Month: June 2024

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Source: nytimes.com

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The growing trend of design fusion is allowing interior decor experts to design homes that are undeniably stylish yet deeply connected to our rich Indian heritage. The trick is to create a harmonious blend of timeless tradition and modern sophistication, bringing the grandeur of Indian craftsmanship into the heart of your home.

Art of fusion: Merging Indian heritage with contemporary decor for stylish home makeover (Image by Freepik)

In an interview with HT Lifestyle, Prachi D Jain, Principal Architect of House Of Lines, shared, “Picture a living space adorned with intricate kantha embroidery wall hangings, a modern counterpoint to the clean lines of minimalist furniture. Or a bathroom featuring handcrafted brass fixtures that echo the artistry of bidri work, all housed within a sleek, contemporary layout. This fusion isn’t just about aesthetics.”

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The trick is to collaborate with skilled Indian artists to create custom curated pieces that celebrate our craft traditions while meeting the needs of modern life. Prachi D Jain said, “These elements, along with sustainable materials and innovative design solutions, ensure that these homes are not only beautiful but also functional and environmentally conscious. Ultimately, the art of fusion allows us to design spaces that transcend mere living areas. They become expressions of cultural heritage, infused with warmth, authenticity, and a timeless sense of beauty. It’s an exciting approach that allows us to tell a story through design, a story that celebrates the rich tapestry of Indian culture reimagined for the modern world.”

Bringing her expertise to the same, Aakanksha Singh, Creative Director at Bridge Bharat, said, “Homes are far more than a place of residence. A space transforms around those who occupy it, and it is in homes where this becomes abundantly clear. When picturing an Indian home, some staples have become a part of the collective subconscious. Bright colours, traditional handicrafts, etc once seen as the default are being pushed aside for an increased push towards modernism and uniformity.”

She opined, “It is here where we can find inspiration from cultural practices from all over the subcontinent that do more than just beautify a home, they tell a story. For instance, imagine the clean lines of a modern apartment punctuated by a vibrant Warli painting depicting a bustling harvest scene—something so foreign to the working urban class of India yet undeniably a part of our very DNA. Or perhaps a Madhubani artwork, bursting with intricate floral motifs, graces a minimalist living room breaking the sterile lengths of walls. Far from an aesthetic trend; it’s a powerful way to keep history alive within our homes and connect with a past that can seem ever more distant. Owning and appreciating these artworks is more than just decoration. It fosters a sense of respect for the craftsmanship and traditions associated with each tribe.”

Source: hindustantimes.com

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Federal Reserve Chair Jerome Powell said during a Federal Open Market Committee press conference that the central bank must control inflation to keep the housing market from becoming even tighter, but experts say there are things the agency could do besides cutting interest rates that might lower housing costs.

Bloomberg News

The Federal Reserve’s tough love approach for the housing market has fueled a long simmering debate about the central bank’s role in the country’s ongoing affordability crisis.

After this week’s Federal Open Market Committee meeting, Chair Jerome Powell said the best thing the Fed can do for the housing sector is keep interest rates high until inflation is fully under control.

“The housing situation is a complicated one, and you can see that’s a place where rates are really having a significant effect,” Powell said during his post FOMC meeting press conference. “Ultimately, the best thing we can do for the housing market is to bring inflation down so that we can bring rates down, so that the housing market can continue to normalize. There will still be a national housing shortage, as there was before the pandemic.”

When the Fed raises interest rates, its goal is to curb demand in the market by increasing borrowing and financing costs. For the housing sector, the thinking goes, as mortgages become more expensive, fewer people want to buy homes and prices stabilize. 

But some economists say reality is not so simple. Mark Zandi, chief economist at Moody’s Analytics, said the elevated rates are not only curbing demand for new mortgages, they are also weighing on the supply side of the housing market in various ways, making it more costly to acquire land and develop both rental and for sale homes. 

Zandi added that many existing homeowners feel “locked in” to their current, ultra-low mortgage rates, “thus limiting the supply of existing homes for sale, and reducing demand for homeownership and thus increasing rental demand and rents.” This is especially significant given that rents — and rental equivalents for owned homes — are how shelter costs are measured in inflation indexes.

