Month: May 2024

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If there’s one thing I’ve learned from my mom, it’s the decorative power of a tray. It makes an ottoman more functional, provides a base for the centerpiece on your kitchen island, and can also be used as, well, a tray to serve drinks at your next gathering. This one is already in my cart; between the gold leaf rim and wallpaper-like floral bottom, I’m truly enamored. ($198, Anthropologie)

Source: theskimm.com

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Welcome to the picturesque city of Newton where history meets modern charm and a strong sense of community prevails. Nestled just outside of Boston, Newton boasts a unique blend of suburban tranquility and urban convenience. With its tree-lined streets, top-rated schools, and diverse neighborhoods, Newton offers a welcoming environment for residents of all ages. There’s a neighborhood to suit every lifestyle from the historic architecture of Newton Centre to the bustling energy and Italian heritage of Nonantum.

Searching for the perfect apartment in the heart of Newton or a cozy condo in a peaceful corner of the city? You’ve come to the right place. In this Apartment Guide article, we’ll cut to the chase, breaking down the pros and cons of moving to Newton. Let’s get started and see what awaits in this charming town.

Pros of living in Newton, MA

1. Top-notch education

Newton is regionally renowned for its exceptional public school system. It consistently ranks among the best in Massachusetts. The city’s commitment to education is evident through its well-funded schools, dedicated teachers, and a wide range of academic and extracurricular opportunities for students. Newton is also close to several prestigious private schools such as the Newton Country Day School and the Commonwealth School, providing families with diverse options for their children’s education.

2. Green spaces and parks

Residents are fortunate to have access to an abundance of green spaces and parks. Newton has over 1000 acres of parkland, including the picturesque Crystal Lake and the Newton Commonwealth Golf Course. Whether it’s for leisurely strolls, outdoor sports, or simply enjoying nature, the well-maintained parks in Newton provide a tranquil escape from the bustle of Boston.

3. Vibrant cultural scene

Newton is home to numerous art galleries, theaters, and music venues. Events like the Newton Open Studios, run by the Newton Art Association, offer a unique opportunity to engage directly with talented local artists. Arts and culture lovers also have easy access to the incredible museums, theaters, and galleries of Boston.

4. Convenient access to Boston

One of the major advantages of living in Newton is its proximity to Boston, which is only a 15 minute drive away. With just a short commute via car, train, or bus, residents can easily travel to Boston for work, entertainment, and cultural experiences. This convenient access to Boston’s amenities and opportunities adds an extra layer of appeal to living in Newton. Conversely, Newton offers Boston residents a serene and charming alternative to the busy Boston streets.

5. Strong sense of community

Residents of Newton actively participate in local events, volunteer initiatives, and neighborhood associations. The city’s close-knit neighborhoods and friendly atmosphere create a welcoming environment.

6. Culinary diversity

Foodies in Newton are spoiled for choice with an array of dining options representing diverse cuisines. From cozy cafes and family-owned eateries to upscale restaurants like sycamore. and Tartuffo, the city’s culinary scene caters to a wide range of palates and budgets.

7. Historic charm

Newton boasts a rich history and architectural heritage, with many well-preserved historic buildings and landmarks that add character to the city. The Jackson Homestead offers a fascinating glimpse into the area’s past, while the picturesque Newton Centre Historic District provides a charming backdrop for leisurely walks and exploration.

Cons of living in Newton, MA

1. High cost of living

One of the primary drawbacks of living in Newton is the high cost of living, including steep housing prices and overall expenses. The city’s desirable location, excellent schools, and quality of life contribute to the premium cost of residing in this community.

2. Limited public transportation options

Despite its proximity to Boston, Newton has limited public transportation options, which can be a drawback for residents who rely on public transit for their daily commutes. While there are bus routes and commuter rail services, the overall public transportation infrastructure within the city itself may not be as extensive or convenient as in other urban areas.

3. Traffic congestion

During peak hours, the city’s roadways and intersections may become congested, impacting the overall ease of travel within and around the area. However, it’s important to remember that this is common in the Boston area and surrounding towns.

