, and now many would-be buyers are questioning home purchases as well, leaving banks with the dilemma of finding business elsewhere or easing underwriting guidelines. Both interest rates and home prices are up significantly from 12 months ago, which should give anyone pause who takes the time to think before they act. I noted a few months ago that the refinance boom was so good that there might not be anything left when it’s all said and done. And I later added that the Fed ruined mortgage rates forever by pushing them beyond historical norms. The obvious downside is that consumers now see long-term fixed mortgage rates below 5% as the new normal, but can they really remain that low over time? Rising Interest Rates Have the Ability to Lock Homeowners In Do you live in a so-called "locked-in household" Whereby the super low...

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### It Looks Like the Seller’s Market Is Coming to an End

- Published: 2014-02-20
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/it-looks-like-the-sellers-market-is-coming-to-an-end/
- Categories: Mortgage News

Many people will look back at 2013 with regret, perhaps realizing that there was a golden opportunity to purchase a home at a major discount. And snag a record low mortgage rate to boot. Today, home prices aren’t so low, nor are mortgage rates. Yes, they’re both lower than they were during the previous boom, but they’re markedly higher than they were just 12 months earlier. What’s clear today is that real estate cycles move fast, if the last few years were any indication. Back in 2011 and 2012, most didn’t want to touch real estate with a 10-foot pole, but in early 2013, it became a manic buying frenzy. There weren’t enough homes on the market to quench the appetite of hungry buyers nationwide. And the few homes that did come to market went to all-cash buyers, aka investors with deep pockets. New families and first-time home buyers simply got outbid and moved on to the next property. Often, that next property wasn’t their dream home, nor did it fit their original needs. But the desire to get in a house, any house, was strong. Feverish even.   Not exactly ideal conditions. Fast forward to early 2014 and for sale signs are collecting dust, getting sun or snow damage, and falling apart. There's even talk of another housing bubble. Scan your local listings and you’ll probably see a fair amount of properties that have been on the market for months, if not more than a year. In Between a...

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### PenFed Just Invented a New Mortgage Program: The 15-Year ARM

- Published: 2014-02-18
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/penfed-just-invented-a-new-mortgage-program-the-15-year-arm/
- Categories: Mortgage Tips

If you’re not satisfied with the selection of mortgage programs offered by your bank or local lender, you might want to consider the new 15/15 Adjustable-Rate Mortgage now being offered by PenFed for a limited time. Yes, you heard that right. The Pentagon Federal Credit Union just launched, or in their own words, “invented,” an adjustable-rate mortgage that doesn’t make its first adjustment for 15 years. And once it does adjust for the very first time, it never adjusts again. Talk about a gamble, assuming you still have your mortgage in the year 2033. The 15-Year ARM Starts at 4. 625% This is a first of its kind home loan program An adjustable-rate mortgage with just one rate adjustment During the entire life of the loan Which is a full 30 years despite what the name may indicate PenFed’s new promotional loan program has a start rate (teaser rate) of 4. 625%, which is fixed for the first 15 years of the 30-year loan. Then the rate adjusts to whatever the weekly average yield on US Treasury securities (I believe the 10-year CMT index) is plus a margin of two percent, rounded to the nearest eighth. So based on today’s CMT of 2. 90%, you’d be looking at a rate of around 4. 90% once it becomes adjustable. Of course, in 15 years that could change significantly. Take a look at the chart of the 10-year yield above. It fell as low as 1. 40% in mid-2012, but has since...

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### Did You Receive a HAMP Modification? If So, Your Mortgage Payments May Increase This Year

- Published: 2014-01-29
- Modified: 2024-01-31
- URL: https://www.thetruthaboutmortgage.com/did-you-receive-a-hamp-modification-if-so-your-mortgage-payments-may-increase-this-year/
- Categories: Mortgage News

Back in 2009, the government launched the Home Affordable Modification Program (HAMP) to help struggling homeowners keep up with their out-of-control mortgage payments. The program offered all types of solutions to reduce borrowers’ monthly mortgage payments to 31% of their gross monthly income, including interest rate reductions (to as low as 2%), loan term extensions, and principal balance reductions. But there was a caveat. Five years after the modification, homeowners who received reduced interest rates would face rate resets. And seeing that it’s 2014, the very first batch of these rate resets is soon to go live. Of the 894,302 homeowners with active HAMP permanent modifications, an overwhelming 88% are scheduled to have mortgage rate increases, according to a new report from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). The increases will take place between 2014 and 2021, and will rise incrementally by up to 1% each year until reaching the national average rate for a conforming 30-year fixed-rate mortgage on the date of the original modification. The average 30-year fixed rate over the past five years has hovered between 4% and 5. 4%, so those enjoying 2% mortgage rates will be in for quite a surprise. Someone’s Monthly Mortgage Payment Will Go Up $1,724 While HAMP was created to make monthly mortgage payments affordable The loan modifications came with rates that weren't set in stone The good news is that the median payment increase is just $196 Which when coupled with the...

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### The Following Words Were Not Found in Obama’s State of the Union Address Last Night

- Published: 2014-01-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-following-words-were-not-found-in-obamas-state-of-the-union-address-last-night/
- Categories: Mortgage News

President Barack Obama said a lot of things during his annual State of the Union Address before Congress last night, but he didn’t utter any of the following words or phrases: - Mortgage - Home loan - Bank - Lender - Refinance - Refinancing - HARP - Foreclosure - Qualified Mortgage - Home prices - Mortgage rates - Fannie Mae - Freddie Mac - FHA In many of his previous addresses, the ongoing housing crisis was at the forefront, but it appears we have turned the corner. After all, it is 2014, and stuff hit the fan all the way back in 2007-2008, so it’s been quite a while now. In fact, the only thing he mentioned about the housing market was that it was “rebounding,” and that taxpayers shouldn’t foot the bill for a housing crisis ever again. Housing Mission Accomplished So this can be taken as good news, as mission accomplished on the housing front. Foreclosures are down, home prices are up, there are fewer underwater homeowners, mortgage rates are still low, and there’s no longer a need to even talk about it. Yes, there will continue to be short sales, foreclosures, strategic defaults, and even mini housing bubbles, but the chaos seems to be contained for now, until the next major misstep. While this is welcome news, and something we should surely sit back and appreciate, as opposed to worrying about what will happen next, it does mean the government handouts are likely up. The Home Affordable...

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### The HarmonyLoan: An Adjustable-Rate Mortgage You Control

- Published: 2014-01-28
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-harmonyloan-an-adjustable-rate-mortgage-you-control/
- Categories: Mortgage Tips

As home prices and mortgage rates continue to rise, lenders are becoming a lot more creative with their product offerings to increase affordability and flexibility. One of the more unique loan programs currently being showcased is called the “HarmonyLoan,” which as the name implies, promises to make everyone happy. It takes the standard adjustable-rate mortgage and sprinkles in options and peace of mind, giving borrowers more incentive to choose an ARM over a more expensive fixed-rate option. The HarmonyLoan Is a One-Click Refinance Instead of having to go through all the trouble of a typical refinance Those with a HarmonyLoan can simply click a button To reset their interest rate lower It could come in handy if rates drop or you're nearing an adjustment on an ARM Pictured above is a favorable example of a HarmonyLoan Rate Reset. Here’s how the HarmonyLoan works. You start with a hybrid ARM, or even a fixed-rate mortgage. Loan options include the 5/1 ARM, 7/1 ARM, 10/1 ARM, 30-year fixed, and 15-year fixed. Six months after loan closing, you will get the first opportunity to reset your interest rate. After the first six months, you can reset every 120 days, but the loan must be current with no late payments in the past 12 months. For example, say you originally locked in an interest rate of 3. 25% on a 5/1 ARM, and rates eventually fall to 3% or lower. As long as six months have gone by initially, you can reset your mortgage...

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### If You Don’t Want to Work Forever, Pay Off Your Mortgage

- Published: 2014-01-23
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/if-you-dont-want-to-work-forever-pay-off-your-mortgage/
- Categories: Mortgage Tips

Conventional wisdom says to pay off the mortgage in its entirety before you retire. That way you won’t have to worry about sizable housing costs when living on a fixed income. Lately, this age old rule has been challenged by a lot of folks because mortgage rates are at unprecedented low levels (or were). Heck, they still are super low, which makes the argument stronger to hold onto the mortgage longer, especially seeing that mortgage interest is tax deductible. But new research from the Center for Retirement Research at Boston College reveals that those with debt are more likely to continue working well into old age. In fact, their working paper revealed nearly half of those in their 60s with debt continued to go to work, compared to just a third of those with no debt. And mortgages seem to be the major culprit, seeing that the debt is often much larger on home loans than credit cards or other loans. More Than Two-Thirds of 64-Year Olds with Mortgages Are Still Working The researchers, Barbara Butrica and Nadia Karamcheva of the Urban Institute, found that at age 64, more than two-thirds of homeowners with mortgages still had to huff it to work. Meanwhile, just over half of those who had paid off their mortgage still went to work each day. So it’s clear that those who tackle the mortgage before they hit their golden years can actually retire at an appropriate age. This new research was a follow-up to a...

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### Real Estate in the United States Is Actually Cheaper Than Most Other Parts of the World

- Published: 2014-01-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/real-estate-in-the-united-states-is-actually-cheaper-than-most-other-parts-of-the-world/
- Categories: Mortgage News

Believe it or not, real estate in the United States is actually really cheap, assuming you compare it to what others are paying in places like Asia, Europe, Canada, and Australia. A new report released today by Demographia compared housing affordability in 360 markets worldwide and found that the U. S. was far and away more affordable than other countries. In its 10th Annual International Housing Affordability Survey (which relied upon data from the third quarter of 2013), the company looked at median home prices and household incomes to determine if the dream of homeownership was within reach. They took the median home price and divided it by the median gross household income to come up with different levels of affordability. Historically, the median multiple has been similar across the nine nations surveyed, with median home prices typically three times (or less) median household income. Real Estate in Hong Kong Is Reserved for the Uber Rich But times have changed... Using that metric, Hong Kong was the least affordable major metropolitan area in the world with a staggering median multiple of 14. 9. In Hong Kong, which is a special administrative region of China, the median household income was $270,000 as of the third quarter. While that sounds amazingly great, the median home price was $4,024,000. In other words, good luck. For the record, Hong Kong was the most unaffordable major market (1,000,000+ population) in the world for the fourth year in a row. Our neighbors to the north have...

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### Quicken Loans Offering $1 Billion for Perfect March Madness Bracket

- Published: 2014-01-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/quicken-loans-offering-1-billion-for-perfect-march-madness-bracket/
- Categories: Mortgage News

Well, somehow it’s already late January, which means NCAA March Madness is less than two months away! It’s personally one of my favorite sporting events, perhaps after the Olympics and the World Cup, but far more exciting than the boring old Super Bowl. With that said, here come the perfect bracket contests... Possibly the most exciting, ridiculous, and inane one is sponsored by Quicken Loans, the self-described “fourth largest retail home mortgage lender” in the nation. They apparently closed a record $80 billion in home loans last year across all 50 states, likely thanks to those stellar mortgage rates on offer. Billion Dollar Bracket Challenge The Detroit-based lender has teamed up with Warren Buffett and his Berkshire Hathaway company to offer a startling $1 billion to any entrant who manages to complete a perfect bracket in the upcoming men’s college basketball championship tournament. The $1 billion prize will be paid in 40 annual installments of $25 million, or if the winner prefers, a $500 million lump sum payout. For the record, Buffett is simply insuring the event, coined the “Billion Dollar Bracket Challenge. ” And it’s no wonder why he agreed to insure it. There’s no chance of filling out a perfect bracket, at least, if you believe DePaul math professor Jay Bergen. The prof claims there are over nine quintillion ways to fill out a March Madness bracket, meaning the odds are against you. Big time. To be exact, the odds are 1 in 9. 2 quintillion, or 9,223,372,036,854,775,808...

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### No, It’s Not Always a Good Time to Buy a Home

- Published: 2014-01-17
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/no-its-not-always-a-good-time-to-buy-a-home/
- Categories: Mortgage Tips

If you talk to most interested parties, whether it’s a real estate agent, a home builder, or someone else who stands to make money from your decision, they’ll probably tell you that it’s always a good time to buy. In fact, that it’s a great time to buy. That real estate always goes up, and even if there are some near-term hiccups, the trajectory is clear. Up. And they could be sort of right. If you look at long-term home price charts, values rise over time, despite downturns here and there. Can’t argue with history... There Are Better and Worse Times to Buy Real Estate However, one thing is abundantly clear. There are certainly better and worse times to buy a piece of real estate. Case in point, this chart from none other than the National Association of Realtors, the perennial cheerleaders of real estate. It shows the home equity a buyer of a median priced home would have accrued based on purchase year. The chart starts in 1984, which is 30 years ago. Most mortgages have 30-year terms, so for the individual who kept their original mortgage and paid it off, they’d be free and clear. They’d also own a property that would have appreciated somewhat significantly, even with occasional pullbacks, including the latest severe drop in home prices. Additionally, inflation would make their home equity appear even greater. For this buyer, it was a good time to buy and hold. They probably have a nice little nest egg....

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### Quicken CEO: Mortgage Rates on Non-QM Loans 4-5% Higher Than QM Loans

- Published: 2014-01-15
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/quicken-ceo-mortgage-rates-on-non-qm-loans-4-5-higher-than-qm-loans/
- Categories: Mortgage News

This morning, the House Financial Services Committee heard testimony from five housing industry leaders regarding the new QM rule. The hearing, titled, “How Prospective and Current Homeowners Will Be Harmed by the CFPB's Qualified Mortgage Rule,” essentially allowed “witnesses” to vent about the new mortgage rules that went into effect on January 10th. What stood out the most to me was a comment made by Bill Emerson, CEO of Quicken Loans, who spoke on behalf of the Mortgage Bankers Association (MBA). He made a number of claims, but perhaps the most noteworthy was his assertion that non-QM loans have mortgage rates 4-5% higher than QM loans. Emerson said certain rate sheets he received indicated that non-QM loans cost “significantly more,” unless they’re for low-default/high credit quality borrowers. Rates Between 8-10% for Non-QM Assuming the standard 30-year fixed is pricing around 4. 5%, a non-QM 30-year fixed would go for between 8. 5% and 9. 5%, or even higher if the loan was deemed higher risk for whatever reason. Such loans would also require very high down payments or significant home equity to gain approval. Clearly this pricing isn’t going to lead to very many QM loan closings, which is why so many industry participants are against the new rule as it stands. Emerson also noted that many jumbo loans wouldn’t qualify for the QM distinction because DTI ratios often exceed 43%. However, because these borrowers tend to have great credit and abundant assets, he believes jumbos will still be available...

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### Nearly 85% of Real Estate Agents Are Actually Homeowners

- Published: 2014-01-14
- Modified: 2018-01-25
- URL: https://www.thetruthaboutmortgage.com/nearly-85-of-real-estate-agents-are-actually-homeowners/
- Categories: Mortgage News

A new analysis from real estate information portal Trulia revealed that the overwhelming majority of real estate agents actually own homes as opposed to rent. The company scoured Census data from 2007-2012 to come up with the homeownership rates, and found that 84. 9% of real estate brokers and sales agents owned property. That compares to just 70. 1% for individuals in all other occupations combined. Appraisers Own, Rarely Rent Trulia also found that many other housing-related jobs had high levels of homeownership, with appraisers and assessors of real estate the most likely to own. This group exhibited a homeownership of 87. 9%, which was second only to “farmers, ranchers, and other agricultural managers. ” And yes, that latter group tends to need to own land to run their respective businesses. In the construction world, construction managers boasted an 82. 9% homeownership rate while construction workers owned just 65. 9% of the time. That’s a sizable gap for those barking orders and those actually hammering in the nails. Finally, there are the architects, which had an ownership rate of 80. 1%. If you’re wondering why these individuals tend to own as opposed to rent, Trulia believes it’s a combination of believing in the importance of homeownership, along with knowing the ins and outs of the home buying process. And it’s not just demographics. Trulia also took the time to determine what the homeownership rate would be based on the age, income, and location of these real estate workers, with occupation...

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### Mortgages Originated in 2013 the Best Performing on Record

- Published: 2014-01-14
- Modified: 2017-11-19
- URL: https://www.thetruthaboutmortgage.com/mortgages-originated-in-2013-the-best-performing-on-record/
- Categories: Mortgage News

We all know underwriting standards have improved immensely since the latest housing crisis. When it comes down to it, they couldn’t have gotten much worse, seeing that lenders were turning to pay-option arms with zero down as a solid choice for borrowers. Today, it’s all about sound underwriting and fixed-rate mortgages, which coupled with rising prices and ultra low mortgage rates, make for a pretty solid recipe. But just how good are the mortgages being made today? Well, according to a new report from Black Knight Financial Services (formerly Lender Processing Services), they’re the best ever. The company’s senior vice president of Data & Analytics, Herb Blecher, noted that 2013 originations were the “best-performing vintage on record. ” If you take a look at the chart below from their most recent Monthly Mortgage Monitor, you’ll notice performance is solid across the board, for Fannie and Freddie loans, FHA and VA loans, and portfolio and private loans. The delinquency rate for loans six months out with 720+ credit scores and LTV ratios south of 80% is fractional. From the chart it appears as if portfolio loans (those kept by banks on their own books) are performing best, followed by GSE loans (Fannie and Freddie), then Ginnie Mae loans (FHA/VA), and finally private. The worst performing vintages vary by loan type, though 2006 to 2008 were the worst years without question. For GSE loans, 2007 was far and away the worst vintage. Loans originated during this period accounted for much of the...

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### 10 Predictions for Mortgage and Housing in 2014

- Published: 2014-01-06
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/10-predictions-for-mortgage-and-housing-in-2014/
- Categories: Mortgage Tips

Well, 2013 has officially come to a close, and 2014 is well underway. For a moment there, it seemed as if each holiday was followed by a weekend, creating an endless vacation, but sadly it’s time to get back to work. So without further ado, I present to you my top 10 predictions for the mortgage and housing market for 2014. For the record, you can see my 2013 predictions here, which I’ll admit were a bit of a mixed bag. 1. Mortgage rates willinchhigher Last year, I expected mortgage rates to move somewhat sideways. I was wrong. They went up a lot more than I predicted. This year, however, I see the movement a bit more muted, seeing that they’ve already risen so much (more than 1% in a year). Most market pundits expect rates on the 30-year fixed mortgage to average close to 5% by year-end, which is less than half a point above current levels. Yes, higher, but not that much higher. And still cheap. 2. Home price appreciation will ease, somewhat Going hand in hand with that prediction is the expectation that home price appreciation will moderate after an explosive couple years. Again, the idea here is that home prices have already chalked impressive gains, so the upside is more limited. Of course, that will depend on the region of the country in question. And our propensity to chase prices higher. I’m not sure I agree with the really conservative views though – the housing market...

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### The Average Mortgage Application File Is Now 500 Pages Long

- Published: 2013-12-12
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-average-mortgage-application-file-is-now-500-pages-long/
- Categories: Mortgage News

During the early 2000s, you didn’t need to prove much to qualify for a mortgage. In fact, it got to a point where it was kind of rare to provide “full documentation” when applying for a mortgage. The most common doc type at that time was stated income, where a borrower would simply write in their monthly income on the loan application form, without the need for tax returns or pay stubs to back it up. This was designed for the self-employed and others with complicated financials that didn’t want to provide hundreds of pages of documentation to get the deal done. These types of loans became extremely popular when home prices surged in value and mortgage payments were no longer manageable for some borrowers. In order to comply with DTI limits, borrowers simply stated their income and moved on. Unfortunately, this eventually led to the advent of no doc lending, which didn’t require income, asset, or employment documentation. Instead, it simply required a credit report to determine eligibility. That Was Then, This Is Now Today, it’s quite the opposite. Because of the obvious missteps made during the housing run-up, lenders now require all types of documentation to get the deal done. Most borrowers now need to provide two years of tax returns and two months of bank statements, along with countless disclosures that seem to be growing in number year after year. In fact, the paperwork situation has gotten so bad that the average mortgage application file now contains...

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### It Turns Out the Best Time to Sell a Home Is During Winter

- Published: 2013-12-11
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/it-turns-out-the-best-time-to-sell-a-home-is-during-winter/
- Categories: Mortgage News

Conventional wisdom says its best to list your home in spring if you want to get the most bang for your buck. And by that, I mean sell your home in a relatively short amount of time for a good price. After all, once winter thaws there are typically a lot more buyers on the lookout for their dream home, which means bidding wars and attractive offers. But a new analysis from Redfin (yes, them again) revealed that winter is in fact the best season to list and sell a home, at least if the past couple years are any indication. The real estate brokerage looked at listings from March 22, 2011 to March 21, 2013, and found that homes sold more often, faster, and for more money during winter than any other season. For example, 65% of winter listings (Dec. 21 – March 21) were likely to sell within six months, compared to just 56% of non-winter listings. And the average sale-to-list price ratio was -2. 3% for winter listings, compared to -3. 5% for non-winter listings. Amazingly, summer was the worst season in this department. The average days on market were also significantly lower for winter listings, at 26 compared to 33 for non-winter months. Warmer Winter Wonderlands Even Better Redfin found that homes sold faster in winter In areas that are warm year-round But in the cold parts of the country The numbers were lower as expected In places where winters aren’t all that cold, the likelihood...

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### How the Fed Ruined Mortgage Rates Forever

- Published: 2013-12-10
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/how-the-fed-ruined-mortgage-rates-forever/
- Categories: Mortgage News

A few years back, the Fed began purchasing mortgage-backed securities in an effort to lower interest rates on mortgages. Over time, the endeavor, known as Quantitative Easing (QE) proved successful and borrowers enjoyed the lowest mortgage rates in history. As planned, mortgage rates dipped to record lows, prompting a housing recovery that at the time appeared as if it would never come. The 30-year fixed mortgage hit its lowest point during the week ending November 21, 2012, averaging 3. 31%, according to statistics from mortgage financier Freddie Mac. About five months later, the 15-year mortgage fixed bottomed out at 2. 56% during the first week of May. Mortgage Rates About 1% Above All-Time Lows Even though mortgage rates are no longer at their lowest lows They're still very cheap historically But the Fed created unrealistic expectations Especially for those who have only seen today's rates and weren't old enough to remember when much higher rates were the norm Since then, rates on both popular loan programs have increased significantly, rising to 4. 46% and 3. 47%, respectively, after the Fed hinted at ending or tapering its QE program. Rates on each are now about a percentage point above their all-time lows, but still historically cheap. For example, the 30-year fixed averaged 17. 48% back in early 1982, which is about four times current levels. Still, it doesn’t seem good enough these days, now that borrowers have gotten a taste of something better. It’s a weird human psychology, but once we...

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### Underwater Mortgage Insurance: Yes, It Exists Now

- Published: 2013-12-03
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/underwater-mortgage-insurance-yes-it-exists-now/
- Categories: Mortgage News

Plenty of strange things happened after the latest housing boom and subsequent bust, but this is perhaps one of the most interesting byproducts. An insurance company named AmTrust Financial has come up with an innovative insurance policy known as “Underwater Mortgage Protection,” or UMP for short. Put simply, it protects you financially if your home goes down in value and you need to sell at a loss. Over the past several years, scores of homeowners have been forced to sell short or simply walk way because their mortgage balance exceeded the depleted value of their home. A UMP policy is designed to cover the shortfall a homeowner in this position might encounter when selling after a significant home price decline. How Underwater Mortgage Protection Works If you need to sell your home But your outstanding loan balance exceeds the sales price Underwater Mortgage Protection can cover some or all of the shortfall In exchange for a paid premium Assuming you need to sell your home when underwater on the mortgage, you’ll complete a claim form. AmTrust will then assist in the sale of your home by “guiding the listing and the closing of the home sale to maximize the price and minimize the marketing time in a down market. ” This entails having an “asset management specialist” obtain a market value for your home and determine a listing price with a real estate agent. For the record, they also use an AVM to obtain the appraised value of your property...

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### 2014 Conforming Loan Limits Unchanged (Except for These 18 Counties)

- Published: 2013-11-26
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/2014-conforming-loan-limits-unchanged-except-for-these-18-counties/
- Categories: Mortgage News

After much speculation and fear mongering, the FHFA finally announced this morning that the conforming loan limit for mortgages acquired by Fannie Mae and Freddie Mac would stay put at $417,000 in 2014. There was some panic the FHFA would lower the loan limits now that we’re mostly out of the woods housing crisis-wise, but interested parties like the National Association of Realtors fought tooth and nail to keep the existing limits in place. The $417,000 loan limit applies to one-unit properties in the contiguous United States, sans the “freak states,” otherwise known as Alaska and Hawaii. In those states, along with Guam and the U. S. Virgin Islands, the conforming loan limit is 50% higher and will remain at $625,500. There Are Two Loan Limits In Effect Since 2008, there are actually two sets of mortgage loan limits, including the “general” and “high-cost. ” The general, or traditional conforming loan limit, hasn’t changed since 2006, before rising about fourfold since 1980. Yes, it stood at just $93,750 back in 1980, and was even as low as $252,700 in the year 2000 before rising like crazy along with home prices. However, the high-cost loan limit has gone on a wild ride thanks to all types of housing crisis legislation, including the Economic Stimulus Act of 2008 and the Housing and Economic Recovery Act of 2008 (HERA). The high-costs limits were as high as $729,750 from mid-2008 until late 2011, but have since fallen to a maximum of $625,500, which is...

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### Former Fannie Mae Executive Says the FHA Is a Predatory Lender

- Published: 2013-11-20
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/former-fannie-mae-executive-says-the-fha-is-a-predatory-lender/
- Categories: Mortgage News

Things are getting nasty in the mortgage world. Former Fannie Mae executive vice president and chief credit officer Edward Pinto slammed the FHA in an op-ed piece on the American Enterprise Institute (AEI) website today. He opened his assault with a definition of predatory lending, which the FDIC defines as “imposing unfair and abusive loan terms on borrowers” and “taking advantage of borrowers' lack of understanding of complicated transactions. ” This is often done through “aggressive sales tactics” and “outright deception. ” Pinto then points out that the FHA’s mortgage insurance program qualifies as “predatory” under that definition. Pinto Claims the FHA Overcharges Lower-Risk Borrowers His first argument is that the FHA overcharges lower-risk applicants. He notes that hundreds of thousands of borrowers have been steered into FHA loans instead of cheaper conventional loans. In fiscal year 2013, he claims roughly 200,000 home buyers that opted for FHA loans could have saved nearly $4,000 over the life of their loans, or $710 million collectively. Additionally, Pinto points out that FHA premiums add up to 10% of the initial mortgage amount over the life of the loan. And because it doesn’t charge for credit risk, low-risk borrowers essentially pay to subsidize rates for high-risk borrowers. He further explains that when the FHA was established back in the 1930s, cross-subsidization was “explicitly prohibited,” yet the average low-risk borrower with a $150,000 loan amount is paying an extra $9,000. Finally, he likens the cross-subsidies to offering what he calls “abusive loan insurance” to...

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### Know Before You Owe Mortgage Forms Finalized

- Published: 2013-11-20
- Modified: 2024-03-16
- URL: https://www.thetruthaboutmortgage.com/know-before-you-owe-mortgage-forms-finalized/
- Categories: Mortgage News

The Consumer Financial Protection Bureau (CFPB) has been hard at work over the past couple years changing the way Americans obtain mortgages, among other things. Their latest mission was to put the clunky and confusing Good Faith Estimate and Truth in Lending (and HUD-1) disclosures to rest, for good. And it appears they’ve done that, though the new "Know Before You Owe" mortgage forms won’t be required until August 1, 2015. So yeah, banks and lenders have a little bit of time before they actually have to start using them, but let’s take a closer look in the meantime. The Loan Estimate The CFPB created two new forms, both pretty darn crisp and clear as far as I can see, which I suppose was the mission at hand. Within three business days of submitting a home loan application, prospective borrowers will receive the so-called “Loan Estimate. ” It essentially replaces the early Truth in Lending Disclosure and the Good Faith Estimate, effectively combining two old forms into one shiny new one. In creating the new documents, the CFPB noted that the 30-year old documents contained overlapping information that was developed by two completely different federal agencies. As a result, the process was both confusing and cumbersome for borrowers, and loan officers were burdened with having to explain the redundant documentation. The new 3-page form contains all types of information, including the loan type, loan term, the projected payments (for both the early years and later years), along with the cash...

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### Housing Affordability Chalks Biggest Drop Since Second Quarter of 2004

- Published: 2013-11-18
- Modified: 2018-03-30
- URL: https://www.thetruthaboutmortgage.com/housing-affordability-chalks-biggest-drop-since-second-quarter-of-2004/
- Categories: Mortgage News

I’ve brought up the issue of housing affordability several times over the past year, and things don’t appear to be getting any better on that front. The latest piece of bad news comes from the National Association of Home Builders, which released its Housing Opportunity Index (HOI) late last week. The HOI measures what percentage of homes sold in a given area are affordable to families earning the corresponding area’s median income during a specific quarter. During the third quarter, only 64. 5% of new and existing homes sold were deemed affordable to families earning the national median income of $64,400. That number is down from 69. 3% in the second quarter, marking the largest quarterly HOI decline since the second quarter of 2004. The index peaked in the first quarter of 2012 with 77. 5% of American households able to afford the median priced $162,000 home. Since then, there’s been a pretty steady decline as home prices seemed to hit bottom and then surge upward. Higher Home Prices and Rising Mortgage Rates the Culprit The ongoing problem in the housing market (assuming you’re not already an owner) is higher home prices coupled with rising mortgage rates, two trends that don’t appear to be changing anytime soon. The median price paid for a home increased to $211,000 in the third quarter from $202,000 a quarter earlier. Meanwhile, interest rates on the 30-year fixed mortgage jumped from 3. 73% to 4. 45%, which further dented affordability. Back in the first quarter...

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### Keep Your Home California Now Considers LTV of 140% or Higher a Financial Hardship

- Published: 2013-11-13
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/keep-your-home-california-now-considers-ltv-of-140-or-higher-a-financial-hardship/
- Categories: Mortgage News

Back in early 2010, the Hardest Hit Fund (HHF) was established by the Treasury to help certain hard-hit states deal with heightened unemployment and foreclosure activity. A total of 18 states and the District of Columbia were allocated roughly $7. 6 billion in federal funds “to develop locally-tailored programs” aimed at getting homeowners back on their feet. In California, the program is known as “Keep Your Home California,” and it’s overseen by CalHFA. The agency was earmarked $2 billion to allocate to at-risk homeowners via a variety of unique programs. Homeowners Don’t Have to Be Delinquent Anymore Today, CalHFA announced an exciting new change to their Principal Reduction Program, recognizing a loan-to-value ratio of 140% or higher as a “financial hardship. ” Prior to this ruling, only things like job loss, pay cuts, extraordinary medical bills, and divorce were considered hardships. Additionally, mortgages had to be delinquent or meet the CalHFA definition of “imminent default” to qualify for assistance. Mortgages with an LTV of 140% or higher now meet this definition. In other words, borrowers no longer need to be delinquent in order to receive assistance, so homeowners that kept up with payments despite being severely underwater can finally catch a break. It’s a big deal because CalHFA is also recognizing the fact that LTVs of 140% or higher are indicative of imminent default, and often lead to foreclosure, even if there isn’t any “real” hardship. Perhaps other loan servicers and state housing agencies will follow suit. Anyway, those who...

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### Beware: Your Adjustable-Rate Mortgage May Reset Lower

- Published: 2013-11-05
- Modified: 2018-08-21
- URL: https://www.thetruthaboutmortgage.com/beware-your-adjustable-rate-mortgage-may-reset-lower/
- Categories: Mortgage Tips

One of the greatest fears adjustable-rate mortgage (ARM) holders have is the risk their interest rate may increase. After all, ARMs come with initial teaser rates that are priced below market to lure in borrowers in the first place, so upon reset, rates are mostly expected to increase. It’s for this very reason that the vast majority of homeowners opt to go with fixed-rate mortgages instead, choosing to pay an interest rate premium in exchange for the absence of risk. But what many borrowers probably don’t consider when selecting a mortgage is that an ARM can also adjust downwards as well. Mortgage Indexes Are Rock Bottom That’s actually been the case over the past several years now, thanks to mortgage-related indexes like LIBOR that dropped to record lows (below 1%) from around 5% just over five years ago. When you factor in the margin, which is the other key piece of the adjustable-rate mortgage pie, you’re looking at a lower fully-indexed rate at adjustment, something most homeowners probably never imagined when they took a gamble on an ARM. If you recall the infamous mortgage rate reset chart that circulated on the net during the onset of the credit crisis, there was a lot of panic that homeowners would see their monthly payments skyrocket upon first reset. And sure, that may have happened to those with extremely short-term ARMs, like 1-month and 1-year ARMs. But a lot of homeowners back then took out 3/1, 5/1, and 7/1 ARMs, all of which...

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### The 1-Year ARM Is Hugely Popular with the Rich Right Now

- Published: 2013-10-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-1-year-arm-is-hugely-popular-with-the-rich-right-now/
- Categories: Mortgage News

If you were shopping for a mortgage and a bank offered you an extra low rate on a 1-year adjustable-rate mortgage, you’d probably scoff at the idea. Why on earth would anyone take out a high-risk ARM with a very limited fixed period at a time when fixed mortgage rates have rarely been lower? To save lots of money, of course... A new analysis put together for the WSJ by Lender Processing Services revealed that jumbo lenders are originating a large share of 1/1 ARMs, those that are fixed for the first year before becoming annually adjustable. In fact, more than 75% of private-label jumbos ARMs originated this year were 1/1 ARMs, as opposed to say 30-year fixed mortgages, which are extremely well-liked by the rest of the population. If you look at mortgage refinancing alone, the numbers are even more 1/1 ARM-happy. In fact, 96% of private-label jumbo ARMs were 1/1 ARMs in August, up from 84% back in January. So those with jumbo loans are increasingly going with very short-term ARMs, despite the 30-year fixed hovering close to 4% and the 15-year fixed averaging close to 3. 25%. What’s the Upside to the 1-Year ARM? The path of the 1-Year ARM since 1985. You might be wondering why someone would choose a 1-year ARM Seeing that it becomes adjustable after just 12 months But when we're talking about a jumbo loan amount The savings in year one alone can be worth it, not to mention what the borrower...

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### MBA Forecasts $1.2 Trillion in Mortgage Volume in 2014, Down 32% from 2013

- Published: 2013-10-29
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/mba-forecasts-1-2-trillion-in-mortgage-volume-in-2014-down-32-from-2013/
- Categories: Mortgage News

If you think this year has been slow in mortgage land, don’t ask what next year has in store. A new forecast released by the Mortgage Bankers Association (MBA) this morning doesn’t paint a pretty picture for 2014. In fact, the industry group sees residential loan origination volume falling 32% from 2013 to $1. 2 trillion. That compares to its upwardly revised estimate of $1. 7 trillion for 2013, which is up from $1. 6 trillion thanks to recently released HMDA data. It’s Not for a Lack of Buyers But don’t blame home purchase activity. Loans taken out to acquire a home are expected to increase nine percent next year. While seemingly weak, it’s more an inventory issue than anything else. There are probably tons of people out there willing to buy homes, but availability continues to be a major roadblock. This is partially because homeowners are holding on now and waiting for future gains before listing their properties, now that the worst has seemingly come and gone. All that said, the MBA sees purchase originations rising to $723 billion in 2014 from $661 billion this year. For 2015, they see marginal improvement, with purchases growing to $796 billion. Refis to Take a Back Seat As I’ve noted for a while now, refinance activity has been cooling and is expected to lose its stranglehold on the market in the very near future. Unfortunately, most borrowers that could refinance their mortgages already did, which would explain all those recent bank layoffs....

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### HARP 2.1 Is Here!  Fannie and Freddie to Use Note Date for Eligibility

- Published: 2013-10-23
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/harp-2-1-is-here-fannie-and-freddie-to-use-note-date-for-eligibility/
- Categories: Mortgage News

I’ve written about the Home Affordable Refinance Program (HARP) on this blog many, many times. Most of the posts have focused on possible extensions and expansions for the popular program, which like any other assistance program has a number of restrictions. Perhaps the most significant one is that only those with loans sold to Fannie Mae and Freddie Mac are eligible to take part. As a result, those with private-label mortgages are out of luck, or at least have to turn to their own loan servicers for possible assistance. Another major roadblock is the HARP cutoff date, which is currently set firmly on May 31, 2009, despite many pleas to push it out another year. Those have thus far fallen on deaf ears, ostensibly because borrowers who purchased homes or refinanced after the mortgage crisis aren’t the targets of relief efforts, whether “fair” or not. New HARP Cutoff Date, Kind Of Anyway, the hitch with the current cutoff date is that it isn’t based on when the loan actually closed, but rather when Fannie Mae or Freddie Mac acquired the original loan. So borrowers may have closed their loan on May 30th, 2009, but their loan didn’t make its way over to one of the government-sponsored enterprises (GSEs) until after that crucial cutoff date. This time lag, which could vary from a few days to a few weeks or longer, could have unintentionally shut out a lot of borrowers. It’s unclear how many, but it could be material. And so...

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### Say Goodbye to the 3% Down Payment Mortgage

- Published: 2013-10-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/say-goodbye-to-the-3-down-payment-mortgage/
- Categories: Mortgage News

In less than a month, Fannie Mae is implementing some tough new mortgage guidelines, including a larger minimum down payment requirement. Come November 16th, 2013, the maximum LTV ratio for loans delivered to Fannie Mae will fall from 97% to 95%. In other words, you’ll need to come up with a 5% down payment if you want to go the conventional route, even for HomePath financing. The rule change means the “Conventional 97 loan” is essentially a thing of the past, and borrowers with little set aside will probably need to look elsewhere for low-down payment financing. For the record, Freddie Mac did away with their “Home Possible® 97 Mortgages” back in 2011 after stating that the performance of such loans was “unacceptable. ” Don’t even ask about Freddie Mac’s “Home Possible 100 Mortgage,” which was touted during the housing boom, flanked by this cool little graphic that kind of summed up the default underwriting decision. The word "yes" was common prior to the mortgage crisis. Will Fannie Mae Borrowers Flock to the FHA? Anyway, when the change goes into effect, those seeking to put the least amount of money down will probably have to turn to the FHA, which should send the underserved back to the agency originally created to serve the underserved. The FHA only requires a 3. 5% down payment, though borrowers do need minimum credit scores of 580 to qualify (10% down if score below 580). However, FHA loans have become a lot less attractive than...

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### Mark Zuckerberg Is Now an Investor in Single-Family Homes

- Published: 2013-10-15
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mark-zuckerberg-is-now-an-investor-in-single-family-homes/
- Categories: Mortgage News

While it might sound like following in the footsteps of hedge funds, or taking advice from Warren Buffett, who recently said he’d invest in single-family homes, the motivation behind the Facebook founder’s latest move seems to be for entirely different reasons. Mark Zuckerberg reportedly purchased four multi-million properties that are adjacent to his Palo Alto residence, which he acquired for around $7 million two years ago, according to the San Jose Mercury News. He apparently began scooping up the nearby properties in December after hearing that a real estate developer wanted to purchase one of the homes and market it as being close to Zuckerberg. Why anyone would want to buy a home simply to be close to the Facebook founder is beyond me, but that’s the story at the moment, which comes from an unnamed source familiar with the situation. After the purchase late last year, three more homes were registered in names of entities associated with a company that handles Zuckerberg’s finances, Iconiq Capital, including one house next door and another two behind his home. In total, more than $30 million was spent on the four properties, with one going for a reported $14 million plus for a relatively small 2,600 square-foot dwelling. So it looks as if he paid well more than what they are currently worth just to get the deal done. Zuckerberg the Landlord The even stranger part about this whole story is that he then leased them out to the original owners. So Zuckerberg...