“Given the unusual circumstances in the nation’s housing market, the higher rates are weighing on housing supply, pushing up rents and housing inflation as measured by the CPI and PCE deflator,” Zandi said.

Meanwhile, other economists and policy experts support the Fed’s approach. Diane Swonk, chief economist at the financial services firm KPMG, said cutting rates would induce greater demand in an already supply-constrained market, thereby increasing prices further without addressing the key factor holding back new supply: local zoning and land use laws.

“Washington can point at the Fed and say fix [the housing market], but the Fed doesn’t really have the tools to fix it,” Swonk said. “The tool they do have, if they were to wield it right now, the fear is that they would just stoke a more pernicious bout of inflation rather than defeat it.” 

But others say the Fed has another tool to address housing affordability in a more meaningful way than by cutting interest rates alone: its balance sheet. 

At the onset of the pandemic, the Fed purchased mortgage-backed securities en masse as part of a quantitative easing effort aimed at keeping financial markets functional. Its MBS holdings more than doubled during the next two years, peaking at $2.7 trillion before the Fed began allowing the assets to roll off their books. It still holds more than $2.3 trillion of mortgages today.

“The Fed bought way too many mortgages for way too long in the name of COVID relief and is now, somehow, perplexed that home prices continue to appreciate,” said Aaron Klein, a senior fellow in economic studies at the Brookings Institution. “Part of the problem was caused by the Fed’s balance sheet purchases. The solution may also lie on the balance sheet.”

The Fed’s mortgage holdings — which include securities backed by the government-sponsored entities Fannie Mae, Freddie Mac and Ginnie Mae — make up a significant portion of the overall market for outstanding agency MBS, which totals more than $9 trillion. 

The Fed’s purchases provided liquidity to the mortgage market, driving down yields and driving up asset prices. To reverse this, Klein said, the Fed could sell its MBS assets into the market, though he noted that such a move would not be welcomed by existing homeowners.

“Having propped up home prices, the Fed is now loath to lower home prices,” he said. “It’s very politically unpopular to lower somebody’s home price.”

Mark Calabria, the former director of the Federal Housing Finance Agency, notes that the Fed’s preference for continued higher rates does not preclude it from driving down its MBS holdings more aggressively. 

Calabria agrees that it would be premature to cut interest rates, noting that inflation also factors into mortgage costs.

“Ultimately, expected inflation enters mortgage rates,” he said. “The current rates are not simply a reflection of Fed tightening but also reflect inflation expectations.’

At the same time, Calabria said the housing market would benefit from the Fed shrinking its mortgage holdings more quickly.

“The Fed should never have purchased so much MBS in the first place,” he said. “The best move now would be to sell off more of its MBS.”

Some Fed officials have said the Fed should seek to exit the mortgage market entirely. Fed Gov. Christopher Waller has said he’d like the Fed’s MBS holdings to fall to zero, though he has not endorsed actively selling assets.

As part of its quantitative tightening campaign, which began in June 2022, the central bank is allowing up to $35 billion of mortgage securities to mature monthly without replacing them. During its May meeting, the FOMC voted to maintain the cap on MBS runoff while lowering its limit on Treasury securities maturation from $60 billion to $25 billion. It has also begun reinvesting the MBS principal payments that exceed the cap into Treasuries, accelerating the shift away from mortgages. 

To this point, mortgages have rolled off the Fed’s balance sheet more slowly than Treasuries. Since the Fed began this round of quantitative tightening, its MBS holdings have declined roughly 13%, compared to 22% for Treasuries. This is in part because of the higher cap on Treasuries, but also because mortgages typically have longer durations. Higher interest rates have led to fewer refinancings, thus limiting the number of mortgages being paid off early, too. 

The debate about whether higher rates do more to help or hurt the housing market has centered, in recent months, on the outsize role shelter costs have played on the overall inflation picture.