4. Limited nightlife options

For those seeking a lively nightlife scene, Newton may not offer as many options compared to nearby Boston. While there are bars, restaurants, and entertainment venues, the nightlife in Newton is relatively subdued and wraps up early.

5. Harsh winters

The New England region, including Newton, experiences harsh winters with cold temperatures, snowfall, and inclement weather conditions. While the winter season can be picturesque, it also brings challenges such as snow removal, icy roads, tire chains, and the need for extra precautions during the colder months.

6. Limited housing inventory

Housing in Newton primarily consists of single family homes so the share of apartment complexes and rental homes is smaller than many of the major cities. Furthermore, due to the high demand for housing in Newton there may be limited inventory available for sale, leading to a competitive real estate market.

7. Zoning restrictions

Zoning restrictions do not generally affect renters. But if you are hoping to buy a house in Newton eventually, you will want to be aware that the city has strict zoning regulations and restrictions. Many of these restrictions are in place to retain the character and history of the town. However, they can impact property development, renovations, and expansions. These regulations may pose challenges for homeowners looking to make major cosmetic or structural changes to their properties, requiring careful consideration and adherence to local zoning laws.

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

To build credit with a secured credit card:

1. Keep your balance low.
2. Use it only for small regular purchases.
3. Monitor your spending.
4. Pay off the entire balance each month.

Whether you’re a teenager trying to start building credit or looking to rebuild your credit after some bad luck, it can be difficult to get creditors to give you opportunities. You know you need to build credit, but you can’t do it if no one will issue you credit. Fortunately, you can use a tool like a secured credit card.

Wondering how to build credit with a secured credit card? Read on to learn everything you need to know to start turning your credit around.

Table of contents:

  • Research your options
  • Put down your deposit
  • Spend wisely on your secured credit card
  • Never miss a bill payment
  • Track your progress on your credit report
  • Use your improved credit to graduate to an unsecured credit card

What is a secured credit card?

A secured credit card is just like a regular credit card, but it requires a deposit that covers the spending limit. Since the deposit will cover what you owe if you don’t pay your credit card bill, it reduces the credit card issuer’s risk when extending you credit.

It’s just like when your landlord requires you to pay a security deposit to cover any damages to the apartment. Even if you leave without paying for the repairs, the landlord can cover them using your security deposit.

Use the tips below to help you use your secured credit card responsibly and build your credit.

1. Research your options

Don’t sign up for just any secured credit card. Take the time to find the best secured credit card for your situation and carefully consider the pros and cons of secured credit cards before applying.

Start the process by checking your credit. While secured credit card issuers are more likely to extend you credit no matter your credit score, not all do. Make sure you know what your credit score is before applying.

Armed with your credit score, take some time to research different secured cards. While most secured credit cards don’t offer the same features as unsecured credit cards, you’ll find a few that do.

Consider which of the following features are most important to you:

  • Flexible deposits
  • Low annual fees
  • Automatic account reviews to determine if you’re ready for an unsecured credit card
  • No credit check (note that this may come with a higher annual fee)
  • Reward or cash back options

Finally, consider any potential costs associated with unsecured credit cards. Discover if the deposit is refundable and if there are any application or annual fees.

Once you’ve decided on a card, fill out the application and send in the application fee (if there is one).

2. Put down your deposit

After you’ve been approved, the credit card issuer will tell you your credit limit and ask you to pay your deposit. Make sure you do so quickly—if you don’t get your deposit in on time, they may close your account before you have a chance to use it.

Remember, the amount you’ll have to deposit will depend on your credit card issuer. Some secured credit card issuers require your deposit to cover the entire credit limit, while others may only require you to put down half of it. Some companies also allow you to raise your credit limit by increasing your deposit, while others aren’t as flexible.

3. Spend wisely on your secured credit card

After making your deposit, you can use your secured credit card like you would any other credit card to build credit. You can use your secured card to make purchases anywhere that takes a credit card, and when you hand your card to the sales clerk to make your purchase, they won’t be able to tell it’s a secured card.