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### How the Government Shutdown Affects Various Types of Mortgages

- Published: 2013-10-01
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/how-the-government-shutdown-affects-various-types-of-mortgages/
- Categories: Mortgage News

The latest buzzword on the street is “shutdown,” and apart from being buzzworthy, it’s actually very real. National parks are closed and hundreds of thousands of government workers have been told to stay at home. Fortunately, active military continues to serve and air traffic controllers, prison guards, and border patrol agents remain on the job. But how does the shutdown affect the mortgage industry? Well, it depends on the type of loan involved, though just about everything will be impacted to some degree. So the name of the game might just be patience. FHA Loans The most popular government loans are insured by the Federal Housing Authority (FHA), which operates under the Department of Housing and Urban Development (HUD). HUD noted that it has 8,709 employees “on board as of pay period ending September 7, 2013. ” In the event of a shutdown, limited staff will remain on hand to handle certain business activities, including FHA loan processing. Take a look at the chart above to see how few employees would be working during a shutdown... not very many. In other words, while FHA loans will still continue be processed, there willdefinitely be delays. Fortunately, FHA lending has become a lot less popular due to higher premiums, which should offset some of the carnage. Also note that Ginnie Mae, which guarantees mortgage-backed securities (MBS) backed by federally insured or guaranteed loans, will see its staff slashed, though it said it will “continue to perform its critical and essential functions. ”...

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### FHA Bailout Official: Agency Makes Request for $1.7 Billion from Treasury

- Published: 2013-09-27
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/fha-bailout-official-agency-makes-request-for-1-7-billion-from-treasury/
- Categories: Mortgage News

Well, it took 79 years, but the FHA’s squeaky-clean track record is over. FHA Commissioner Carol Galante wrote a letter to Congress formally requesting a bailout from the Treasury, the first time the agency has ever had to go down that road. And it’s no small number either – the government housing agency needs a staggering $1. 7 billion to meet the capital requirements of its depleted Mutual Mortgage Insurance Fund. However, Galante stressed that the money wasn’t necessary to handle claims activity, and that the agency has “more than sufficient resources. ” In other words, the money is only necessary to keep the capital reserve ratio above two percent, with the money being transferred before the fiscal year ends on Monday September 30th. Of course, just like any other company that insures mortgages, the last five or so years have been rough. High-Risk Loans Crushed the FHA The agency originally lost its shirt on seller-paid down payment assistance loans, which allowed borrowers to purchase homes with absolutely nothing down. As we all know, those who had nothing to lose eventually walked away from their homes when values went south. And more recently the FHA registered $5 billion in losses through its troubled reverse mortgage program, in which seniors took huge draws and eventually defaulted on the mortgages tied to homes worth considerably less. Still, the worst seems to be over, as indicated in testimony before the Senate Committee on Banking in late July of this year. At that time,...

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### Zillow: Credit Score Single Most Important Factor for Mortgage Rates

- Published: 2013-09-26
- Modified: 2018-04-26
- URL: https://www.thetruthaboutmortgage.com/zillow-credit-score-single-most-important-factor-for-mortgage-rates/
- Categories: Credit Scores, Mortgage Rates, Mortgage Tips

This morning, Zillow, the company behind the love it or hate it Zestimate, released a new study that analyzed the impact credit scores have on mortgage rates and corresponding payments. The company used data from 13 million loan quotes and 225,000+ purchase loan requests on the Zillow Mortgage Marketplace. Zillow Studied Data on 225k Purchase Loan Requests Zillow performed a deep data dive using their mortgage marketplace They found that sub-620 credit scores barely receive one viable quote Whereas borrowers with scores of 740+ received the best rates The bar has been raised when it comes to credit scores What they found was that borrowers with FICO scores south of 620 shopping for Zillow mortgage rates were unlikely to receive even one mortgage quote, in spite of being able to provide a sizable down payment between 15 and 25%. At the same time, Zillow noted that the best mortgage rates are now reserved for borrowers with 740+ FICO scores, a departure from the old rule of 720 and higher. That Questionable Credit Score Can Cost You Zillow said borrowers with 740+ FICO scores receive an average rate of 4. 42% While borrowers with scores between 620-639 receive rates of 5. 09% That's nearly . 75% higher Just because of credit score Zillow said borrowers with scores above that key level were offered an average rate of 4. 42% (APR) for a conventional 30-year fixed mortgage. That compares to 5. 09% APR for a score between 620 and 639. So clearly...

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### Why Mortgages Are Declined: 50 Reasons You Might Be Denied a Home Loan

> Mortgages are declined frequently for tons of different reasons. Learn why and what steps you can take to boost your chances of approval.

- Published: 2013-09-25
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/why-mortgages-are-declined/
- Categories: Mortgage Tips

Getting a mortgage is never a sure thing, even if you’re the richest individual in the world. And even if you have a perfect 850 FICO score. There are a ton of underwriting guidelines that must be met to qualify for a home loan, both for the borrower and the property. So even the most creditworthy borrower could still run into roadblocks along the way. Last week, the Federal Financial Institutions Examination Council (FFIEC) released Home Mortgage Disclosure Act (HMDA) data for 2012. Though mortgage lending was up a big 38% from 2011, there will still thousands of declined mortgage applications. In fact, the top mortgage lender in the United States, Wells Fargo, denied 84,687 of the 399,911 home purchase applications it received (21. 2% rejection rate), including those that were pre-approved, according to a Marketwatch analysis. Rejection Rates by Top 10 Mortgage Lenders in 2012 (Purchases) Reasons Why Lenders Decline Mortgage Applications Inadequate credit history Lack of affordability due to limited income Insufficient job history Lack of funds for down payment, closing costs, and reserves Issues with the property (as opposed to the borrower) While the possibilities are endless, I can provide several reasons why a mortgage loan might be declined. Credit History Let’s start with credit, which is a biggie. First off, if your credit score isn’t above a certain level, your home loan application might be declined. While the FHA permits financing with credit scores as low as 500, most individual banks have overlays that call for...

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### Is the ‘No Taper’ Good or Bad for Mortgage Rates and the Housing Market?

- Published: 2013-09-19
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/is-the-no-taper-good-or-bad-for-mortgage-rates-and-the-housing-market/
- Categories: Mortgage News, Mortgage Rates

Yesterday, many declared “victory” when the Fed decided not to taper its monthly purchases of mortgage-backed securities and longer-term Treasuries. Put simply, most assumed the Fed would announce some level of tapering, such as reducing their $40 billion in monthly MBS purchases by $10 billion, just to test the waters. Instead, they decided to keep on keeping on, which excited the markets and caused the 10-year yield to plummet about 20 basis points yesterday late in the day. As a result, mortgage rates should head lower as well, though as I’ve mentioned before, interest rate movement always tends to lag news, assuming it’s good news. It’s kind of like gas prices. You read about oil prices dropping, and expect to save some coin at the pump, only to see gas station operators taking their sweet time to actually bring prices down. By the time they finally get around to lowering prices, some piece of bad news comes along and they quickly raise prices again. Now this isn’t to say that mortgage rates won’t improve somewhat, but they’re not going to fall dramatically.   Lenders don’t want to get burned when there’s still a lot of uncertainty in the air, so interest rate improvements should be conservative and calculated. Long story short, the tapering or outright end to the Fed’s purchase program is already baked into rates, as evidenced by the 1%+ climb seen over the past several months. This will not come undone simply because the Fed decided to delay...

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### Old Subprime Players Back In Charge of New Mortgage Companies

- Published: 2013-09-11
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/old-subprime-players-back-in-charge-of-new-mortgage-companies/
- Categories: Mortgage News

It has been about five years since the so-called subprime mortgage crisis rattled Wall Street (and America), and led to scores of layoffs and bank failures. In the years that followed, thousands of mortgage companies that were turning major profits disappeared seemingly overnight. To celebrate, or rather mark that anniversary, the Center for Public Integrity is publishing a three-part series on what has happened since. Or more accurately, what the major players are up to now. It reads more like an exposé than anything else, singling out the bad players that ostensibly caused the crisis, who are now back in the game working for new companies. They focus on the top 25 subprime lenders of days past, which collectively dished out nearly $1 trillion in high-risk mortgage loans between 2005 and 2007. These companies, which include big names like Countrywide, IndyMac and Ameriquest, accounted for nearly three-quarters of high-priced loans during the subprime peak. And now their old executives run new businesses that will shape the mortgage market (and housing market) of the future. This is rather scary, given the fact that they didn’t do a great job in the last decade, and probably won’t do too much better in coming years when competition heats up and desperation kicks in. Already Bad Signs of Lessons Not Learned In fact, we’re already seeing some bad signs of loose lending resurfacing, what with CashCall offering 125% second mortgages and Suze Orman telling viewers that it’s okay to put less down on a...

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### Suze Orman Says It’s Now OK to Put Just 10% Down on a Home

- Published: 2013-09-10
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/suze-orman-says-its-now-ok-to-put-just-10-down-on-a-home/
- Categories: Mortgage News

I’m starting to get really worried about the housing market. Suze Orman, who doles out no-nonsense financial advice to millions of loyal followers, has changed one of her cardinal rules. You’d like to think that one of her rules is that the rules can’t change, but here we are. Suze Has Changed One of Her Key Mortgage Rules! It seems like a very non-Suze thing to do What with rules being things that shouldn't bend or break But her 20% down payment rule Has been slashed in half to just 10% to reflect today's climate In what she referred to as a “Suze alert! ,” Orman told viewers on CNBC that they no longer need to bring in a 20% down payment when buying a home. Instead, she’s happy with buyers coming up with just 10% down. Of course, she does have some rules for those who can only muster 10%. She wants them to stick with a 30-year or 15-year fixed mortgage, and the total housing payment should be less than current rental payments, maintenance included. Conventional wisdom says to bring 20% down payment to the closing table because you’ll first show the seller you’re serious and qualified, second obtain a lower mortgage rate, and lastly avoid mortgage insurance. If you’re loan is above 80% LTV, you’ll need to obtain PMI or go with an FHA loan, and your mortgage rate will come with more pricing adjustments. Additionally, a home seller might consider other offers first, knowing that financing...

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### Check Out the Five Biggest Sacrifices People Made In Order to Buy a Home

- Published: 2013-09-09
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/check-out-the-five-biggest-sacrifices-people-made-in-order-to-buy-a-home/
- Categories: Mortgage Tips

The National Association of Realtors released its 2013 National Housing Pulse Survey recently, and they’ve been sharing bits and pieces for free on their blog. A more interesting tidbit shared over the weekend shed some light on the sacrifices home buyers make in order to scrounge up enough cash to buy a piece of property. Ditching the Luxury Lifestyle The top cutback made by all buyers was on “luxury items” or “non-essential items,” which is pretty standard if you’re gearing up to purchase anything expensive. Of all buyers surveyed by NAR, 32% indicated that they had to cut back in those departments. Broken down further, 42% of first-time buyers said they had to ditch such items, compared to just 26% of repeat buyers. Entertain Yourself The second biggest concession was entertainment, with 26% of all buyers indicating that they had to forego fun while saving up to buy a home. Again, many more first-time buyers (35%) had to make this sacrifice compared to seasoned repeat buyers (20%). Whether you’re in the market to buy a home or not, you should limit how much you spend on entertainment, which can add up in a hurry. I Don’t Have Anything to Wear The third biggest hard decision a prospective buyer had to make involved clothing, with 20% indicating that new clothes were on hold. More than a quarter (27%) of first-timers had to wear their old clothes while home shopping, compared to 15% of repeat buyers, who perhaps felt more at ease...

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### 125% Second Mortgages Are Back Again...

- Published: 2013-09-05
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/125-second-mortgages-are-back-again/
- Categories: Mortgage News, Refinance

It feels like we’re getting dangerously close to repeating history in the worst way possible. High-risk loan programs that seemed extinct were perhaps only endangered, as evidenced by a new product launch over at CashCall, an Orange County based company that offers both personal and mortgage loans. Yep, they’re offering 125% second mortgages, and no, I’m not talking about HARP loans for those underwater on their mortgages. This is a bona fide “no equity home loan,” a mortgage instrument popular during the housing boom that quickly disappeared once values began to take a dive. How the 125% Second Mortgage Program Works Essentially, those who wish to borrow more than their home is worth can apply for one of these loans if they meet certain conditions. For example, if your home is only worth $200,000, but you want to borrow $250,000, this loan will allow just that. This differs from a traditional cash-out refinance, which typically requires a homeowner to have some equity buffer, such as 20% or more. These types of loans worked back in the day on the expectation that home prices would continue to rise over time, and eventually the homeowner wouldn’t be “underwater” any longer. They failed because (as we all know) home prices eventually stopped going up, and homeowners with giant mortgage balances had already spent the cash elsewhere, and had no intention of paying it back once their property values were cut in half. This particular 125% second mortgage is a 15-year fixed loan, and...

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### Redfin’s Price Whisperer Determines What Local Buyers Are Willing to Pay Before You List Your Home

- Published: 2013-08-27
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/redfins-price-whisperer-determines-what-local-buyers-are-willing-to-pay-before-you-list-your-home/
- Categories: Mortgage Tips

In a bid to increase its listing business, Redfin has launched a new tool called the “Price Whisperer,” which aims to find out the value of your home before you list it. By value, I mean what someone is willing to pay for it at any given time. The way it works is pretty interesting. First, you enter your address and contact information, along with your “Test Price,” assuming you don’t want Redfin to figure that out for you. Then a Redfin agent will contact you to iron out the details of your Whisper, including the number of bedrooms and bathrooms, square footage, some pictures, and will probably discuss your “hoped-for price. ” From there, Redfin will attempt to garner interest for your proposed asking price by sending e-mails to active buyers searching in your property’s area. They estimate an average of 200-300 potential buyers will be contacted. The e-mail asks these prospective homeowners if they’d be interested in your home at the price you set, as seen in the image below: As you can see, there are three options: Yes, No, or Maybe. Within 48 hours you will receive a report on their responses. Those who respond first indicating that they want to see your property in person will get first dibs at touring your house, assuming you actually decide to sell it. At the moment, Price Whisperer is available to both homeowners who have decided to use Redfin to list their home and also those who aren’t even...

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### Purchase Applications Grab Majority Share of Mortgage Market in July as Refinances Fade Away

- Published: 2013-08-22
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/purchase-applications-grab-majority-share-of-mortgage-market-in-july-as-refinances-fade-away/
- Categories: Credit Scores, Mortgage News, Refinance

There’s been a lot of fuss about the refinance market drying up lately, and we now know it’s not just noise. Last month, purchase-money mortgages gobbled up the majority share of the overall mortgage market, according to the latest Origination Insight Report from Ellie Mae. The company noted that purchases accounted for 53% of applications in July, up from 49% in June and 42% a year earlier. During 2012, the purchase share averaged a paltry 38% as refinances took center stage, helped on by ridiculously low mortgage rates and the expansion of the successful HARP initiative. The worst month for purchases in recent history occurred during January of this year, when they accounted for just 27% of the mortgage market. Since then, they’ve steadily climbed higher into the traditional home buying season, while refinances have retreated amid higher rates. Refinances Peaked in January with 73% Share What a difference half a year makes. Refinances snagged an astonishing 73% of the mortgage market in January, but since then have seen sequential declines just about every month. The only bright spot for refis was HARP-related, with high loan-to-value loans (95%+) rising three percent from a month earlier. However, market watchers expect the overall numbers to move in much the same direction for a while, with refinances eventually slipping to a sub-40% share in 2014. Unfortunately, most homeowners have already taken advantage of the low rates, with only 55% of existing mortgages currently at above-market rates (not all stand to benefit from a...

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### A Perfect Example of Why Throwing All Your Money at the Mortgage Can Come Back to Bite You

- Published: 2013-08-20
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/a-perfect-example-of-why-throwing-all-your-money-at-the-mortgage-can-come-back-to-bite-you/
- Categories: Mortgage Tips

There are countless programs out there aimed at paying down the mortgage as quickly as possible, but they often highlight the interest savings without properly disclosing the risks involved. While it may sound extremely enticing to pay down your mortgage in “half the time,” or “save $50,000” via some kind of payment accelerator, it doesn’t always work out exactly as planned. Or even close to it. This harsh reality was revealed in a first person account over at the Yahoo! Contributor Network, in which Laura Quinn blamed her extra mortgage payments for getting her into even “deeper debt. ” Larger Mortgage Payments = More Debt Ironically, extra payments to principal are intended to reduce debt and interest expense, but Quinn managed to accomplish the exact opposite. While it sounds great on the surface, that money has to come from somewhere. And if it dries up your liquidity in the process, you could put yourself in a bind. Quinn experienced this first hand after she and her husband set a lofty goal to pay off their mortgage by 2020. When they first purchased their home in 2005, they had an initial monthly payment of $1,100 on a 30-year fixed, despite setting a goal to pay off the mortgage in 15 years by making payments of roughly $1,500. Then they refinanced from a 30-year loan to a 15-year loan (at no cost), which increased their payment to $1,230. By the way, no cost loans mean higher interest rates, so another mistake was...

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### The LendingTree Mortgage Negotiator Makes Home Loan Shopping Anonymous

- Published: 2013-08-19
- Modified: 2024-03-16
- URL: https://www.thetruthaboutmortgage.com/the-lendingtree-mortgage-negotiator-makes-home-loan-shopping-anonymous/
- Categories: Mortgage Rates, Refinance

Everyone’s heard of the Priceline Negotiator, but what about LendingTree Mortgage Negotiator? I hadn’t heard about it until last week, when a commercial popped up on my television pitching the new system. I love scrutinizing mortgage companies and their products because they’re often full of hot air. When it comes down to it, mortgages just aren’t that exciting, and there aren’t many ways to differentiate them, other than via clever marketing tactics. Still, it sounded interesting, so I decided to take a closer look. From what I remember, LendingTree basically asked for a borrower’s vital information, and then sent it off to a handful of lenders who proceeded to bombard the customer. The idea was that they would fight for your business, though my guess is consumers didn’t want four banks calling them, let alone one. This was the classic model. Perhaps it’s still in use today, I’m not sure. Anyway, this is probably why Zillow created its Mortgage Marketplace, which relies on borrower anonymity first and foremost. How the LendingTree Mortgage Negotiator Works First you enter in basic home loan details Including loan amount, loan type, interest rate And what the origination charges are The form tells you where to look on your GFE to ensure you enter accurate information It looks like LendingTree may have learned something from Zillow’s successful pricing model, seeing that their new tool allows borrowers to shop anonymously while using a Good Faith Estimate for accuracy. To start, you indicate whether the transaction is...

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### The FHA Is Now Offering Mortgages to Borrowers Just One Year After Foreclosure, Short Sale, or Bankruptcy

- Published: 2013-08-16
- Modified: 2013-08-16
- URL: https://www.thetruthaboutmortgage.com/the-fha-is-now-offering-mortgages-to-borrowers-just-one-year-after-foreclosure-short-sale-or-bankruptcy/
- Categories: Foreclosure, Mortgage News

In a bid to perhaps stay relevant, though in the FHA’s own words, to continue “its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances,” borrowers may now be eligible for an FHA loan just one year after experiencing a short sale, foreclosure, or even a bankruptcy. The news came via a new mortgagee letter (13-26) posted on HUD’s website Friday. While it sounds completely irresponsible and crazy, especially seeing that we’re just a year or two out of the worst mortgage crisis in recent history, they do have some standards in place to ensure not just anyone can get a mortgage again. Did You Experience an “Economic Event? ” In order to get approved for an FHA loan just one year after experiencing such a massive credit hit, you must prove it was due to an “Economic Event,” otherwise known as unemployment or a “severe” reduction in income. Of course, by severe reduction they’re only talking about a minimum 20% reduction in household income for a period of at least six months. The last time I checked, it’s pretty common for individuals to see their income fluctuate like that. And the FHA is even allowing those with seasonal or part-time employment to qualify under these new rules. However, there are a few more checks and balances. The lender must analyze the borrower’s credit to determine that they were a sound borrower before the Economic Event took place, and that their credit only...

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### Obama Answered My Question About HARP 3

- Published: 2013-08-08
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/obama-answered-my-question-about-harp-3/
- Categories: Mortgage News, Refinance

This week has been all about Obama, at least on this blog. The President has been making the rounds, visiting multiple locations on the West Coast to discuss the state of the economy, housing, and of course, mortgages. After a speaking engagement in Phoenix, which I detailed here, he met up with Zillow CEO Spencer Rascoff for some housing Q&A with everyday homeowners, renters, and prospective buyers. I was lucky enough to get one of my questions asked on air by Rascoff, which I submitted via Twitter. Here’s what I wrote: What’s happening with #MyRefi or #HARP3? Is there any hope of such a program? Some Background on HARP I’ve been following the Home Affordable Refinance Program (HARP) since it was originally announced back in 2009, and have subsequently covered changes and proposed modifications since then. When it was first released, the max LTV under the program was just 105%, which didn’t provide much relief for underwater homeowners, especially seeing that most were nowhere close to having LTVs that low. Later, HARP was expanded to allow for LTVs up to 125%, though that too didn’t appear to be enough to spark the interest of most homeowners. Finally, HARP got a real shot in the arm when it was announced that there would be no maximum LTV, essentially allowing anyone with a Fannie- or Freddie-backed mortgage to refinance. Still, the industry has asked for more, including reHARPing, which would allow a homeowner to refinance more than once under the program. Additionally,...

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### The 10 Best Quotes From Obama’s Housing Speech

- Published: 2013-08-07
- Modified: 2013-08-07
- URL: https://www.thetruthaboutmortgage.com/the-10-best-quotes-from-obamas-housing-speech/
- Categories: Mortgage News

Yesterday, President Obama gave a speech on homeownership at Desert Vista High School in Phoenix, Arizona, one of the hardest hit cities in the nation. While it was mostly fluff many of us have heard before, there were some nice little takeaways. I’ve listed what I feel are the top 10 quotes, based on their impact, candor, and humor, in the order in which they were said. 1. I think about my grandparents’ generation... in that earlier generation, houses weren’t for flipping around, they weren’t for speculation -- houses were to live in, and to build a life with. Housing needs to be perceived as shelter again, not solely as an investment, according to the President. 2. We cracked down on the bad practices that led to the crisis in the first place.   I mean, you had some loans back there in the bubble that were called “liar’s loan. ”  Now, something that's called a liar's loan is probably a bad idea. Obama knows stated income loans are bad news, though it’s unclear if he knows they’ve already begun to resurface. 3. Congress should pass a good, bipartisan idea to allow every homeowner the chance to save thousands of dollars a year by refinancing their mortgage at today’s rates.   We need to get that done.   We’ve been talking about it for a year and a half, two years, three years.   There’s no reason not to do it. He continues to push for HARP3 or MyRefi, though...

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### Study: Minimum Credit Card Payments Increase Risk of Mortgage Default

- Published: 2013-08-02
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/study-minimum-credit-card-payments-increase-risk-of-mortgage-default/
- Categories: Credit Scores, Mortgage News

A new study from credit reporting agency TransUnion revealed some interesting insights about credit card use and mortgage performance. The report titled, “TransUnion Minimum vs. Actual Payments Study,” found that roughly four in 10 consumers pay off their credit cards in full each month. Of the remaining six, about two will only make the minimum payment due. Those who pay off their credit cards in full each month are known as “transactors, “ while those who carry debt from month to month are known as “revolvers. ” TransUnion found that the latter group tends to get into trouble on other loans, such as auto loans and mortgages. To measure just how much worse these revolvers performed, the company came up with two new metrics. The first, known as "Total Payment Ratio" (TPR), is calculated by dividing a consumer's aggregate monthly credit card payment by the total minimum due on all their credit cards. So if a consumer has five credit cards with a combined minimum payment due of $250, but pays a total of $2,500, their TPR would be 10. Per the study, this would land the consumer in the middle bracket, which has heightened risk of mortgage delinquency, as seen in the chart above. It is consumers with TPR’s north of 30 that perform best on other loans, with mortgage delinquencies significantly lower than those with much smaller TPRs. The worst group is those with TPRs below 1. 03, otherwise known as those making the minimum payment, or perhaps...

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### A Lack of Qualified Buyers Could Hit the Real Estate Market

- Published: 2013-07-31
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/a-lack-of-qualified-buyers-could-hit-the-real-estate-market/
- Categories: Mortgage News

Lately, I probably haven’t been winning many friends with my somewhat pessimistic view on the real estate market. A couple weeks back, I warned that affordability was set to take a major blow, as a result of higher home loan interest rates and surging home prices. And just last week, I cautioned readers that the >housing market might be cooling, at least in some parts of the country. Interest Still High, Quality Perhaps Not The issue I see materializing is a lack of qualified buyers, not necessarily a lack of interest from prospective home buyers. In other words, properties that are listed at seemingly astronomical prices will continue to receive bids, but if the buyers aren’t actually able to obtain financing at those sky-high prices, it all means nothing. There are a few different issues at hand. For one, there is the prospective buyer who got pre-qualified to buy a home two months ago, when both interest rates and home prices were significantly lower. For this individual, they may find that they can no longer actually afford what they thought they could, once their lender says their mortgage rate is no longer 3. 5%. This is especially true for those who were just squeaking by in the affordability department, as many often are. It’s simple math really. If a borrower’s DTI ratio is now too high, the lender won’t be able to offer them a loan. And with rates and prices higher, there’s no easy way around a higher monthly...

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### Fannie Economist: Rising Mortgage Rates Should Slow Purchases, Not Lower Prices

- Published: 2013-07-18
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/fannie-economist-rising-mortgage-rates-should-slow-purchases-not-lower-prices/
- Categories: Mortgage News, Mortgage Rates

A new commentary written by Fannie Mae’s Vice President of Applied Economic and Housing Research, Mark Palim, aims to put fears of rising rates to bed. In the analysis posted on Fannie’s website, Palim notes that the recent increase in mortgage rates shouldn’t derail the nascent, yet rather fragile housing recovery. But surely one would logically assume that a larger monthly mortgage payment would mean home prices would have to come down, right? Not exactly. There's No Historical Correlation He points to history, which shows no strong correlation between rising interest rates and slumping home prices. And he uses charts to state his case. Going back to 1990, there were two notable mortgage rate spikes. The first occurred between October 1993 and December 1994, when 30-year fixed mortgage rates increased from 6. 83% to 9. 20%. For the record, that’s a 34. 7% increase. Still, home prices weren’t really affected, as you can see from the chart above. As Palim pointed out, appreciation slowed, but year-over-year prices were still higher. The second notable spike occurred between October 1998 and May 2000, when rates increased from 6. 71% to 8. 51%. That’s a 26. 8 increase, in case you’re wondering. During that time, home prices didn’t seem to lose any momentum, and actually appeared to keep increasing at a reasonable pace. While those examples are perhaps telling of what may happen as rates continue to rise, Palim himself did admit that the recent toying with rates (via quantitative easing) has no...

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### Chart: Look How Many Homeowners Could Benefit From HARP 3.0

- Published: 2013-07-15
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/chart-look-how-many-homeowners-could-benefit-from-harp-3-0/
- Categories: Mortgage News, Refinance

I’ve discussed the idea of an enhanced Home Affordable Refinance Program (HARP) on several occasions, though nothing has actually materialized. Whether it’s HARP 3. 0, #MyRefi, or reHARPing, there’s no argument that the guidelines could be eased quite a bit to allow many more to refinance under the program. But just how many homeowners could actually benefit if the rules were changed again? Well, a pair of Fed researchers did the heavy lifting for us, and now we have a decent idea under a variety of different scenarios. 2. 5 Million Have Already Benefited Under HARP Since 2009, roughly 2. 5 million homeowners have used HARP to refinance their mortgages, savings hundreds on monthly mortgage payments. More importantly, these homeowners were given major motivation to stay in their homes, as opposed to walking away with little or no equity to keep them interested. In 2012, the program got a name change (HARP 2. 0) and a major tune-up, allowing homeowners to refinance without any loan-to-value constraints (previously 125% LTV). As you can see from this chart, that put the program into overdrive and greatly increased homeowner participation. Mortgage rates happened to be pretty low at the time as well, which probably made HARP a lot more popular than it otherwise would have been. Still, it’s clear that program enhancements led to a lot more interest in the program, and that meant fewer mortgage defaults, increased consumer consumption, and an improved economy. So why won’t policymakers consider the proposed changes for...

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### Don’t Choose a Mortgage Lender for Their Sales Gimmick

- Published: 2013-07-11
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/dont-choose-a-mortgage-lender-for-their-sales-gimmick/
- Categories: Mortgage Tips, Refinance

As competition heats up, banks and lenders will likely ramp up efforts to get their hands on your mortgage, using all types of pitches and gimmicks to separate themselves from the crowd. But mortgages aren’t cool or exciting, so any funky stuff they come up with to sell you a mortgage is probably just a load of baloney. For example, you might be offered reduced closing costs, a relationship discount, or a stuffed animal. Okay, that last one may only be a half-truth if you bring your kid with you to sign the paperwork. You may also be told that certain fees will be waived, or that they’ll lock your mortgage for free. Sadly, most of these “fees” don’t tend to exist in the real world, so you have to question whether you’re actually getting anything at all. All the major players do it, including Wells Fargo, Capital One, Chase, Citi, Discover, Costco, etc. The smaller guys probably don’t offer special discounts or fancy marketing, though that doesn’t mean they won’t throw some nonsense your way in a different form. Look at the Big Picture When shopping for a mortgage, it’s important to look at the interest rate and the fees you must pay to acquire that rate. If you’re focused on $500 off closing costs, as opposed to your mortgage APR, you’re missing the point. The same goes for a relationship discount. If you already do business with the bank that is offering to close your mortgage, and they...

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### Hovnanian: Higher Mortgage Rates Will Just Lead to Smaller Homes

- Published: 2013-07-02
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/hovnanian-higher-mortgage-rates-will-just-lead-to-smaller-homes/
- Categories: Mortgage News, Mortgage Rates

During an interview with CNBC this morning, Ara Hovnanian of K. Hovnanian Homes expressed that he’s not worried about higher mortgage rates hurting the housing market. In fact, the mega home builder’s CEO actually thinks we’re in the “early innings” of the housing recovery, noting that housing starts are still way below the expected average for this decade. He said we’re currently at a pace of around 900,000 annual starts, up from 500,000 just two years ago, but nowhere close to the 1. 5-1. 6 million expected. At the same time, mortgage rates are still insanely cheap, as I pointed out yesterday. Hovnanian recalled conditions back in 1983, when mortgage rates averaged 13. 4% and housing starts were at a staggering 1. 7 million. So if you look at things from a mortgage rate point of view, there’s not enough supply to keep up with demand. That would explain some of the recent home price gains, which are slated to keep increasing at a steady clip. All in all, he didn’t seem too concerned about mortgage rates rising, so long as they don’t rise by some obscene amount in a short period of time. Funnily enough, he actually called for 3% mortgage rates back in 2008 to solve the problem of supply and demand. Looks like he got his wish... Customers Want Bigger Homes While Rates Are Cheap At the moment, Hovnanian says customers have been buying the largest of their offerings, perhaps because housing is so affordable. In fact,...

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### Look: Mortgage Rates Are Still Historically Cheap

- Published: 2013-07-01
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/look-mortgage-rates-are-still-historically-cheap/
- Categories: Mortgage News, Mortgage Rates

I feel like I’ve been going on and on about mortgage rates lately, but for good reason. After hovering at or near record lows for such a long period of time (it seemed indefinite), the party finally came to a sudden halt, and now we’re seeing extraordinary rate increases. This sudden reversal of fortune has created a media frenzy, with some wondering if higher mortgage rates will derail the housing recovery, and others thinking they may actually be a call to action. I mentioned last week that everyone I know wants to refinance now, just weeks after rates were near their lowest point in history. In that post, I noted that rates were still a relative bargain, compared to their historical path. And I argued that rates could see some near-term easing, seeing that the market seemed to grossly overreact to the news of the Fed ending its mortgage-backed securities purchase program (QE3). Mortgage Rates Are Significantly Lower This Week The good news is rates did indeed come down from their recent highs, by a pretty sizable margin too. Using Wells Fargo’s rates as a yardstick, we saw a high of 4. 875% last week on the 30-year fixed, which has since fallen to 4. 375%. It’s not the 4% flat seen two weeks, or anywhere close to the mid-3% range we saw a few weeks before that, but it’s a meaningful improvement. So for those who didn’t panic and lock their rate on the way up, you could get...

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### Why You Should Care About Your Neighbor’s Mortgage

- Published: 2013-07-01
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/why-you-should-care-about-your-neighbors-mortgage/
- Categories: Mortgage Tips

While your neighbor’s home loan may be none of your business, how they choose to finance their property can affect your home’s value. A new Home Value Forecast Update from Teck Valuation Services revealed that areas where homeowners took out high loan-to-value (LTV) loans experienced larger home price declines. Zero Down Palmdale For example, in Palmdale, California, a city about 60 miles (by car) north of Los Angeles, the average LTV was approximately 94% from 2000 to 2012. And since home prices peaked there around 2006, they’ve fallen by more than 60%. Put simply, in areas where homeowners took out high LTV loans, there was much less incentive to stick around once home prices began to fall. Additionally, homeowners may have had difficulty keeping up with payments, as many of the high-LTV loans carried expensive second mortgages with interest rates in the double-digits. This led to a downward spiral as more and more homeowners missed payments and/or walked away, with little or no home equity to keep them invested. Established Arcadia Conversely, in areas where LTVs were lower, home price declines tended to be much more muted, as was the case with Arcadia, CA, which is closer to the urban center of Los Angeles. There, the average LTV was below 70% for the same period, and home prices only experienced a “very shallow decline” in 2008-2009 before bouncing back to all-time highs. As you can see, the spread between mortgage amount and average sold price was a lot wider in...

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### Watch Out for the Adjustable-Rate Mortgage Pitch

- Published: 2013-06-24
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/watch-out-for-the-adjustable-rate-mortgage-pitch/
- Categories: Mortgage Rates, Mortgage Tips, Refinance

Over the past couple weeks, mortgage rates have risen roughly 1% across the board. If you look at Wells Fargo’s mortgage rates, which I highlighted late last week due to their meteoric rise, you’ll notice the 30-year fixed is now pricing at 4. 875%, up from 4% about 10 days ago. Consider the fact that back in early May, a rate in the low 3% range was the norm for the 30-year fixed. The 15-year fixed has climbed similarly, from 3. 125% to 3. 875% in about 10 days. A month earlier, it was around 2. 5%. In other words, conditions aren’t good in mortgage land, to put it more than mildly. It’s not much different for adjustable-rate mortgages either – the popular 5/1 ARM is now pricing at 3. 125%, up from 2. 5% a week or so ago. Mortgage Payments on the Rise What this all means is that mortgage payments are rising, even if you’re refinancing your existing mortgage to a much lower rate. The payment you could have secured earlier this month will now be significantly higher, to the point where your refinance may not even make sense anymore. If you’re looking to purchase a home, your purchasing power has been severely reduced. Check out my mortgage payment chart to see what you can afford based on today’s rates. And as mortgage rates continue to rise, banks and lenders will increasingly look for ways to soften the blow, of course, without actually lowering rates. So all...

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### Blogger Claims Bernanke Made His Mortgage $53,000 More Expensive

- Published: 2013-06-18
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/blogger-claims-bernanke-made-his-mortgage-53000-more-expensive/
- Categories: Mortgage News, Mortgage Rates

A Yahoo! Finance blogger named Rick Newman claims Ben Bernanke cost him $53,000 on his recently acquired mortgage. The issue revolves around the latest testimony from the Federal Reserve boss, who revealed the Fed could taper purchases of mortgage-backed securities (MBS) in the not-so-distant future. If the Fed tapers its purchases, supply of MBS will essentially rise above demand, and home loan interest rates will increase. The funny thing is Bernanke didn’t actually take any action, he just said it was possible the Fed could taper MBS purchases at some point this year. Still, it was enough to rattle investors and send mortgage rates flying. In just weeks, 30-year fixed rates climbed from around 3. 5% to just over 4%. Blogger Missed Out on a 3. 5% Mortgage Rate Newman said he found a home to purchase in late April, and in early May was able to lock in a mortgage rate of 3. 5%, which was pretty much the floor for the 30-year fixed. He instead decided to float his rate, with the hope rates would fall even more between the time his loan was processed and closed. Unfortunately, he got caught up in Bernanke’s drama, and had difficulty sleeping at night as he began to play the market. In fact, he even considered walking away from the house because of the rise in rates. Finally, Newman decided to just give up hope on a rate below 4% and take a rate of 4. 125%, knowing that time was...

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### Bank of America Panned for Unattractive Refinance Offer

- Published: 2013-06-11
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-panned-for-unattractive-refinance-offer/
- Categories: Mortgage News, Refinance

Anytime someone is looking to save you money, you should probably be skeptical, really skeptical. After all, it’s one thing to seek savings on your own, but if someone is doing the work for you, there’s a good chance they’ve got their own best interests in mind. Yesterday, a few publications, including American Banker, grilled Bank of America for its recent refinance pitch to a New Jersey customer. The borrower, who currently has a 20-year fixed mortgage set at a very low 4%, was offered a new 30-year fixed mortgage at a rate of 3. 75%. At first glance, it sounds like a slightly better deal, though not all that significant in regard to rate. But BofA smartly chose to highlight the mortgage payment savings of $362 of month, and $4,344 annually. Unfortunately, if you actually bother to read the fine print, beyond the headline screaming at you to refinance, you’ll notice that the APR is 4. 105%, higher than the borrower's existing mortgage rate. The APR is that high because Bank of America is helping itself to two mortgage points to get the deal done, and those must be factored in and presented to the borrower. Additionally, because Bank of America is recommending the borrower refinance into a 30-year loan, they effectively add 10+ years to their loan term, which will cost the borrower more money in interest as the loan amortizes that much more slowly. In fact, the offer would add $37,188 in additional interest over the full...

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### Zillow CEO Says Don’t Wait, Best to Sell Home Now

- Published: 2013-06-07
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/zillow-ceo-says-dont-wait-best-to-sell-home-now/
- Categories: Mortgage News, Mortgage Rates

In a rather odd interview on CNBC Thursday, Zillow CEO Spencer Rascoff said it’s “definitely a great time to sell. ” This despite the fact that it's mid-2013 and home prices are expected to rise a fair amount in the near future. Funnily enough, back in March his company asked a bunch of economists about the direction of home prices, and the consensus was a fairly decent 21. 99% increase through 2017. Even Stan Humphries, Zillow’s chief economist, sees home prices climbing 18. 42% over the five-year period. To be sure, home prices have been on a tear lately in many parts of the country that were previously hit hard by the housing crisis, including Phoenix, Los Angeles, and the Bay Area. But Rascoff sees the current level of home price appreciation as unsustainable, and expects it to fall back in line with historical norms. Supply and Demand The culprit at the moment has been supply and demand. There aren’t many homes for sale, and distressed properties have all but disappeared. The April pending and distressed sales report from the California Association of Realtors revealed that the combined share of distressed properties (short sales and foreclosures) fell to 24. 4%, down from 27. 9% in March and 45. 8% a year earlier. Distressed sales are now at their lowest level since February 2008, and only really expected to keep falling as more borrowers gain home equity and get back above water. There are also Wall St. investors (hedge funds) buying...

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### Mortgage Rates Experience Largest Single-Week Increase Since 2011

- Published: 2013-06-05
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-experience-largest-single-week-increase-since-2011/
- Categories: Mortgage News, Mortgage Rates, Refinance

To say the last couple weeks have been bad for mortgage rates (and consumers) would be an enormous understatement. In fact, over the past month mortgage rates on the ever fashionable 30-year fixed have risen nearly a full percentage point. We’re talking rates of around 3. 375% in early May that have since rocketed to around 4. 125%, with 4. 25% in sight. The Mortgage Bankers Association released its weekly mortgage applications survey this morning, which revealed the largest single-week increase in rates since July 1, 2011. Yes, about two years folks. Their average contract rate for the 30-year fixed jumped from 3. 90% to 4. 07% for the week ending May 31, 2013, a sizable jump to be sure. That puts it at its highest level since April 2012 – rates for jumbo mortgages and FHA loans are also at their highest levels since May 2012. Keep in mind that FHA loans now also have mortgage insurance for life in many cases, so borrowing looking for such loans really missed the boat. Pretty much no loan program is exempt from the carnage, including the 15-year fixed and adjustable-rate mortgages. Put simply, the recent Fed minutes included talk of ending its stimulus program (QE3), and what seemed like a potential issue far down the road has gotten very real in just a short period of time. This has pretty much hammered refinance traffic, with applications falling 15% from a week earlier and now at the lowest level since November 2011....

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### Many FHA Loans Now Require Mortgage Insurance for Life

- Published: 2013-06-04
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/many-fha-loans-now-require-mortgage-insurance-for-life/
- Categories: Mortgage News

In mid-2013, the FHA implemented a major change to its loan program that requires the annual mortgage insurance to be paid for the life of the loan if the loan-to-value ratio (LTV) exceeds 90%. FHA Loans Got Pricey Overnight A newly imposed rule means most FHA borrowers Will be forced to pay mortgage insurance for the full loan term Which can greatly increase the total cost of the loan And make it an unattractive home loan option relative to conventional offerings This is a very significant change, seeing that many borrowers turn to the FHA because they don’t have access to a large down payment. Prior to this underwriting change, borrowers generally only had to pay monthly mortgage insurance until the loan amortized to 78% LTV. And in some cases, the annual mortgage insurance premium wasn’t required at all, just the upfront mortgage insurance premium. I touched upon this earlier, but the changes are now live. You can see the charts here, which detail the mortgage insurance premiums based on loan term and LTV. To add insult to injury, the annual insurance premium on FHA loans was also increased back in April. So essentially today’s FHA borrowers are actually being hit twice. Note:Those who qualify for an FHA streamline refinance (for loans originated prior to June 1, 2009) only have to pay a 0. 55% annual MIP thanks to an Obama administration initiative. If you’re wondering why the FHA made these changes, it was to shore up capital and protect...

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### New Study Blames Cash Out Refis for Mortgage Crisis

- Published: 2013-05-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/new-study-blames-cash-out-refis-for-mortgage-crisis/
- Categories: Mortgage News, Refinance

A new study from Fed researcher Steven Laufer puts a lot of the mortgage crisis blame on cash out refinancing, which swelled in popularity as home prices increased in the early 2000s. Of course, when home prices took a turn for the worse, many who extracted home equity paid the price by acquiring an underwater mortgage. At this point, we all know homeowners relied on their homes as ATM machines during the housing run-up, but some of Laufer’s figures are pretty startling. For example, when focusing on a sample of homeowners from Los Angeles, he found that nearly 40% who defaulted on their mortgages were earlier buyers who purchased their homes prior to 2004. What’s interesting is that more than 90% of these defaulters would have had outstanding mortgage balances below their current home values had they not extracted home equity, which would have left little motivation to default. But as we all know, scores of homeowners turned to second mortgages and home equity lines of credit to squeeze out every last drop of value in their homes, much to the delight of lenders and Wall Street investors. As a result, even those who purchased homes at relatively cheap levels found themselves in negative equity positions, thanks to the loose lending guidelines that allowed cash out refinancing to 100% LTV or higher. This explains why you’ll see a long-time homeowner selling their home short, even though they purchased it decades ago. Had these homeowners not extracted home equity, many would...

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### The Fed Minutes and Mortgage Rates

- Published: 2013-05-22
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-fed-minutes-and-mortgage-rates/
- Categories: Mortgage News, Mortgage Rates

Just a few short hours ago, the Federal Reserve released the hotly anticipated FOMC "minutes" from its two-day meeting that took place back on April 30th and May 1st, 2013. The contents weren’t all that exciting, though they seemed to be enough to result in a 200+ point stock market swing. The markets opened considerably higher this morning, only to take a beating after the minutes were released, with the Dow falling roughly 80 points. What Was Said at the Meeting? The Fed basically said inflation was stable Which meant they didn't need to raise key interest rates Because the economy is still questionable But if and when the economy heats up they'll change their tune In a nutshell, the Fed said economic growth expanded moderately in the first quarter, unemployment edged lower (but employment growth slowed), and consumer price inflation remained low, with expectations for future inflation stable. Put simply, there wasn’t all that much drama in the economy during the first quarter, and things appear to be on track, albeit not a fast track to anywhere good or bad. The Fed didn’t even seem to express any excitement about recent developments in the housing market, highlighting the decline in existing home sales in March alongside rising prices. For the record, those sales were revised upward today by the National Association of Realtors, and April existing home sales were the highest since November 2009, when the homebuyer tax credit gave the market a temporary boost. Anyway, the takeaway is...

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### How Long Do You Plan to Keep Your Mortgage?

- Published: 2013-05-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-long-do-you-plan-to-keep-your-mortgage/
- Categories: Mortgage Tips

The mortgage landscape has changed a ton over the past several years. Mortgage lending guidelines have firmed tremendously since the housing crisis took hold, and mortgage rates have fallen to new all-time lows. Meanwhile, home prices seem to have bottomed, and decent home price appreciation is in the forecast. This has created an interesting environment for both prospective and existing homeowners. Determining Your Homeownership Horizon When to buy real estate and take out a mortgage You need to determine how long you plan to keep the property And in that same sense, the home loan that goes along with it As it will dictate loan choice, paying points, and more Perhaps one of the biggest changes in thought is that those who take out a mortgage today will keep it for as long as they own their home. In the past, this wasn’t the case, with mortgage rates very high, and then in a downward trend for many years since. That allowed existing homeowners to refinance and tap home equity via cash out refinances and HELOCs, while also reducing monthly mortgage payments. Even recent homeowners were able to refinance just six months or a year after purchasing their homes, thanks to the precipitous drop in interest rates. But that march downward seems to have come to an end, and could in fact reverse course, which will equate to slower prepayment speeds and far fewer refinances. After all, no one will be keen to lose your super low mortgage rate, even...

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### Will High Quality Mortgages Prevent Another Housing Bubble?

- Published: 2013-05-08
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/will-high-quality-mortgages-prevent-another-housing-bubble/
- Categories: Mortgage Tips

After the previous mortgage boom and subsequent crash, many questions were asked regarding what exactly went wrong. There was plenty of finger pointing, from overreliance on credit scores, to endless investor speculation, to Wall St. packaging substandard mortgages and the government’s accommodative policies. But one source of blame that kept resurfacing was the prevalence of high-risk loan products, such as the option arm. Others blamed “subprime” for the housing crash, though that infamous eight-letter word was often used as a one-size-fits-all definition for any mortgage that went bad. Regardless, it was clear that shoddy mortgages held some material amount of blame for the previous crisis. After all, many of the loans were destined to fail, seeing that the teaser rates offered were the only way one could afford the property to begin with. Today’s Mortgages Are Pristine If you want to compare the previous housing run-up to that of today’s, you should consider the mortgages behind the properties being purchased. Back during the mid-2000s, the quality of mortgages was awful. Scores of homeowners were purchasing properties with credit scores well below 620, which is the subprime cutoff. Additionally, these borrowers were purchasing homes with zero down financing, or worse, with zero documentation. Not to mention many of the properties were non-owner occupied four-unit properties, often with second mortgages stuck at 12%. One of the most common loan documentation types was stated income, which allowed borrowers (or their loan reps) to put any amount of monthly income they’d like in the...

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### Warren Buffett: Now Is the Time to Get a Mortgage

- Published: 2013-05-06
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/warren-buffett-now-is-the-time-to-get-a-mortgage/
- Categories: Mortgage News, Mortgage Rates

There are plenty of so-called experts and gurus out there with all types of advice on what you should do with your money, but perhaps the most celebrated is Warren Buffett, known affectionately as the “Oracle of Omaha. ” On Saturday, the 82-year old financial wizard held his annual shareholder meeting for Berkshire Hathaway in Nebraska's largest city, which many refer to as "Woodstock for Capitalists. " He talked about everything from politics to the economy to his personal life on Star Wars Day (May the fourth... ), and every single word was taken as gospel by his loyal legion of followers. Fox News also caught up with Buffett, who took the time to discuss the state of the economy with Liz Claman. The most interesting tidbits (to me) were about housing and mortgages, something you may want to pay attention to if you’re thinking about buying a home or refinancing. Buffett Says Get a Mortgage Today One major takeaway from the interview was the line, “if you ever want to get a mortgage, today is the day to get a mortgage. ” If you’re wondering why he is so bullish on mortgages, it’s pretty simple. Mortgage rates are at or near all-time record lows, so you can borrow money on the cheap. This low-rate environment explains why housing is so affordable at the moment, even though home price-to-income ratios are above historic norms. Like anyone else with half a brain, he knows interest rates (including mortgage rates) will eventually...

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### The HELOC Resets Are Coming: Should We Worry?

- Published: 2013-05-02
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/the-heloc-resets-are-coming-should-we-worry/
- Categories: Mortgage News

Several years ago, when the mortgage crisis first materialized, an interest rate reset chart from Credit Suisse began circulating on the Internet. The picture said more than a thousand words – it essentially foretold disaster for the housing market, and it largely delivered. Fast forward to 2013, and you’d think we’d be out of the woods, seeing that the chart was from all the way back in 2007. But there is yet another wave of resets on the horizon, and this time it’s home equity lines of credit (HELOCs). More 10-Year Draw Periods End in 2014 Most HELOCs are designed so a homeowner can draw from the line of credit for the first 10 years, and then pay back the balance during the following 15 years. To further accommodate homeowners, the initial 10-year draw period allows for interest-only payments. And people tend to like to make smaller payments. Per a new report from Fitch Ratings titled, "U. S. Banks - Home Equity ReSet Risk Hitting the ReSet Button in 2014," home equity lending surged in 2004 as credit conditions eased and home prices shot higher. The screenshot above from the OCC's Fall 2012 Semiannual Risk Perspective illustrates that (it actually gets worse in later years). According to Fitch, HELOCs outstanding increased 42% in 2004, and home prices still aren’t back to 2004 levels in many areas of the country. In other words, most borrowers who still have their HELOCs will have a difficult time refinancing out of them. And borrowers...

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### How Does HARP 2.5 Sound?

- Published: 2013-04-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/how-does-harp-2-5-sound/
- Categories: Mortgage News, Refinance

For the past couple years now, there has been a big push for a so-called HARP 3. 0, which would essentially open the door to private-label refinances under the popular Making Home Affordable Program. Since inception, only Fannie and Freddie mortgages have been eligible, despite private-label mortgages accounting for more of the carnage that led to the housing crisis. Still, such negotiations have always ended in an impasse, likely because investors don’t want to lose any money by giving homeowners who are able to make payments a break. But that hasn’t stopped the Obama administration from fighting for such a program, despite it now being years since the crisis first reared its ugly head. Will Eligibility Date for HARP Be Pushed Forward? Apparently a bunch of mortgage executives met with White House officials last week to discuss the current situation in mortgage and housing. And one official familiar with the talks told Inside Mortgage Finance that the Obama administration will “push hard” for HARP 3. 0, that is, an underwater refinance program for non-Fannie/Freddie mortgages. Unfortunately, there’s still a lot of doubt surrounding such a push, seeing that the bill would need to make its way through Congress before landing on Obama’s desk for signature. As I mentioned, we are now years away from the height of the mortgage crisis, so convincing a bunch of lawmakers to ease payments for mortgagors now seems a lot less likely. This would have made sense when housing was in the gutter, but now...

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### Still No Comeback for Subprime Mortgages

- Published: 2013-04-25
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/still-no-comeback-for-subprime-mortgages/
- Categories: Mortgage News

It has been some time since the word “subprime” was voted word of the year. Six years to be exact. And since then, the word subprime has really only been uttered in the past tense, often with contempt. You know, like subprime lawsuit, or subprime default, or some other combination of words that cast subprime in the worst possible light. In the mortgage world, subprime mortgages are generally characterized as having FICO scores below 620. These days, such loans are hard to come by, though there may be a small handful of lenders willing to offer loans to those with credit scores below that magical cutoff. But even if you can get your hands on a subprime loan, the mortgage rate will probably be relatively unattractive, seeing that the pricing adjustments for credit scores that low are steep. FHA Filled in for Subprime Over the past five years or so, FHA loans grew insanely popular as conventional lenders raised credit standards, effectively eliminating their subprime offerings. The FHA actually permits lending to borrowers with credit scores as low as 500, though most individual lenders require much higher scores, such as 640 or higher. Put simply, lenders impose overlays above the minimum requirements to avoid winding up with a ton of bad loans that end up in default or foreclosure. In 2010, Wells Fargo began accepting 500 credit scores for FHA loans after being pressured to do more, though such loans needed to meet additional criteria, such as a larger down...

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### Mortgages vs. Inflation

- Published: 2013-04-24
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgages-vs-inflation/
- Categories: Mortgage Matchups

Mortgage match-ups: "Mortgages vs. inflation. " While inflation has been kept mostly in check lately as the economy has limped along, many economists expect it to rise significantly in coming years as things get back on track. At the moment, both inflation and interest rates are very low because the economy is in the dumps, but what goes down must eventually come back up too. Inflation is a tricky concept to wrap one’s head around, but it’s basically defined as the increase in the cost of goods and services over time. Or a decline in the purchasing power of money. One may also look at it as a money supply that has grown too large, which can push prices higher and higher, eventually outpacing wages and creating big problems. The Fed essentially controls the money supply by raising or lowering rates, which contracts or expands supply, respectively. Currently, interest rates are low to accommodate growth.   This is good for borrowers (who can qualify for mortgages), but bad for savers, which I'll explain later in the post. There's a lot more to the story, but to keep things simple, as inflation rises, the value of our dollars today will be diminished tomorrow. Essentially, that $100 you have in your bank account won’t be worth $100 in the future. Or it won’t buy you what it once could. Instead, it will lose value, or purchasing power, over time, thanks to inflation. This is pretty much a given, though inflation rates do...

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### Real Estate Agents Influence Lender Choice for Nearly Half of Home Buyers

- Published: 2013-04-10
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/real-estate-agents-influence-lender-choice-for-nearly-half-of-homebuyers/
- Categories: Mortgage News

A new survey from Campbell Communications and Inside Mortgage Finance Publications revealed that real estate agents hold sway when it comes to choosing a lender. In fact, the survey claims 45% of buyer decisions regarding which lender to go with are controlled or influenced by real estate agents. So instead of shopping around for the best deal or using a family/friend’s referral, many home buyers instead follow the lead of their real estate agent, for better or worse. This is especially important news for lenders, now that the refinance boom is finally coming to an end, and purchase-money mortgages are expected to take center stage. The Mortgage Bankers Association expects home purchase lending to increase from $503 billion in 2012 to $585 billion this year. And you better believe that banks and lenders will want to align with real estate agents to ensure they get as much of that business as possible. After all, refinance activity is expected to slow tremendously, so they’ll need to make up for that lack of business elsewhere. Agents Prefer Quick and Reliable Lenders Real estate agents need to know their buyers can obtain financing So they prefer to have some sort of control over the lender you choose Or perhaps they choose one for you or at least direct you toward one Which explains why they always have a preferred lender The survey also noted that real estate agents prefer speed and reliability above all else, meaning they might not have a borrower’s best...

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### New Website Helps Mortgage Brokers Shop Around

- Published: 2013-04-08
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/new-website-helps-mortgage-brokers-shop-around/
- Categories: Mortgage News

For those shopping for a mortgage, it can be pretty difficult to determine which company is the best to work with. There are several possible options, including visiting a local bank branch or credit union, surfing over to an online mortgage lender, or getting in contact with a mortgage broker. While each have their pros and cons, mortgage brokers have the advantage of shopping around on behalf of borrowers because they tend to work with a large number of different banks and lenders. This can certainly take some of the legwork out of the home loan process for consumers, but brokers still need to determine who can do what (and where). When it comes down to it, it’s pretty difficult to keep up with the many mortgage programs out there, especially as lenders ease and expand their offerings in light of the new mortgage renaissance. Enter Mortgage Elements Fortunately, there is now a website geared toward mortgage brokers known as "Mortgage Elements" that keeps track of programs offered by wholesale banks and lenders. The website, which is modeled after the periodic table, though much smaller, allows brokers to quickly determine which lenders offer a certain home loan program. Aside from it being easy on the eyes, it’s also very intuitive and user-friendly. For example, if a broker wants to know which lenders offer 10/1 adjustable-rate jumbo mortgages in the state of California, they need only click on the desired “element” and state. From there, they will see a huge (or...

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### PennyMac Cracks List of Top 10 Mortgage Lenders

- Published: 2013-03-25
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/pennymac-cracks-list-of-top-10-mortgage-lenders/
- Categories: Mortgage News

During the fourth quarter of 2012, newcomer PennyMac cracked the top 10 mortgage lender list, according to stats compiled by MortgageStats. The Calabasas, California-based startup managed $10 billion in residential mortgage loan volume during the final quarter of the year, which accounted for roughly 2% of total market share. While it’s not Countrywide quite yet, PennyMac is displaying its ability to grow quickly in the now white-hot mortgage market. In case you didn’t already know, former Countrywide COO and CFO Stanford L. Kurland, who was known as the #2 guy behind Angelo Mozilo, helms PennyMac. He’s not the only Countrywide alum on staff – David A. Spector is president and COO of PennyMac, and Anne D. McCallion is their CFO. There are others too. Essentially a decent sized group of ex-Countrywide employees created PennyMac, which makes the story interesting to begin with. The company started out buying distressed mortgages for pennies on the dollar (hence the name) about five years ago, and later moved on to the loan origination game. The original unit that buys mortgages is known as PennyMac Mortgage Investment Trust, and is currently publicly traded and doing quite well (NYSE:PMT). It was also recently announced that PennyMac will IPO its PennyMac Financial Services, Inc. division, which is the lending and servicing arm of the company. A quick gander on their website reveals that they originate all types of home loans, from FHA Streamline loans to HARP loans and jumbo loans. This explains their ability to become a...

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### Mortgage Madness 2013

- Published: 2013-03-21
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/mortgage-madness-2013/
- Categories: Mortgage News

(Please click here for the large, legible version) As an ode to the NCAA tournament, or "March Madness" as it's commonly known, I woke up this morning with the brilliant idea of creating a "mortgage bracket. " I quickly discovered that there probably weren't 64 different mortgage options out there, let alone 32, unless you really want to split hairs and give everything an interest-only option. Or add a 3rd and 4th mortgage to the mix. So I went with a more appropriate 16-team field, and the results are featured in the image above. In this year's tournament, fixed-rate mortgages dominated adjustable-rate mortgages because mortgage rates are at unprecedented levels. This makes it wise to lock in a low interest rate for "life. "  Of course, the 15-year fixed gave the 30-year fixed a run for its money, but you can't mess with greatness. In previous years of the tournament, ARMs were actually king, and there was even a time when the out-of-favor option arm had a bit of a Cinderella story.   But that didn't end very well... Picking Your Winner When it comes down to it, different homeowners will favor a different outright winner, based on their own personal qualities, finances, preferences, and needs. For some, paying off the mortgage makes more sense than investing, even if not financially rational. But for others, it may be the perfect time to pay down the mortgage slowly and invest the money elsewhere. Others may opt for a short-term ARM because...

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### Nearly Half of All Underwater Private-Label Mortgages Modified

- Published: 2013-03-20
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/nearly-half-of-all-underwater-private-label-mortgages-modified/
- Categories: Mortgage News

For months, I’ve been banging on about the lack of a refinance program for private-label mortgages, those not backed by Fannie Mae and Freddie Mac. Sure, HARP is great for underwater homeowners whose loans are owned by the pair, but what about those who aren’t so fortunate? I’ve brought up proposals such as HARP 3 on several occasions, along with Oregon Senator Jeff Merkley’s refinance program that targets those who hold mortgages that aren’t government-backed. The Obama administration has also been open to an expanded HARP for these types of borrowers, but without Congressional approval, any stirrings of such relief continue to fall on deaf ears. But apparently these borrowers are actually receiving some assistance outside of HARP. 45% of Borrowers Have Received a Loan Modification A new commentary released today by Fitch Ratings revealed that about 45% of all underwater borrowers with private-label mortgages have received a loan modification. The company noted that loan modifications, distressed loan liquidations, and home price gains have reduced the number of underwater loans in private-label residential mortgage-backed securities (RMBS) by a sizable 25%. There are still roughly 1. 5 million underwater loans in these at-risk securities, though that number has fallen from 2. 04 million. Perhaps the biggest driver has been home price increases, with double-digit growth seen in some of the hardest-hit areas, including Arizona, California, and Nevada. Assuming home prices continue to tick higher, which they’re expected to, the number of waterlogged loans will continue to drop at a steady clip....

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### Study Claims Mortgage Default Risk Lower on Energy Efficient Homes 

- Published: 2013-03-19
- Modified: 2013-03-19
- URL: https://www.thetruthaboutmortgage.com/study-claims-mortgage-default-risk-lower-on-energy-efficient-homes/
- Categories: Mortgage News, Mortgage Rates

Do you live in a “green” house? If so, you might be a better mortgage borrower, whether you realize it or not. A new study released today by the University of North Carolina at Chapel Hill (UNC) Center for Community Capital and the Institute for Market Transformation (IMT) found that owners of Energy Star-rated homes are less likely to miss mortgage payments. In fact, the numbers are substantially better – apparently owners of these green-certified homes are 32% less likely to default on their mortgages. And the more points a home receives on the Home Energy Rating System (HERS) index of efficiency, the lower the mortgage default risk. A borrower in an Energy Star property is also 25% less likely to prepay the mortgage early. So the most energy efficient homes are also the safest for banks and lenders to target. Why Is Default Risk Lower? In a nutshell, energy-efficient homes have lower utility costs, which means more money in the pockets of owners. As a result, these borrowers may be less likely to become overextended, so mortgage payments will be more manageable. The author of the study, research fellow Dr. Nikhil Kaza, noted that the amount of money spent on energy equates to 15% of the annual cost of homeownership. In fact, American households spend about $230 billion annually on energy costs, not including transportation. An Energy Star-certified home typically delivers a 20% savings on annual utility costs. Additionally, homeowners can save on maintenance costs as a result of...

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### Home Prices Expected to Rise 22% Through 2017

- Published: 2013-03-18
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/home-prices-expected-to-rise-22-through-2017/
- Categories: Mortgage News

A huge panel of economists from banks, universities, and investment and research firms weighed in on the direction of U. S. home prices over the next five years. The consensus was average home price appreciation of 21. 99% through 2017, growth that exceeds what Zillow refers to as “pre-bubble rates,” which took place from 1987 to 1999. During that time period, home prices appreciated annually at a rate of 3. 6%, on average. 2013 Strongest of Next Five Years The 118 panelists indicated that 2013 would be the strongest year in terms of home price appreciation, with values expected to climb an average of 4. 6%. That compares to the 5. 5% gain seen in 2012, meaning there should be some moderation despite the positive sentiment. In 2014, prices are expected to rise another 4. 2%, and then dip to between 3. 6% and 3. 8% for 2015-2017. All in all, it’s another sign that housing has indeed bottomed, and should slowly work its way back to previous highs seen before the crisis hit. Who’s the Most Optimistic? I decided to scour the list of panelists to see first who was included, and second what they thought. There is an interesting mix of participants on the list, and an even more intriguing divergence of opinion. Let’s start by looking at who is most confident about home prices going forward, with the cumulative total displayed below: 1. Ethan Penner, Managing Partner at Monday Real Estate Partners – 77. 86% 2. David...

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### Preparing Yourself for the Sellers Market

- Published: 2013-03-12
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/preparing-yourself-for-the-sellers-market/
- Categories: Mortgage Tips

Whether you like it or not, the buyer’s market of the past couple years or so has come to an abrupt end. Now, sellers have the upper hand, with multiple offers streaming in and properties selling way above list. Don’t believe me? A home in San Mateo, California, just outside San Francisco, snagged an astounding 97 offers during the first eight days it was listed. The original asking price was $375,000, but ravenous homebuyers managed to push the final selling price to $510,000. So no, your cover letter about it being your first family home won’t be enough to get your lowball offer accepted. Sure, this example is absurd and extreme, but it’s happening nationwide in highly sought after areas. I peeked at a few condos in Los Angeles and saw a similar trend – properties are typically pending within a week or so of the listing date, and selling for a decent premium above ask. Inventory Is the Culprit So how on earth did sellers get the power all of a sudden? Well, there are a number of reasons. First, there isn’t any inventory. This is partially because homebuilders slowed down, and partly because existing homeowners are either underwater or unwilling to sell at rock-bottom prices. Investors also swooped in over the past few years and bought up all the foreclosed homes at major discounts. At the same time, homebuyer sentiment is on the up and up, and buyers are finally entering the fray, all at once. This has...

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### Beginning of the End for Fannie and Freddie?

- Published: 2013-03-05
- Modified: 2024-04-10
- URL: https://www.thetruthaboutmortgage.com/beginning-of-the-end-for-fannie-and-freddie/
- Categories: Mortgage News

There have long been stirrings of a potential Fannie Mae and Freddie Mac merger, or the outright dissolution of the under-fire companies ever since they fell under conservatorship back in 2008. And now it looks as if the wheels are finally in motion. Yesterday, during prepared remarks at an economic conference in Washington, FHFA director Edward DeMarco revealed plans for a “new business entity,” essentially a securitization platform that could eventually serve as the framework for the secondary mortgage market. The initial operation and funding for the business will be provided by Fannie and Freddie, though the venture will be led by individuals outside the two companies, in a physically separate location. In short, the company is being formed to replace the outdated infrastructure that exists at the two companies today, which some feel led to the mortgage crisis. Fannie and Freddie provide liquidity in the mortgage market to ensure banks and lenders have money to make new loans, but in recent years they’ve grown far too large. They're also inherently flawed, seeing that they were public-private companies (before the takeover) that attempted to meet government housing goals while also competing with private market participants, so much so that they took part in high-risk lending during the housing run-up. The Need for Private Capital At present, Fannie, Freddie, and the FHA/VA support more than 90% of new mortgages originated, meaning private capital is largely absent from the mortgage market. It has been since crisis first took hold, with no one...

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### HomeSteps Review: Freddie Mac Homes for Sale

- Published: 2013-03-04
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/freddie-mac-homesteps-review/
- Categories: Mortgage Tips

In case you weren’t aware, Freddie Mac, along with sister Fannie Mae, acquired a ton of real estate as a result of the ongoing mortgage crisis. And one way Freddie Mac is reducing their inventory of real estate owned (REO) is via their “HomeSteps” program, which is the name of the company’s real estate sales unit. Sure, they probably don’t want to be in the business of selling real estate, but because they’re a quasi-government agency, they have to do it efficiently and ethically. And that could mean savings for you! So if you're in the market to purchase real estate, one avenue you can consider along with the traditional channels is Freddie Mac HomeSteps. What Is HomeSteps? Freddie Mac has lots of homes for sale Thanks to the housing crisis and the many foreclosures that came with it HomeSteps is the name of the program tasked with unloading all of this REO inventory Let's start with some basics about the home buying program offered by Freddie Mac so you know what you're looking at here. In short, Freddie Mac has a bunch of single-family homes, townhouses, and condos that they need to sell. Some refer to them as "Freddie Mac homes. " They can be found in cities nationwide, though inventory is pretty light in more popular areas of the country for obvious reasons. The properties you'll find via the HomeSteps website were acquired by Freddie Mac as a result of foreclosure or deed-in-lieu of foreclosure, or perhaps a...

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### Detailing the FHA’s New Annual Mortgage Insurance Premium Structure

- Published: 2013-02-26
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/detailing-the-fhas-new-annual-mortgage-insurance-premium-structure/
- Categories: Mortgage Tips

Over the next few months, the FHA will make a number of substantial revisions to its annual mortgage insurance premium structure. This is in addition to the FHA’s increase in upfront mortgage insurance premium, which came last year. In short, the changes will cost new FHA borrowers more money going forward as a means to bolster capital for the agency’s ailing reserve fund. Essentially, future borrowers will pay for the missteps of past homeowners, though the FHA was the one that allowed such loose lending (downpayment assistance loans) to persist. The blame game aside, let’s take a look at the important changes coming soon to an FHA loan near you: Mortgage Insurance No Longer Canceled at 78% LTV A rule that went into effect in 2001 Canceled the annual MIP on FHA loans at 78% LTV Based on the original amortization of the home loan Meaning homeowners only had to pay it for a fraction of the loan term Perhaps the biggest change is the automatic removal of annual mortgage insurance premiums once an FHA loan falls to a certain loan-to-value ratio (LTV). This rule, which came into effect in 2001, canceled MIP payments once the loan reached 78% of the lower of the sales price or original appraised value, based on the original amortization schedule. It was also possible to make extra principal payments to get to that magical level, though using a new appraisal to lower the LTV is not an option. In other words, if you want...

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### Nearly 20% of Vegas Borrowers Owe More Than Double Their Home’s Worth

- Published: 2013-02-21
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/nearly-20-of-vegas-borrowers-owe-more-than-double-their-homes-worth/
- Categories: Mortgage News

While the good news about housing keeps flooding in, one piece of negative data jumped out at me today. The latest Zillow Negative Equity Report released today revealed that nearly one out of every five (18. 6%) Las Vegas homeowners with a mortgage owed double what their home was worth as of the end of the fourth quarter. In other words, if their home’s present value is $100,000, their mortgage balance is somewhere around $200,000. For most people, this would signal being past the point of no return. After all, most of us have enough trouble paying off a mortgage when we’re above water, so the thought of owing double is daunting, even with a kick-butt mortgage rate. Of course, if you stick around long enough, home price appreciation should do some of the heavy lifting, but it’s still a big ask for struggling homeowners. While I cherry-picked a bad piece of data, it should be noted that 26. 7% of Vegas homeowners were in this position one year earlier, so it’s not nearly as bad as it was. And only 8. 9% of underwater homeowners are delinquent on their mortgage payments, down from 9. 9% a year earlier. So yes, things are getting better... at the same time, the 200%+ loan-to-value (LTV) ratio bracket was the most prominent in Sin City. In other words, if you went door to door and asked Vegas homeowners with mortgages what their LTV was, most would say 200%+. The second largest distribution for...

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### New Mortgage Rules Eliminate 60% of Today’s Loans

- Published: 2013-02-12
- Modified: 2013-02-12
- URL: https://www.thetruthaboutmortgage.com/new-mortgage-rules-eliminate-60-percent-of-todays-loans/
- Categories: Mortgage News

A pair of sweeping mortgage rules is expected to eliminate roughly 60% of today’s mortgages, according to a new analysis from CoreLogic. The so-called Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) rules come with a ton of restrictions to ensure borrowers actually qualify for the mortgages they take out. In exchange for meeting these more stringent underwriting guidelines, banks and lenders will be afforded certain protections (and less regulation), making them more willing to originate such loans. And while the QRM rules are not yet finalized (only QM), is it widely anticipated that in order to qualify for such a loan, a hefty 10% down payment will be necessary. In short, these types of loans will be the safest and most valuable to originate, and thus lenders will offer the most competitive mortgage rates, similar to today’s conforming loans. Who Will Be Left Out by QM and QRM? An analysis of 2. 2 million loans originated during 2010 revealed that 24% of borrowers wouldn’t qualify based on the back-end debt-to-income (DTI) requirement of 43%. In other words, if your mortgage payment and all other monthly liabilities exceed 43% of your gross monthly income, you wouldn’t qualify based on the new rules. That could mean a higher mortgage rate, and/or a more difficult time finding a loan. The second largest category of borrowers that would be left out would be the low and no doc applicants, which removes another 16%. In short, if you can’t go full doc in the...

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### Getting a Mortgage After a Short Sale: Tips, Tricks, and Waiting Periods

- Published: 2013-02-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/getting-a-mortgage-after-a-short-sale/
- Categories: Mortgage Tips

Over the past several years, scores of homeowners have elected to ditch their unmanageable mortgages via short sales to avoid foreclosure. It’s estimated that roughly 370,000 short sales closed last year alone. Because short sales have been so popular, there will inevitably be tons of former homeowners re-entering the marketplace in the near future. In fact, there are already plenty of so-called “boomerang buyers” who dumped their old homes via short sale and acquired new ones. Of course, whether you’ll actually be eligible for a mortgage after a short sale will depend on a number of factors. There are already plenty of qualification requirements for a mortgage, and you’ll need to add “prior short sale” to that list as well. The Short Sale Waiting Period Depends on Mortgage Type The short sale waiting period is dependent on loan type Along with what transpired leading up to the short sale Those with extenuating circumstances may not have to wait at all Assuming they weren't delinquent on the loan before the sale Perhaps the easiest loan to qualify for after a short sale is a FHA loan, mainly because it has the shortest post-short sale waiting period. In fact, it has NO waiting period if you weren’t delinquent on your former mortgage during the 12 months preceding the short sale and the proceeds of the sale served as payment in full. Additionally, you must have stayed current on all other installment debts during the same time period. Sadly, most borrowers who pursued...

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### Deed in Lieu of Foreclosure vs. Short Sale: Here's Why They're Different

- Published: 2013-01-30
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/deed-in-lieu-of-foreclosure-vs-short-sale/
- Categories: Foreclosure, Mortgage Matchups

It's time for another mortgage match-up, with the latest in the series pitting the lesser known "deed in lieu of foreclosure" vs. the more popular short sale. Nowadays, there are plenty of options to get rid of your home and avoid foreclosure, even if you owe more than the property is currently worth. By avoiding the full-blown foreclosure process, you canreducethe negative impact to your credit score and ensure the lender won’t come after you for any deficiency balance. Additionally, you may be able to purchase real estate and qualify for a mortgage much sooner if you go with one of these foreclosure alternatives. What Is a Deed in Lieu of Foreclosure? As the phrase "deed in lieu" suggests Instead of the lender pursuing foreclosure and taking your home They will allow you to voluntarily deed back your property It's basically a preemptive forfeiture of the home in exchange for some benefits In short, a deed in lieu of foreclosure is exactly what it sounds like. Instead of foreclosure, you agree to voluntarily deed your property to the lender. In exchange for this transfer of ownership, the lender will release the associated lien (mortgage), allowing you to move on with your life. However, banks will only agree to a deed in lieu if you keep the property in good shape and meet some sort of hardship requirements. The trade-off is that the bank gets a property free from damages typically associated with foreclosure, and they don’t need to deal with...

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### HARP May Be Expanded and Extended to Promote Mortgage Refinancing

- Published: 2013-01-30
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/harp-may-be-expanded-and-extended-to-promote-mortgage-refinancing/
- Categories: Mortgage News, Refinance

There’s been a lot of buzz about the Home Affordable Refinance Program lately. While it has picked up steam in recent months, thanks to the removal of the LTV barrier, it’s still not reaching millions of underwater homeowners in need of a lower mortgage payment. Fortunately, there have been stirrings of expansions and extensions aimed at including more of these folks in 2013. Yesterday, U. S. Treasury Department official Michael Stegman hinted of a broader program at the American Securitization Forum conference. He told attendees that the Obama administration would work to get a refinance program for private-label mortgages (those not owned or backed by Fannie and Freddie) through Congress. As I’ve noted time and time again, these types of loans make up the minority of outstanding mortgages, but represent the majority of the delinquency problem. Data from back in 2009 revealed that private-label mortgages accounted for less than 20% of outstanding loans, but nearly two-thirds of all serious delinquencies. Sadly, these borrowers have not been able to take advantage of programs like HARP and HARP 2. 0, which hurts the entire housing market as avoidable foreclosures carry on. Even if Congress can’t agree on a deal, Stegman said Treasury has the authority to unilaterally modify the “most deeply underwater” mortgages, and compensate investors for some of the lost interest. New Bill to Protect Lenders and Spur Refis Along with that piece of seemingly positive news, New Jersey Senator Robert Menendez and California Senator Barbara Boxer plan to introduce new...

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### Wells Fargo Shifts Loan Officer Pay to Highlight Mortgage Quality

- Published: 2013-01-28
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-shifts-loan-officer-pay-to-highlight-mortgage-quality/
- Categories: Mortgage News

Here’s an interesting little piece of mortgage news. According to an internal presentation obtained by Bloomberg, top mortgage lender Wells Fargo plans to incentivize loan officer pay based on loan quality. While I wasn’t able to track down the presentation, the publication noted that mortgage salespeople would receive extra compensation for submitting “complete loan applications” to loan processors and mortgage underwriters within a five-day period. In return for their speed and organization, Wells Fargo would pay salespeople an additional 0. 03% on each loan that meets the requirements for the new rule. On the example $400,000 loan included in the article, it would bump pay up another $120, on top of the $1,720 they reportedly earn before the bonus. For the record, that $1,720 equates to 0. 0043%, in case you were wondering how much Wells Fargo reps make for originating your home loan. Of course, that’s just an example, and it could well vary quite a bit depending on a number of factors, such as the type of loan, volume, position, etc. Sign of the Times The move by Wells is clearly a sign of the times, which is a mix of both extraordinary demand for mortgages and much more stringent underwriting guidelines. Back in the day, before the boom turned to crisis, many lenders provided incentives to loan officers who originated the riskiest types of loans, largely because they were sold off on the secondary market in a game of hot potato. So loan officers and mortgage brokers...

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### Higher Home Prices Push 1.3 Million Mortgage Holders Back Above Water

- Published: 2013-01-17
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/higher-home-prices-push-1-3-million-mortgage-holders-back-above-water/
- Categories: Mortgage News

During the third quarter of 2012, another 100,000 or so homeowners “reached a state of positive equity,” per the latest report from analytics firm CoreLogic. That brought the three-quarter aggregate total to 1. 4 million borrowers, thanks to higher home prices ushered on by extremely low inventory. Still, there are millions more who are underwater on their mortgages, meaning they owe more than their properties are worth. CoreLogic reported that 10. 7 million homeowners were in a negative equity position as of the end of the third quarter. That represented 22% of all residential properties with a mortgage, meaning we’ve got a ways to go before this housing crisis is really over. Another 2. 3 million borrowers were considered “near-negative equity” because they held less than five percent home equity at the end of the third quarter. These types of borrowers may be above water, but if you factor in real estate commissions, they could still be forced to sell at a loss. Together, these at-risk borrowers represented 26. 8% of all mortgaged properties nationwide, down from 27% a quarter earlier. In all, $31 billion in negative equity vanished from quarter-to-quarter. Nevada Still Waterfront Property Despite being situated in a vast desert, Nevada continues to the lead the country in the underwater mortgage department. In the Silver State, a whopping 56. 9% of all mortgaged properties were still in a negative equity position as of the third quarter. Nevada was followed by Florida (42. 1%), Arizona (38. 6%), Georgia (35....