But if you want to improve your credit, you must use your secured card wisely. Keep the following tips in mind:

  • Make regular small purchases with your secured card. Consider using your card for one type of purchase, such as gas or monthly subscriptions. This will keep your balance low while also keeping your spending in check.
  • Keep the balance as low as possible. Experts typically recommend keeping it below 30 percent, but since you’re actively working to improve your credit, try only using 10 percent of your available credit. This means that if your card has a limit of $1,000, you should keep your balance below $100. Small regular purchases will help you accomplish this.

4. Never miss a bill payment

The deposit on your secured credit card does not cover your purchases, so you still need to pay your monthly bill. While you are only required to pay the minimum balance, make it a habit to pay the entire balance off each month.

This will keep your credit utilization low and help you avoid paying interest on an unpaid balance. Avoiding interest charges is especially important on secured credit cards since they often carry higher interest rates than unsecured credit cards.

5. Track your progress on your credit report

As you use your secured credit card, monitor your credit score closely. While increasing your credit may be a slow process, seeing small gains can be motivating. Plus, it will help you ensure your credit report is accurate.

Some credit card companies are starting to offer credit monitoring services and include your credit score on your bill. If your credit card issuer doesn’t offer this, you can see your credit report at AnnualCreditReport.com.

6. Use your improved credit to graduate to an unsecured credit card

As your credit improves, you can upgrade to an unsecured credit card. Some companies also refer to this as “unsecuring” or” graduating” to an unsecured credit card.

Some secured credit card issuers will automatically upgrade you to an unsecured credit card, at which point they’ll usually apply your security deposit as a statement credit offsetting your purchases. You can also apply for an unsecured credit card, at which point you’ll close the secured credit card and the issuer will refund your deposit. The best time to upgrade to an unsecured credit card is when you feel confident in your credit card habits. You want to ensure you can use the credit card responsibly to keep building your credit.

What are the benefits of a secured credit card?

Secured credit cards offer several advantages:

  • Most of them report to the three major credit bureaus (Experian®, TransUnion® and Equifax®) so you can build your credit.
  • Since the security deposit covers their risk, secured credit card issuers are more likely to issue credit to people with no or poor credit.
  • You can gain credit card experience and develop healthy credit card habits.
  • Over time, you can work toward an unsecured credit card, which may offer better features.

How long does it take to build credit with a secured credit card?

How long it takes to build credit with a secured credit card depends on several factors, including your credit history and your behavior with the secured credit card. Someone who makes a lot of large purchases on their secured card might see their score improve slower than someone who only makes small purchases, even if both people pay their bills off in full each month.

Typically, it takes six months to a year to see your credit health improve, making a secured credit card one of the best ways to build credit relatively fast. Remember: a secured credit card doesn’t automatically improve your credit—you have to use the card responsibly.

FAQ

Learn more about using secured credit cards to improve your credit below.

How much will a secured credit card raise my score?

Using a secured credit card responsibly may help your credit slightly in the short term, especially when you combine it with other credit improvement strategies. Larger gains will come as you continue to work on your credit over the course of a year or two.

Your credit situation and how responsibly you use the secured credit card will determine how much it improves your credit. Increasing your credit takes time and patience—no credit improvement strategy offers an overnight fix.

Can you increase a secured credit card limit?

Secured credit cards often have low balances, but you may be able to get a credit limit increase. Contact your credit card issuer and ask if you can increase your deposit in exchange for a larger limit. You can also ask if you are eligible to graduate to an unsecured credit card, which typically comes with a larger credit limit.

Work on your credit with Lexington Law Firm

Remember: a secured credit card is a powerful tool to improve your credit, but only if you use it responsibly—spend wisely, pay your bill on time every time and keep your balance low. Take this time to develop a healthy relationship with credit card usage, be patient and trust the process.

If you’re looking to learn more about how to  build your credit, the team at Lexington Law Firm can help. Get a free credit snapshot today to get started.

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

Source: lexingtonlaw.com

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The weight of student loan debt in the United States has reached a staggering $1.7 trillion, impacting millions of borrowers. This financial burden can hinder homeownership, career choices, and economic security. The question of canceling student loans entirely has become a central debate in American politics and personal finance. While complete cancellation isn’t currently possible through a single program, there are avenues for forgiveness, discharge, and strategic repayment that can significantly ease the burden.

How Many Student Loans Were Canceled?