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### Short Sales Increased 23 Percent in 2012 While REOs Plummeted

- Published: 2013-01-14
- Modified: 2013-01-14
- URL: https://www.thetruthaboutmortgage.com/short-sales-increased-23-percent-in-2012-while-reos-plummeted/
- Categories: Foreclosure, Mortgage News

It appears as if 2012 was a very good year for the housing market, according to the latest CoreLogic MarketPulse report released this morning. The company said “housing made an impressive recovery in 2012,” thanks to a six percent increase in total home sales, the first such increase since 2005. Sales increased to 4. 2 million units during the year, up from 3. 9 million in 2011, but remain below the 5. 5 million average since the early 2000s. Short Sales Lead the Way The sales increase was led by an impressive 23% increase in short sales, which hit their highest level since the housing crisis took hold. A total of 370,000 short sales closed last year, which means scores of at-risk borrowers were freed from their crushing mortgages, and new homeowners were able to take over at much more reasonable price points. Ideally, this new batch of homeowners with fixed mortgages set at ultra-low interest rates will drive the future recovery. The popularity of short sales also probably explains why the Mortgage Forgiveness Debt Relief Act of 2007 was extended for another year with no resistance. Without such legislation, homeowners with underwater mortgages would have little incentive to go through with a short sale, seeing that the shortfall would be considered taxable income. The extension means short sales will continue to lead the “recovery” in 2013, as rising home prices allow more borrowers to get out of dodge. At the same time, the prevalence of short sales will hinder...

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### New Petition Urges Mortgage Re-HARPing

- Published: 2013-01-11
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/new-petition-urges-mortgage-re-harping/
- Categories: Mortgage News, Refinance

Well, file this one under “was bound to happen,” or, “was only a matter of time. ” A clever guy by the name of Marcus J. from Clementon, New Jersey has created an online petition to eliminate the securitization cut-off date for HARP eligibility. At the moment, this ever-important cut-off date is May 31, 2009, meaning if your mortgage was sold to Fannie Mae or Freddie Mac after that date, you’re not eligible for a HARP refinance. Unfortunately, many homeowners already refinanced their mortgages under HARP, perhaps when it wasn’t as attractive as it is now, seeing that there is a much more flexible HARP 2 nowadays. At the same time, mortgage rates have marched lower and lower since HARP was originally unveiled, again, likely frustrating homeowners who refinanced early on. There are also the many people who purchased homes after that cut-off date, who are now underwater and likely seeking a HARP refinance. Eliminate HARP Cut-Off Date? The petition essentially calls for the elimination of the cut-off date, which Marcus J. refers to as “arbitrary,” along with the one-time HARP limit. This would allow for so-called "reHARPing. " He argues that removing these roadblocks would permit millions of Americans to refinance their mortgages to lower rates, thus saving thousands on their monthly mortgage payments over time. Note:You can reHARP a Fannie Mae loan that was refinanced under HARP from March to May 2009. Interestingly, he isn’t the first to propose such an idea. Back in May 2012, U. S....

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### Ability-to-Repay and Qualified Mortgage Rules Unveiled

- Published: 2013-01-10
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/ability-to-repay-and-qualified-mortgage-rules-unveiled/
- Categories: Mortgage News

Well, the Consumer Finance Protection Bureau finally released its “Ability to Repay” and “Qualified Mortgage” rules today. At first glance, they look to be pretty lackluster, and the CFPB seems to be asking more questions than it is giving answers. As part of Dodd-Frank reform arising out of the latest mortgage crisis, lenders must now ensure that borrowers have the ability to repay their mortgages. While this sounds like a no-brainer, prior to the crisis just about anyone with a pulse could take out a home loan. The CFPB included the story of a victimized borrower in its press release, though you have to wonder how many of these homeowners actually knew they couldn’t afford the loans before agreeing to apply for one. Sure, it went both ways, but it was both lenders and borrowers who were at fault for the crisis. Ability-to-Repay Rule The new “Ability-to-Repay rule” requires lenders to underwrite pretty muchALLnew residential home loans a lot more stringently than in past years, namely the 2000s. However, the new mortgage rules are pretty much on par with today’s underwriting standards, which have become much more rigorous in light of past abuses. I say pretty much all because HELOCs, time-share plans, reverse mortgages, bridge loans, and certain construction-to-perm loans are exempt from the ATR rule. As part of the ATR rule, lenders must consider and verify eight (8) underwriting criteria: - Current income or assets - Current job status - Credit history - Monthly payment on mortgage - Monthly...

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### Mortgage Debt Relief Extended Through 2013

- Published: 2013-01-03
- Modified: 2018-08-29
- URL: https://www.thetruthaboutmortgage.com/mortgage-debt-relief-extended-through-2013/
- Categories: Foreclosure

Well, the fiscal cliff was averted at the 11th hour, though there are already rumblings of more cliffs to come. I guess things are going to be pretty rocky in 2013, as many had suggested in earlier predictions. But one thing is for sure – the Mortgage Forgiveness Debt Relief Act of 2007 has been extended for another year, until the end of 2013. Put simply, it means homeowners who have mortgage debt forgiven won’t be on the hook for it later when the IRS comes a knockin’. Before the law was introduced, those who sold their homes short or lost them to foreclosure would have to treat any shortfall as income, which clearly didn’t make a lot of sense if someone couldn’t even make their mortgage payment to begin with. Loan modifications were also subject to taxation if the principal balance was reduced. Fortunately, Bush signed the bill into law to pave the road for millions of distressed sales, which continue to aid the housing recovery. Aside from all the other tax stuff, this initiative is perhaps the most important piece of the American Taxpayer Relief Act of 2012, seeing that distressed sales, including short sales and foreclosures, account for a huge chunk of home sales nowadays. After all, most homeowners who aren’t distressed probably have no intention of selling their properties at the perceived bottom, which explains the inventory shortage. The legislation will also ensure that loan modifications can continue to be processed for struggling homeowners. Keep in...

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### Mortgage Rates Not as Low as They Could Be

- Published: 2012-12-31
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-rates-not-as-low-as-they-could-be/
- Categories: Mortgage News, Mortgage Rates, Refinance

A new Fed study and associated workshop revealed that mortgage lenders continue to offer inflated mortgage rates to consumers, despite ongoing efforts to reduce such borrowing costs. Over the past several years, the Fed has pledged to purchase billions in mortgage-backed securities (MBS) in an effort to lower consumer mortgage rates. The plan seems to have worked so far, pushing 30-year fixed mortgage rates from the five-percentage range to around 3. 3% today. However, Federal Reserve Bank of New York researchers Andreas Fuster and David Lucca argue that rates should be even lower. In fact, the 30-year fixed could be closer to 2. 6% if the yield declines in MBS were fully passed on to consumers. Fat chance. Lender Profits Clearly Rising While it’s open for debate, it’s clear that lender profits have risen substantially in recent years, largely because of the widening spread between yields on MBS and primary mortgage rates. During 2007, this primary-secondary spread was around 45 basis points, but has since risen 70 bps to about 115 bps. Some of the participants in the workshop attributed the disparity to higher guarantee fees (which are passed on to consumers), costs associated with putback risk (repurchasing bad loans), a decline in the value of mortgage servicing rights, and so on. But if you look at the mortgage banker profit survey from the Mortgage Bankers Association, the average profit on home loans originated in the third quarter of 2012 was $2,465, up from $1,423 two years earlier. Profits have...

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### 10 Predictions for Mortgage and Housing in 2013

- Published: 2012-12-28
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/10-predictions-for-mortgage-and-housing-in-2013/
- Categories: Mortgage News

Well, another year has passed, and unlike previous years, 2012 was a fairly decent year for the housing market. After all, 30-year fixed mortgage rates chalked their “lowest annual average in at least 65 years,” per Freddie Mac. Home prices also increased, which created a number of positives for the market. So what can we expect in 2013? I’ll take a crack at it. 1. Mortgage rates will move sideways The direction of mortgage rates always seems to top the list, largely because tracking them is about as fun as gambling. Currently, the 30-year fixed is averaging an amazingly low 3. 35%. Back in January, it averaged 3. 91%, a rate most thought wouldn’t go any lower. We continued to be pleasantly “surprised” in 2012, but I don’t see that trend continuing in 2013. Sorry folks. This may be as good as it gets. Look for mortgage rates to stay close to current levels, though there may be some ups and downs in the first half of the year as uncertainty looms. In the latter half of 2013 expect mortgage rates to rise, though not by any material amount. 2. Home prices will rise slightly While mortgage rates could tick higher as the year progresses, home prices should also extend their recent rise. They already appeared to hit bottom in many metros throughout the United States, though some cities may experience further declines before things turn around. Either way, don’t expect home prices to rise at their current clip. A...

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### FHA Goes Easy on Borrowers with Soft Changes

- Published: 2012-12-20
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/fha-goes-easy-on-borrowers-with-soft-changes/
- Categories: Mortgage News

There’s been a lot of hubbub lately regarding the FHA, its seemingly high-risk lending, and its dwindling insurance fund (that would eventually be taxpayers’ problem). And one senator in particular, Bob Corker, has been on a personal mission to see that the agency cleans up its act before it goes the way of the dodo. However, it appears as if the FHA will continue to throw caution to the wind. In a letter written to Corker on Tuesday, the FHA’s Acting Assistant Secretary Carol Galante presented some new changes that are slated to “go live” either immediately or by January 31, 2013. A Minimum Credit Score? Currently, the minimum credit score allowable for an FHA loan is 500, though most lenders have much higher requirements, so it’s not truly as low as it appears. Additionally, those wishing to put the signature 3. 5% down need at least a 580 credit score, which is still dismal by any standards. To tidy things up, Galante has proposed that borrowers with credit scores below 620 have a maximum debt-to-income (DTI) ratio of no more than 43% in order to be approved via the FHA’s TOTAL Scorecard, which is an automated underwriting system. If the borrower’s DTI exceeds 43%, lenders will be required to manually underwrite the loan application. So basically the FHA will continue to accept borrowers with dismal credit scores, though Galante claims this change will reduce claim rates by roughly 20% for borrowers with sub-620 credit scores. New Max LTV on...

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### Fiscal Cliff Deal May Include Loan Modifications for Non-Agency Mortgages

- Published: 2012-12-19
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/fiscal-cliff-deal-may-include-loan-modifications-for-non-agency-mortgages/
- Categories: Mortgage News

Here’s a little nugget of potentially good news that may materialize out of the fiscal cliff. The Treasury Department is reportedly floating a new initiative, referred to as the “Market Rate Modification Program,” which will allow underwater borrowers with non-agency mortgages to do a rate and term refinance to take advantage of today’s low interest rates. As it stands, if Fannie Mae, Freddie Mac, or Ginnie Mae don’t back your mortgage, getting a loan modification is difficult, if not impossible. And while most newly originated loans are now backed by these government agencies, many non-agency mortgages, also referred to as private-label mortgages, were originated during the housing boom. As a result, millions of Alt-A loans, subprime loans, option arms, jumbo loans, and so forth are not eligible for the existing government refinance and modification programs, such as the popular HARP II. The Treasury Department has determined that “Significantly Underwater Borrowers,” characterized as those with loan-to-value ratios of 125% or higher who have such loans are more likely to default, despite being current on payments. In short, these borrowers are unable to get the assistance fellow Americans (or even neighbors) receive because their loans aren’t backed by Fannie, Freddie, or the FHA/VA, so the Obama Administration fears they may walk. Obviously, the last thing we need is more foreclosures, especially now that everyone seems to think we’ve “turned the corner. ” How the Market Rate Modification Program Would Work It all sounds quite simple. If you’re one of those “Significantly Underwater...

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### BofA Boss: Not Everyone Should Own a Home

- Published: 2012-12-14
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/bofa-boss-not-everyone-should-own-a-home/
- Categories: Mortgage News

Bank of America CEO Brian Moynihan got down to brass tacks today. Well, sort of. As much as the CEO of one of the world’s largest banks can get. In prepared remarks at the Brookings Future of Homeownership Forum where he was the keynote speaker, Moynihan questioned homeownership at its core. He noted that Americans' view of homeownership has gone “from building long term equity to cashing in on short term equity gains. ” Moynihan pointed to a surge in investment properties, which increased from a historical four percent share to a high of 28% in 2006, just before everything went so terribly wrong. And added that home flipping was the norm, noting that in late 2005 more than 80% of all refinancing involved cash out, or tapping home equity. Homeowners became overleveraged, and we all know what happened next – those with little or no equity stopping making payments, and the whole thing came crashing down. Housing Isn’t For Everyone? Moynihan also seemed to question whether just anyone should own a home. “As a just, democratic society, we owe all our citizens a safe, good place to live. But, a roof over one’s head doesn’t always have to come with mortgage debt. And in many cases shouldn’t. ” He also took aim at the financial benefits of owning a home, remarking that since 2001 average appreciation has been just two percent. And that recent and ongoing weak economic growth, unemployment, and slower household formation will make a home purchase...

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### Consumers Prefer PayPal Over Walmart for Mortgage Needs

- Published: 2012-12-03
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/consumers-prefer-paypal-over-walmart-for-mortgage-needs/
- Categories: Mortgage News

File this under confusing. A new “online study” from Carlisle & Gallagher Consulting Group released today revealed some interesting consumer sentiment regarding mortgages. The point of the survey was to determine consumers’ views about the home mortgage application process, and if they’d consider alternatives to the traditional bank or lender route. The results were somewhat strange. Of the 618 U. S. consumers surveyed, 80% said they would consider taking out a mortgage from a “non-bank,” which isn’t the surprising part. After all, these days the big banks are seeing increasing pressure from tech-happy startups and the like, many of which don’t charge fees, or at least make banking easier and related activities less painful. A PayPal Mortgage? But what was particularly interesting was that 48% of consumers said they would consider a mortgage from PayPal. Last time I checked, PayPal was simply a company that allowed individuals to transfer money to friends and family or to pay for online purchases. Businesses can also use PayPal for their merchant needs as an alternative to standard credit card processing hardware/software. So where does the mortgage from PayPal come in? I’m not sure, but I guess the results suggest people like the company’s service, and perhaps ease of use, which would leave them open to a PayPal mortgage. For the record, the biggest consumer gripes regarding mortgages included slow execution during the mortgage process, difficulty communicating with lenders, inability to track said mortgages, and untrustworthy advice. How PayPal would tackle those issues is...

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### To Mess or Not Mess With the Mortgage Interest Deduction

- Published: 2012-11-29
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/to-mess-or-not-mess-with-the-mortgage-interest-deduction/
- Categories: Mortgage News

That is the question... I’ve been trying to avoid writing about this subject for a week or two now, mainly because it’s so controversial, so overanalyzed, and really hard to sum up in one neatly edited post on this website. Aside from that, one’s opinion of the mortgage interest deduction will surely be swayed by whether or not they own a home, if they have a mortgage on said home, how much money they make, if they itemize deductions, if they’re a realtor or a homebuilder, and so on. But first a little background on the mortgage interest deduction, known as the MID. Currently, homeowners are able to deduct mortgage interest on both primary residences and second homes, just as they are real estate property taxes. However, in order to take advantage of the MID, homeowners must itemize their deductions, and those deductions must exceed the standard deduction to actually benefit the homeowner. Secondly, there are caps on the MID – only the first $1 million of home acquisition debt is deductible ($500,000 if married and filing separately). And for home equity debt, only the first $100,000 is deductible. There are a lot of finer details, but I don’t want to derail the conversation into complicated tax topics. Save that for your CPA. What the Mortgage Interest Deduction Costs Now let’s talk about cost. The MID is reportedly the largest deduction in the tax code, accounting for $470. 4 billion in tax deductions in 2008, per the Reason Foundation. In...

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### Survey: Lower Income Borrowers Do Less Mortgage Research, Shopping

- Published: 2012-11-28
- Modified: 2018-02-02
- URL: https://www.thetruthaboutmortgage.com/survey-lower-income-borrowers-do-less-mortgage-research-shopping/
- Categories: Mortgage News

There have been plenty of reports about lower-income borrowers getting the short end of the stick during the latest housing downturn. And a new National Housing Survey from mortgage financier Fannie Mae might reveal why. Based on the second quarter data in the report, it appears as if those with annual incomes of less than $50,000 are more likely to take someone else’s “word for it,” as opposed to doing their own research. In fact, 30% of respondents in the survey defined as being “lower income” borrowers indicated that a mortgage broker’s recommendation would be a major factor in choosing a lender. That compares to 20% for those earning $50,000 - $100,000, and 17% for top earners in the $100,000+ group. The numbers are similar for using a real estate agent’s referral, at 29%, 20%, and 14%, respectively. Lower income borrowers were also more than three times more likely to rely on lender advertising than the wealthiest group. Richest Borrowers Took the Best Offer Conversely, the richest of borrowers were most likely to be influenced by the competitiveness of the offer received. More than three-quarters (76%) of the $100,000+ crowd said the best offer was a major influence, compared to just 54% of low-income borrowers. So basically just more than half of low-income borrowers seemed to care what their mortgage rate was. Wealthy borrowers also indicated that when shopping for a mortgage, they were more likely to obtain quotes from multiple banks and lenders. I’ve said it many times before,...

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### Is There Any Correlation Between Elections and Mortgage Rates?

- Published: 2012-11-06
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/is-there-any-correlation-between-elections-and-mortgage-rates/
- Categories: Mortgage Rates, Mortgage Tips

Seeing that it’s Election Day, I figured I’d take a look at historic mortgage rates to see if there is any correlation between their direction and elections. Specifically, I wanted to see if there was any significant movement after an election took place, as a new Republican or Democrat (or Roseanne) could potentially sway the direction of the economy. At least, that’s what the aggressive pundits out there always seem to bark in November. For my little project, I relied upon archives of the Primary Mortgage Market Survey from Freddie Mac, which stretch back to 1971. Let's Run the Numbers I wanted to find out if mortgage rates are impacted by presidential elections So I looked at 30-year fixed rates in November versus December During an election year since 1972 The results were interesting... The very first presidential election since that time came on November 7, 1972, when Richard Nixon pummeled George McGovern in a landslide victory. During the month of November in 1972, the 30-year fixed averaged 7. 43%. It increased to 7. 44% in December, and stayed put through March. Not much movement at all. In the 1976 election, Carter defeated Ford, and the 30-year fixed stood at 8. 81%. It dropped to 8. 79% a month later, and was pretty much unchanged for an entire year afterwards. In 1980, Reagan took office after crushing Carter, and the 30-year fixed averaged 14. 21%. It increased to 14. 79% a month later, and to 18. 45% nearly a year...

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### The White House Is Better Off Than It Was Four Years Ago

- Published: 2012-11-05
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/the-white-house-is-better-off-than-it-was-four-years-ago/
- Categories: Mortgage News

By now, we’ve all heard the line, “Are you better off than you were four years ago? ” It was uttered in 1980 during a presidential debate between Ronald Reagan and Jimmy Carter, when the former questioned incumbent Carter’s America. And more recently, Mitt Romney brought the line (and the strategy) back to the forefront in his campaign against president Barack Obama. Obama fired back with an ad that addressed the question, and now just about every other article about the election mentions this “are you better off” business. Pushing politics aside, but still focusing on Washington D. C. , one thing seems to be clear. 1600 Pennsylvania Avenue Is on the Mend Relax; I’m only talking about the physical structure. The White House is worth more today than it was four years ago, at least, if you ask Zillow. Yes, the ubiquitous real estate listing company has a Zestimate for 1600 Pennsylvania Avenue, just like every other home in the United States, and it’s higher now than it was in 2008. Of course, it’s not much higher. Back in October 2008, it was valued at a staggering $280. 8 million. Today, its appraised value is $284. 9 million, a paltry 1. 5% increase. Sure, it’s not record-breaking home price appreciation, but if you ask most homeowners if a 1. 5% gain over the past four years would “work for them,” I’m sure a lot of them would reply, “yes. ” Interestingly, the famous home and landmark saw its value...

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### Zillow Now Offers Pre-Foreclosure and Foreclosure Listings for Free

- Published: 2012-10-25
- Modified: 2024-04-10
- URL: https://www.thetruthaboutmortgage.com/zillow-now-offers-pre-foreclosure-and-foreclosure-listings-for-free/
- Categories: Foreclosure, Mortgage News

If you want to snag a foreclosure property on the cheap, take a look at the new improved Zillow. The real estate listing company announced the launch of its so-called "Foreclosure Center" today, which includes tutorials, buyer and seller guides, and most importantly, free foreclosure listings! You can now access pre-foreclosures, foreclosure auctions, bank-owned properties, and more, alongside their standard listings. Zillow estimates their pre-market inventory to total more than 1. 5 million properties nationwide, along with another 250,000 properties that have already been foreclosed on. They are also “surfacing” 67,000 foreclosure listings in their for-sale search category (I guess merging them? ). Now if only they could display all that shadow inventory as well... like the people about to walk away, or just behind on the mortgage. Zillow's Foreclosure Listings Include Pictures For better or worse You can actually get a lot of detail on these foreclosed properties Including both interior and exterior photos Which may reveal the condition some of these homes are in This is what a foreclosed kitchen looks like after being ransacked and left for dead. At least they did some decorating. So if you ever wanted to see what a gutted, foreclosed home looked like, wonder no longer. Pictures aside, there are also details galore. Take a look at this screen grab from one property listed as a pre-foreclosure in auction status. Check Out the Foreclosure Status in Great Detail Instead of simply marking a property as "foreclosed" Zillow provides the history of the...

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### Mortgage Mentioned Just Once During Final Presidential Debate

- Published: 2012-10-17
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-mentioned-just-once-during-final-presidential-debate/
- Categories: Mortgage News

What a difference four years make. Back in 2007, the only subject the presidential hopefuls talked about was mortgages. In fact, it got to a point where it became nauseating, all the talk about mortgages and loan modifications and foreclosures and housing woes. At the time, the candidates’ lack of knowledge surrounding those subjects was also painfully clear; they stumbled when trying to explain what exactly was going on, but pledged to do whatever it took to help turn things around. Leading up to this year’s round of debates, I had paper and pen out, ready to jot down all the interesting mortgage references, and then pick them apart. But as the night went on, I pushed my pad of paper to the side of me, capped my pen, and realized there weren’t going to be any mentions of housing woes or foreclosures or any of it. Apparently such talk is “so four years ago. ” What Exactly Was Said? Well, funnily enough, the first mention of “mortgage” didn't even come from one of the candidates, but rather from an audience member, who asked about the future of the mortgage interest deduction, along with other deductions. The question was for Romney, who responded by saying deductions would be reduced, perhaps to a fixed number such as $25,000, and then you could decide which deductions to take using that money. So you could use it all on the mortgage deduction, or spread it among charitable and child tax deductions as well....

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### HARP Refinancing Takes Off Thanks to New Guidelines

- Published: 2012-10-16
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/harp-refinancing-takes-off-thanks-to-new-guidelines/
- Categories: Mortgage News, Refinance

As a result of recent enhancements, and perhaps ultra-low mortgage rates, the Home Affordable Refinance Program has actually made a meaningful impact. Last month, there were a total of 98,885 HARP refinances recorded by the FHFA, which accounted for nearly 24% of all the Fannie Mae and Freddie Mac refis during August. That’s a big chunk of the business, and represents nearly a quarter of the 400,000 total HARP refis originated in all of 2011. Since January, 618,217 loans have been refinanced via HARP, bringing the all-time total to 1,640,068 (the program began in 2009). A total of 1,292,932 HARP refis have been for loan-to-value ratios between 80 and 105 percent, and another 228,666 were for refis between 105-125%. Helping the 125% Last month, a total of 26,944 loans refinanced through the program had a loan-to-value north of 125%, which was one of the major program enhancements announced in late 2011 and implemented in 2012. In fact, fewer borrowers (23,265) with LTV ratios between 105-125% refinanced through the program in August. Simply put, the program is reaching the hardest-hit borrowers out there, many of whom you would assume are “too far gone” to benefit from such a program, let alone any program. After all, if you’re underwater on the mortgage by more than 25%, it might be looked at as a losing endeavor, especially if it doesn’t involve any principal forgiveness. But these numbers show there are believers out there, even in the darkest of times. For all of 2012,...

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### Did Bank of America Offer to Pay Off Your Second Mortgage?

- Published: 2012-10-01
- Modified: 2012-10-01
- URL: https://www.thetruthaboutmortgage.com/did-bank-of-america-offer-to-pay-off-your-second-mortgage/
- Categories: Foreclosure, Mortgage News

Are you one of the “lucky” ones? Bank of America announced late Friday that it is in the process of mailing roughly 150,000 letters to distressed homeowners, offering to pay off their second mortgages as part of the national foreclosure settlement. Before this announcement, they had been lacking in the assistance department and getting bad press because of it. The Charlotte-based bank said it began mailing the letters back in July, and will continue to inform pre-qualified homeowners throughout the year. The program is opt-out, meaning the borrower’s second mortgage will be fully paid off, or “extinguished,” unless the customer contacts the bank within 30 days of receiving the letter to decline the offer. By paying off the second mortgages of struggling borrowers, Bank of America said its goal is to put homeowners in better equity positions in the hopes they’ll get back on their feet. In other words, if they can remove the burden of a big second mortgage and push the borrower’s loan-to-value ratio below 100%, homeowners might change their tune and ride out the storm, especially with the prospect of rising home prices on the horizon. Who Qualifies for Relief? First and foremost, you must have a second mortgage. That’s a big no-brainer. On top of that, the mortgage must be owned and serviced by Bank of America, though it technically doesn't matter who owns the first mortgage. Bank of America only seems to be offering this assistance to those behind on their mortgage payments, namely second...

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### Consumers Don’t Care About Low Mortgage Rates Anymore

- Published: 2012-09-26
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/consumers-dont-care-about-low-mortgage-rates-anymore/
- Categories: Mortgage News, Mortgage Rates

As you’re probably aware, the latest move to boost the economy was another round of quantitative easing, known as QE3. This most recent initiative targets mortgage-backed securities specifically, with the Fed pledging to purchase $40 billion per month, on an open-ended basis, until things improve. Since it was announced, mortgage rates have inched down to new all-time lows, not that they were anywhere close to high to begin with. In other words, I don’t think anyone was pumping the brakes on buying or refinancing because rates were “too high. ” So now homeowners that may have qualified for a rate of 3. 5% on a 30-year fixed can snag a rate of 3. 25% instead. Pop the champagne! On a $200,000 loan amount, we’re talking about nearly $30 a month in savings. And ideally this money is pumped back into the economy to get things chugging along again. But are low rates the problem here, or simply the easiest out for the Fed? Mortgage Rates No Longer a Popular Search Term I decided to do a little test to see if the low mortgage rates were making a difference. Sure, they made a difference over the past few years after dropping several percentage points, but now that they’ve been so low for so long, I wanted to see if pushing them even lower would make a material difference. So I turned to Google, and more specifically, their Insights for Search tool. It shows you what people are searching for on...

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### Fico Explains Why Short Sales Hurt Your Credit Score

- Published: 2012-09-25
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/fico-explains-why-short-sales-hurt-your-credit-score/
- Categories: Credit Scores, Mortgage News

There’s been a lot of confusion about short sales, especially with regard to how they affect one’s credit score. Plenty of people have recommended them as an alternative to foreclosure, even going as far as to say they can spare you the nasty credit score ding. And while they can be a worthwhile foreclosure alternative, the credit score impact really isn’t much different. This has been an issue for a while because common sense and logic would tell you that a short sale is better than foreclosure. Being a Good, Bad Borrower After all, if you choose to short sell your home, you’re making a conscious effort to work with your lender. As opposed to hastily packing your things and heading for the hills, or stripping your home of its precious copper and selling it on the black market. That should be rewarded, right? And the mortgage crisis was a one-off event, which made good consumers “break bad. ” If anything, agreeing to a short sale should tell other creditors that you mean well, even if you can’t or don’t want to continue making your monthly mortgage payments on your underwater home. Unfortunately, this sentiment hasn’t translated to higher credit scores. Fico still sees foreclosures and short sales as very similar negative events. But why? Aren’t they totally different? Data Backs It Up Folks Whether foreclosures and shorts sale are similar or not, data collected by Fico proves that those who short sell are higher risk than other borrowers. Fico...

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### 2011 Was the Worst Year in Mortgage Lending Since 1995

- Published: 2012-09-18
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/2011-was-the-worst-year-in-mortgage-lending-since-1995/
- Categories: Mortgage News

While we’ve certainly been in a good news cycle for the past many months, it wasn’t long ago that things looked really bleak. If you’re in the mood to reminisce, consider a new report from the Federal Reserve, which revealed that 2011 was the worst year in mortgage lending since 1995. Per Home Mortgage Disclosure Act (HMDA) data dissected by the Fed, just 7. 1 million loans were originated by the more than 7,600 lenders nationwide included in the report. That was the lowest total since the 6. 2 million home loans reported in 1995, which was nearly 20 years ago. The numbers were down from about 7. 9 million in 2010, with refinance loans (surprisingly) leading the decline. Refinance volume surged late in 2011, but it wasn’t enough to keep the numbers above 2010 levels. Volume fell about 13 percent year-over-year. Home purchases declined as well, thanks in part to the expiration of the first-time homebuyer tax credit program. FHA lending also decreased from 2010, though the low-down payment loans continued to account for nearly half of the purchase-money mortgage market. For the record, HMDA data is estimated to cover roughly 90 to 95 percent of FHA lending and between 75 and 85 percent of all other first mortgages, making it the broadest representation out there. Overall, 11. 7 million home loan applications were collected by reporting institutions in 2011, down roughly 10 percent from a year earlier. Just before the mortgage crisis reared its ugly head, home loan...

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### Mitt Romney’s ‘Plan to End the Housing Crisis’

- Published: 2012-09-10
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/mitt-romneys-plan-to-end-the-housing-crisis/
- Categories: Mortgage News

Politics... ugh. Is there anything worse? It’s that time again, when presidential candidates boost rhetoric into overdrive, which sadly has revolved around the nation’s housing problems for the past couple elections. Four years ago, Republican hopeful John McCain and Obama exchanged jabs, with the former strongly opposed to a government bailout, noting at the time that, “the fundamentals of our economy are strong. ” He got a lot of flack for that statement, especially after he couldn’t remember how many houses he owned when put on the spot (it turned out to be seven). McCain also said he was opposed to lower down payment requirements for FHA loans (which I agreed with) and the idea of Fannie and Freddie insuring underwater mortgages – the latter eventually happened. Housing Under Obama As we know, Obama went on to become president and introduced a variety of programs to reduce foreclosures and improve the housing situation, most notably the Making Home Affordable plan. It includes HAMP, HARP, HARP 2. 0, FHA-HAMP, HAFA, HAFA II, and many other initiatives. Thus far, millions of Americans have taken advantage of the programs, which include loan modifications, refinancing to lower interest rates, principal reductions, forbearance, and so on. The President has also cut costs for FHA streamline refinances, making it much cheaper and easier for those who hold such loans to snag a lower rate. Oh, and mortgage rates on the popular 30-year fixed are nearly three percentage points below where they stood back in 2008. Unfortunately,...

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### The Problem With Mortgage Rate Surveys

- Published: 2012-09-06
- Modified: 2019-02-08
- URL: https://www.thetruthaboutmortgage.com/the-problem-with-mortgage-rate-surveys/
- Categories: Mortgage Rates, Mortgage Tips

Every week, mortgage financier Freddie Mac comes out with a mortgage rate survey, which reveals the average interest rate (and points) charged by lenders for popular types of home loans. About 125 lenders from across the nation, including thrifts, mortgage lenders, credit unions and commercial banks, take part in the survey that dates back to 1971. The survey data is collected from Monday to Wednesday, and the results are posted on Freddie Mac’s website on Thursday of each week. Come Thursday morning, the media goes nuts with the data in the report, known as the Primary Mortgage Market Survey (PMMS). And just minutes after its release, you’ll see startling headlines like, “mortgage rates fall again,” or “mortgage rates climb higher. ” Mortgage Rate Surveys Use Old Data The biggest flaw with the survey is that the rates are delayed Because mortgage rates aren't static They are constantly in flux, both daily and intraday changes can take place So you're really just getting yesterday's news at best Unfortunately, whatever the message may be for a given week, it’s often old news by the time the media gets their grubby hands on it. You see, mortgage rates can and will change daily, and sometimes swing dramatically, depending on what’s going on that week. Lately, there have been plenty of swings thanks to all the uncertainty regarding the direction of the economy. So a mortgage rate quote (yes, they’re just quotes in the survey) given to a handful of borrowers on Monday may...

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### Why Your Mortgage May Get More Expensive

- Published: 2012-09-04
- Modified: 2012-09-20
- URL: https://www.thetruthaboutmortgage.com/why-your-mortgage-may-get-more-expensive/
- Categories: Mortgage News, Mortgage Rates

Last Friday, the Federal Housing Finance Agency (FHFA) announced plans to increase guarantee fees (g-fees) on loans sold to Fannie Mae and Freddie Mac. Banks and lenders pay Fannie and Freddie so-called “g-fees” in exchange for purchasing their loans and bundling them into mortgage-backed securities, which are then sold to investors on the secondary market. The pair also assume the risk if the loans in the underlying securities default, which has certainly been an issue since the mortgage crisis reared its ugly head. Since then, g-fees have inched higher and higher to account for risks not seen in years past when home price appreciation masked the impending danger. Currently, it is estimated that Fannie and Freddie own or guarantee about 60 percent of residential mortgages, meaning there’s a good chance they own yours. And their share has certainly increased even more as a result of the credit crunch, which pushed many private players out of the secondary market. G-Fees Going Up 10 Basis Points The FHFA has now directed Fannie and Freddie to raise g-fees on single-family mortgages by an average of 10 basis points (0. 10%). This comes on the heels of an increase back in April, which was implemented to fund the payroll tax cut extension. The increases will be effective with commitments starting November 1, 2012 for loans sold for cash, and December 1, 2012 for loans exchanged for mortgage-backed securities (MBS). The average g-fee charged by Fannie Mae and Freddie Mac increased to 28 basis points...

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### Are Younger Underwater Homeowners More Responsible Borrowers?

- Published: 2012-08-23
- Modified: 2024-03-14
- URL: https://www.thetruthaboutmortgage.com/are-younger-underwater-homeowners-more-responsible-borrowers/
- Categories: Mortgage News

Zillow released the second edition of its new Zillow Negative Equity Report today, revealing some interesting statistics about age and underwater borrowers. The company noted that the youngest underwater borrowers, those aged between 20-24, were the least likely to be delinquent on their mortgages. Just 5. 9% of underwater borrowers in this age bracket were 90 days or more behind on the mortgage, versus 9. 2% of all other underwater homeowners. Of course, Zillow didn’t have an explanation as to why younger homeowners are better at staying current. If I had to take a stab at it, I would think it has to do partially with the fact that these younger homeowners have only been in their properties for a few years at best, so they just haven't had the time to give up. And maybe they’re just more optimistic than the older generations, who have watched much of their home equity get zapped in recent years. They've also got more time on their hands to ride things out. They may also not be as savvy about strategic default, or in exploding option arms and other high-risk loan programs that would make payments unmanageable after a few years. Or it could just be that young people are more responsible than we give them credit for... either way, they'll pave the way for the future of the housing market, so it's important to keep an eye on what they're up to. Younger Homeowners More Likely to be Underwater Delinquency rates aside,...

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### Introducing HAFA II: A Quicker Short Sale Process

- Published: 2012-08-22
- Modified: 2012-08-22
- URL: https://www.thetruthaboutmortgage.com/introducing-hafa-ii-a-quicker-short-sale-process/
- Categories: Foreclosure, Mortgage News

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, has released details of a new program to expedite short sales. The program consolidates Fannie and Freddie’s current short sale programs, including the original Home Affordable Foreclosure Alternative (HAFA) programs and other proprietary ones. The new streamlined approach will be known as the “Standard Short Sale/HAFA II,” and is designed to make short sales easier for those most in need. Short Sales for Those Still Making Payments First and foremost, the new guidelines will allow homeowners with Fannie or Freddie mortgages to pursue a short sale, even if they are current on their mortgage payments, assuming they have an eligible hardship. At the moment, it’s difficult (but not impossible) to get a short sale going unless you fall behind on your payments, which kind of defeats the purpose of attempting to avoid full-blown foreclosure. With HAFA II, loan servicers will be able to quickly qualify such borrowers without any additional approval from Fannie or Freddie. Common hardships listed by the FHFA include unemployment, divorce, long-term disability, increased housing expenses, disaster (natural or man-made), business failure, and death of a borrower or household wage earner. The streamlined process will also work for those who are transferred to a job or accept a new career opportunity more than 50 miles away. This should help more borrowers conduct short sales without the massive credit score hits associated with multiple missed mortgage payments. Fannie and Freddie have also agreed not to pursue...

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### The Word ‘Underwater’ Gets New Dictionary Meaning

- Published: 2012-08-15
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-word-underwater-gets-new-dictionary-meaning/
- Categories: Mortgage News

In recent years, new words (or jargon really) tied to the ongoing credit and mortgage crisis have found their way into fancy official dictionaries. Just take the 2008 Merriam-Webster dictionary word of the year, “bailout. ” Or “subprime,” which was the 2007 word of the year as voted by the American Dialect Society. Clearly these words have been used frequently as of late, which explains why the big shots are finally giving credit where it is due. But what’s new in 2012? What’s the latest in mortgage crisis linguistics? Well, Merriam-Webster didn’t invent a new word, but they did give new meaning to a very common existing one. In a 2012 update of Merriam Webster's Collegiate® Dictionary, they added a new “sense” for the way “underwater” is used, as it pertains to a mortgage. Sure, it was a word before, but now it’s taken on another meaning. For the record, Merriam-Webster defines an underwater mortgage like so: "having, relating to, or being a mortgage loan for which more is owed than the property securing the loan is worth. " In other words, buying at the wrong time and watching your property value fall off a cliff. Or serially refinancing your mortgage until you zap all your home equity, and then panicking as your loan-to-value ratio skyrockets. Sign of the Times While one could take this as a bad thing, it’s really just a sign of the times. And it could actually be seen as another step toward recovery. We had...

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### FHFA: No Principal Forgiveness for You!

- Published: 2012-07-31
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/fhfa-no-principal-forgiveness-for-you/
- Categories: Foreclosure, Mortgage News

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, concluded today that principal forgiveness is not the best approach to help homeowners and reduce foreclosures. Over the past several months, there had been a lot of back and forth about whether principal reductions would prevent more strategic defaults and otherwise unnecessary foreclosures, but it now appears to be dead in the water. FHFA director Edward J. DeMarco, who had earlier expressed little interest in reducing principal for underwater homeowners, released a statement today advising that it wouldn’t be in the best interest of taxpayers, who are ultimately responsible for footing Fannie and Freddie’s bill. HAMP PRA = FAIL The agency concluded that an initiative called, “Home Affordable Modification Program Principal Reduction Alternative,” or HAMP PRA for slightly shorter, didn’t “clearly improve foreclosure avoidance while reducing costs to taxpayers,” as compared to other existing approaches. In other words, the programs already in existence, such as HARP 2. 0, are plenty good to encourage homeowners to stay in their homes and make their mortgage payments. Anything more is just too expensive, and could actually cause more harm to the housing market and the mortgage industry. Mortgage Bankers Association (MBA) president David H. Stevens also released a statement, showing his support for DeMarco while focusing on the availability of credit going forward. Stevens noted that principal forbearance is effective as well, without the negative ramifications of making mortgage financing more restrictive and expensive for everyone else in the future....