Total cancellation of federal student loans is rare. However, there are specific situations where it can happen. Loan discharge can occur due to school closure, complete disability, or death of the borrower. Public Service Loan Forgiveness (PSLF) is a program that forgives the remaining balance of federal student loans after ten years of working full-time in public service. As of April 2024, only about a quarter of a million borrowers have successfully achieved PSLF forgiveness, highlighting the program’s complexity and limitations.

The Department of Education proposes automatic debt cancellation for borrowers who qualify for existing forgiveness programs like PSLF or Income-Driven Repayment (IDR) forgiveness but have yet to apply. This initiative aims to streamline the process and benefit millions.

Is There Legal Action to Get Loans Revoked?

Loan cancellation through legal action is not common but possible. Borrowers can file a borrower defense to repayment claim if they believe their school misled them or engaged in misconduct. If successful, the borrower may have their loans discharged. However, the process can be lengthy and complex, requiring significant evidence.

Another potentially more widespread legal avenue involves lawsuits against for-profit colleges accused of predatory lending practices. If a court finds the college engaged in wrongdoing, student loans tied to that institution could be discharged for affected borrowers.

What is the Save Plan?

The Income-Driven Repayment (IDR) plan offers a path to eventual loan forgiveness after a set period of qualified payments. The standard IDR plan forgives any remaining balance after 25 years of on-time payments. However, the Biden administration has proposed a change called the SAVE plan, which would shorten the forgiveness timeline to 20 years for undergraduate loans and 25 years for graduate school debt. This change would significantly benefit millions of borrowers struggling with their loan burden.

The SAVE plan still needs to be finalized and requires approval. However, it highlights the ongoing efforts to make IDR a more viable option for loan forgiveness.

Alternatives to Cancellation: Forgiveness and Strategic Repayment

While complete cancellation may not be readily available, other strategies exist to manage and eliminate student loan debt.

  • Public Service Loan Forgiveness (PSLF): Working full-time for a qualifying government or non-profit organization for ten years and making 120 on-time monthly payments can lead to complete loan forgiveness under PSLF. However, navigating the program’s requirements can be challenging.
  • Teacher Loan Forgiveness: Teachers who work in low-income schools for five consecutive years can qualify for up to $17,500 in federal student loan forgiveness.
  • Income-Driven Repayment (IDR) Plans: IDR plans adjust monthly payments based on your income and family size, making repayment more manageable. After 20 or 25 years of qualified payments under the proposed SAVE plan, any remaining balance would be forgiven.
  • Loan Consolidation: Consolidating multiple loans into one can simplify repayment and potentially qualify you for a lower interest rate.
  • Refinancing: Depending on your creditworthiness, refinancing private student loans with a private lender may offer a lower interest rate and potentially save you money over the loan term.

Conclusion

While complete student loan cancellation isn’t a one-size-fits-all solution, there are various options. Forgiveness programs like PSLF and IDR offer a path to eventual debt elimination for federal loans. Strategic repayment strategies like consolidation and refinancing can also significantly reduce the financial burden. The ongoing debate and proposed changes like the SAVE plan indicate a potential shift towards making loan forgiveness more accessible.

For borrowers struggling with student loan debt, staying informed about available programs and exploring all options to manage their debt effectively is crucial. Resources from the Department of Education and financial aid offices can provide valuable guidance.

Source: creditabsolute.com

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Token Pull Back Keeps Things Boring

By:
Matthew Graham

Wed, May 8 2024, 4:44 PM

Token Pull Back Keeps Things Boring

Coming into this week, we expected things to be boring and sideways after last week’s more directional movement.  So far, everything is going according to that plan.  In order to maintain a boring, sideways stance today, the bond market needed to do a bit of selling lest the trend remain decidedly directional (it would have been the 6th straight day with lower yields).  Intraday volatility was modest at best.  Yields were higher at the outset and didn’t change much over the course of the day.  The 10yr auction had essentially no impact, but that’s understandable as it came in fairly close to expectations. 

10:54 AM

Modestly weaker overnight and into the 9am hour.  Bouncing a bit since 9:40am.  MBS still down an eighth and 10yr up 2.7bps at 4.485

01:03 PM

Minimal reaction to 10yr auction.   MBS still down an eighth.  10yr up 3.1bps at 4.489

04:15 PM

Very sideways into the close.  MBS down 5 ticks (.16) and 10yr yields up 4bps at 4.497

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com

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Mortgage rates did well last week, making it almost halfway back to the lower levels seen on April 9th.  Why focus on April 9th?  That was the last day before the most recent Consumer Price Index (CPI).

Why focus on CPI?  That’s the monthly economic data that matters most to rate movement these days.  It’s not the only game in town, but it caused the biggest recent jump, by far.

Last week’s combination of economic data and reassurance from the Fed was enough to get rates headed back in a friendly direction.  There was some follow-through today, but not for any news reasons. 

In fact, “reasons” for rate movement are in far more limited supply this week.  In other words, last week was good and we caught a small break today with the modest improvement in rates, but things could be more choppy and sideways for the rest of the week.

Source: mortgagenewsdaily.com

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The refi market continues to be anemic as higher rates are persisting, with refi volume dropping 3.4% compared to the prior month. Seven of the top nine lenders recorded gains in April, with Plaza Home Mortgage, Liberty Reverse Mortgage/PHH and Guild Mortgage standing out for their gains between 36% and 48%.

When asked about whether or not these gains lead to overarching optimism for the direction of the industry or if caution should remain, RMI President John Lunde said he’d split the difference.

“I’ll call it cautious optimism,” he said. “Nothing we’ve seen recently suggests rampant growth, but if we can manage steady gains that would be a big step in the right direction.”

H4P gains are particularly encouraging, which likely stems from renewed industry attention likely brought about by rule changes announced in 2023 and 2024 by the Federal Housing Administration (FHA).

“I do think there’s more focus and attention on it this year with the changes by FHA, which gives originators a reason to take a fresh approach and energy into that niche,” he said.

When asked about where refi business is still taking place despite high rates and falling share of total volume, Lunde said it comes down to the concentration of home price appreciation in a given area of the country.

“Refi is generally going to happen where home price appreciation has been the strongest for the past several years, which can outpace the decline in principal limit factors from higher interest rates,” he said. “I’d expect to see these endorsements continue to whither though, as the recent increase in the 10-year CMT took away the benefit of the declines in the fourth quarter.”

As for what industry professionals should be keeping in mind, purchase may be the name of the game in the near future, Lunde said.

“I continue to think it’s all about purchase business, and getting in front of borrowers that are looking at a forward mortgage right now,” he said. “In many cases, reverse-eligible borrowers will see a lot more benefit for their financial goals from a reverse than a new forward or HELOC.”

HMBS issuance

The top HMBS issuer for April was Finance of America Reverse (FAR), which will soon consolidate under the overarching Finance of America brand. It created $155 million in new issuance, outdoing its March figure by $15 million. Longbridge Financial increased its own issuance to $107 million, while Liberty Reverse Mortgage/PHH and Mutual of Omaha Mortgage jumped to $95 million and $88 million, respectively.

“April’s original (first participation) production of $322 million was $54 million higher than March’s $268 million, though lower than that of April 2023, when approximately $379 million in original new HMBS pools were issued,” New View said in one of its two HMBS commentaries.

When asked about HMBS performance for the month, New View Partner Joe Kelly said that while performance is improved, “it’s not much of a bounce back but a period of relative stability and tightening spreads helps.”

A healthier first-participation pool market — in this case 20 of the month’s 89 pools — could be a good sign for the industry, but it largely “remains to be seen,” he said. “There is enough so far to keep reasonable liquidity and pricing.”

Mandatory purchase of HMBS loans out of pools — required when a loan reaches 98% of its maximum claim amount (MCA) — is generally stable, at least relatively speaking, Kelly explained, according to data shared in a second commentary. The payoff rate for April beat the 12-month average, and when asked how that factors into overall HMBS market health, Kelly explained the benefits.

“Payoff rates have stabilized at a lower rate for non-assignment payoffs,” he said. “The reduction in refinancing risk has had a beneficial effect on overall pricing.”