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### New Refinancing Program for Loans Not Owned by Fannie or Freddie

- Published: 2012-07-30
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/new-refinancing-program-for-loans-not-owned-by-fannie-or-freddie/
- Categories: Mortgage News, Refinance

Yet another mass refinancing program has been proposed, this time by Oregon Senator Jeff Merkley. His program, “The 4% Mortgage: Rebuilding American Homeownership” (RAH), is geared toward underwater borrowers who have kept up with their mortgage payments, but haven’t been able to receive assistance via existing programs. It specifically targets those who hold mortgages that aren’t government-backed, and therefore do not qualify for HARP or HARP II. Presumably, it includes those with jumbo mortgages as well, who have also been left out of the refinancing party. So basically all homeowners with private-label mortgages, which is a figure somewhere north of three million. Clearly a lot of individuals have been left out. A refinancing program for these borrowers is certainly overdue, so perhaps it could work. Let’s look at the details. How RAH Would Work A temporary, government-backed trust would be created by the Treasury, the Federal Reserve, or the FHA to purchase mortgages from banks, credit unions, and mortgage lenders that meet the program’s criteria. The trust would create a secondary market for the loans, and sell bonds to raise funds so it could purchase the mortgages. Investors would buy the bonds because of their implied government guarantee, thus creating ongoing liquidity to fund the program. RAH would make money via the near 2% spread between the cost of funds and the interest rate charged to homeowners, and therefore would not need taxpayer money to operate. It would only offer mortgages for three years, at which point it would only...

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### Facebook Founder Mark Zuckerberg Has a 1% Mortgage

- Published: 2012-07-16
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/facebook-founder-mark-zuckerberg-has-a-1-percent-mortgage/
- Categories: Mortgage News, Refinance

It’s always interesting to see what the rich and famous are doing, right? Heck, celebrity magazine Us Weekly features a section called “Just Like Us,” which attempts to liken celebrities to everyday people. They “play in the park” and “get their car washed,” just like us... But what about when they buy real estate and obtain mortgages – are they just like us? Not exactly, as evidenced by a recent mortgage transaction from Facebook founder Mark Zuckerberg. Zuckerberg Is the 1%, Literally Back in March 2011, the tech billionaire purchased a $7 million home in Palo Alto, California using a $5. 95 million adjustable-rate mortgage obtained from Morgan Stanley, the same company who handled the Facebook IPO. It had an initial mortgage rate of 1. 75%, which while extremely low, apparently wasn’t good enough for Zuckerberg. Over the past year, mortgage rates have crept even lower, so it appears as if Mark wanted to take advantage of that drop, despite being the world’s 40th most wealthy individual. Per Bloomberg, Zuckerberg was able to refinance his mortgage with First Republic Bank, snagging another ARM with an initial interest rate of 1. 05%. This is apparently the minimum rate for the loan, which will become a monthly adjustable ARM tied to the LIBOR, or London Interbank Offered Rate, a widely used mortgage index. His deal is LIBOR plus 0. 8%, which based on today’s rate, puts the loan at 1. 05%. Of course, it’s probably going to rise considerably over time, but...

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### Don’t Use Pennies to Pay Your Mortgage

- Published: 2012-07-10
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/dont-use-pennies-to-pay-your-mortgage/
- Categories: Mortgage News

You may have read a certain ABC news report that a man made his final mortgage payment with pennies he had collected over the years. If not, the story goes like this. During the past 35 years, Milford, Massachusetts resident Thomas Daigle began saving pennies to pay off the mortgage on his first home. The first one was supposedly found on the ground of the parking lot as he left the bank where he obtained his mortgage. He told his wife at the time that he’d use pennies to make his final mortgage payment, and because “his word” meant everything, he stuck to it. As time went on, any penny he encountered would be collected and put with the rest, eventually rolled and packed into boxes in his basement. He kept a tally of the total number of pennies so he’d know when he met his goal. And in April, on his 35th wedding anniversary, he took the pennies down to Milford Federal Savings and Loan Association and made his final payment, just as he said he would. It is estimated that the 62,000 pennies weighed roughly 427 pounds, depending on the material they were made with. Cool Yes, Practical No While this story is heartwarming and certainly admirable in a very unconventional type of way, it’s clearly nowhere close to practical. Sure, he was able to save $620 worth of pennies and make a “free” mortgage payment, but let’s analyze the amount of work he put into it. The...

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### Housing Bottom Now Expected in 2013, Recovery Looks Weaker

- Published: 2012-06-27
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/housing-bottom-now-expected-in-2013-recovery-looks-weaker/
- Categories: Mortgage News

There’s been a lot of interesting housing-related news over the past week, with some good and some bad. The first bit is that economists finally believe the national housing bottom is near. Yes, we’ve heard that before, several times, but per Zillow, the economists surveyed are all “largely” on-board this time. So that’s good news. The bad news is that more than half of the same respondents believe the homeownership rate will continue to fall from the 65. 4% level seen in the first quarter. In fact, one in five think homeownership will be at or below 63% in coming years, which will test the all-time low established in 1965. For the record, some areas of the nation have already appeared to bottom, and are actually up quite a bit. In hard-hit Phoenix, home prices are already up 12% from their bottom. In San Francisco, prices are up 10% from bottom. But New York, Atlanta, and Chicago are still waiting for the bounce. Housing Recovery Not Looking Too Hot Meanwhile, future home appreciation isn’t looking as good as it once was. Back in June 2010, Zillow-surveyed economists expected cumulative appreciation of 10. 3% from 2012 to 2014. Now, the experts only see home prices appreciating a paltry 3. 5% for the same period. That’s $1. 25 trillion less in housing wealth than previously expected. Yikes. So expect an “L” shaped recovery... in other words, a steep decline, followed by many, many flat years. Sure, it may a be "squiggly L"...

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### Housing Market Update: Floodgates Officially Open

- Published: 2012-06-21
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/housing-market-update-floodgates-officially-open/
- Categories: Mortgage News

Well, another week has gone by, and mortgage rates drifted to a new low, per the latest Freddie Mac data. Yawn. Yes, we know the 30-year fixed is at its lowest point ever, but it’s getting tiresome. In fact, it has been tiresome for quite some time now. Sure, it has boosted affordability and made home buying more attractive, but it seems like we’re forgetting about all the bad stuff hanging over our heads. Perhaps that was the idea... All of a Sudden It’s a Seller’s Market? This has created a bit of a strange seller’s market, which I pointed out a week ago in my piece about how the low mortgage rates may be a home buyer trap. Whether that is true or not remains to be seen, and we won’t know for a while. But I do feel the low rates are creating a strange housing market, at least out here in Los Angeles, where it’s near impossible to snag a decent property nowadays. Rewind just a few months back and properties were sitting on the market for days and days, often with multiple price reductions and still no bites. Seemingly good homes for sale, just no takers. Today, a property is listed and pending before you even knew it was listed. What the heck happened? Is the housing crisis over? Did we finally hit bottom after the many years of predictions saying it was going to be in 2009, 2010, 2011, etc? Or is this just another...

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### What Flavor Is Your Mortgage?

- Published: 2012-06-19
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/what-flavor-is-your-mortgage/
- Categories: Mortgage Tips

Knowing where you stand before applying for a mortgage is key to negotiating a better interest rate. Yes, you can negotiate your rate! But if you don’t know what type of risk you present to a bank or lender, how can you be sure you’re getting a good deal? While it may seem obvious to those in the industry, many prospective and existing homeowners don’t seem to know when they have the easiest approval on their hands, or the trickiest deal in the history of man. Let’s take a look at some common loan scenarios to help you better understand your position. Vanilla This is your full doc 800 FICO score W2 borrower With a conforming loan amount And no obvious red flags This is the most common mortgage “flavor” you’ll hear about. When someone says the loan is “vanilla,” they’re basically saying it’s a flawless loan scenario. In other words, the borrower has great credit, good income and assets, and plenty of home equity (or a sizable down payment). The property is also an owner-occupied, single-family residence, meaning there should be no pricing adjustments whatsoever. As a result, this type of mortgage presents very little risk to the originating lender, and pricing should be very favorable. Expect mortgage rates at or below those advertised and fight for the lowest rate out there. Shop your rate with confidence, knowing everyone and their mother should be fighting tooth and nail over your loan. For the record, the mortgage rates you see...

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### Discover Home Loans Review: The Nation's #1 Home Equity Loan Lender

- Published: 2012-06-12
- Modified: 2023-12-08
- URL: https://www.thetruthaboutmortgage.com/discover-home-loans-review/
- Categories: Mortgage Tips

Well, it’s official, there’s a new mortgage player in town, and they go by a familiar name, “Discover Home Loans. ” You may have heard a while back that the credit card issuer was getting into the mortgage game, and now their operations are officially live. In case your were wondering, they scratched and clawed their way into the mortgage biz by acquiring the loan origination assets of Tree. com, formerly known as LendingTree. And despite a brief exit from the mortgage space back in 2015, they continue to offer both mortgage refinance loans and home equity loans. Even better, they don't charge an application fee, origination fee, or appraisal fee, and $0 is due at closing. What Does Discover Home Loans Offer? Rate and term refinances Cash out refinances Home equity loans Terms of 10, 15, 20, and 30 years Loan amounts range from $35,000 to $300,000 Discover Home Loans offers both mortgage refinances and home equity loans. As far as the refinance option goes, it can be either a rate and term refinance and cash-out refinance, the latter allowing you to tap home equity. And they allow you to borrow up to 90% of your property value. Their home equity loans can be in the first lien or second position, meaning you can take one out if you have a property that is free and clear. Or you can add one behind your first mortgage as a second mortgage. They do not offer home equity lines of credit...

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### Short Sale vs. Foreclosure: What’s the Credit Score Impact?

- Published: 2012-05-30
- Modified: 2018-04-10
- URL: https://www.thetruthaboutmortgage.com/short-sale-vs-foreclosure-whats-the-credit-score-impact/
- Categories: Credit Scores, Mortgage Matchups

Mortgage match-up: “Foreclosure vs. short sale on your credit report. ” It’s been a while since I’ve come up with a mortgage match-up, but there’s been a lot of fuss about short sales and credit scores lately, so I wanted to add my two cents. I already touched upon how a foreclosure affects one’s credit, but I never really addressed the impact of a short sale. Let’s start with short sales, which have surged in popularity, and then tie in foreclosures at the end to illustrate the difference. A Short Sale Will Lower Your Credit Score Even if you strike a deal with your lender To sell your home for less than the mortgage balance It will still be reported to the credit bureaus As a negative event and lower your score Despite what you may think, or what you have may heard, a short sale is a still a negative event, according to FICO, the founder of the FICO score. Why? Well, with a short sale, you are essentially making a deal with your creditor to pay less than what is agreed. This is the essence of a short sale. And when you pay less than what is agreed, there’s a possibility that the lender can pursue a deficiency judgment against you. But in the case of a short sale, you are essentially protecting yourself from any negative repercussions on that front by getting the lender to call the debt “paid,” even if for less than agreed. That’s all...

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### Obama Hasn’t Refinanced His Mortgage in Seven Years

- Published: 2012-05-17
- Modified: 2013-08-10
- URL: https://www.thetruthaboutmortgage.com/obama-hasnt-refinanced-his-mortgage-in-seven-years/
- Categories: Mortgage News, Refinance

Despite a push to allow more Americans to refinance their mortgages (Harp 2. 0), the Obamas haven’t taken the time to refinance their own, according to a disclosure released yesterday by the White House. The financial disclosure revealed that as of the end of 2011, the 30-year mortgage (not sure if that means fixed or just refers to the term) tied to their south Chicago home, taken out in 2005, was still active. Obama’s Mortgage Rate is 5. 625% Now we’ll assume he’s got a fixed-rate mortgage, even though that’s not entirely clear because no one is specifying. And at 5. 625%, that means he’s paying a rate nearly two percentage points above what mortgage rates are currently being offered at today for a 30-year fixed. What we also don’t know is the loan amount. The disclosure only revealed that the loan amount is somewhere between $500,001 and $1 million. Now assuming it’s not a jumbo loan, he could possibly snag a rate two percentage points lower than his current rate. And I’m sure he would receive the most favorable terms, given his income, assets, employment history, etc. Being the U. S. president is pretty helpful. Let’s do the math to see what he could save, using $600,000 as the loan amount. Loan amount: $600,000Current rate: 5. 625%Refinance rate: 3. 75%If he were to refinance his current loan, his monthly mortgage payment would drop from $3,453. 94 to $2,778. 69. That’s a monthly savings of roughly $675, or $8,100 annually....

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### You May Have Missed the Housing Bottom, But Not the Mortgage Rate Bottom

- Published: 2012-05-15
- Modified: 2012-05-15
- URL: https://www.thetruthaboutmortgage.com/you-may-have-missed-the-housing-bottom-but-not-the-mortgage-rate-bottom/
- Categories: Mortgage News, Mortgage Rates

Over the past several months, it has become somewhat clear (insert gigantic grain of salt here) that home prices may have bottomed last year, at least in some areas of the country. While it’s still too early to say so definitively, it looks like some homes were snatched up at rock-bottom prices a year ago. These same homes are now valued quite a bit higher, and recent comparable sales are backing up the numbers. Of course, some are also calling it a “mini bubble,” otherwise known as a fake recovery, spurred on in part by the record low mortgage rates. But only time will tell... You Missed the Bottom Perhaps you’re kicking yourself, thinking you could have purchased that same house for a lot less a year ago. Yep, you were all set to time the bottom, and seemingly out of thin air, it came and went, and you were none the wiser. How did that happen? You were watching home prices on a weekly basis, looking at recent sales, surveying market conditions. How could you have missed it? Well, they always say that timing the market bottom is near impossible, partially because you only know it has actually hit bottom when it’s too late. So did you mess up? Did you miss your chance to get the steal of the century? Not quite. Have Mortgage Rates Bottomed? For much of the first half of 2011, mortgage rates on the popular 30-year fixed stood around 4. 75%. While this may...

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### Bank of America Ramps Up Principal Reductions

- Published: 2012-05-08
- Modified: 2012-05-08
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-ramps-up-principal-reductions/
- Categories: Foreclosure, Mortgage News

It took a while, but Bank of America announced today that it intends to mail out principal reduction offers to some 200,000 homeowners. The first letters should be arriving in mailboxes this week, with most mailed by the third quarter of this year. The principal reduction program is part of the national foreclosure settlement, which was finalized back in February. It called for at least $10 billion to go toward reducing mortgage balances. The other big banks will need to get on board as well, since that settlement also involved Ally/GMAC, Chase, Citi, and Wells Fargo. Are You Eligible? This program isn’t for those with a Fannie Mae, Freddie Mac, FHA, or VA loan. So that eliminates quite a few borrowers right there. The loan must be owned and serviced by Bank of America, or serviced by an investor that has given BofA the authority to carry out such modifications. Additionally, you must owe more on your mortgage than the property is currently worth. In other words, you must hold an underwater mortgage. You also have to be delinquent on your mortgage, but don’t go missing payments just to participate. You must have been 60 days behind as of January 31, 2012. Finally, your total housing payment must total more than 25 percent of gross household income (debt-to-income ratio). How It Works Assuming you qualify, Bank of America will first reduce your principal balance to “as low as” 100% loan-to-value. After that, they’ll lower the mortgage rate, and possibly forebear...

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### Wells Fargo Claims More Than a Third of Mortgage Market

- Published: 2012-05-03
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-claims-more-than-a-third-of-mortgage-market/
- Categories: Mortgage News

Talk about dominating the market. A new report from Inside Mortgage Finance revealed that San Francisco-based bank and mortgage lender Wells Fargo snagged 33. 9% of the mortgage market in the first quarter of 2012. It was the biggest residential mortgage market share in recorded history, and comes thanks to a huge drop-off by its closest competitor, Bank of America, whose appetite for mortgages soured in recent months. BofA stopped both reverse mortgage lending and accepting loan applications from correspondent lenders, which shrunk their presence in a hurry. Instead of turning out to be the next Countrywide, they shifted their focus toward retail customers instead, focusing on quality over quantity it seems. But with a waiting list of 90 days to refinance, Bank of America may be focused on other things, such as loss mitigation on all their existing mortgages. Meanwhile, Wells’ market share increased from 30. 1% in the fourth quarter of 2011 to 33. 9% from the January to March period, which meant they originated roughly $130. 5 billion of the $385 billion total. No One Else Even Close Amazingly, no other lender came even close to Wells Fargo. In fact, its closest competitor, Chase, claimed just 10. 6% of the mortgage market during the first quarter. And it dropped off quickly from there, with U. S. Bancorp coming in third with a paltry 5. 2% of the market, followed by Bank of America with just 4. 2%. Even more astonishing, Wells Fargo’s market share bested the next...

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### Bank of America’s Mortgage to Lease Program

- Published: 2012-04-02
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/bank-of-americas-mortgage-to-lease-program/
- Categories: Mortgage News

About a week ago, Bank of America released details of its so-called “Mortgage to Lease” program, which as the name implies, allows homeowners to lease the homes they previously mortgaged. So let’s take a closer look to see just what Bank of America is doing here. First things first, this is a very limited pilot program, so don’t assume you can head down to Bank of America, fill out some paperwork, and then ditch your pesky mortgage but not your beloved house. In fact, fewer than 1,000 customers will be “invited” to participate in the Mortgage to Lease program, meaning your chances of being selected are only slightly better than winning the Mega Millions jackpot. Additionally, only homeowners in Arizona, Nevada, and New York are part of the pilot, so if that’s not you, you’re out of luck, at least for the moment. Requirements for the Mortgage to Lease Program: Mortgage is owned by Bank of America Mortgage is 60 days + delinquent All other loan modification solutions have been exhausted or ignored Face high risk of foreclosure Have no second mortgages Still occupy the home Have enough income to make affordable rent payments So while this looks like a lengthy list, it’s probably not all that uncommon. Well, the lack of second mortgages probably is, as most homeowners who are currently in trouble went with 100% financing. And most used second mortgages to get there. But for those with one loan who still managed to find themselves underwater, or...

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### CashCall Mortgage Review: Still Offering Really Low Mortgage Rates. But How?

- Published: 2012-03-19
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/cashcall-mortgage-same-apr-and-mortgage-rate/
- Categories: Mortgage Tips

So I listen to the radio here and there, and even though I only listen occasionally, I still tend to get bombarded with mortgage advertisements. Funny how that works. The latest was from a southern California based company named "CashCall Mortgage" which I believe started as a personal or payday loan lender before jumping into the real estate and mortgage game. Anyway, I noticed in their radio ad that both the mortgage rate and APR were the same, which doesn’t tend to be the case with most mortgage loans. Typically, you’ll hear something like, “Get a low, low 4% mortgage rate! ,” followed by some fast talking terms and conditions speak that says 4. 55% APR or something significantly higher. So that bit jumped out at me initially. It sounds like a great deal, right? Instead of the usual “bait and switch,” where your mortgage refinance is riddled with fees, you’re actually getting the interest rate they advertise with no fees! But wait, this must be too good to be true. How can you get a super low rate and pay no fees. The short answer is you can’t. There’s no free lunch, or free mortgage, for that matter. CashCall “No Closing Costs” Mortgage It's a common sales pitch in the mortgage industry Pay attention to the no cost part, which doesn't mean you aren't paying for it It just means you aren't paying out-of-pocket at closing Instead you pay for this lack of costs via a higher interest rate...

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### Do I Qualify for the National Mortgage Settlement?

- Published: 2012-02-09
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/do-i-qualify-for-the-national-mortgage-settlement/
- Categories: Foreclosure, Mortgage News, Refinance

In case you haven’t heard by now, the so-called “National Mortgage Settlement” was finalized today. It’s the largest multi-state settlement since the Tobacco Settlement back in 1998, related to robosigning allegations that took place over the past several years. Essentially, some of the nation’s largest loan servicers routinely signed off on foreclosure documents without doing their due diligence, and/or without the presence of a notary. It will provide more than $25 billion in assistance to homeowners, participating states and the federal government. For the record, all 50 states participated except for lonely old Oklahoma. The offending parties in the National Mortgage Settlement include: - Ally/GMAC - Bank of America - Citi - JPMorgan Chase - Wells Fargo These are the nation's five largest mortgage loan servicers. Benefits will be provided to both borrowers whose loans are owned by the settling banks as well as to borrowers whose loans they service. In other words, your mortgage may have been originated by another company and sold to one of these companies to be serviced. So be sure to check your loan documents if you think you may be eligible. Where the Settlement Money Will Go The bulk of the money, at least $10 billion, will go toward principal balance reductions. In other words, those who hold underwater mortgages will see their balances drop to get them above water. But the assistance will only be directed toward those who are either delinquent or at imminent risk of default as of the date of...

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### Bank of America Has a Waiting List to Refinance

- Published: 2012-02-09
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-has-a-waiting-list-to-refinance/
- Categories: Mortgage News, Refinance

If you’re interested in refinancing your mortgage with Bank of America, you may be in for a big surprise. Per Bloomberg, the mega bank has been unable to keep up with demand, thanks in part to HARP Phase II, which is beginning to roll out. The program, which allows pretty much anyone to refinance, regardless of how deeply underwater they are, has led to everyone and their mother inquiring about a possible refi. And we all know that the biggest names in the finance world will experience the biggest windfall. Unfortunately, Bank of America has been making steady moves to get out of the mortgage world in recent times. In fact, their share of the mortgage market has dwindled to little more than five percent, which is less than it held before it acquired Countrywide. This is largely because they exited both the wholesale and correspondent mortgage businesses to focus on building relationships at the retail level. 90-Day Wait to Refinance I hope you’re patient, because Bank of America is telling some customers who call during high volume periods of the day to make a reservation. And once they do that, it could take anywhere from 60 to 90 days just to hear back. Even then, it’s unclear how much longer it will take to apply for a refinance, get the loan underwritten, and finally get it funded. By then mortgage rates could rise, though that’s probably not too much of a concern. But in the mean time you’d still...

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### Choose Your Own Term Mortgages: Look Beyond the 30-Year

- Published: 2012-01-27
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/choose-your-own-term-mortgages/
- Categories: Mortgage Tips

It’s time to talk about silly mortgage products! So I was driving out in Los Angeles today, listening to ESPN radio or some other sports station, when a mortgage ad came on the air. It was for “Crestline Funding’s MyFi,” which allows mortgagors to choose their own loan term. When I got home I did a quick search on Google, but didn’t see anything about it, so I don’t know the exact guidelines, or even if it’s spelled that way. Or if it’s offered outside California. But they did mention a few details on air. Essentially, they let you choose any mortgage term you’d like, ranging from five to 40 years, instead of being confined to the typical 15- or 30-year term. MyFi and the Quicken YOURgage Some mortgage lenders let you pick your own mortgage term Instead of simply offering a standard 30- or 15-year fixed This can be beneficial if you have a specific goal in mind Or want to save even more money on your mortgage For the record, I did come across a similar product offered by Quicken Loans known as the “YOURgage. ” It’s an unfortunate name to say the least, but apparently the same idea as the MyFi, though you can only choose a term between eight and 30 years. Simply put, if you don’t want a standard 30- or 15-year loan term, you can ask them to refinance your mortgage into an 18-year fixed or a 24-year fixed loan. Or anything else in...

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### 2011 Mortgage Lending Volume Lowest In Over a Decade

- Published: 2012-01-26
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/2011-mortgage-lending-volume-lowest-in-over-a-decade/
- Categories: Mortgage News

You may have thought that mortgage lenders were raking it in, what with the record low mortgage rates currently on offer. But 2011 was actually the slowest 365 days in mortgage lending since the year 2000, according to figures released by Inside Mortgage Finance. The company noted that residential home loan origination volume totaled an estimated $1. 35 trillion last year, which was down a hefty 17. 2 percent from 2010. The company attributed the weakness to a soft second quarter, when just $280 billion in new mortgages were extended to homeowners. That was actually the weakest quarter since the end of 2008, when you know what hit the fan. Around that time, interest rates on the popular 30-year fixed were close to 5%, which is more than a point above where they stand now. Couldn’t Keep Up With Demand Interestingly enough, many mortgage lenders have complained about having too much business in recent years, so it’s unclear if they actually wanted more volume. It wasn’t long ago that Chase supposedly inflated its refinance rates to temper demand, partially because of reduced staff and more manpower directed toward things like loan modifications. And back in 2009, Wells Fargo complained about the quality of the loan applications it was underwriting, hinting that it may have been hurting them more than it was helping. Wells Fargo Top Mortgage Lender in Fourth Quarter 2011 Still, the San Francisco-based bank has retained its position as the top mortgage lender in the nation. The company...

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### Mortgage Crisis Foreshadowing

- Published: 2012-01-17
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/mortgage-crisis-foreshadowing/
- Categories: Mortgage Tips, Refinance

I think a lot. Often, about mortgages. In fact, a day doesn’t go by when I don’t try to think of topics to write about on this very website. It’s not always easy to come up with new material, given the fact that I’ve been writing about mortgages since 2006. But every once and a while, I try to come up with something interesting in the rather mundane world of mortgage. And so the other day, I remembered a former landlord of mine. She owns a home in Los Angeles. I had rented out the property back in 2004 or so when everything was booming. Mortgages were hot, as was real estate. Home prices only moved in one direction, and did so in an accelerated fashion. You couldn’t lose! I’ll never forget a conversation I had with the owner. At the time, I worked for a mortgage lender, and she had come by the house for some reason or another. We began talking about real estate, mortgages, and the like, and she mentioned something I’ll never forget. I Refinance My Mortgage Every Year She told me, rather proudly, that she refinanced her mortgage every year. And that she had a Countrywide rep that took care of everything. As far as I knew, this meant she was tapping her home equity each year as the property value increased, and likely employing an option arm to keep monthly mortgage payments low. She seemed so pleased with herself, with telling me of her...

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### Why Principal Reductions on Loan Mods Aren’t the Move

- Published: 2012-01-11
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/why-principal-reductions-on-loan-mods-arent-the-move/
- Categories: Foreclosure, Mortgage News, Refinance

Unless you live under a rock, you’ve likely heard stirrings of a mega super duper fantastic solve-all trillion-dollar refinance program in the works to save America once and for all. You know, the one President Obama plans to unveil just in time for the election to give his campaign a shot in the arm (at least that’s what the pundits are saying). For the record, I'm sure any other President seeking a second term would play this the same way. (Read more about the rumored mass mortgage refinancing plan. ) Well, critics have already come out in droves to have their say about the proposed deal. One that made me think was an opinion piece by the Motley Fool, who for some reason is talking about mortgages for a change, as opposed to tempting you with their “Hidden Gems. ” Doesn’t Address Underwater Homeowners Their core issue with the proposal is that it doesn’t address borrowers with underwater mortgages, you know, those that exceed the current value of the associated homes. The author argues that the lower mortgage payments would certainly help these borrowers (and stimulate the economy), but without any home equity, they won’t have the incentive to refinance. This is where I think he (and anyone else with this argument) gets it wrong. You see, there are scores of borrowers, dare I say millions, who are underwater and making on-time payments (or at least trying to). And a program with no loan-to-value ratio constraints that lowers their mortgage...

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### Mass Mortgage Refinancing Plan: Obama’s Ace In the Hole

- Published: 2012-01-05
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mass-mortgage-refinancing-plan-obamas-ace-in-the-hole/
- Categories: Mortgage News, Mortgage Rates, Refinance

We’ve heard talk of mass refinancing plans for years now, but nothing has quite delivered. Sure, the >Home Affordable Refinance Program (HARP) was recently expanded to allow just about any homeowner to refinance, regardless of negative equity issues. But since it was announced in late October, I haven’t heard too much about it. Perhaps because it’s voluntary for mortgage lenders and still comes with cumbersome underwriting requirements? Now there’s word of a “true mass refinance program,” one that allows pretty much anyone to refinance to today’s super low mortgage rates with few, if any restrictions. A blog post written by James Pethokoukis that appeared on the American Enterprise Institute website yesterday is grabbing some serious headlines at the moment regarding the supposed plan. In short, it suggests that Obama is looking to replace the current FHFA director with one of his own, which will allow the President to implement such a program. Just in time for election season too (not that I want to get political about this). And because the FHFA oversees both Fannie Mae and Freddie Mac, anyone with a mortgage guaranteed by the pair, which is most homeowners, will be able to participate. How the Mass Mortgage Refinancing Plan Would Work Apparently it would be modeled after a plan originally thought up by Columbia University economists Glenn Hubbard and Christopher Mayer. Every homeowner with a Fannie/Freddie backed mortgage would be eligible to refinance their existing first mortgage to a fixed rate of 4% or less. The only...

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### Bernanke Has Refinanced His Mortgage Twice in the Past Two Years

- Published: 2011-12-13
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/bernanke-has-refinanced-his-mortgage-twice-in-the-past-two-years/
- Categories: Mortgage News, Refinance

When deciding whether you should refinance your mortgage, you may look to your friends, family, and neighbors to see what they’re doing and/or to get advice. After all, if they’re refinancing, maybe there’s something to it. But when it comes to financial advice, it doesn’t get much better than the Chairman of the Federal Reserve, Ben Bernanke. Okay, okay, we know, he destroyed the economy and got us in this mess so we shouldn’t believe a word he says, right? Well, that’s up for debate, and that debate won’t take place here. But the takeaway is that he and the Fed control monetary policy, and thus should have a good idea as to whether mortgage rates will be heading higher or lower. And so this may explain why Bernanke has refinanced his mortgage twice in the past two years. Yes, two times! That almost makes him a serial refinancer. Well, not really, but it's pretty awesome. According to the WSJ, he lives in a rather humble 3-bedroom, 2,100 square-foot home outside Washington D. C recently appraised at $850,000. He purchased the home for $839,000 all the way back in 2004 and currently holds a $672,000 mortgage. In case you were wondering, it is indeed a 30-year fixed rate mortgage. Unsurprisingly, there is no adjustable-rate mortgage or option arm for Mr. Bernanke. At the same time, it doesn’t appear that he’s been all that aggressive in paying off his mortgage. Perhaps he feels his money is better served in another financial...

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### Maximum FHA Loan Limit Restored to $729,750

- Published: 2011-11-21
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/maximum-fha-loan-limit-restored-to-729750/
- Categories: Mortgage News

Late last week, Congress agreed to reinstate the temporarily inflated FHA loan limits that fell on October 1. So for the next two years, homeowners in high-cost regions of the country will be able to take out FHA loans for amounts up to $729,750, as opposed to the $625,500 cap that previously applied. While this may sound like a win for the badly bruised housing market, a recent study suggested otherwise. Back in July, a pair of George Washington University researchers claimed that higher FHA loan limits would do little to positively affect housing. In fact, they noted that the FHA loan limit could be slashed in half and still serve 95 percent of its historic target market. But we all know times have changed, and the FHA’s target market isn’t the underserved, low-income borrowers of times past. These days, it’s anyone who doesn’t want to come up with a large down payment to purchase a home. Thanks to their flagship 3. 5% down loan program, the FHA’s market share has risen to about 30 percent of total loan origination volume, putting pressure on capital reserves and increasing the likelihood of a taxpayer bailout down the road. All this at a time when we’re supposed to be shrugging off government support and bringing private capital back into the mix. Hmm. For the record, those researchers feel the FHA should hold at most a nine to 15 percent share of the mortgage market and lower the max loan limit to a...

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### Soon Just About Any Underwater Borrower Will Be Able to Refinance

- Published: 2011-10-24
- Modified: 2018-01-13
- URL: https://www.thetruthaboutmortgage.com/soon-just-about-any-underwater-borrower-will-be-able-to-refinance/
- Categories: Mortgage News

The Federal Housing Finance Agency (FHFA) released details of a newly revamped Home Affordable Refinance Program (HARP) today, with the main feature being a lack of a loan-to-value (LTV) limit. Previously, the max LTV accepted under the program was 125 percent, meaning those in need of the most help were essentially out of luck. With this change, even the deepest underwater borrower will be able to refinance their mortgage to take advantage of today’s record low mortgage rates. It's a huge deal. Of course, there are some limitations to take note of as well. In order to qualify for the new HARP, you must meet the following requirements: - The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. - The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. - The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009. - The current loan-to-value (LTV) ratio must be greater than 80%. - The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months. Assuming you meet these guidelines, you can request a HARP refinance from either your existing mortgage lender or via another bank offering the program, your choice. Just keep in mind that if you’re refinancing from a fixed-rate...

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### Some 30-Year Mortgage Rates Aren’t Really Fixed

- Published: 2011-09-30
- Modified: 2018-07-12
- URL: https://www.thetruthaboutmortgage.com/some-30-year-mortgage-rates-arent-really-fixed/
- Categories: Mortgage Tips

Let’s talk about mortgage marketing for a moment. I’d hate to call it deceptive, since that’s a term used by the FTC and other government outfits to call out shady companies doing less than kosher things. So that may be a bit harsh. But I would define some of the mortgage advertising out there at the moment as slightly “misleading. ” You see, there are ads, whether they’re in your local newspaper, on a billboard, at a bus stop, or online, which advertise a “low fixed rate” on your home loan. Unfortunately, many of these aren’t really fixed-rate mortgages. In fact, they’re quite the opposite. Your Fixed-Rate Mortgage Is an ARM There's a new trend in mortgage advertising Where lenders advertise ARMs as if they're fixed Using the initial fixed-rate period on hybrid ARMs to their advantage Then explaining that it can adjust in the fine print below Say what? That’s right. These purported fixed-rate mortgages are often adjustable-rate mortgages, otherwise known as ARMs, and more harshly referred to as “exploding ARMs” by those who got burned by interest rate resets. You see, somewhere along the way mortgage lenders got the bright idea that they could advertise super low mortgage rates on popular 30-year mortgages by exploiting the amortization period. Most mortgages, whether they’re truly fixed for the life of the loan or adjustable, have a 30-year term. So a 5/1 ARM is still a 30-year mortgage, but the mortgage rate is only fixed for the first five years before...

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### Short Sales Can Save You Money If You’re Extremely Patient

- Published: 2011-09-26
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/short-sales-can-save-you-money-if-youre-patient/
- Categories: Mortgage News

If you’re reading this, you’ve undoubtedly heard of a real estate short sale, which allows a distressed homeowner to unload their property for less than the current mortgage balance. Short sales have surged in popularity over the years thanks to the precipitous drop in home prices and the overwhelming presence of zero down mortgages taken out during the boom. This led to a huge negative equity problem, which is in part being dealt with via short sales. And while these transactions can be a great alternative to foreclosure for the homeowner, they can also greatly benefit the home buyer in the transaction as well. But like anything that saves you money, there are plenty of hoops to jump through, and patience is a requisite. Short Sales Are 27 Percent Cheaper Per the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, released this morning, the average short sale price was 27 percent lower than a non-distressed property. This explains why they’ve been quite popular among first-time home buyers, despite waning somewhat recently. Last month, first-time home buyers accounted for 39. 7 percent of the short sale transactions completed. While a sizable share, it’s down from the peak 54. 1 percent share seen in November 2009, just before the original expiration of the homebuyer tax credit. It also represents a third straight monthly decline, and the lowest share since the survey began. Why Are Short Sales Becoming Less Popular? Well, as mentioned earlier, short sales aren’t for the faint of heart.   And...

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### What on Earth Is a Zestimate and Is It Accurate?

- Published: 2011-09-07
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/what-on-earth-is-a-zestimate/
- Categories: Mortgage Tips

I was on Zillow the other day looking at real estate when it occurred to me that I never really touched upon the so-called “Zestimates” offered up by the famous real estate portal. Most consumers have heard of the Zillow Zestimate, which made its debut back in 2006. But they’ve been largely written off by industry folk (real estate agents) as “unreliable” and various other expletives, assuming the value estimation is lower than it should be. First things first, let’s define a Zestimate. By Zillow’s own account, a Zestimate is the “estimated market value” of a property. By estimated, they mean a home value assigned using proprietary computer algorithms developed by statisticians. They also refer to Zestimates as a “starting point in determining a home’s value,” which is important to note when browsing around Zillow. A Zestimate is computed based on data, not human touch, vision, interaction, etc. And we all know how computers can fall short... this explains why there are error rates. Speaking of, the median error rate for the entire nation is currently 4. 6%, which means half of Zestimates nationwide were within 4. 6% of their sales price, and the other half were off by more than 4. 6%. Where to Find a Zestimate? Simply visit the home details page of any property And you'll see the Zestimate near the top of the page in the center Below the most recent sold price There is also a section below dedicated to the Zestimate If you look...

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### Shares of Zillow Skyrocket in Nasdaq Debut

- Published: 2011-07-20
- Modified: 2017-12-08
- URL: https://www.thetruthaboutmortgage.com/shares-of-zillow-skyrocket-in-nasdaq-debut/
- Categories: Mortgage News

Real estate behemoth Zillow went public today to much fanfare. After an original IPO price target of $12-$14, which later rose to $16-$18 before settling in at $20, shares opened strong this morning under the “Z” stock symbol. As of the early afternoon in New York, shares were going for $34. 75, up 73. 75% from the final IPO price. Per Yahoo! data, Zillow opened at $57 per share, and briefly touched $60, before settling in quite a bit lower. Still, the company looks to be benefiting from a strong IPO market and a recent resurgence in websites going public (hopefully this isn't another dot-com bubble in the making). The Zestimate Company Zillow is probably best known for providing so-called “Zestimates,” which are rough house value estimates that many feel are less than accurate and a far cry from a true appraisal. In recent years, the company also launched the “Zillow Mortgage Marketplace,” which gives prospective homebuyers and those looking to refinance the chance to shop for mortgage rates anonymously. Zillow offered 3,462,000 shares, valuing the company at roughly $70 million, though with today's spike it's now valued at about $120 million. What do you think – are shares of Zillow overvalued or undervalued? It's certainly one of the premier properties on the web, which makes me think it'll do well over time. Zillow Acquired Trulia I came across this post and decided to do an update since it's been a few years. I still want to keep post for...

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### What Is an Underwater Mortgage? When You Owe More Than Your Home Is Worth

> A mortgage is considered "underwater" if the outstanding balance exceeds the current value of the associated property. Here's what you can do if you've got one.

- Published: 2011-06-28
- Modified: 2021-08-21
- URL: https://www.thetruthaboutmortgage.com/what-is-an-underwater-mortgage/
- Categories: Mortgage Tips

Mortgage crisis Q&A: “What is an underwater mortgage? ” I have no idea why I never touched on this topic before... perhaps I thought it was too simple of a concept, but clearly it could use a proper explanation seeing that millions of mortgages are now underwater nationwide. Put simply, an “underwater mortgage” is defined as a home loan with an outstanding balance that exceeds the value of the associated property. An underwater mortgage can also be referred to as an “upside-down mortgage” or a “negative equity mortgage. ” Let's look at an example of an underwater mortgage to illustrate:Current mortgage balance: $500,000Current house value: $400,000Home equity: -$100,000 (negative equity)In this rather common scenario, the borrower would be $100,000 underwater on their mortgage because they currently owe $500,000, yet the home is now only worth $400,000. Typically, you'd see the opposite in a healthy real estate market.   The homeowner might have a mortgage balance of $500,000 and a property value of $600,000 thanks to regular mortgage payments and home price appreciation. If that were the case, the homeowner would have $100,000 in home equity, and it would put their loan-to-value ratio (LTV ratio) at roughly 83%. In the underwater mortgage example, the borrower would have an LTV ratio of 125% (the lower the number the better here folks). An LTV above 100% implies negative equity, or underwater status.   It's not good! Why are mortgages underwater? Borrowers owe more than their homes are worth Because many took out zero...

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### Are Mortgage Rates Higher for Condos?