In terms of trends that New View is observing now, Kelly said that prepayments and losses are tracking low versus historical averages, which is largely healthy for the market. He added that he cannot “recall a time when there were so many proprietary reverse mortgage issuers.”

Source: housingwire.com

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Obtaining a mortgage with a reduced interest rate is a crucial objective for many prospective homeowners. Getting a good interest rate can save borrowers thousands of dollars over the course of a loan and have a big impact on your financial health.

It takes research and preparation to navigate the complicated world of mortgage rates, but making the effort can pay off with lower monthly payments and significant long-term savings.

What Is the Best Way to Get a Lower Mortgage Rate?

Although there’s no one-size-fits-all approach that will help homebuyers qualify for a mortgage at a reduced mortgage rate, there are a few crucial steps one can take. These include carefully tending your credit score and diligently comparing lenders and financing choices.

This may be especially daunting to first-time homebuyers, but borrowers who learn how to lower their mortgage interest rate can better their chances of long-term financial stability and successful homeownership.

💡 Quick Tip: SoFi’s award-winning mortgage loan experience means a simple application — we even offer an on-time close guarantee. We’ve made $7.5 billion in home loans so we know a thing or two about what makes homebuyers happy.‡

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Pros and Cons of a Lower Mortgage Rate as a Home Buyer

As a prospective homeowner, getting a reduced mortgage rate could offer many benefits, though there are a few potential challenges as well.

Pros:

•   Decreased monthly payments: A lower interest rate usually results in a lower monthly mortgage payment, giving you more money for investments or other expenses.

•   Long-term savings: Depending on the loan amount and term, even a small interest rate reduction can save a significant amount of money over the course of the loan — possibly tens of thousands of dollars. Experiment with a mortgage calculator to see how the interest rate and loan term impact the total interest paid over the life of the loan.

•   Building equity faster: As a result of lower interest rates, a larger portion of your monthly payment is applied toward paying off the loan, hastening the process of building equity in your house.

Cons:

•   Qualification requirements: Borrowers with a strong credit rating, steady income, and a sizable down payment are frequently eligible for the lowest rates offered by lenders. Achieving these requirements may prove difficult for some buyers.

•   Higher upfront costs: Securing a lower interest rate may require paying higher upfront costs, such as points or a big down payment.

•   Limited availability: Some purchasers may find that the lowest advertised rates are only accessible to customers who qualify for certain loan types under particular circumstances.

•   Market volatility: Interest rates can change over time for an array of economic reasons. An adjustable-rate mortgage may offer a borrower a low initial interest rate, but savings could be outweighed by rate hikes in the future.

Recommended: The Best Affordable Places to Live in the U.S.

Ways to Get a Lower Mortgage Rate

If you’re wondering how to get a lower interest rate on a mortgage, here are tactics you’ll want to take a look at:

Shop for Mortgage Rates

Finding the best loan terms for a house purchase requires doing your research on mortgage interest rates. Get quotes first from a variety of lenders, such as banks, credit unions, and online lenders. Consider whether you are eligible for a loan guaranteed by the government, such as a VA loan (from the U.S. Department of Veterans Affairs) or an FHA loan, backed by the Federal Housing Administration. Don’t accept the first mortgage deal you run across; shop around and compare rates offered by different lenders.

To evaluate rates, fees, and terms side by side, make use of online comparison tools. Never be afraid to ask a lender if they can match a competitor’s rate or give better conditions. Other considerations, like closing expenses and the caliber of the customer service, may influence your choice of mortgage, and the lowest rate that is advertised may not always be the best one. Make sure you have researched your selection and that it is in line with your long-term financial objectives.

Nurture Your Credit Score

Borrowers with better credit scores usually receive reduced rates from lenders. A better rate might result from paying your bills on time, cutting overall debt, fixing any inaccuracies on your credit report — or all three. Get a copy of your credit report from each of the big credit reporting agencies, check it for accuracy, and quickly request fixes for any inaccuracies. Next, focus on paying off current debts on time, maintaining modest credit card balances, and refraining from creating new credit lines unnecessarily.

Choose Your Loan Term Carefully

Investigate different types of mortgage loans, including fixed-rate and adjustable-rate mortgages (ARMs). Each type has a different interest rate structure and set of requirements. Shorter loan terms of 15 or 20 years usually have cheaper interest rates than 30-year mortgages, which results in significant savings over the course of the loan. They also typically have larger monthly payments.

Longer loans spread out payments over an extended period of time, which lowers the monthly payment but comes with higher overall interest charges. When choosing a loan term, take your cash flow, long-term objectives, and financial status into account. While a longer term could offer more flexibility with lower monthly payments, choosing a shorter term can help save money and allow you to pay off the mortgage sooner.

Make a Larger Down Payment

Increasing your down payment is one of the best ways to get a lower mortgage rate. For borrowers who are able to make a substantial down payment — typically 20% or more of the purchase price of the home — lenders frequently offer lower interest rates. A higher down payment shows financial responsibility and lowers the lender’s risk, which makes for a more desirable borrower. Borrowers can also eliminate private mortgage insurance (PMI) with a sizable down payment, which further reduces your monthly payment. Although stowing away a down payment takes time and discipline, there could be significant interest savings over the course of the loan.

Buy Mortgage Points

Purchasing discount points, sometimes referred to as mortgage points, can be a calculated move to obtain a cheaper mortgage rate. Each point costs 1% of the total loan amount and lowers the interest rate by a specific amount, usually 0.25% per point. Although purchasing points necessitates a one-time payment, it might provide substantial savings during the loan term. Before you purchase points, make sure you set aside cash reserves for emergencies. And ask yourself if you plan to stay in the house past the breakeven point (the point at which the monthly savings from a lower payment equal the initial cost of purchasing points).

Lock in Your Mortgage Rate

Once you’ve found a good rate and gone through the mortgage preapproval process, locking in your rate is a crucial step in protecting against potential rate increases during the closing process. When a rate is locked in, the lender agrees to guarantee the agreed-upon interest rate for a predetermined amount of time — usually 30 to 60 days — while the loan application is being processed. This guarantees that the rate won’t change during this time, even if market rates rise. If rates drop, though, one might not be able to benefit from the lower rates unless the lender has a float-down option.

Refinance Your Mortgage

If mortgage rates drop significantly (or your financial profile improves markedly) after you purchase your home, refinancing your mortgage can cut monthly payments and total loan costs. But it’s crucial to take into account refinancing charges, like appraisal and closing costs, and balance these against the possible savings from a lower rate. Homebuyers should think about long-term financial objectives and how refinancing fits within their total budget. Working with a reliable lender and thoroughly weighing options can help one decide if refinancing is the best course of action.

💡 Quick Tip: Have you improved your credit score since you made your home purchase? Home loan refinancing with SoFi could get you a competitive interest rate with lower payments.

Searching for Mortgage Rate Tips

Start by keeping an eye on market developments and learning how the economy affects mortgage rates. To be eligible for reduced rates, carefully manage your credit score. You can also get reasonable rates and better conditions by shopping around and comparing offers from different lenders. To optimize savings, think about the advantages of increasing your down payment, buying discount points, and selecting the ideal loan term. Lock in a cheaper rate while the market is favorable.

Recommended: Home Loan Help Center

The Takeaway

Prospective homeowners can improve their chances of obtaining a favorable rate and ultimately save a large amount of money over the course of their loan by raising their credit score, shopping around for the best rates, and negotiating with lenders. Market conditions, lender competition, and your individual financial situation will factor into your mortgage terms. Greater financial stability can be achieved from taking proactive measures to achieve a cheaper mortgage rate, whether through buying discount points or increasing the down payment.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Can you ask your mortgage company to lower your interest rate?

Yes, you can negotiate with your mortgage company to potentially lower your interest rate before you sign on for a loan. After you have a mortgage, you could ask your lender about a mortgage recast or a refinance.

What makes mortgage interest rates go down?

Mortgage interest rates can decrease due to factors such as economic downturns, changes in federal monetary policy, and market competition among lenders.

Can you negotiate a lower interest rate on a mortgage?

Yes, you can use variables like your creditworthiness, the state of the market, and lender competition to negotiate a lower interest rate on a mortgage.

Photo credit: iStock/Delmaine Donson
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer.​​
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.

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Source: sofi.com