- Published: 2011-06-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-rates-higher-for-condos/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: “Are mortgage rates higher for condos? ” If you're in the market for a new condo or a townhouse (as opposed to a house), you're probably looking to save some money on your mortgage payment each month. After all, condos tend to be a lot cheaper than single-family homes in similar areas because you get limited space and forgo things like a nice green yard to play in. But you may be in for a surprise when you start shopping mortgage rates. Condos May Have Hidden Financing Costs While condos are typically priced lower than single-family homes There are other costs to consider like HOA dues and more expensive home loan financing If you're unable to put down 25% on a condo purchase you will likely get hit with a pricing adjustment This will either increase your mortgage rate slightly or bump up your closing costs Sure, a condo might come with a lower price tag, but that's not the end of the story. They typically come with higher mortgage rates and costly HOA dues, both of which should be factored into your side-by-side analysis. In some areas, HOA fees can be nearly as expensive as mortgage payments, totaling $500 or more each month. So definitely factor them in when determining affordability. Additionally, many mortgage lenders charge a 0. 75% mortgage rate pricing adjustment for a condo once the loan-to-value ratio (LTV) exceeds 75 percent. And let's face it, most home buyers put very little down these days....

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### How Much Do Mortgage Brokers Make? No Salary Means The Sky Is the Limit

- Published: 2011-06-14
- Modified: 2024-01-11
- URL: https://www.thetruthaboutmortgage.com/how-much-do-mortgage-brokers-make/
- Categories: Mortgage Tips

Mortgage Q&A: “How much do mortgage brokers make? ” If you use a mortgage broker, you may be curious what they earn and how they're paid. In short, mortgage brokers work as middlemen between borrowers and banks/lenders, so they can be compensated by either party. They are typically paid a percentage for each home loan they originate, as opposed to earning a salary. So if we know what they make per loan, we'll have a decent idea as to what they might take home each year as well depending on annual volume. But you have to consider their costs to operate as well, which will vary based on how large their shop is, if they employ loan officers, how much they spend on advertising (if any), and so on. How Does a Mortgage Broker Get Paid? They can choose to get paid by either the lender or the borrower They can charge an origination fee directly, which comes out of the borrower's pocket Or elect to get paid by the lender, which is indirectly paid by the borrower The latter results in a slightly higher interest rate, meaning it's paid over time via higher monthly mortgage payments In the recent past (before April 1, 2011), mortgage brokers could make money on both the front and back end of a mortgage loan. Simply put, they could charge a loan origination fee directly to the borrower and also get paid by the mortgage lender via a yield spread premium (YSP). This YSP...

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### Are Mortgage Rates Negotiable? How to Haggle Your Way to Big Savings

- Published: 2011-05-31
- Modified: 2024-11-02
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-rates-negotiable/
- Categories: Mortgage Rates, Mortgage Tips

Mortgage Q&A: “Are mortgage rates negotiable? ” Here's a popular question everyone looking for a mortgage wants to know (or should want to know). And it's an especially important one if you're actively shopping for a home loan, since the clock is probably ticking and you've got work to do. Can you get an even lower rate than the quote you just received? Or do lenders really have their hands tied? Let's dig right in. You Should Be Able to Negotiate Your Mortgage Rate Yes, mortgage rates are negotiable in most cases If anyone tells you otherwise they're probably fibbing There's always wiggle-room like there is with any other product you buy But you won't know this unless you take the time to ask! In most cases, mortgage rates are 100% negotiable, like many other costs involved with obtaining a mortgage, such as the loan origination fee. This was especially true back before the mortgage crisis, but a little more complicated these days thanks to compliance issues. There are also some online lenders today that don't use loan officers, nor pay out commissions based on rates. So in these cases, you can't really negotiate with the company directly. But if there is an individual involved, which there often is, there's a good chance you'll be negotiating. Like anything else you shop for, you may be told that prices/rates are firm, or are as low as they can go. Psssh. This isn't the case, as mortgage rates can always be adjusted...

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### Fannie Mae HomePath Review

> A closer look at the HomePath financing offered by mortgage financier Fannie Mae, which allows individuals to buy previously foreclosed homes with very little down.

- Published: 2011-05-23
- Modified: 2023-01-19
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-homepath-review/
- Categories: Mortgage Tips

After the mortgage crisis, government mortgage financier Fannie Mae wound up with a lot of bank-owned homes.   They said it themselves; they couldn't prevent every foreclosure out there. This was especially true after scores of borrowers took out low down payment mortgages, only to watch home values sink and deplete them of all their home equity, destroying the housing market in the process. Fannie Mae Homes for Sale Fannie Mae HomePath Is the program that was created to unload the many homes That are now owned by Fannie Mae due to foreclosure As a result of the massive housing crisis that took place However, Fannie Mae is not in the business of owning single-family homes or condos, so they're trying to unload them as quickly as possible by offering all types of incentives to prospective home buyers. They have thousands of properties nationwide, including single-family homes, condos, and townhouses, including homes geared toward first-time buyers and those for move-up buyers. Some of the properties have received repairs and improvements, but all are sold as-is, meaning you still need to do your diligence and inspect the property before purchase. There is no specific HomePath loan, but Fannie Mae offers special home loan financing on these properties via its “HomeReady Mortgage” loan program. The HomeReady program offers lower mortgage insurance and pricing adjustments to borrowers who complete homeownership education, which will equate to lower monthly mortgage costs. And you don't have to be a first-time home buyer. Let's take a closer...

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### Astronauts Eligible for Mortgages With No Money Down

- Published: 2011-05-02
- Modified: 2018-06-26
- URL: https://www.thetruthaboutmortgage.com/astronauts-eligible-for-mortgages-with-no-money-down/
- Categories: Mortgage Tips

We all know it's hard to find a mortgage with zero down these days. You can thank everyone who got one a few years ago for that. This is why we can't have nice things. Heck, post mortgage crisis, most borrowers have to go with FHA loans if they've got little in the way of assets for a down payment, as the loan program allows financing with just 3. 5 percent down. But not all hope is lost for zero down. And you don't have to travel to some distant planet to find it. In fact, it's now available right here on Planet Earth. Are You a Space Traveler? One little known perk to being an astronaut Is the ability to get a zero gravity err. . down mortgage You may not even have to travel to space to get one All NASA employees including those on the ground are probably eligible If you travel to outer space often, or live with someone who does, you might be able to get your hands on a mortgage with zero down. This is one of the little-known perks afforded to astronauts, other than exploring new worlds and traveling at 18,000 mph. That's right; the folks over at the NASA Federal Credit Union are offering a so-called “High Loan to Value Mortgage” for a limited time to its people. The “unique loan” allows 100 percent financing for loan amounts up to $650,000, and does not require costly private mortgage insurance (PMI is typically...

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### Fico: Some Homeowners 110 Times More Likely to Strategically Default than Others

- Published: 2011-04-25
- Modified: 2024-03-14
- URL: https://www.thetruthaboutmortgage.com/fico-some-homeowners-110-times-more-likely-to-strategically-default-than-others/
- Categories: Mortgage Tips

Fico, the creator of the almighty Fico score, says enhancements in its analytic modeling allow it to identify borrowers who are over 110 times more likely to strategically default than the least riskiest borrowers. A strategic default refers to those who are able to make mortgage payments, but instead decide to default and go into foreclosure as a means of cutting their losses, despite the related credit score damage. The company divided the population into high versus low strategic default risk bands, and found that the riskiest 20 percent of borrowers included 67 percent of those who eventually strategically defaulted. This means loan servicers could potentially reach two-thirds of those who would commit strategic default by targeting just 20 percent of borrowers. The data also revealed that these homeowners also tend to be more “savvy managers of their credit,” exhibiting higher Fico scores, lower revolving balances, fewer instances of exceeding limits on their credit cards and lower retail credit card usage. Interestingly, the new FICO Labs research also indicates that borrowers who have lost the most home value are only twice as likely to default as those whose houses have lost the least value. This counters previous studies, which argued that home price depreciation is the leading driver of strategic default. A study from the University of Chicago Booth School of Business indicated 35 percent of mortgage defaults in September 2010 were strategic, up from 26 percent in March 2009, so it's clearly a concern for lenders and loan servicers...

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### Can't Pay Your Mortgage? Turn Your Home Into a Billboard

- Published: 2011-04-07
- Modified: 2013-08-10
- URL: https://www.thetruthaboutmortgage.com/cant-pay-your-mortgage-turn-your-home-into-an-billboard-adzookie/
- Categories: Foreclosure, Mortgage News

If you're having trouble keeping up with mortgage payments, which we know many of you are, there's a new solution. It might be a little less conventional than a loan modification or a short sale, but it's still a solution, at least, according to a new company called Adzookie. The “free mobile advertising network” is looking to create some buzz, and probably some capital, by offering the extreme home makeover. So “if you're prepared for bright colors and stares from neighbors,” head over to their website and fill out the short form to detail why your home should be picked. If your home meets Adzookie's criteria, a team member will contact you. Just understand that you must own your home; it cannot be rented or leased.   If you're already in the process of foreclosure, that too may be a no-no. Adzookie will paint the entire outside of your home, minus the roof, the windows and any awnings. Painting will take roughly 3 to 5 days, and your home must remain painted for at least three months (though it could last up to one year). If you suddenly freak out and decide to cancel after three months, or if the company cancels the agreement, they'll repaint your home back to its original colors. It's unclear how many mortgage payments they'll make (or how big), but it looks like it's a short-term offer, and one that will likely piss off your neighbors. (photo: Adzookie. com)

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### Homebuilder Plans to Buy Its Own Homes

- Published: 2011-04-04
- Modified: 2011-04-04
- URL: https://www.thetruthaboutmortgage.com/homebuilder-plans-to-buy-its-own-homes/
- Categories: Mortgage Tips

One of the nation's top homebuilders plans to buy its own homes and rent them out. Beazer Homes introduced its “Pre-Owned Homes Division” today, which will acquire, improve, and rent out recently built and previously owned homes in markets where the company operates. “Homes targeted for inclusion in the Pre-Owned Homes program will have been built since 2004 by a reputable builder, including homes built by Beazer Homes,” the company said in a release. “All Beazer Pre-Owned Homes will receive necessary repairs and upgrades to bring them up to strict Company standards. ” Beazer expects to acquire homes at a discount as most will be distressed sales, including foreclosures and short sales. And Phoenix seems to be the test market, with more than 100 homes expected to be purchased in fiscal year 2011. Beazer said it chose the desert metro because the rental market for recently-built homes is strong, with an estimated vacancy rate below five percent. If things work out, Beazer may expand the program to include homes in Nevada or California. The company said it will target consumers who have elected not to become homeowners, along with those unable to fully qualify for mortgage financing. The move should help Beazer on a number of fronts, as they'll be able to remove eyesores in the very neighborhoods they created, which should boost home prices and investor/homeowner confidence, while reducing foreclosures and upping home sales. Those who rent the properties will eventually be given the option to buy as well.

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### Wells Fargo Offers Homeowner $2 Loan Modification Discount

- Published: 2011-03-23
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/wells-fargo-offers-homeowner-2-loan-modification-discount/
- Categories: Mortgage Tips

Here's another PR nightmare... Wells Fargo reportedly offered a struggling homeowner a loan modification that resulted in just $2 off his monthly mortgage payment, according to an ABC news affiliate. The Independence, Ohio-based homeowner, Mike Elewski, apparently got into trouble back in 2009 when the ongoing recession began to affect his business. In August of 2009, he asked the San Francisco-based bank and mortgage lender to grant him a loan modification, but bank representatives said they only negotiate with homeowners behind on mortgage payments. As a result, Elewski stopped making his mortgage payments, and before long, faced foreclosure. Eventually a judge ordered mediation between him and Wells Fargo, and after mountains of paperwork and thousands in attorney fees, the bank offered him a modification. Unfortunately, the loan mod resulted in just $2 off his regular mortgage payment, meaning foreclosure is likely imminent. But alas, because the story is gaining steam, Wells will likely have to step in and give the man a better deal. This seems to be the trend nowadays, make noise and get help. A Wells spokesman did tell the publication it would never tell customers to miss payments, and noted that it was continuing to work with the customer to identify solutions that would allow him to retain his home. Per the article, the Ohio attorney general's office has already received 450 complaints involving mortgages since the beginning of the year. (photo: wwarby)

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### Homeowners Less Likely to Default on Mortgages from Local Lenders

- Published: 2011-01-05
- Modified: 2018-02-02
- URL: https://www.thetruthaboutmortgage.com/homeowners-less-likely-to-default-on-mortgages-from-local-lenders/
- Categories: Mortgage Tips

New research from Ohio State University suggests that homeowners who obtain home loans from local mortgage lenders are less likely to default than those who borrow from more distant banks. The researchers noted that even if two similar homeowners received the same type of mortgage with the same interest rate, the borrower who went with the local bank might be better off. “The door you walk into when you’re looking for a loan matters a lot,” said Stephanie Moulton, assistant professor in the John Glenn School of Public Affairs at Ohio State University, in a statement. “Local banks seem to offer some protection to homebuyers, particularly those with low incomes who may be seen as risky borrowers. ” Moulton attributed the phenomenon to more prudent underwriting at local banks, who tend to look at income and employment history more closely to ensure borrowers can actually make their mortgage payments. “Many mortgage brokers base their decisions on whether to offer a mortgage on one or more key numbers, such as a credit score,” she added. “In other words, if your credit score is above a certain level, and you meet other criteria, the broker will offer the loan. The same may be true of large, non-local banks. ” But local banks and lenders typically have established relationships with their borrowers, including checking/savings accounts, so they know more about those being extended home loans. Many of these local banks also get their borrowers to set-up automatic mortgage payments, which could lead to...

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### Most Consumers Only Obtain One Mortgage Quote

- Published: 2010-12-14
- Modified: 2018-07-09
- URL: https://www.thetruthaboutmortgage.com/most-consumers-only-obtain-one-mortgage-quote/
- Categories: Mortgage Rates, Mortgage Tips

Here's a shocker. Only about 40 percent of borrowers obtain more than one mortgage quote, according to a survey conducted by Harris Interactive and mortgage comparison service LendingTree. Despite this, more than nine in 10 borrowers understand that mortgage rates vary among mortgage lenders, which explains why only three in 10 felt "very confident" they received the best deal on their mortgage. Borrowers Know Mortgage Rates Aren't All the Same The survey found that the majority of borrowers Only took the time to get a single mortgage rate quote Even though they know lender rates vary Which explains why they didn't feel confident they were getting the best deal So we know most homeowners don't bother obtaining more than one quote, and that they don't feel great about it. But why aren't they shopping if they have a bad feeling about it all? There's got to be a good reason, right? Well, of course there is. Why Aren't Homeowners Shopping Around? They aren't quite sure the lender they spoke to is "the one" Yet they aren't taking the time to see what else is out there One reason is time, or lack thereof Another big reason is the complicated nature of mortgages in general Borrowers aren't putting in the time to shop for a mortgage because of the time-sensitiveness associated, and also because of all the complicated terminology. In other words, they're often pressed for time either because they have a certain close of escrow date, or they need to...

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### Mortgage Lenders Raise Credit Score Requirements on FHA Loans

- Published: 2010-11-17
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-lenders-raise-credit-score-requirements-on-fha-loans/
- Categories: Mortgage Tips

Both Wells Fargo and Bank of America, the top two residential mortgage lenders in the nation, have raised minimum credit score requirements on FHA loans, according to Bloomberg. The pair raised the minimum FICO score to 640 from 620 on FHA-insured loans they buy from other mortgage lenders. Per FICO, there are roughly 6. 3 million Americans that have credit scores between 620 and 640, or about 3. 7 percent of the population. As a result, correspondent lenders like Quicken, which is a top ten mortgage lender, have stopped making many of their FHA loans. And FHA commissioner David Stevens told Bloomberg the move would exclude as many as 15 percent of FHA borrowers, who often have no other place to turn for home loan financing. However, Wells Fargo will continue to offer FHA loans with FICO scores as low as 600 via its own loan officers. And Bank of America still offers FHA loans to its direct customers with FICO scores as low as 620 for purchase money mortgages, though they now require 640 for mortgage refinance applications. Chase, the third largest lender in the nation, had already raised its credit score requirements on FHA loans a while back. Credit Quality Improves on FHA Loans But credit quality has improved immensely at the FHA, largely because more creditworthy borrowers have turned to the agency for financing. And the FHA recently imposed a minimum credit score of 500, while also requiring that borrowers have at least a 580 credit score...

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### Strategic Default Driven by Future Home Prices, Default Costs

- Published: 2010-10-19
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/strategic-default-driven-by-future-home-prices-default-costs/
- Categories: Mortgage Tips

Borrowers thinking about walking away from their homes voluntarily don't necessarily give up because the mortgage balance exceeds the value of their homes, according to an Economic Letter titled "Underwater Mortgages," from the Federal Reserve Bank of San Francisco. The authors, John Krainer and Stephen LeRoy, argue that the decision seems to be heavily impacted by the direction of home prices and default costs, such as relocation and credit score impact. “To understand why, consider a homeowner who is at the underwater point, with the house value exactly equal to the outstanding balance of the mortgage. Should this borrower strategically default? ” “We argue that the borrower still has incentive to stay in the house. Going forward, the borrower is in a “heads-I-win, tails-you-lose” position vis-à-vis the lender. If house prices fall further, then the borrower can default immediately, so that declines in house prices translate into losses for the lender. ” “On the other hand, if house prices rise, then the gain accrues to the borrower. With no downside risk, the borrower will not actually be indifferent as to whether to default. ” Borrowers Beyond the Point of No Return? Underwater Mortgages Q4 2000: Underwater Mortgages Q4 2009: While this seems to make sense, many borrowers are probably beyond the point of no return, even if home prices appreciate a bit over the next few years. Consider that the typical homeowner who is currently underwater on their mortgage won’t see positive equity until 2015. And some won't see positive...

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### Former Countrywide Boss to Pay Largest SEC Fine Ever

- Published: 2010-10-18
- Modified: 2018-03-08
- URL: https://www.thetruthaboutmortgage.com/former-countrywide-boss-to-pay-largest-sec-fine-ever/
- Categories: Mortgage News

Former Countrywide CEO Angelo Mozilo will pay a record $22. 5 million penalty to settle SEC charges that claim he and two other executives misled investors as the mortgage crisis took flight. Mozilo also agreed to pay $45 million in “disgorgement of ill-gotten gains” to settle the SEC’s disclosure violation and insider trading charges, for a total settlement of $67. 5 million, which will be returned to affected investors. As part of the settlement, Mozilo is also permanently barred from serving as an officer or director of a public company. "Mozilo's record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite — a looming disaster in which Countrywide was buckling under the weight of increasing risky mortgage underwriting, mounting defaults and delinquencies, and a deteriorating business model,” said Robert Khuzami, Director of the SEC's Division of Enforcement, in a statement. Former Countrywide COO David Sambol also agreed to pay $5 million in disgorgement and a $520,000 penalty, along with a three-year officer and director bar. Additionally, former CFO Eric Sieracki agreed to a $130,000 penalty and a one-year bar from practicing before the Commission. The SEC alleged that the trio failed to disclose to investors the significant credit risk Countrywide was taking to build and maintain mortgage market share. Countrywide apparently misled investors by claiming it was essentially a prime mortgage lender, though in reality it was originating tons of high-risk mortgages (such...

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### 'How to Be a Mortgage Broker' Most Popular Course in Prison

- Published: 2010-09-17
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/how-to-be-a-mortgage-broker-most-popular-course-in-prison/
- Categories: Mortgage Tips

Since the mortgage crisis has taken hold, I've tried to think of all the reasons why everything went so horribly wrong. By now, we know things like no money down mortgages, stated income loans, huge second mortgages, and option arms were bad news. Seems so very obvious in hindsight... But the problems went beyond that, as evidenced by a piece in Forbes, written by white-collar criminal Walter Pavlo. In the blog post titled, “Mortgage Brokering Taught in Prison,” Pavlo noted that the class, taught by an inmate accused of, you guessed it, mortgage fraud, was by far the most popular. In fact, the two-hour class, which met three days a week for a month back in 2001-2002, had a waiting list because the prison would only allow 25 copies of the curriculum to be produced. And as Pavlo aptly pointed out, “Mortgage Brokering was a great career because institutions did not care whether you were a felon or not, as long as you had a legitimate deal. And in 2002-2006 they were all legitimate. ” Those who took the course and were subsequently released from prison saw success and testimonials were shared with future classes, making it all the more popular, and certainly “more lucrative and easier than selling the drugs that had put them in prison to begin with. ” Let me just get one thing straight. This isn't to say that mortgage brokers were to blame for the mortgage crisis, rather that a lack of regulations allowed for...

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### Yield Spread Premiums Banned

- Published: 2010-08-16
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/yield-spread-premiums-banned/
- Categories: Mortgage News

The Federal Reserve issued a final rule today that effectively bans yield spread premiums paid to mortgage brokers, along with loan officers employed by depository institutions. These loan originators will no longer be able to bump mortgage rates higher or steer consumers toward certain loan products in exchange for a higher commission. This was a major problem prior to the mortgage crisis, when the highest risk loans (option arms) were often accompanied with the greatest compensation. “The new rule seeks to ensure that consumers who agree to pay the originator directly do not also pay the originator indirectly through a higher interest rate, thereby paying more in total compensation than they realize,” the Fed said in a statement. “The final rule also prohibits a loan originator that receives compensation directly from the consumer from also receiving compensation from the lender or another party. ” However, loan originators can continue to receive compensation based on the loan amount via mortgage points. For example, originators may collect one percent of the loan amount, or $2,000 for a $200,000 loan, in upfront closing costs. They just can't adjust their commission based on the interest rate associated with the loan. The final rules are effective April 1, 2011. Consumers to be Notified When Loan Changes Hands A number of other rules were proposed today, including a provision that consumers be notified when their home loan changes hands. This is another important rule seeing that loans are quickly resold to other companies shortly after origination....

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### USDA Zero Down Loan Program to Return

- Published: 2010-08-02
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/usda-zero-down-loan-program-to-return/
- Categories: Mortgage Tips

The USDA's zero down loan program is slated to make a comeback, thanks to legislation making its way to President Obama's desk. The measure was part of H. R. 4899, otherwise known as “The Emergency Supplemental Appropriations Act,” which the Senate passed last week. It increases the Rural Housing Service (RHS) commitment authority allowing guaranteed loans and making the program completely self-sufficient; previously, the RHS provided conditional commitments. However, it increases the guarantee fee for borrowers to 3. 5 percent, though that too can be rolled into the loan. “This is going to be a great lift for thousands of rural home buyers who need to close on their home purchases before Sept. 30 to take advantage of the home buyer tax credit,” said NAR President Vicki Cox Golder, in a statement. “Many rural families would have been left out in the cold without these guaranteed loans. Increasing the commitment authority will help rural families, support local housing markets, create jobs and generate new tax revenues,” she added. New guidelines are expected to be released after the President signs the bill. Currently, the USDA home loan program is reserved for families in rural areas with incomes of up to 115 percent of the median income, who are without adequate housing, but able to afford mortgage payments.

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### HUD to Investigate Mortgage Lenders Who Discriminate Against Expectant Mothers

- Published: 2010-07-27
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/hud-to-investigate-mortgage-lenders-who-discriminate-against-expectant-mothers/
- Categories: Mortgage Tips

The U. S. Department of Housing and Urban Development plans to launch multiple investigations to determine if certain mortgage lenders are denying loans to expectant mothers, new parents, and those on temporary disability. The move came after a New York Times article exposed the practice, which may violate the Fair Housing Act. HUD enforces the Fair Housing Act, which prohibits discrimination in lending based on sex, familial status, and disability. Whether expectant or not, a borrower has the right to a home loan so long as they can demonstrate the ability to afford it, using measures like debt-to-income ratios and the like. The FHA requires its approved lenders to review a borrower's income to determine if they can make mortgage payments for the first three years of the loan, though FHA-insured lenders cannot inquire about future maternity leave. If a borrower happens to be on maternity leave or short-term disability at the time of loan closing, lenders must document the borrower's intent to return to work and that they qualify for the loan, taking into account any reduction in income due to their leave. HUD is also reviewing Fannie Mae and Freddie Mac's underwriting guidelines to determine if they meet Fair Housing Act requirements. "Denying a mortgage to people just because they're having a baby is flat wrong," said Vice President Biden, Chair of the White House Task Force on Middle Class Families, in the release. "Mothers on maternity leave have jobs, they have income, and they shouldn't have to...

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### Bill Aims to Eliminate Loan Mod Credit Score Hit

- Published: 2010-07-26
- Modified: 2013-08-10
- URL: https://www.thetruthaboutmortgage.com/bill-aims-to-eliminate-loan-mod-credit-score-hit/
- Categories: Credit Scores, Mortgage News

A bill introduced by California Congresswoman Jackie Speier earlier this month aims to protect the credit scores of homeowners who accept loan modifications. Currently, even on-time modified mortgage payments are treated as “delinquent” or “incomplete” by the banks and mortgage lenders who extend the relief. As a result, homeowners who accept the terms of a loan modification may also see their credit scores plummet, making it difficult to obtain subsequent loans, credit cards, and even a job. The “Protecting Homeowners’ Credit History Act,” otherwise known as H. R. 5743, would abolish the practice by prohibiting banks from reporting such modifications as negative events and banning the credit bureaus from including such information in consumer credit reports. “Homeowners shouldn’t have their credit scores damaged for doing the right thing,” said Speier, in a release. “Rather than rewarding responsible homeowners who modify their mortgage payments to keep their homes, the credit reporting system punishes them. ” Of course, those seeking payment relief (whether current or not) could easily be categorized as higher credit risks, so it's hard to say whether this legislation will actually stick. And those who are already delinquent before applying for a loan modification will see their credit scores fall regardless, based on the late payments alone. There's also the question of whether it would be retroactive to account for the millions who already applied for loan modifications. Back in November, Fico said government-sponsored loan modifications wouldn't adversely affect homeowners' credit scores, at least not at the moment. The...

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### Most Borrowers Don’t Strategically Default Until Deeply Underwater

- Published: 2010-06-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/most-borrowers-dont-strategically-default-until-deeply-underwater/
- Categories: Mortgage Tips

New research conducted by the Federal Reserve revealed that the median borrower doesn’t strategically default until home equity falls to -62 percent of their home’s value. In other words, only half of borrowers who are severely underwater actually make the decision to walk away. The Fed researchers believe “borrowers face high default and transaction costs because purely financial motives would likely lead borrowers to default at a much higher level of equity. ” They also concluded that default is much more common at significantly lower negative equity levels when combined with a negative life event, such as a loss of income. In fact, roughly 80 percent of defaults in their sample were the result of income shocks combined with negative equity. “Our results therefore lend support to both the "double-trigger" theory of default and the view that mortgage borrowers exercise the implicit put option when it is in their interest,” the paper said. The Fed noted that many borrowers continue to “pay a substantial premium over market rents to keep their homes,” partially because they refuse to believe their homes depreciated substantially, while also overvaluing the prospect of future capital gains. However, when equity falls below -50 percent, half of defaults appear to be strategic and driven purely by negative equity. The study focused on borrowers from hard-hit states like Arizona, California, Florida, and Nevada who purchased homes in 2006 using non-prime mortgages with no money down. Nearly 80 percent of the borrowers defaulted by the end of the observation...

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### Delinquent Mortgage Borrowers Now Get Free Cell Phones

- Published: 2010-06-29
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/delinquent-mortgage-borrowers-now-get-free-cell-phones/
- Categories: Mortgage Tips

Imagine receiving a cell phone in your mailbox, that once powered on, dialed your mortgage lender – and once connected, offered lower mortgage payments. Sounds like a dream right? Well, First Guaranty Mortgage customers have reportedly received cell phones in the mail, programmed to dial the company's loss mitigation department. The move was employed to offer at-risk customers, those it was unable to contact through traditional means, money-saving loan modifications. A similar tactic, utilized by SunTrust Bank, cut their non-response rate in half – it had been as high as 50 percent two years ago. But why aren't customers getting in contact with their banks and mortgage lenders, especially with all the media attention regarding loan modifications? You'd think struggling borrowers would jump at the opportunity to secure a lower mortgage rate, extended amortization, or if they're lucky, a principal balance reduction. Perhaps some borrowers fear making contact, or are simply looking to fly under the radar for as long as possible before actually being evicted. After all, it takes 417 days for a lender to simply send a foreclosure notice, and even longer to get booted. And hey, free rent beats a free phone any day of the week. Then there are the many, many severely underwater borrowers who are probably strategically planning their exits. Interestingly, a similar initiative to get customers to contact SunTrust using prepaid gift cards that required a call to the bank for activation saw less success. At the same time, more traditional measures like...

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### Countrywide to Pay $108 Million for Overcharging Homeowners

- Published: 2010-06-07
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/countrywide-to-pay-108-million-for-overcharging-homeowners/
- Categories: Mortgage News

Former mortgage lending giant Countrywide has been ordered by the FTC to pay out $108 million in refunds to homeowners who were overcharged by the company's servicing division. After borrowers fell behind on mortgage payments (mind you from terrible mortgage programs like the infamous option arm), Countrywide's loan servicing operation began overcharging homeowners for things like property inspections, lawn mowing, and other services meant to protect their financial interest in the properties. But instead of hiring third-party vendors to perform the services, the mortgage lender created subsidiaries to hire the vendors so it could mark up the fees, often by 100 percent. The FTC claims the move was part of Countrywide's strategy to increase profits from default-related service fees as the mortgage market began to take a dive. Additionally, while servicing the loans of those facing Chapter 13 bankruptcy, Countrywide allegedly made “false or unsupported claims to borrowers about amounts owed or the status of their loans,” and didn't notify borrowers when new fees and escrow charges were added to their loan balances. The FTC’s complaint and settlement names Countrywide Home Loans, Inc. and BAC Home Loans Servicing LP, formerly doing business as Countrywide Home Loans Servicing LP, as defendants. The settlement money will be refunded to homeowners who Countrywide overcharged before July 2008, prior to their acquisition by Bank of America. Countrywide was ranked as the largest mortgage servicer in the United States in early 2008, with a balance of more than $1. 4 trillion in its servicing portfolio.

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### The Fonz is New Spokesperson for Reverse Mortgage Company

- Published: 2010-06-02
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-fonz-is-new-spokesperson-for-reverse-mortgage-company/
- Categories: Mortgage News

The “Fonz,” better known for being cool than pitching mortgage products to old people, is the new face of a growing reverse mortgage company. One Reverse Mortgage of Livonia, Michigan announced today that award-winning actor and author (really? ) Henry Winkler will be the company's new spokesperson going forward. He will take part in all major advertising campaigns effective immediately, including television commercials slated to air on national cable networks. “Once I learned of the work One Reverse Mortgage was doing to help seniors, I was immediately interested," Winkler said in a press release. "I have always been committed to helping others, and I see my work here as the next step in that effort. ” I thought he didn't trust anyone over 30, but I guess I was wrong. Reverse mortgages allow homeowners 62 years of age or older to pull equity from their homes without the need to sell the property or make a monthly mortgage payment, unlike a traditional refinance. They have surged in popularity in recent years, partially because it's easier to bank on existing home equity than expected appreciation. But scrutiny of the loans has also skyrocketed because of their ties to other investment vehicles like annuities. One Reverse Mortgage is a subsidiary of Quicken Loans, another heavy hitter in the loan origination space. (photo: gesika22)

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### Nearly 40 Percent of California Foreclosures Were Rentals

- Published: 2010-05-18
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/nearly-40-percent-of-california-foreclosures-were-rentals/
- Categories: Mortgage Tips

Of the estimated 211,154 residential units foreclosed on in California during 2009, roughly 77,145 were rental units, according to a new report focused on tenant rights. The foreclosures resulted in the displacement of an estimated 208,795 tenants who were living in single-family homes, condos, and multi-family apartments, despite likely making on-time mortgage payments every month. From 2008 to 2009, there was a 70 percent increase in the foreclosure rate of apartment buildings of five units or more – single-family foreclosures fell 3. 1 percent year-to-year. An overwhelming 85 percent of the foreclosed properties went back to banks and mortgage lenders in 2009, while private investors took the rest. During the year, banks forfeited more than $776 million in rental income, focusing on booting tenants by hiring lawyers to litigate eviction cases and having real estate agents carry out cash-for-keys deals. “Once the properties are vacated, they become prime targets for vandalism, further contributing to plunging property values, and creating legal liability for banks as the owners of blighted vacant property,” the Tenants Together report said. “Furthermore, banks continue to tarnish their standing in local communities by maintaining their policies to evict rent- paying tenants. ” Fannie Mae and Freddie Mac have implemented post-foreclosure programs to assist renters, but many banks apparently continue to see tenants as obstacles to future profits. Tenants Together is calling for better tenant protections, including making the “Protecting Tenants at Foreclosure Act” (PTFA) permanent, passing local “just cause for eviction” laws, providing tenant notification when a...

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### Foreclosure More Likely if You're Bad at Simple Math

- Published: 2010-04-28
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/foreclosure-more-likely-if-youre-bad-at-simple-math/
- Categories: Mortgage Tips

There's a better chance you'll experience foreclosure if your math isn't up to snuff, according to a new research paper from the Atlanta Fed. Three researchers studied the effect of borrower's financial literacy and cognitive ability to see what type of role, if any, they played in the mortgage crisis. They surveyed subprime borrowers who took out mortgages between 2006 and 2007, and found foreclosure starts were approximately two-thirds lower in the group with the highest measured level of numerical ability compared with the group with the lowest measured ability. Additionally, borrowers in the lowest numerical ability group spent, on average, about 25 percent of the time in delinquency, while borrowers in the highest group were only late on average 12 percent of the time. The lowest group also missed nearly 15 percent of mortgage payments on average, while the highest group only missed six percent of payments. Here's a sample of some of the questions asked: 1. In a sale, a shop is selling all items at half price. Before the sale, a sofa costs $300. How much will it cost in the sale? 2. If the chance of getting a disease is 10 per cent, how many people out of 1,000 would be expected to get the disease? 3. A second hand car dealer is selling a car for $6,000. This is two-thirds of what it cost new. How much did the car cost new? The researchers said a borrower's inability to perform simple mathematical calculations likely impacts...

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### Many Homeowners Won't See Positive Equity Until 2015

- Published: 2010-03-29
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/many-homeowners-wont-see-positive-equity-until-2015/
- Categories: Mortgage News

We already know negative equity is plaguing millions of Americans nationwide, but perhaps worse is the fact that many won't see any positive equity for many years to come, according to First American CoreLogic. In fact, the typical homeowner who is currently underwater on their mortgage won't see positive equity until 2015. In the hardest-hit markets, homeowners won't get back in the black until 2020, and even then, if they were to sell, they'd probably still take a loss thanks to associated fees and commissions. So where is it going to take a while? Well, in Detroit, Michigan, 2020 equity for current underwater borrowers will still be -$7,156... yep, it'll still be in the red into the next decade. It's a little better in Las Vegas, but still pretty dismal – Sin City underwater homeowners can expect 2020 equity to be $1,039. That's probably not the best news, but I suppose it's better than owing money on your home. There are some winners out there though, in places like Boston, where 2009 home equity of -$130,452 is expected to be $77,158 in 2020; Washington D. C. is displaying similar numbers. More than 11. 3 million, or 24 percent, of all residential properties with mortgages were in a negative equity position as of the end of 2009. In Las Vegas, 70 percent were underwater, followed by 51 percent in Arizona and 48 percent in Florida.

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### Bank of America Wants You to Earn Principal Forgiveness

- Published: 2010-03-24
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-wants-you-to-earn-principal-forgiveness/
- Categories: Mortgage Tips

Bank of America announced a new strategy today to tackle the pesky underwater mortgages on its books, many acquired via its merger with Countrywide. The so-called "earned principal forgiveness" initiative will target borrowers with subprime loans, option ARMs, and prime two-year hybrid ARMs. For loans at least 60 days delinquent with current loan-to-value ratios of 120 percent or higher, the bank will offer an interest-free forbearance of principal that the homeowner can turn into reduced principal over five years if they stay current on mortgage payments. "In our experience with Home Affordable Modification Program and National Homeownership Retention Program modifications, Bank of America has found that many homeowners who owe considerably more on their mortgages than their homes are worth are reluctant to accept a solution that addresses only the amount of the payment without an accompanying reduction in the balance due on the loan," said Barbara Desoer, president of Bank of America Home Loans, in a press release. Bank of America said it will make principal reduction the initial consideration toward reaching HAMP's 31 percent debt-to-income ratio target when modifying the aforementioned loan types. Certain holders of option arms may also receive a HAMP modification that eliminates the negative amortization feature and results in the forgiveness of all or part of the negative amortization amount to reduce principal to as low as 95 percent loan to value. Of course that means the borrower will no longer have the ability to make ultra-low monthly mortgage payments, but BofA hopes the...

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### How Short Sale Fraud Works

- Published: 2010-03-15
- Modified: 2018-01-09
- URL: https://www.thetruthaboutmortgage.com/how-short-sale-fraud-works/
- Categories: Mortgage News

There's been a lot of talk about short sales lately, and considerable concern about related fraud. After all, there is lots of potential profit to be made by selling properties below market value. Up in the hard-hit northern San Joaquin Valley region of California, the “hottest fraud” reportedly involves short sales, per an article in the Merced Sun Star. The way it works is pretty simple: A homeowner falls behind on mortgage payments, or simply tells the bank they can no longer keep up with payments. They inform the mortgage lender that they'd like to execute a short sale because the current mortgage balance exceeds the value of the property; this is also known as being underwater or upside down. This is pretty common, as nearly 25 percent of the nation is currently underwater on the mortgage, and 2. 4 million mortgages in California alone are in negative equity positions. Oh, and apparently 67 percent of California homeowners sold their homes last year because they couldn't afford to pay the mortgage. Anyway, the lender agrees to a short sale (assuming they receive an offer they deem acceptable), and hires a real estate agent to resell the property on their behalf. The unscrupulous real estate agent then creates a limited liability corporation (LLC) that offers to buy the property, but for a lowball price. Meanwhile, legitimate offers from genuine buyers are kept a secret, and the real estate agent returns to the lender with just the one offer from the aforementioned...

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### Short Sale Program Slammed by Appraisers

- Published: 2010-03-10
- Modified: 2024-03-27
- URL: https://www.thetruthaboutmortgage.com/short-sale-program-slammed-by-appraisers/
- Categories: Mortgage News

Just days after details of the Treasury's streamlined short sale program were revealed, several leading appraiser groups have criticized the proposal. The issue involves how short sale properties would be valued under the program, relying on broker price opinions (BPOs) carried out by real estate agents rather than standard appraisals completed by licensed appraisers. Essentially, a BPO is more associated with what a home would sell for, while an appraisal uses a more thorough valuation approach. Banks and mortgage lenders would use the BPOs to determine the value of a home and the corresponding minimum offer to accept. The homeowner supposedly won’t know the value, but if an offer comes in that meets or exceeds it, the bank or lender must take it. Of course, this setup is ripe for fraud, and law enforcement officials have already highlighted fraud involving short sales as a new form of mortgage fraud. A new trend referred to as “property flopping” has emerged, where a property is artificially appraised below its actual market value (using a BPO) and sold to a related party of the real estate agent, who then sells the property at its real market value for a quick profit. "We strongly believe continuing to allow 'broker price opinions' (BPOs) in the property valuation component will not adequately protect the public interest (consumer, borrowers, etc. ) or the interests of the various parties to the loan (lenders, loan servicers, etc. ) and is likely to exacerbate mortgage fraud," the appraiser organizations wrote...

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### 67 Percent of Californians Sold Homes Because They Couldn't Pay the Mortgage

- Published: 2010-02-25
- Modified: 2011-02-28
- URL: https://www.thetruthaboutmortgage.com/67-percent-of-californians-sold-homes-because-they-couldnt-pay-the-mortgage/
- Categories: Mortgage Tips

A staggering 67 percent of Californians who sold their homes in 2009 did so because they couldn't meet their mortgage obligations, according to the California Association of Realtors' 2009-2010 Survey of California Home Sellers. “Tighter underwriting standards and a decline in equity continued to impact the market in 2009,” said C. A. R. President Steve Goddard, in a press release. “Many homeowners chose to sell last year because their adjustable-rate mortgage reset at the same time home prices were experiencing an unprecedented decline, leaving them with little equity and difficulty in qualifying for a refinance. ” Difficulty meeting mortgage obligations was the top motivation to sell, followed by job loss and mortgage payment increase. On average, homes sold for $20,958 less than the original asking price in 2009; the median difference between selling and listing price was $32,315. The list-to-sold-price ratio was nearly four times wider between first-time sellers ($30,000 below list price) and sellers who had previously sold a home ($8,000 below list price). First-time sellers accounted for 44 percent of all sellers in 2009, a 33 percent increase from 2008, and nearly triple the 15 percent share seen in 2007. Financing difficulties complicated the sales process in a number of ways, with 63 percent of homes falling out of escrow prior to closing, and 70 percent of sellers citing that the “buyer could not get an acceptable mortgage. ” However, the primary reason homes fell out of escrow was because the buyer backed out, followed by buyer's remorse,...

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### HAMP Permanent Loan Modifications Double

- Published: 2010-02-17
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/hamp-permanent-loan-modifications-double/
- Categories: Mortgage Tips

The Home Affordable Modification Program (HAMP) has finally gotten some legs, with permanent loan modifications doubling last month compared to December, according to the Treasury. More than 116,000 homeowners have now received permanent HAMP modifications and another 76,000 have been offered to borrowers, with only the borrower signature in the way of being finalized. At the same time, 60,476 trial modifications and 1,005 permanent loan modifications have been cancelled; hopefully asking for full income documentation prior to extending an offer will make future mods more successful. "With nearly one million homeowners paying less each month and the number of permanent modifications steadily rising, HAMP is doing the job it was designed to do," said Phyllis Caldwell, Chief of Treasury's Homeownership Preservation Office, in the release. "Struggling families are receiving payment relief and the housing market is showing signs of stabilization. " The Treasury said 57. 4% of the permanent loan modifications have gone to borrowers coping with unemployment or a reduction in hours or wages. More than ten percent cited “excessive obligation” as the main reason for hardship, and principal borrower illness (2. 7%) was the third most common reason. In total, 1. 3 million homeowners have received offers for trial loan modifications under the loan program, and a cumulative savings of $2. 2 billion has been achieved for the 940,000 borrowers actively taking part. The median monthly mortgage payment has been reduced by $521. 85. All of the permanent loan modifications involved an interest rate reduction, 41. 7 percent...

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### Former Countrywide Customers to Receive Relief Payments

- Published: 2010-02-16
- Modified: 2018-02-26
- URL: https://www.thetruthaboutmortgage.com/former-countrywide-customers-to-receive-relief-payments/
- Categories: Mortgage News

Former mortgage lender Countrywide Financial is mailing out checks to 2,700 borrowers as part of a settlement with Florida homeowners, according to a press release from Attorney General Bill McCollum. In July 2008, McCollum’s office filed a lawsuit against the Calabasas, CA-based home loan lender for what it called deceptive and unfair trade practices, namely putting borrowers into mortgages they couldn’t afford with misleading mortgage rates and prepayment penalties. More than $16. 9 million in so-called relief payments will be distributed this week, with each check written for over $6,000. The big question is how many of the affected homeowners actually still own their homes (or are at least current on the mortgage payments), given the fact they’re located in foreclosure-riddled Florida. The AG was also awarded $4 million to fund a foreclosure defense assistance program; the first funds were distributed in late 2009. The organizations that receive the grants over the next two years have agreed to provide free legal assistance to eligible homeowners facing foreclosure who cannot afford an attorney to review their case. Ex-Countrywide boss Angelo Mozilo was also named in the case, and a civil case against him is still pending in Broward County Circuit Court. Joins Growing List of States Coming After Countrywide Like I mentioned earlier (jokingly), this won’t be over until all 50 states and Puerto Rico have filed a lawsuit against former mortgage lender Countrywide Financial. In August 2008, Indiana Attorney General Steve Carter filed a lawsuit against the Countrywide, accusing the...

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### Why Is the APR Lower Than the Mortgage Rate?

- Published: 2010-02-09
- Modified: 2022-12-30
- URL: https://www.thetruthaboutmortgage.com/why-is-the-apr-lower-than-the-mortgage-rate/
- Categories: Mortgage Tips

If you've been shopping mortgage rates lately, you may be wondering why the APR is sometimes lower than the advertised interest rate. It's typically the opposite as a result of closing costs, so it's certainly strange at first glance. The APR, or annual percentage rate, is the interest rate of the loan factoring in specified closing costs like the loan origination fee, processing fees, mortgage insurance, and so forth. So if a mortgage rate is fixed for 30 years, those fees will push the APR above the interest rate. For example, on a $300,000 loan, a 30-year fixed mortgage offered at 5% with $5,000 in costs and fees has an APR of 5. 15%. Because you're actually only borrowing $295,000 from the bank if you have to give them $5,000 to get the loan. Why Does This Happen? The APR can be lower than the interest rate on an ARM Because of the way lenders calculate ARMs Since they're only fixed for an initial period They can use low mortgage indexes to their advantage to forecast a lower rate once it adjusts But what about interest rates tied to adjustable-rate mortgages? Why do they always seem to display an APR lower than the mortgage interest rate? Don't they have the same lender fees that would also increase the APR? The answer comes in how ARMs are calculated; because they're only fixed for a certain period, be it one year or the first five of their usual 30-year term, lenders have...

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### What to Pay First?  Mortgage or Credit Card?

- Published: 2010-02-03
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/what-to-pay-first-mortgage-or-credit-card/
- Categories: Mortgage News

Well, an increasing number of consumers are making sure the plastic is paid before the mortgage, bucking the historical trend and adding to strategic default worries nationwide, according to credit bureau TransUnion. In the first quarter of 2008, the percentage of consumers current on credit cards but delinquent on mortgages surpassed the percentage of consumers current on their mortgages and delinquent on their credit cards for the first time ever. You might need to read that twice or even three times. Since then, this trend trend was worsened, with the percentage of consumers who are delinquent on their mortgages and current on their credit cards rising to 6. 6 percent as of the third quarter of 2009, up from 4. 3 percent in Q1 2008. Consumers Typically Pay Their Mortgages First Historically borrowers pay the mortgage first But a recent trend has shown it to be quite the opposite Borrowers are paying their credit cards first And neglecting their home loans "Conventional wisdom has always been that, when faced with a financial crisis, consumers will pay their secured obligations first, specifically their mortgages," said Sean Reardon, the author of the study and a consultant in TransUnion's analytics and decisioning services business unit, in the release. "However, a recent TransUnion analysis has found that increasingly more consumers are paying their credit cards before making mortgage payments. This analysis reaffirms the results of a previous TransUnion study that examined data between the third quarter of 2006 and the first quarter of 2008....

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### FDIC Chief Bair Receives Curious Mortgage from Bank of America

- Published: 2010-01-21
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/fdic-chief-bair-receives-curious-mortgage-from-bank-of-america/
- Categories: Mortgage News

FDIC chief Sheila Bair, who spearheaded loan modification efforts early on at failed institutions such as Indymac, received a rather interesting mortgage from Bank of America last summer, according to a report from The Huffington Post Investigative Fund. Her family reportedly purchased a $1. 1 million home in the Maryland suburbs in July, borrowing $898,000 from Bank of America. At the same time, they refinanced their former home in Amherst, Massachusetts as a second home (or vacation property). Only problem is the “second home” is a duplex, and Bank of America doesn't seem to permit financing on multi-unit second homes. It would need to be declared as an investment property, which is subject to a higher interest rate and more financing restrictions that may have killed the deal entirely. If you think the duplex issue is a simple oversight, consider the fact that she also rents out the “second home,” bringing in between $15,000 and $50,000 annually as a result, per her most recent financial disclosure. The loan documents tied to the "second home" included a rider stating it was to be used for their "exclusive use and enjoyment" and could not be used as a rental property. Also consider that this type of scenario is a common type of occupancy fraud, whereby borrowers claim a property is a second home instead of an investment property to qualify or obtain a lower mortgage rate. Not only that, but she met with the Charlotte-based bank regarding bailout talks in the weeks...

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### Bernanke: Exotic Mortgages Caused Housing Bubble

- Published: 2010-01-04
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/bernanke-exotic-mortgages-caused-housing-bubble/
- Categories: Mortgage Tips

Fed Chairman Ben Bernanke noted in a speech yesterday that an increase in exotic mortgages, not monetary policy, was the cause of the latest housing bubble. Though the most rapid home price appreciation occurred when short-term interest rates were at their lowest levels, Bernanke argued that the “magnitude of house price gains seems too large” to be explained by monetary policy alone. He said the difference in monthly mortgage payment between a fixed mortgage and adjustable-rate mortgage (the latter more closely related to monetary policy changes) was “consequential but not dramatic,” whereas more exotic types of ARMs such as pay option and negative amortization loans lowered payments markedly. “These more exotic mortgages show much more significant reductions in the initial monthly payment than could be obtained through a standard ARM,” said Bernanke. “Clearly, for lenders and borrowers focused on minimizing the initial payment, the choice of mortgage type was far more important than the level of short-term interest rates. ” “The availability of these alternative mortgage products proved to be quite important and, as many have recognized, is likely a key explanation of the housing bubble. ” The prevalence of these types of loans increased substantially between 2005-2006, and was coupled with less restrictive underwriting standards, all provided on the basis of further home price appreciation. But as we all know, the grossly inflated home prices could not be sustained, even with those 1% teaser rates. That led to a record number of foreclosures because most of the mortgages were...

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### Bank of America Completes Just 98 Permanent Loan Modifications

- Published: 2009-12-10
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-completes-just-98-permanent-loan-modifications/
- Categories: Mortgage Tips

Amid all the uproar surrounding the Home Affordable Modification Program (HAMP), it was revealed today that Bank of America completed just 98 permanent loan modifications. While that figure is certain to rise thanks to the bank’s 156,864 active trial modifications currently underway, the numbers are seriously weak compared to other major loan servicers. GMAC Mortgage managed to make 7,111 loan modifications permanent, while Chase has 4,302 on the books, followed by Ocwen with 4,252, Aurora Loan Services with 3,622, and Wells Fargo with 3,537. In recent weeks, both Bank of America and Chase have complained about the government-sponsored loan modification program, saying it has been difficult to get all the required paperwork from borrowers. But all excuses aside, Bank of America is well behind its peers, and as the top mortgage lender and servicer in the nation, it seems pretty inexcusable. In total, only 31,382 loan modifications have been made permanent, while 697,026 are in trial mode; yep, just over four percent have gone the distance so far. Per HAMP rules, to receive a permanent modification borrowers must make at least three trial payments, provide documents that include proof of income and hardship verification, and have their credit re-underwritten. To facilitate the process, the Obama Administration recently extended the trial period for modifications started on or before September 1 so borrowers have more time to submit required information. California leads the nation in total loan modifications (trial+permanent) with 148,350, followed by Florida with 90,575 and Illinois with 37,552. Oh, and...

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### Fannie Mae Deed for Lease Program

- Published: 2009-11-05
- Modified: 2024-03-09
- URL: https://www.thetruthaboutmortgage.com/fannie-mae-deed-for-lease-program/
- Categories: Foreclosure, Mortgage News

Mortgage financier Fannie Mae has unveiled a new foreclosure prevention tool called the “Deed for Lease Program," which helps struggling borrowers stay in their homes. Unfortunately, that’s about all it does; borrowers must transfer the property back to their mortgage lender by competing a deed in lieu of foreclosure, and then lease the house at the prevailing market rate. That said, the Deed for Lease program is only for borrowers who are unable to take advantage of more favorable loan workout solutions such as loan modifications. "The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae, in a statement. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities. " To participate in the Deed for Lease program, the subject property must be the borrower’s primary residence and it must be clear of any subordinate liens (second mortgage). Borrowers or tenants that wish to stay in the property must be able to document that the new market rent is no more than 31 percent of their gross income (debt to income ratio). Leases under the new program may be arranged for up to 12 months, with the potential to extend the lease via a month-to-month contract after that period. Fannie Mae noted that a Deed for Lease property that is subsequently...

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### Loan Modifications Will Not Hurt Credit Scores (At the Moment)

- Published: 2009-11-02
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/loan-modifications-will-not-hurt-credit-scores/
- Categories: Mortgage Tips

Going forward, government sponsored loan modifications will not adversely affect consumers’ credit scores, at least not immediately, according to a report in SF Gate. Fair Isaac, now simply known as Fico, has applied the change on behalf of the U. S. Treasury Department so borrowers in need of a loan modification don’t hold back on fears of dented credit scores. As of today, those who receive a loan modification via a government plan will see the phrase “loan modified under a federal government plan” (instead of “partial payment”) on their credit report next to the associated credit tradeline. At this time, that distinction will neither hurt nor help consumers, but it could do so in the future. Once Fico can document and predict consumer behavior for those with a government-sponsored loan mod, the data may be factored into credit scoring, potentially hurting those who elected to modify their mortgage. Per the article, Fico doesn’t typically make changes to its scoring algorithm until it has collected data for at least a year, so we won’t know the real credit score impact for a good while. Keep in mind that those already delinquent on a mortgage will receive the “appropriate level of delinquency,” and the new system will not simply bring the account current. Those who already received a loan modification via a government program may be able to get the scoring change applied retroactively, but good luck working with creditors and the credit bureaus. And there’s always the worry that a...

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### Bill Aims to Increase FHA Down Payment to Five Percent

- Published: 2009-10-02
- Modified: 2014-03-22
- URL: https://www.thetruthaboutmortgage.com/bill-aims-to-increase-fha-down-payment-to-five-percent/
- Categories: Mortgage News

A new bill introduced by New Jersey Republican Scott Garrett would require FHA borrowers to make at least a five percent minimum down payment. The proposed legislation, which would increase the minimum down payment from the current minimum 3. 5 percent, would also prohibit financing of closing costs. “In the Housing and Economic Recovery Act (HERA), Congress set the FHA down payment requirement at 3. 5% and allowed closing costs to be included as part of that number.   This effectively allowed FHA down payment levels to be as low as 2. 5%,” the release said. Garrett stressed that while “homeownership is a noble goal,” the benefits must be weighed with the risks involved, especially if the taxpayer is on the hook. “As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage,” said Garrett. “In trying to find a reasonable balance between the current, extraordinarily low level and a level that would ensure a significant reduction of risk to the taxpayer. ” It wasn’t long ago that an FHA borrower could get downpayment assistance, and pay virtually nothing out of pocket for homeownership. Of course, this led to monumental losses at the FHA, eventually pushing its capital ratio below the mandated minimum, leading to policy changes. Furthermore, the FHA has been exploited over the past year and change as a means to secure financing with next to nothing down, as evidenced...

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### Can I Refinance a Mortgage With Negative Equity?

> There are now a number of programs available that allow borrowers short on equity to refinance their existing mortgages.

- Published: 2009-10-01
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/can-i-refinance-with-negative-equity/
- Categories: Mortgage Tips, Refinance

Mortgage Q&A: “Can I refinance a mortgage with negative equity? ” Nowadays, more and more homeowners are finding that their condo or home value isn’t worth what it once was at the height of the real estate market. In fact, many are discovering that their current mortgage balance(s) now exceeds the value of their property, putting them in a position of negative equity, otherwise known as being upside down. Or put another way, the proud owner of an underwater mortgage. Okay, maybe not proud. Perhaps panicked is a better adjective. To make matters worse, mortgage payments are also resetting higher as teaser rates disappear and ARMs adjust. Let's learn more about negative equity and its ahem, negative consequences. What Is Negative Equity? If equity means ownership Negative equity must mean a lack thereof So in the case of a mortgage It means you owe more than the underlying asset (home) is worth As noted, when you owe more on your home loans than your property is worth, it is considered being in a negative equity position. For example, if your home is currently worth $300,000, but you have an outstanding mortgage loan balance of $400,000, you've clearly got no equity. But it's worse than that. You actually have $100,000 in negative equity. Hmm, have might be the wrong word, since it's more a lack of having anything, namely, equity. Anyway, this doesn't necessarily mean you have to take action, as your loan balance will dwindle over time with regular principal...

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### 3,944,602 Home Loan Applications Denied in 2008

- Published: 2009-10-01
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/3944602-home-loan-applications-denied-in-2008/
- Categories: Mortgage News

Below are some select takeaways from the Federal Reserve’s new report titled, “The 2008 HMDA Data: The Mortgage Market during a Turbulent Year (view here). ” Lending for first mortgages on site-built, owner-occupied home purchases fell 22. 3 percent from 2006 through 2007 and an additional 24. 5 percent from 2007 through 2008. Additionally, mortgage refinance lending slipped 18. 3 percent from 2006 through 2007, and another 20. 9 percent from 2007 through 2008. Last year, about 14 million loan applications were submitted, with just over 12 million acted upon by mortgage lenders. A whopping 3,944,602 home loan applications were denied; that’s nearly a third (32. 3 percent). “In 2008, for both home-purchase and refinance conventional lending, blacks and Hispanic whites had notably higher gross denial rates than non-Hispanic whites,” the report said. “Generally, denial rates for blacks have been the highest, and denial rates for Hispanic whites were between those for blacks and those for non-Hispanic whites. ” Nearly three-quarters (73 percent) of the first-lien home loans reported in 2008 were sold during the same year. “Higher-priced loans were often sold through the private securitization process; indeed, loans sold through this process diminished considerably, from about 10 percent of sold loans in 2006 to less than 1 percent in 2008,” the report said. From 1996 through 2005, the share of non-owner-occupant lending rose every year, rising from 6. 4 percent to 17. 3 percent; it has since fallen to 13. 5 percent in 2008. In 2005 and 2006, lenders...

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### FHA Insurance Fund to Fall Below Minimum, Policy Changes Coming

- Published: 2009-09-18
- Modified: 2021-09-01
- URL: https://www.thetruthaboutmortgage.com/fha-insurance-fund-to-fall-below-minimum-policy-changes-coming/
- Categories: Mortgage Tips

The Federal Housing Administration announced today that it will make a series of policy changes in reaction to its capital reserve ratio falling below the congressionally-mandated two percent minimum. "To be clear, the fund's reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new Congressional action," said FHA Commissioner David H. Stevens, in a statement posted on the HUD website. "That said, given the size and scope of the FHA and its importance to today's market, these risk management and credit policy changes are important steps in strengthening the FHA fund, by ensuring that lenders have proper and sufficient protections. " Effective January 1, the FHA will require supervised mortgagees to submit audited financial statements to ensure such entities are adequately capitalized. The FHA may also up the net-worth requirement of mortgagees, from the current $250,000 to $1,000,000, which would likely lead to consolidation in the industry. Mortgage brokers will still to be able to originate FHA-insured loans through their relationships with approved mortgagees, but will no longer receive independent FHA approval for origination eligibility. “These policy changes will require the FHA approved mortgagee to assume responsibility and liability for the FHA insured loan underwritten and closed by the approved mortgagee. ” The FHA will also revise procedures for streamlined refinance transactions, establishing new requirements for seasoning, payment history, income verification, collection of credit score, and so on. “These revisions bring documentation standards for streamline refinance transactions in line with other FHA...

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### How Long After Foreclosure Can I Purchase a Home? Waiting Periods By Loan Type

- Published: 2009-09-16
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-long-after-foreclosure-can-i-purchase-a-home/
- Categories: Foreclosure

Timely mortgage Q&A: “How long after foreclosure can I purchase a home? ” If you’ve recently experienced foreclosure, you may be wondering when you’ll be able to purchase a new home. While it may not be in your immediate sights, there’s probably a good chance you’ll want to get back on track and get into a new home once you do so. Now when I say purchase a home, I mean doing so with the aid of a mortgage; obviously you can buy a house with cash at any time if you’ve got it on hand. But if you're looking to get another mortgage, you'll be subject to various "foreclosure seasoning requirements," which range from as little as one day to seven years, depending on the type of loan and the circumstances. Foreclosures Remain on Your Credit Report for Seven Years The foreclosure record will be on your credit report for 7 years Unless you can dispute it and get it removed So future lenders will know you made a major misstep And this could affect future eligibility A foreclosure will remain on your credit report for seven years, which can be a total drag both on your credit score and your ability to obtain a subsequent mortgage. However, some banks and bad credit lenders will allow borrowers to purchase a home within just a couple years of foreclosure, depending on your credit score and recent credit history. It’s imperative to rebuild your credit as soon as possible after foreclosure...

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### How Long Does a Foreclosure Stay on Your Credit Report?

- Published: 2009-09-15
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/how-long-does-a-foreclosure-stay-on-your-credit/
- Categories: Foreclosure

More mortgage crisis Q&A: “How long does a foreclosure stay on your credit report? ” With all the foreclosures sprouting up, struggling homeowners that are either going through the process or teetering on the brink may be wondering what the repercussions are, aside from the obvious, losing your home. Well, with regard to credit, foreclosure is a very serious delinquency, and one that will stay on your credit report for up to seven years (typically from the date of filing). The filing date for a foreclosure may be the Notice of Default (NOD) in a non-judicial state such as California or the Lis Penden (written notice of pending lawsuit) in a judicial state like New York. Initially, the foreclosure will hit your credit score big time, likely dropping it more than 150 points, pushing even the most prime borrower into subprime status. The amount it will drop will vary based on your credit history.   If your credit score was essentially flawless, you'll see a larger drop.   If your credit score was already dinged up, the drop won't be as severe. Essentially, two borrowers with different credit scores hit with foreclosure will end up in similar places. And they aren't good places... Time Is Your Friend, Kind Of... A foreclosure will stay on your credit report for up to 7 years Typically from the date of filing Expect a big credit score hit initially That will lessen over time if you add positive credit history to your report However,...

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### Do Mortgage Modifications Work?

- Published: 2009-08-13
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/do-mortgage-modifications-work/
- Categories: Mortgage Tips

Here’s some timely mortgage Q&A: “Do mortgage modifications work? ” Since the mortgage mess got in full swing, mortgage lenders and loan servicers have been increasingly offering mortgage modifications to stave off foreclosure, but the results haven’t been too hot. This begs the question as to whether these loss mitigation tools actually work, especially if the homeowners are so underwater that it will take them literally decades to get back above water. Consider the Re-Default Rate While it's still early days The re-default rate on loan modifications Which is when a delinquent borrower is late on their loan mod Has been quite high, putting into the question the success of these offerings What we know so far is that the re-default rate on loan modifications has been so high that many question if they even work, and if they’re worth all the legwork/trouble, not to mention the money involved. Back in May, Fitch Ratings warned that 3 out of 4 mortgage modifications may re-default after just 12 months, a staggeringly high failure rate for what were regarded as potentially home-saving loss mitigation tools. Of course, there may be a reason all these loan modifications are turning out nasty numbers; they don’t actually lower monthly mortgage payments. Are These Really Loan Modifications? Or Just Repayment Plans? While it's easy to claim they don't work You have to look at what's really being offered here If the borrower is set up to fail They'll probably fail That’s right, many of these loan...

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### Are Mortgage Points Tax Deductible?

- Published: 2009-08-05
- Modified: 2024-08-03
- URL: https://www.thetruthaboutmortgage.com/are-mortgage-points-tax-deductible/
- Categories: Mortgage Tips

More mortgage Q&A: “Are mortgage points tax deductible? ” Mortgage points, sometimes known as loan origination fees or discount points, can be tax deductible if certain conditions put forth by the IRS are met. Can You Deduct Mortgage Points In Full or Over Time? You have to meet a series of "tests" from the IRS In order to deduct your mortgage points in full For the tax year you paid them Otherwise the deduction needs to be amortized over the life of the loan Generally, you cannot deduct the full amount of mortgage points in the year paid, as they are considered prepaid interest and must be deducted equally through the life of the loan. For example, if you paid $5,000 in points on a 30-year fixed loan, you'd generally have to amortize the tax break over 360 months. That works out to roughly $167 per year, or $13. 89 per month, and probably isn't enough to get excited about. And you need to itemize to take advantage of the tax break. Fortunately, there are exceptions to deduct all the points in the tax year paid so you can potentially get a bigger refund or lower tax liability. Let's discuss what needs to happen in order to deduct the full amount of points paid in a single tax year. Note:You should receive a form 1098 in the mail from your lender and/or loan originator that details any deductible points you paid during the tax year. You can deduct thefull amountof...

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### Chase Offering 1% Mortgage Cash Back

- Published: 2009-08-03
- Modified: 2018-07-10
- URL: https://www.thetruthaboutmortgage.com/chase-offering-1-mortgage-cash-back/
- Categories: Mortgage Tips

Chase is offering to give customers 1% of their scheduled monthly principal and interest mortgage payments back if they meet certain requirements via its new "1% Mortgage Cash Back" program. How to Qualify for 1% Cash Back Your home loan must be from Chase It can be a home purchase loan or a refinance And you must have your mortgage payment automatically deducted From an eligible Chase checking account The bank will pay customers 1% of their total annual mortgage payments on each anniversary of the loan’s origination date so long as payments are made automatically and in full from a qualifying Chase checking account. The annual reward payment can be applied to your home loan to pay down mortgage principal or customers may elect to receive a simple cash payment deposited into their checking account instead. "We talked to many customers and prospects, and they really liked the idea of having their bank help them pay down their mortgage,” said David Lowman, Chief Executive Officer of Chase Home Lending, in a press release. “They also liked the option of getting the reward in cash. ” The Savings Can Be Substantial Over the Long Term If you get the annual reward and apply it to your home loan each year You could save thousands of dollars over the full loan term And pay off your mortgage slightly ahead of schedule But be sure to consider other lenders that may offer lower mortgage rates and save you even more! On a...

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### Report: Originate to Distribute Mortgages Default More

- Published: 2009-06-18
- Modified: 2024-03-16
- URL: https://www.thetruthaboutmortgage.com/originate-to-distribute-mortgages-carry-higher-foreclosure-rates/
- Categories: Mortgage Tips

Mortgages sold on the secondary market quickly after being originated were underwritten more poorly than loans kept on banks' books, according to a report from the University of Michigan Ross School of Business. The so-called originate-to-distribute (OTD) model, where mortgages are sold in bulk to investors shortly after being originated, allowed banks and mortgage lenders to loosen guidelines and throw underwriting rules out the window in return for big incentives. “Purnanandam's analysis shows that the more a bank participated in the OTD market before the 2007 collapse, the larger its mortgage asset charge-offs and defaults after the disruption,” the report said. “When the market for mortgage loans collapsed, these banks were forced to carry the troubled mortgages on their balance sheets. The research also shows higher foreclosure rates for OTD mortgages than those mortgages kept by the originators. ” Purnanandam blames an “incentive problem” where banks and lenders weren’t as discerning about borrowers if they knew the mortgage would eventually be sold to a third-party. "The screening came down, and the banks were willing to lend to folks they otherwise would not have," said Purnanandam. "We find a systematic pattern in that the banks that were originating and selling their mortgages are suffering disproportionately more. " Data also revealed that banks with lower capitalization were more likely to originate low-quality loans, while banks primarily funded by customer deposit accounts did not originate “excessively inferior” OTD loans. I think he’s missing the data from Washington Mutual, Downey Savings, and Wachovia, but...

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### Home Price Depreciation Leading Cause of Mortgage Default

- Published: 2009-04-13
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/boston-fed-home-price-depreciation-strongest-indicator-of-mortgage-default/
- Categories: Foreclosure, Housing Market, Mortgage Tips

A report released by the Boston Fed last week found that home price depreciation is a leading cause of mortgage default, challenging common arguments that attribute rising delinquencies to unaffordable mortgage payments. “We find that the DTI ratio at the time of origination is not a strong predictor of future mortgage default,” the report said.    “A simple theoretical model explains this result. ” “While a higher monthly payment makes default more likely, other factors, such as the level of house prices, expectations of future house price growth and intertemporal variation in household income, matter as well. ” The economists estimated that a 10 percentage-point increase in the debt-to-income ratio increases the probability of 90-day delinquency by just seven to 11 percent. Conversely, a one percentage-point increase in unemployment rate raises this probability by 10-20 percent, and a 10 percent fall in house prices raises it by more than half. Their findings are important, given the fact that streamlined loan modification programs currently on offer focus on getting a struggling borrower’s housing payment down to a specific debt ratio. It may also explain why re-default rates are exceedingly high, and puts into question the benefit of a loan modification versus foreclosure. “Investors also lose money when they modify mortgages for borrowers who would have repaid anyway, especially if modifications are done en masse, as proponents insist they should be,” the report noted. “Moreover, the calculation ignores the possibility that borrowers with modified loans will default again later, usually for the...

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### The Worst Loan Modification Companies

- Published: 2009-04-02
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/the-worst-loan-modification-companies/
- Categories: Mortgage Tips

It’s a relatively new business, but like any other, it’s been infiltrated by fraud and scams in no time at all. That’s a good thing for companies like MFI-Mod Squad, which investigates loan modification fraud. Yesterday, the company put out a list of the twenty worst loan modification companies, though I don’t think it was an April fool’s joke. “Many people have been asking me to post a list of unreliable loan modification companies,” said Steve Dibert, President of MFI-Mod Squad, in a release. “I’m happy to do so because it can help homeowners avoid scams. ” The companies that made the list below haven’t been approved to charge an upfront fee and claim to offer a money-back guarantee, big red flags in the loan mod world. They’ve either failed to come through with the promised loan modification or refused to offer a refund to homeowners. All but Samaritan Financial and Mortgage Mitigation Clearing House are located in California, a state that requires loan modification companies to be approved by the Department of Real Estate (DRE) to charge upfront fees (law firms are exempt). Last week, the FTC cracked down on two loan modification companies, “Hope Now Modifications” and “New Hope Modifications”, which posed as affiliates of foreclosure alliance Hope Now. The List: •   Green Credit Solutions- (now approved by MFI-Mod Squad) •    Peoples First Financial •    United Law Group •    Excel Loss Mitigation •    Nations Choice •    USA Mortgage Aid •    Mortgage Assistance Center •    Bank Modifications, Inc •    Apply2Save...

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### California Realtors Offer to Make Mortgage Payments

- Published: 2009-04-02
- Modified: 2021-08-07
- URL: https://www.thetruthaboutmortgage.com/california-realtors-offer-to-make-mortgage-payments/
- Categories: Mortgage Tips

The California Association of Realtors has become the latest group to offer to make mortgage payments if you lose your job after purchasing a new home. It applies only to first-time homebuyers (or those who haven’t owned a home for three years), who open escrow beginning today and close by the end of the year in the beautiful state of California. To be eligible, the borrower must be under the age of 70 and use a California Realtor in the transaction; self-employed borrowers are ineligible. If you do qualify, and subsequently lose your job, CAR’s "Mortgage Protection Program" will provide monthly payments of up to $1,500 for six months (have they seen home prices in California? ). The program has a $1 million cap, so only about 3,000 families could benefit from the initiative. Recently, homebuilder Lennar offered a similar homebuyer insurance policy via its “Peace of Mind” mortgage payment protection program. The company, which called loss of employment the number reason for mortgage default, said it would cover up to six months of mortgage payments if a new homeowner lost their job involuntarily. Personally, I feel this whole new trend of payment protection is troubling, because these programs seem to promote irresponsibility. If you think your job is in jeopardy, or you make the decision to buy a home based on the fact that you might be covered temporarily if you lose your job, perhaps it’s not the best time to purchase a home. I think one important requirement...

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### Indymac Federal Becomes OneWest Bank Group

- Published: 2009-03-20
- Modified: 2024-06-03
- URL: https://www.thetruthaboutmortgage.com/indymac-federal-becomes-onewest-bank-group/
- Categories: Mortgage News

The FDIC completed its sale of Indymac Federal Bank yesterday to OneWest Bank Group LLC, a newly formed federal savings bank headquartered in Pasadena, CA. Beginning today, 33 branches of Indymac Federal will reopen as OneWest bank branches, and depositors of Indymac will automatically be a part of the new, privately-held thrift. In a press release, the regional bank said it will offer deposits, along with conforming loans and jumbo mortgages via its retail platform to its Southern California customers. OneWest also acquired the profitable reverse mortgage unit Freedom Financial, along with its $21. 3 billion loan portfolio, and $150 billion in forward mortgage servicing rights. As part of a loss share agreement with the FDIC, OneWest will continue to modify mortgages in the single family residential portfolio under the original loan modification model established during the takeover. The FDIC said Indymac lost $2. 6 billion in the fourth quarter thanks to continued deterioration in the real estate market, with the total estimated loss to the Deposit Insurance Fund (DIF) a staggering $10. 7 billion. “As of January 31, 2009, IndyMac Federal had total assets of $23. 5 billion and total deposits of $6. 4 billion. OneWest has agreed to purchase all deposits and approximately $20. 7 billion in assets at a discount of $4. 7 billion. The FDIC will retain the remaining assets for later disposition,” the agency said in a release. Indymac was seized by the FDIC back in mid-July after a spectacular run on the bank’s deposits...

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### HSBC to Halt Lending, Shutter HFC and Beneficial

- Published: 2009-03-02
- Modified: 2018-03-01
- URL: https://www.thetruthaboutmortgage.com/hsbc-to-halt-lending-shutter-hfc-and-beneficial/
- Categories: Mortgage Tips

HSBC announced today it will close both its HFC and Beneficial units, resulting in thousands of layoffs. The consumer lending companies offer a number of products, including home mortgages, home equity loans, and personal loans.   Combined, the two units have 775 branches in 45 states. “HSBC will continue to service and collect the existing receivable portfolio as it runs off, while continuing efforts to reach out and assist mortgage customers with their loan repayments and home preservation,” the company said in a press release. “The Consumer Lending branch offices, branded in the US as HFC and Beneficial, will cease taking new loan applications as soon as practical and substantially all branch offices will be closed as soon as commitments to customers are satisfied. “ The company said it remains committed to the “US financial services market” and its remaining U. S. based business units, such as its credit card subsidiary. In late November, HSBC halted wholesale and correspondent lending thanks to ongoing disruptions in the credit markets. At the time, the bank said it serviced over 400,000 first mortgages valued at over $68. 8 billion, and more than 120,000 home equity lines with value in excess of $3. 5 billion. HSBC has also shut down most of its structured credit and mortgage-backed securities distribution operations. The company reported a 2008 pretax loss of $15. 5 billion in its U. S. operations today, compared with profit of $91 million in 2007. Closed Offices Was Just the Beginning Back in 2007,...

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### Countrywide Name to be Retired in April

- Published: 2009-02-19
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/countrywide-name-to-be-retired-in-april/
- Categories: Mortgage Tips

Sad news folks.   On April 27, Bank of America will re-brand Countrywide Financial to “Bank of America Home Loans,” according to a report today in the WSJ. Now it’s unclear if they’ll have a ceremony or hang an old jersey on the wall, but it’s surely the end of the Countrywide brand as we know it. Barbara Desoer, the B of A executive in charge of the mortgage unit, implied that the move will allow the bank to separate itself from the former mortgage lender’s not-so-stellar reputation. The name change is also aimed at improving its customer relationship, using a name that’s more associated with “responsible lender” and “accountable,” as opposed to say “fraud” and “ripoff. ” Desoer said the new integrated unit plans to hire 1,000 new employees and move another 500 to mortgage processing from home-equity processing in light of the recent refinance bonanza. Of course, 7,500 employees are still set to lose their jobs as a result of the merger, which was completed last July. Since then, Bank of America has been working around the clock to settle scores of lawsuits and customer complaints. In early October, the Charlotte-based bank announced a loan modification program aimed at helping 400,000 former Countrywide borrowers get into more sustainable loans. And just last week, Countrywide settled with the Colorado Attorney General, agreeing to provide roughly $6 million in aid to eligible borrowers who were pushed into unaffordable, high-cost loans. While the name Countrywide Financial may be absent from future...

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### Equifirst to Halt Lending Operations

- Published: 2009-02-17
- Modified: 2021-08-06
- URL: https://www.thetruthaboutmortgage.com/equifirst-to-halt-lending-operations/
- Categories: Mortgage Tips

Equifirst announced today that effective immediately, it will be ceasing lending operations. Going forward, the Charlotte, North Carolina-based mortgage lender will no longer accept applications for “any type of Mortgage Loan product. ” “EquiFirst will continue to process any completed Mortgage Loan application and will notify the submitting Broker of the status of such Mortgage Loan application upon completion of underwriting and processing,” the company said on its website. “All previously submitted Mortgage Loan applications must continue to comply with the terms of the Wholesale Mortgage Broker Agreement ("Agreement") currently in effect between the Broker and EquiFirst. This action will not affect current Mortgage Loan applications that are already scheduled to close. ” Prior to the announcement, the company was offering run of the mill wholesale FHA loan products, meaning its departure wasn’t all that unexpected. Over the second half of 2008, Equifirst transitioned its product line to be a “fully functional FHA lender,” closing more than 1,700 loans during the period. As of February 17, underwriting turn times took a whopping 11 days, while conditions took an average of three days to be reviewed. Equifirst was founded in 1990, and operated as both a retail and wholesale mortgage lender through the years; the company was subsequently acquired by Barclays Capital Real Estate Holdings Inc. in 2007 (yes, bad timing). In mid-2007, the company was offering an assortment of subprime, Alt-A, and jumbo loan products, while sporting the slogan, “Non-Conforming Results. ” Shortly after, Equifirst cut more than 400 jobs...

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### Former Fannie Mae Employee Attempted to Destroy All Data

- Published: 2009-01-30
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/former-fannie-mae-employee-attempted-to-destroy-all-data/
- Categories: Mortgage News

A former Fannie Mae contracted employee was indicted for computer intrusion this week for allegedly planting a malicious script on the company’s servers in an effort to wipe out all its data. A federal grand jury indicted Rajendrasinh Babubhai Makwana earlier this week; he is scheduled to be arraigned today and faces up to 10 years in prison if convicted. After being let go on October 24, a senior engineer at Fannie Mae discovered the malicious script embedded in a “routine program,” and quickly took appropriate measures to remove it. The code was apparently entered into the system on October 24, and set to launch tomorrow, January 31, with the virus designed to propagate through Fannie’s 4,000 computer servers and destroy virtually all data. The implications of such an attack could have been staggering for the company, as it seems to have enough problems managing its business without rogue employees intentionally trying to destroy it. Of course, one could argue that wiping the data clean could be a positive for the troubled mortgage financier. It’s unclear why Makwana, hired to create computer scripts for Fannie Mae, was let go prior to the incident. In related news, Fannie Mae has reportedly reached an agreement with consumer group Neighborhood Assistance Corp. of America to rework more troubled mortgages. The company has also extended its eviction suspension another month, until February 28. The suspension, part of the company’s so-called National Real Estate Owned (REO) Rental Policy, applies to all single-family properties, including owner-occupied...

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### The Hummers Are Back

- Published: 2009-01-21
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/the-hummers-are-back/
- Categories: Mortgage News

In recent weeks, I’ve seen an increasing number of tank-like Hummers cruising the streets of Los Angeles, a troubling trend clearly tied to the big drop in gas prices. Drawing a parallel to housing, my fear going forward is that the unprecedented drop in mortgage rates will lead to another ill-conceived housing bonanza. And while underwriting guidelines have tightened and oversight is seemingly improved, it appears we could fall right back into the same mess that got us here. Which brings us to a larger issue, whether we even care about the fundamental problems, or if we simply want it all swept under the rug? When gas prices fell, the SUVs and Hummers came out in droves, not because global warming worries subsided, but because you no longer had to shell out $100 to fill the tank. And now that mortgage rates are at record lows, mortgage lenders are hiring again while scores of borrowers inquire about refinance opportunities. Meanwhile, homebuilders are trying to lower rates via government subsidies to spark new home sales and dump their stagnating inventories on unsuspecting buyers. On top of that, U. S. Representative Al Green introduced legislation this week to bring back seller-financed down payment assistance, despite the fact that the risky loans could sink the overworked FHA. Unfortunately, all these moves aim to prop up sagging home prices, which still remain much too high, while we continue to ignore the fact that the system is broken. Let’s face it, Americans don’t want to...

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### Skaters Benefiting from Foreclosure Crisis

- Published: 2009-01-06
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/skaters-benefiting-from-foreclosure-crisis/
- Categories: Mortgage Tips

While record numbers of foreclosures continue to wreak havoc on home prices and the economy as a whole, one unlikely group seems to be benefiting immensely. Young skateboarders looking for an empty pool to practice and refine their tricks in are finding it increasingly easy to find that perfect spot as more and more homes become abandoned. According to an article in the NY Times, some are using real estate websites and Google Earth to track down homes that have been foreclosed on, and then toting water pumps and buckets, draining pools and diving right in. In fact, pool skating is seeing a resurgence in places like hard-hit Fresno, California, as skaters have more empty pools at their disposal than they know what to do with. And though they risk trespassing charges for skating in abandoned pools, those who drain the pools are actually providing a service, as dirty standing water can become a breeding ground for West Nile virus. In California, an estimated 5,000 abandoned pools can be found in Sacramento County, some of which are subject to fines up to $1,000 a day for pools left with filthy standing water. Of course, on the other end of the spectrum are the pool builders, who have seen orders drop precipitously, leading to widespread layoffs and closures. In scorching Phoenix, AZ, a swimming pool mecca, residential pool permits were down about fifty percent from 2007, while the company that once sponsored the famous pool at Chase Field where the Diamondbacks...

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### Bailout is 2008 Word of the Year

- Published: 2008-11-26
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/bailout-is-2008-word-of-the-year/
- Categories: Mortgage Tips

Another year, another word of the year tied to the ongoing mortgage crisis. Merriam-Webster unveiled its word of the year for 2008, selecting the term “bailout” because it received the highest intensity of lookups over the shortest period of time. The online dictionary defines it as “a rescue from financial distress,” though more opinionated readers could perhaps express it more strongly. Regardless, the word bailout has been used frequently in the media, from discussing the fate of Fannie, Freddie, and the big three automakers, to speaking of foreclosure moratoriums and loan modifications for individual borrowers. The term bailout was also a large aspect of the rhetoric spewed by both presidential candidates as they tried to get a handle on the ongoing housing crisis, a top issue during the storied campaign. A number of other words in the top ten related to the presidential election, including words like vet, socialism, maverick, bipartisan, and rogue. Words in the top ten that potentially related to the financial crisis included trepidation, precipice, and turmoil. Of course it’s not surprising that this year’s word of the year has a lot to do with the mortgage crisis, considering last year’s winner was “subprime. ” (photo: gaetanlee)

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### Downey Savings Shut Down by FDIC

- Published: 2008-11-21
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/downey-savings-shut-down-by-fdic/
- Categories: Mortgage Tips

Downey Savings was shut down late Friday by the FDIC on a busy day where two other banks were also seized. US Bank has agreed to take on the company’s banking operations, including its 170 branches in California and five in Arizona. The news doesn’t come as much of a surprise, given Downey’s dismal share price and the admission of a consent order demanding it raise capital by year-end or face conservatorship. It’s unclear to what extent the Newport Beach, CA-based bank and mortgage lender was still lending, given it dropped its wholesale lending unit back in mid-October. That channel had historically provided roughly 80 percent of all single-family loan origination volume. As of the end of the third quarter, Downey had total deposits of $9. 7 billion and $12. 8 in total assets, many of which were non-performing. PFF Bank and Trust Acquired by US Bank It was a busy afternoon for US Bank, who also agreed to acquire Pomona, CA-based PFF Bank and Trust, along with its $3. 7 billion in assets, $2. 4 billion in deposits, and 37 branches. The combined failures will cost the FDIC roughly $2. 1 billion, further diminishing its already vulnerable Deposit Insurance Fund (DIF). A third bank, The Community Bank, located in Loganville, Georgia, was also seized. A total of 22 banks have failed so far this far, including five in the state of California alone. I suspect a number of other banks will fail within the next month as well, given...

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### Hovnanian Wants Mortgage Rates Cut to Three Percent

- Published: 2008-11-17
- Modified: 2018-01-08
- URL: https://www.thetruthaboutmortgage.com/hovnanian-wants-mortgage-rates-cut-to-three-percent/
- Categories: Mortgage News

One the leading U. S. homebuilders has called for the government to temporarily cut mortgage rates to make homeownership more affordable and stimulate sales. Ara Hovnanian, CEO of K. Hovnanian Homes, suggested to Bloomberg TV that interest rates should be temporarily slashed to three percent on 30-year fixed-rate mortgages in 2009. The rate would then rise to four percent in 2010, though it’s unclear what would happen after that. Hovnanian called the crisis a “problem of supply and demand,” which he believes can be solved by making homes affordable to everyone. New home sales fell to a seasonally adjusted annual rate of 464,000 units in September, off more than 33 percent compared to same period a year earlier. Flagging home sales have made it increasingly difficult for homebuilders to survive, driven by tight credit conditions that have pushed many potential buyers out of the market. K. Hovnanian has homes for sale in 431 communities in 47 markets throughout the United States, and has been trying desperately to move inventory, proposing stunts like this. Shares of Hovnanian were down a penny, or 0. 34%, to $2. 97 in afternoon trading on Wall Street, not far from their 52-week low. In late October, Realogy proposed a similar move, calling for a short-term government buy-down of interest rates to at least 4. 5 percent. It seems they’re trying everything to keep the party going, with no regard for the U. S. economy going forward.

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### Subprime Wins Ninth Race at Aqueduct Park

- Published: 2008-11-03
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/subprime-wins-ninth-race-at-aqueduct-park/
- Categories: Mortgage Tips

The word “subprime” has undoubtedly been associated with massive losses over the past couple of years, but last Thursday, quite the opposite was true. It took just one minute and 38 seconds for two-year-old filly “Subprime” to round the one-mile dirt track at Aqueduct Park and collect the $52,800 purse in the ninth race. Of course it wasn’t much of a surprise, given the fact that the horse with the seemingly unfashionable name was the favorite to win the final race of the evening at the storied horse track in Queens, New York. Subprime, ridden by jockey Richard Migliore, took in $6. 30 for the win, edging out Reforestation and Castanet while giving gamblers who took the sure thing something to cheer about it. And the horse clearly has deep Wall Street roots, having been sired by stallion “High Yield” at the height of the subprime craze. Funnily enough, back in mid-August, both Fannie Mae and Freddie Mac announced they would no longer purchase or securitize any mortgages deemed “subprime” in New York in accordance with the state’s recently passed mortgage bill. At least something in subprime is working out, aside from all those loan modifications... (photo: rogerbarker)

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### Bank of America Launches Modification Program to Satisfy Countrywide Lawsuits

- Published: 2008-10-06
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-launches-modification-program-to-satisfy-countrywide-lawsuits/
- Categories: Mortgage News

So I guess there was a point to the many, many state Attorney General lawsuits filed against Countrywide Financial over the past year. Today, Bank of America announced the launch of a program aimed at modifying loans for up to 400,000 former Countrywide borrowers as part of an agreement with those very AGs. Beginning December 1, Countrywide mortgage servicing personnel will be ready to reach out to eligible customers, but foreclosure sales will not be initiated or advanced for borrowers deemed likely to qualify for assistance until then. The program will be focused on owner-occupied borrowers who are either seriously delinquent or at risk of becoming delinquent thanks to an interest rate reset or payment recast. Modification options will include interest rate reductions, principal reductions on negative amortization loans, and FHA refinancing under the newly launched Hope for Homeowners program. The home retention program aims to provide up to $8. 4 billion in mortgage rate and principal reductions on hundreds of thousands of troubled mortgages. Additionally, Bank of America is launching a $150 million “Foreclosure Relief Program” to compensate Countrywide servicing customers who went through or who are at risk of foreclosure. Another program will make payments of up to $70 million to Countrywide customers who face “imminent foreclosure” to provide them with help as they “transition from home ownership. ” That’s a nice way of putting it.   Helping them transition back to the apartment they should have stayed in before being told they could afford a $500,000 home....

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### Washington Mutual Shut Down by OTS

- Published: 2008-09-26
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/washington-mutual-shut-down-by-ots/
- Categories: Mortgage News

So much for the merger with Chase; instead the largest bank failure in U. S. history. Late Thursday evening, Washington Mutual was shut down by the Office of Thrift Supervision (OTS) and the FDIC was named receiver, making it the 13th failure of the year. At the same time, JP Morgan Chase acquired the assets of the failed thrift for $1. 9 billion, essentially protecting both the bank and the FDIC from a run on deposits that could have been much more spectacular than the Indymac bank run. The OTS noted that depositors had pulled out $16. 7 billion in deposits since September 15, essentially sapping liquidity and leading to the bank’s collapse. Chase will take on the company’s 2,200 retail branches, $188. 3 billion in deposits, and its $176 billion loan portfolio. FDIC Chairman Sheila C. Bair said the move is “simply a combination of two banks,” and that it will be business as usual come Friday morning. However, it’s not business as usual for shareholders, who will likely be wiped out when the company files for bankruptcy protection. Last week, Goldman Sachs was reportedly shopping the ailing thrift, garnering interest from a number of banks, including Citi, Wells Fargo, Chase, and Banco Santander. But ultimately none of the above seemed interested in acquiring the Seattle-based bank’s toxic portfolio of mortgages, many of which are default-prone option-arms. It’s been a tough year for WaMu, who halted wholesale lending, shut much of its retail mortgage operation, and raised $7 billion...

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### Website Selling “I Hate Mortgage Brokers” T-Shirts

- Published: 2008-07-16
- Modified: 2013-09-10
- URL: https://www.thetruthaboutmortgage.com/website-selling-i-hate-mortgage-brokers-t-shirts/
- Categories: Mortgage Tips

A website popped up today selling “I Hate Mortgage Brokers” t-shirts and other various products such as baseball hats and teddy bears to foreclosure victims looking for a little bit of payback. While I’m not sure why one would purchase a teddy bear with the message, “Mortgage Brokers SUCK! ” on it, this clearly reveals the mortgage crisis’s firm foothold in pop culture. The site selling the t-shirts asks if you’re “angry at the mortgage industry,” and offers pissed off Americans a chance to stick it to the man by donning a t-shirt with the message, “Beware of the Mortgage Broker” emblazoned on the front. If that’s not clever enough for you, you can grab a t-shirt with the phrase, “I hateLawyersMortgage Brokers! ” Of course, if you’ve “lost everything” as the site mentions, you’d have to mull it over before spending what little you have left on a t-shirt that costs $20, but hey, that’s your decision. I must say it’s a bit sad that the mortgage broker continues to get slammed for the mortgage crisis, as it’s clearly more complicated than that. There were certainly scores of bad brokers and loan officers out there, but without the opportunity to push incentive-laden option arms and other toxic mortgages offered by banking giants and mortgage lenders, the crisis would not be where it is today. Oh yeah, and the site also has an online petition aimed at lobbying for stronger mortgage industry regulation, with the goal to gather 1. 5...

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### In Pictures: Indymac Bank Run

- Published: 2008-07-14
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/in-pictures-indymac-bank-run/
- Categories: Mortgage Tips

Our street team headed down to Encino, CA today to take a look at what we thought would be a fairly busy day at bank and mortgage lender Indymac. But what we saw when we arrived was beyond anything we had expected, as the line out in front of Indymac meandered along Ventura Blvd. for about a block. The scene was pretty extreme, with several police cars, news vans, and scores of anxious customers standing out in the heat behind yellow caution tape in what appeared to be a line you’d see only at Disneyland. There must have been a couple hundred people standing in line, laying on the ground, shielded under umbrellas, or huddled in front of the branch peering inside, nervously waiting for answers. One passerby we talked to thought the whole thing was ridiculous, noting that most if not all of these people’s deposits are FDIC insured. Insured or not, we knew it’d be a bit of a scene, just not this bad. Hello mortgage crisis! Click on the thumbnails below to see larger shots or check out the giant originals here.

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### Introducing Indymac Federal Bank

- Published: 2008-07-13
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/introducing-indymac-federal-bank/
- Categories: Mortgage News

Tomorrow morning, Indymac Federal Bank will open its doors, largely to panicked and upset customers inquiring about their mostly-insured deposits. On Friday, the FDIC announced that it had assumed control of the struggling mortgage lender, creating Indymac Federal Bank as its successor. At the time of closing, the agency said Indymac had roughly $1 billion in potentially uninsured deposits held by about 10,000 unlucky depositors, but pledged an advance equal to 50 percent of the uninsured amount to those affected. And as the FDIC begins to sell Indymac’s assets, including their seemingly successful reverse mortgage unit Freedom Financial, depositors could receive more of their currently at-risk cash. But despite the fact that about $18 billion in deposits are fully insured and protected, the bank will likely see a run tomorrow as wary customers err on the side of caution. The OTS noted that customers withdrew more than $1. 3 billion in deposits in just 11 days after Senator Charles Schumer’s letter regarding the bank’s stability was made public, which they attributed to the bank’s failure. Indymac is the largest OTS-regulated thrift ever to fail and the second largest financial institution failure in U. S. history. It is also the fifth FDIC-insured bank failure so far this year, and speculators believe many more will follow, prompting Chairman Sheila Bair to release a press statement regarding the health of the banking industry. Bair did her best to assure anxious customers, and was quick to point out that Indymac’s $32 billion represents only...

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### Introducing Wachovia’s New Three-Pronged Option Arm

- Published: 2008-06-30
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/introducing-wachovias-new-three-pronged-option-arm/
- Categories: Mortgage Tips

Wachovia announced today that it would no longer offer the negative amortization payment option on its popular and now infamous “Pick-a-Payment” loan program amid heightened criticism and rising defaults. The Charlotte-based bank and mortgage lender said it will continue to offer the option arm with three payment choices, including the standard 30-year principal and interest option, a 30-year interest-only option, and a 15-year payment option. The company is also waiving all prepayment penalties tied to the risky loans in order to give borrowers the freedom to refinance into more favorable programs if they so choose, assuming they’re not completely underwater. It’s likely today’s action is tied to the recent enlistment of Goldman Sachs, who was hired to explore alternatives for the company’s mismanaged loan portfolio. The company acquired a huge portfolio of the so-called "toxic loans" via its acquisition of Golden West in 2006, for which it paid a whopping $25 billion. And as recently as late March, Wachovia was actively pitching the option arm loan program on national television, despite the fact that the mortgage industry was already in tatters. Two weeks ago, Washington Mutual announced that it was discontinuing all negative amortization loan programs, joining Countrywide who revealed in late April that it would scrap the complicated loans after its merger with Bank of America. Shares of Wachovia were off 62 cents, or 3. 82%, to $15. 60 in afternoon trading on Wall Street, hovering slightly above their 52-week low. The company also noted today that it has...

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### Service Launched to Help Pets Affected by Foreclosure

- Published: 2008-06-23
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/service-launched-to-help-pets-affected-by-foreclosure/
- Categories: Mortgage News

A new non-profit called “No Paws Left Behind” was launched today to help foreclosure victims find homes for their pets if they’re unable to take them to their next place of residence. So-called “foreclosure pets” are surging in numbers as millions of U. S. homeowners face the prospect of losing their homes, putting millions of pets at risk as well who are often left at abandoned homes without necessary care. “In an effort to help families coping with the devastating foreclosure process, we are bringing awareness to the growing trend of abandoned pets and offering possible solutions,” said Cheryl Lang, founder of No Paws Left Behind, in a statement. “We founded No Paws Left Behind to provide homeowners facing foreclosure with a resource for finding alternative housing for their pets during this difficult time. Through visiting our Web site, borrowers are provided with an array of housing options for their pets, whether a no kill shelter or temporary foster care. No Paws Left Behind will also provide monetary assistance for pet deposits required by new landlords. ” Borrowers facing foreclosure who are unable to care for their pets can visit NoPawsLeftBehind. org to search for local no-kill shelters and other housing providers by zip code. The website also includes helpful tips for both homeowners and mortgage lenders to help minimize the epidemic. Additionally, the organization is working to repeal current law that prevents the removal of pets from abandoned properties before the eviction process, leaving inspection officers with little choice...

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### Down Payment Assistance Loans Drive $4.6 Billion Loss at FHA

- Published: 2008-06-09
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/fha-down-payment-assistance-loans-drive-46-billion-loss/
- Categories: Mortgage News

FHA Commissioner Brian D. Montgomery said today that his organization realized $4. 6 billion in “unanticipated long-term losses,” largely due to an increased number of seller-funded loans in its portfolio. He noted that FHA loans made to borrowers who relied upon seller-financed down payment assistance went into foreclosure three times more than loans extended to borrowers who supplied the down payment themselves. As a result, the FHA plans to submit a request to the Federal Register immediately to reopen public comment regarding the rule that allows such assistance, a crucial step as these loans now account for one third of the FHA’s loan portfolio. “Legislation must address the risks associated with down-payment assistance that comes from the seller or any other person or entity that stands to benefit from the transaction financially,” he told the National Press Club in prepared remarks. “The IRS, GAO and our own Inspector General have previously expressed concerns with these circular financing schemes. ” He stressed that the FHA remains solvent (he said so twice in fact) with $21 billion in reserves, but warned that no insurance company would be able to survive after taking these types of losses year after year. “Unless we take action to mitigate these losses, FHA will soon either have to shut down or rely on appropriations to operate,” something it has never relied upon in its 74-year history. Montgomery called for common sense lending, like verifying income, assets, credit, and the ability to repay, while also pushing the HUD’s...

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### Mortgage Bust Market Cap Impact

- Published: 2008-04-16
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/mortgage-bust-market-cap-impact/
- Categories: Mortgage News

What a difference a mortgage crisis can make. Take a look at select mortgage stocks and their market cap declines from June 2007 to the present date to see the magnitude of the ongoing credit crunch. The companies below are listed by their market cap from June 2007 (compiled by OECD), followed by their market cap as of their April 16, 2008 closing price. Bank of America was worth $216. 92 billion, now $164. 77 billion Barclays was worth $91. 28 billion, now $62. 88 billion BB&T was worth $22. 35 billion, now $17. 82 billion Bear Stearns was worth $20. 24 billion , now $1. 48 billion Chase was worth $162. 73 billion, now $152. 85 billion Citi was worth $255. 14 billion, now $122. 95 billion Countrywide was worth $20. 95 billion, now $2. 9 billion Credit Suisse was worth $74. 26 billion, now $54. 52 billion Deutsche Bank was worth $72. 38 billion, now $59. 92 billion Fifth Third was worth $21. 18 billion, now $10. 71 billion First Horizon was worth $4. 93 billion, now $1. 59 billion Goldman Sachs was worth $86. 58 billion, now $66. 64 billion IndyMac was worth $2. 15 billion, now $353 million KeyCorp was worth $13. 34 billion, now $9. 68 billion Lehman Brothers was worth $39. 50 billion, now $23. 10 billion M&T Bank was worth $11. 42 bilion, now $9. 89 billion Merrill Lynch was worth $71. 50 billion, now $44. 06 billion Morgan Stanley was worth $89....

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### Study: Originate to Distribute Model to Blame for Mortgage Crisis

- Published: 2008-04-01
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/study-originate-to-distribute-model-to-blame-for-mortgage-crisis/
- Categories: Mortgage Tips

Research and consulting firm Celent released a study yesterday titled, “Pathology of the US Mortgage Crisis,” which examines the evolution of the credit crunch from its humble beginnings as a U. S. subprime mortgage problem to the subsequent global liquidity crisis that ensued. The Boston-based firm noted that the global credit market saw a “flight of uncertainty” over the past nine months that led to billions in associated write-downs. It also led to the fall of investment banking giant Bear Stearns, and multiple emergency rate cuts by the Fed. Not to mention scores of layoffs and lender closures throughout the United States, including the collapse of former #1 mortgage lender Countrywide, Greenpoint, NovaStar, and many other big names. Shift from Originate and Hold to Originate to Distribute Celent noted that a big factor behind the mortgage crisis was the shift from an “originate and hold” mentality to an “originate to distribute” model. In the past, banks would offer loans to their customers and hold them in their portfolios until they were paid off. This meant they cared an awful lot about loan quality, and took the time to underwrite loans properly. Ditto for the types of loans they offered, and the risk they took. But things changed in the early 2000s, where it turned into a veritable game of hot potato as loans were sliced and diced, packaged and sold. Essentially, most originating banks and mortgage lenders only held onto mortgages long enough to sell them off to investors, promoting...

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### Wachovia Pitching Pick-a-Pay Mortgage Amid Crisis

- Published: 2008-03-26
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/wachovia-pitching-pick-a-payment-mortgage-amid-crisis/
- Categories: Mortgage Tips

Yesterday I saw a television ad from Wachovia touting their “Fixed Rate Pick-a-Payment Mortgage” as a sensible choice for homeowners. It struck me as a bit odd and out of place for the Charlotte, NC-based bank to showcase a hybrid option-arm loan program on national television with all the negative press swirling over the last year and change, especially given the fact that our nation is in the midst of a major mortgage crisis. However, it didn't seem to stop them from running these commercials claiming the option arm can lower monthly mortgage payments and free up cash so homeowners can put their money to good use elsewhere, like socking away funds for retirement. I took a look at the fine print on their website and discovered that this option arm is just as toxic as the ones being pitched years ago by Countrywide and other lenders when home prices were actually appreciating. The loan program has the standard four payment options, with 1-yr, 3-yr, or 5-yr fixed options, and of course a minimum payment option which allows for negative amortization up to 125% of the original loan amount. Although they do throw in this disclaimer in the small print: “Choosing the minimum payment will increase your mortgage balance and the aggregate amount you are required to pay over the mortgage term. You should compare the advantage of using your home's equity for other purposes against the disadvantage of the increase to your mortgage balance. ” It’s hard to consider...

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### Company Launched to Buy Distressed Mortgage Assets

- Published: 2008-03-20
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/company-launched-to-buy-distressed-mortgage-assets/
- Categories: Mortgage Tips

As the mortgage crisis deepens, it’s clear that opportunities will present themselves, and some winners must emerge. And so PennyMac, or Private National Mortgage Acceptance Co. , has been launched to take advantage of the dislocation in the U. S. mortgage market. The Calabasas, CA-based company, headed by Stanford L. Kurland, former Countrywide CFO and COO, plans to invest in and service mortgage assets on behalf of private investors. PennyMac plans to acquire loans from banks and mortgage lenders looking to reduce their mortgage exposure, which the company believes will promote homeownership in the long term. Interestingly, the new company’s management includes 10 former Countrywide employees, working just miles away from Countrywide’s headquarters. Earlier this week, billionaire Wilbur Ross reached an agreement to acquire H&R Block’s Option One servicing unit, containing roughly $53 billion in loans. In October, Ross acquired the servicing rights of $42 billion in mortgages from American Home Mortgage, and assuming the Option One deal is finalized, WL Ross & Co. LLC would be the country’s second-largest subprime servicing portfolio after Countrywide. A month later, NovaStar Financial agreed to sell its servicing rights to Morgan Stanley’s Saxon Mortgage for $175 million in cash. And in December, Goldman Sachs agreed to buy C-Bass's loan servicing unit Litton Loan Servicing. Mortgage servicing, which involves the collection of monthly mortgage payments and subsequent late fees, has been one of the few profitable areas of the mortgage industry over the last year and change. Update: Fremont General has agreed to sell...

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### Top 10 Most Admired Mortgage Companies

- Published: 2008-03-12
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/top-10-most-admired-mortgage-companies/
- Categories: Mortgage Tips

Fortune magazine released its top 10 list of the most admired mortgage companies in the March 17th edition, which begs the question: What makes a company admirable? Topping the list was LandAmerica, a title insurance company that reported a fourth-quarter loss of $45. 9 million, closed 160 offices, and currently faces an antitrust lawsuit that claims it artificially inflated rates. Second was Washington Mutual, a Seattle-based thrift that saw its shares fall to their lowest point since 1995 last week amid concerns it faced billions more in write-downs despite recording its first quarterly loss since 1997. In a close third was Fidelity National Financial, a title insurance provider that was also involved in the previously mentioned antitrust suit and whose shares are trading near a 52-week low. Fourth was First American, another title insurer/appraisal company that was part of the aforementioned antitrust suit, which posted an annual loss for 2007, cut 1,100 jobs, and whose eAppraiseIT unit was accused of colluding with Washington Mutual to inflate appraised values. That brings us to Sovereign Bancorp, which posted a $1. 6 billion loss and scrapped its dividend amid higher credit losses, leading the company to fire its CFO following the CEO's departure last year. A sale to Santander Bank is also starting to slip away. Next is IndyMac, the Pasadena, CA-based mortgage lender that recently posted its first annual loss, cut 24 percent of its staff, and warned this week that it could miss first-quarter estimates as well. Stewart Title followed, a...

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### Bank of America to Buy Countrywide

- Published: 2008-01-11
- Modified: 2018-08-30
- URL: https://www.thetruthaboutmortgage.com/bank-of-america-buys-countrywide/
- Categories: Mortgage News

Rare Opportunity for BofA? As expected, Bank of America announced this morning that it would buy struggling mortgage lender Countrywide Financial for $4. 1 billion in stock, rescuing the nation's top lender while bolstering its own position. "Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation's premier lender to consumers," Bank of America CEO Ken Lewis said in a statement. Shareholders of Countrywide will receive 0. 1822 of a share of Bank of America stock in exchange for each share of Countrywide, representing a 7. 5 percent discount from Thursday's close. "We believe this is the right decision for our shareholders, customers and employees," said Angelo Mozilo, Countrywide chairman and chief executive in a statement. The deal, which is expected to close in the third quarter, shouldn't affect Bank of America's earnings per share in 2008 and may actually lift EPS in 2009, excluding buyout and restructuring costs. Bank of America is expected to take a $1. 2 billion restructuring charge related to the buyout, and said it would recognize $670 million in after-tax cost savings in the transaction, fully realized by 2011. Most importantly, the acquisition will make the Charlotte-based bank the largest mortgage lender and loan servicer in the United States. In the meantime, Bank of America plans to let Countrywide operate separately under its own brand, with no planned integration until 2009. Lewis noted...

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### Subprime Voted Word of the Year for 2007

- Published: 2008-01-07
- Modified: 2010-10-29
- URL: https://www.thetruthaboutmortgage.com/subprime-voted-word-of-the-year-for-2007/
- Categories: Mortgage Tips

Not surprisingly, the American Dialect Society voted "subprime" the word of the year for 2007. At a voting session in Chicago on January 4, the group said the word was chosen because it provided a rare example from the banking sector that has become a part of everyday conversation. "When you have investment companies losing billions of dollars over something like bundled subprime loans, then you have to consider whether it's important,” said American Dialect Society spokesman Wayne Glowka, in a statement. "You probably also want to think about paying off that third mortgage. " It beat out competition from terms such as Facebook, green, water-boarding, and Googleganger. Among related citations, the term "Ninja", which means no income, no job, no assets, (no-doc loan) was also highlighted. Other real estate terms nominated included "scratch and dent loan", "exploding ARM", and "liar's loan". In 2006, the word of the year was “plutoed", in reference to the planet losing its classification, preceded by the word “truthiness” in 2005, as made popular on the Colbert Report. Founded in 1889, the American Dialect Society includes academics, amateurs, teachers and writers who study the English language in North America.

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### Interest Rate Reset Chart

- Published: 2007-10-25
- Modified: 2018-04-19
- URL: https://www.thetruthaboutmortgage.com/interest-rate-reset-chart/
- Categories: Mortgage Tips

So you’ve probably heard all about the mortgage rate resets that will occur over the next decade, but now you can see them in colorful graph form! The graph above, based on Credit Suisse data and recently published by the International Monetary Fund includes everything from negative amortization loans to Alt-A loans to agency-backed loans and prime paper home loans. It details several types of adjustable-rate mortgages that are due to reset over the next ten years, whether it's shedding their interest-only option or their ultra-low start rate. To give you an idea of how bad it could be, adjustable-rate mortgages worth a record $50 billion are scheduled to reset to higher payments this month alone, while roughly 1. 3 million subprime ARMs are due to reset between now and the end of 2008. My Mortgage Can Reset? Billions worth of mortgages will reset each month Making monthly mortgage payments even more expensive For those who could barely afford them to begin with Expect lots of foreclosures and short sales What’s more frightening is that a recent poll indicated that most borrowers didn’t even realize their mortgages could/would reset, or what exactly it all meant. Unfortunately, for many borrowers stuck in option-arms and other high-risk adjustable loans, once their interest rates do reset, and monthly mortgage payments rise substantially, many will have little or no equity to bail themselves out. This will make it very difficult to sell the property or refinance the underlying mortgage. Option ARM Is Public Enemy...

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### Ex Pro Wrestler Enters Mortgage Business

- Published: 2007-09-14
- Modified: 2024-08-05
- URL: https://www.thetruthaboutmortgage.com/ex-pro-wrestler-enters-mortgage-business/
- Categories: Mortgage Tips

If you’ve ever watched “pro” wrestling, you’ve undoubtedly heard of Ric Flair, the undisputed king of flair, and an all time great in the eyes of thousands of adoring fans. Well, the man has somehow body-slammed his way into the mortgage business, in what looks like a lead company, though it’s hard to tell as the bulk of his company website is consumed by glamorous photos of the ex-pro wrestler draped in lush, silky robes. According to his website, “RicFlairFinance. com” (which you absolutely have to visit), the company offers mortgages, auto loans, and refinance loans for consumers in a variety of financial situations. The website has an application process referred to as the “Figure Four Process”, whereby potential borrowers select the type of loan they need, complete an application, submit it, and finally, “get the loan. ” Some revolutionary stuff here. The company website says, “Get the money you need to live like the “Nature Boy”... it’s as simple as 1-2-3-4. ” Rick Flair referred to himself as “Nature Boy”, “Nature Boy Ric Flair”, and “The Black Scorpion” in his wrestling days. Message boards have already been abuzz, fretting about whether the news of a pro-wrestler joining the game could further rock the creditability of the embattled mortgage industry. (photo: thebadderintheworld)

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### Lowermybills Dancing Alien Ads Are Back!

- Published: 2007-09-10
- Modified: 2018-04-13
- URL: https://www.thetruthaboutmortgage.com/dancing-alien-ads-are-back/
- Categories: Mortgage Tips

Dancing aliens rejoice. The ads are back. Apparently dreams do come true sometimes. A few weeks ago, a blogger from the New York Times had commented that the silly dancing aliens, grooving silhouettes, and freaked out office worker advertisements had mysteriously disappeared from websites across the Internet. The omnipresent, mostly obnoxious ads were part of a mortgage campaign by LowerMyBills, an Experian company that specializes in lead generation, including the lucrative home loans space. Their disappearance was attributed to the ongoing credit crunch, and their relative popularity (or perhaps notoriety) was clear when the company began cutting back on online advertising geared toward mortgages. A LowerMyBills company spokeswoman denied any such cutbacks, but said it was possible for the company to shift ad spend from time to time to other segments of their business, such as comparison shopping. Many fretted that the mortgage lead business was on the way out after the infamous ads finally disappeared. Nonetheless, the dancing alien ads are back, and they should be enough to help disgruntled mortgage enthusiasts crack a smile in this down housing market. A Feel-Good Story For some downtrodden folks The return of the dancing aliens Is the one bright spot In an otherwise bleak reality Finally, a feel-good story in the mortgage industry. We've waited a long time for this. If you're not familiar, you’ve probably seen the ads at some point, one where a green alien is doing some kind of Macarena-esque dance, or possibly the "office freak out" where...

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### Greenpoint Mortgage Closed

- Published: 2007-08-20
- Modified: 2024-03-13
- URL: https://www.thetruthaboutmortgage.com/greenpoint-mortgage-closed/
- Categories: Mortgage News

Greenpoint Mortgage was shut down today by parent Capital One Financial Corp. , who said weak demand for residential home loans forced the company to shut the ailing mortgage lender. Capital One announced that it would cease loan origination operations at Greenpoint Mortgage immediately, and according to initial reports, cut roughly 1,900 jobs. Loans that are already in the pipeline and locked will continue to be processed and should ultimately fund as scheduled. It is unclear what will happen to loans far along in the process that haven't been locked. The news followed statements made by the VP of investor relations for Capital One last week, which sparked employee fear that the company was gearing up to close Greenpoint Mortgage. Greenpoint Mortgage headquarters in Novato, California will be closed, along with 31 other branches in 19 states throughout the United States. Greenpoint Mortgage specialized in Alt-A loans, offering programs for borrowers with low credit scores down to 620, as well as option-arms, second mortgages, jumbo loans, and other high-risk products. Greenpoint's Demise Started with Fewer Loan Programs But earlier this year, Greenpoint narrowed their product offerings significantly, effectively sinking loan volume and forcing the closure of 13 branches and some 440 layoffs. Amazingly, Capital One picked up the wholesale mortgage lender in their $13. 2 billion North Fork Bancorp purchase just last December, with high hopes that Greenpoint would be a solid performer. Unfortunately, the housing market turned at just the wrong time, quickly turning the lender's profits into catastrophic...

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### Pay Rate vs. Teaser Rate

- Published: 2007-06-28
- Modified: 2018-06-05
- URL: https://www.thetruthaboutmortgage.com/pay-rate-vs-teaser-rate/
- Categories: Mortgage Tips

If you scan through mortgage programs and lender rate sheets you may have come across mortgage lingo such as “pay rate” or “teaser rate”. Though the two terms are sometimes used interchangeably by loan officers, mortgage lenders, and mortgage brokers, they are actually very different. Allow me explain why. What Is a Pay Rate? A payment option offered on certain home loans That allows you to pay less than the note rate But this typically means the interest isn't paid in full Which results in negative amortization A "pay rate" is essentially an option to make a mortgage payment that is lower than the actual note rate (mortgage rate) associated with the home loan. In other words, if you only make the pay rate payment, which is usually referred to as the minimum payment, negative amortization will likely occur. This means you aren’t paying enough each month to cover the total amount of interest due, and the unpaid portion will be tacked onto the existing loan balance. For example, if you owe $1,000 in interest in a given month, but the lender gives you the option to only pay $800, that $200 shortfall would be added to the outstanding balance going forward. So you don't actually get a discount, you get a payment deferment, which will actually cost you because the loan balance will grow, resulting in more interest on subsequent payments. Of course, it can serve a meaningful purpose if you have cash flow issues, or if you simply...

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### Predatory Lending Q & A

- Published: 2007-06-19
- Modified: 2024-03-16
- URL: https://www.thetruthaboutmortgage.com/predatory-lending-q-a/
- Categories: Mortgage Tips

I did a recent interview regarding predatory lending. I thought I'd share it here to offer a better insight as to what predatory lending is, and how it can affect you and your family. 1. How would you define predatory lending in the mortgage industry? Predatory lending is a very subjective term, which makes it hard to define, and even harder to control. To some, it may involve charging too much to complete a mortgage application, while others may define it as doctoring forms to qualify an applicant for a loan. It also involves more cut and dry practices such as deceiving borrowers by failing to include all associated costs upfront, forging documentation, or simply leaving out important documents such as the Hud-1 or the Good Faith Estimate. Either way, what’s clear is that predatory lending usually involves unethical practices. 2. Is it a big problem? Why or why not? Personally, I think it’s a huge problem. Much of the current state of affairs in the mortgage industry can be blamed on predatory lending to some extent, whether it was manipulating figures to qualify a borrower, or simply sticking a borrower into an option-arm they would later default on after mortgage payments reset. Many households nationwide have been shattered by some form of predatory lending. 3. What are the consequences or the problems that a borrower can face if they get a mortgage with a predatory lender? Clearly the biggest consequence is a borrower losing his or her home. If...

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### A Long List of Mortgage Layoffs, Mergers, and Closures

> A never-ending list chronicling the latest mortgage layoffs, lender closures, and company mergers.

- Published: 2007-02-21
- Modified: 2025-04-12
- URL: https://www.thetruthaboutmortgage.com/a-list-of-recent-mortgage-closures-mergers-and-layoffs/
- Categories: Mortgage Tips

I first created this list of mortgage layoffs and closures in February 2007. Back then, scores of mortgage companies consolidated, laid off employees, sent out scary warnings, and went out of business. Around that time, some 2. 33% of all U. S. mortgages were delinquent, a number which was sure to rise over the following years as the full extent of the mortgage crisis revealed itself. Between the first and second quarter of 2006 alone, mortgage repurchase requests also tripled thanks to shoddy underwriting that was prevalent during that era. It was a toxic combination of sky-high home prices at the time of origination, zero down payments, rising mortgage rates, terrible underwriting, rampant fraud, a deteriorating secondary market, and unmanageable mortgage payments. The party came to an abrupt halt when home values plummeted in nearly every metropolitan area throughout the United States. There were some 86,126 mortgage job cuts in 2007, and countless more in subsequent years as major institutions like Bear Stearns, Countrywide Financial, IndyMac, and Washington Mutual all shuttered. More than a decade since the Great Recession began, mortgage companies are still facing the consequences of getting involved in what was then a very risky housing market. Now we face yet another potential housing crisis, due to lofty property values and a doubling of mortgage rates (3% to 6%) in less than a year. Since early 2022, mortgage layoffs have been driven by a major decrease in mortgage refinance demand and a dwindling pool of eligible home buyers...

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### Rent Before Applying for a Mortgage

- Published: 2007-01-15
- Modified: 2024-01-29
- URL: https://www.thetruthaboutmortgage.com/rent-before-applying-for-a-mortgage/
- Categories: Mortgage Tips

While it's common for young, prospective homeowners to live with mom and dad to save money for their down payment and future mortgage payments, there's a potential downside. Banks and mortgage lenders can sometimes decline applicants without adequate rental history. This is especially true if you have other issues, such as poor credit or shaky employment. Though it makes perfect sense to live at home to save money on things such as rent, groceries, utilities and the like, it does little to prove you’ll be a sound borrower once you finally do move out. Going from living with mom and dad to paying thousands per month is a big step. Lenders will want to know you can handle it. And though you might get approved for a mortgage without rental history, it can be helpful regardless to prepare you for homeownership. Rental History Is Important to Predict Future Payment Behavior When you apply for a mortgage, the bank or lender will dig into your financial history, whether it’s in the form of credit cards, auto loans, or a previous lease. If you fail to provide these things, they'll be hesitant to lend to you. In short, if you want to qualify for a mortgage, it's best to rent first so you have the ability to document that rent for at least a year. Doing so will also prepare you for the responsibility of homeownership. Sure, you can ask mommy or daddy to co-sign for you, but if you don’t have...

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