The Bureau of Labor Statistics’ Consumer Price Index, or CPI, report for May, which was released this week, showed shelter costs are up 5.4% over the previous 12 months, compared to an overall inflation reading of 3.3%, or 3.4% when factoring out food and energy costs. 

During his post FOMC press conference, Powell said the stickiness of housing inflation readings is partially the result of how that category of price growth is measured. U.S. inflation indexes focus on rental costs — along with estimates of owner’s equivalent rent for owner-occupied properties — which rose sharply after the COVID crisis subsided. Because these changes are only recorded when new leases are signed, Powell said it has taken longer than expected for data to reflect recent slower price growth.

“What we’ve found is that there are big lags,” he said. “There’s sort of a bulge of high past increases in market rents that has to be worked off, and that may take several years.”

Mike Frantantoni, chief economist for the Mortgage Bankers Association, noted that the Fed’s preferred measure of inflation — the core personal consumption expenditures, or PCE, price index — applies a smaller weight to shelter costs. This is why this inflation reading, which came in at 2.8% in April, is even closer to the Fed’s 2% target than CPI. 

While some say this reading is close enough to begin relaxing monetary policy — with the hope that a more normalized housing market could help carry it the rest of the way — Frantantoni said this is a gamble that carries more risk than reward for the housing sector. 

Frantantoni said lower rates would lead to more construction activity and alleviate lock-in effects, but noted that those changes would take a long time to play out and, ultimately, provide benefits to the market. He would rather see the Fed wait until price growth has stabilized across the board before trimming its policy rate.

“Changing their monetary policy framework to ignore shelter prices now, at the onset of a rate cutting cycle, would not be a good tactical move,” he said.

Source: nationalmortgagenews.com

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Inside: Learn $40000 a year is how much an hour. Plus find a 40k salary budget to live the lifestyle you want.

You want to know if a 40k salary is a solid hourly wage? At first glance, you may think so.

When you get your first job and you are making just above minimum wage making over $40,000 a year seems like it would provide amazing opportunities for you. Right?

The median household income was $70,084 in 2021 not much different from the previous year (source). Think of it as a bell curve with $70 at the top; the median means half of the population makes less than that and half makes more money.

The average income in the U.S. is $55,350 for a 40-hour workweek; that is an increase of 1.1% from the previous year (source). That means if you take everyone’s income and divide the money out evenly between all of the people.

But, the question remains can you truly live off 40,000 per year in today’s society since it is below both the average and median household incomes. The question you want to ask all of your friends is $40000 per year a good salary.

In this post, we are going to dive into everything that you need to know about a $40000 salary including hourly pay and a sample budget on how to spend and save your money.

These key facts will help you with money management and learn how much per hour $40k is as well as what you make per month, weekly, and biweekly.

Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…

Can I make a living on this salary?

$40000 a year is How Much an Hour?

When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 40k a year hourly. That way you can decide whether or not the job is worthwhile for you.

For our calculations to figure out how much is 40K salary hourly, we used the average five working days of 40 hours a week.

40000 salary / 2080 hours = $19.23 per hour

$40000 a year is $19.23 per hour

Let’s breakdown how that 40000 salary to hourly number is calculated.

Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $40000 by 2,080 working hours and the result is $19.23 per hour.

Just above $19 an hour.

  • That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
  • You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.

What if I Increased my Salary?

Just an interesting note… if you were to increase your annual salary by $5K, it would increase your hourly wage to over $21 an hour – a difference of $2.40 per hour.

To break it down – 45k a year is how much an hour = $21.63

That difference will help you fund your savings account; just remember every dollar adds up.

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How Much is $40K salary Per Month?

On average, the monthly amount would be $3,333.

Annual Salary of $40,000 ÷ 12 months = $3,333 per month

This is how much you make a month if you get paid 40000 a year.

$40k a year is how much a week?

This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $40k salary a year, how much can I expect to make at the end of the week for my effort?

Once again, the assumption is 40 hours worked.

Annual Salary of $40000/52 weeks = $769 per week.

Find jobs that pay weekly.

$40000 a year is how much biweekly?

For this calculation, take the average weekly pay of $769 and double it.

$769 per week x 2 = $1,538

Also, the other way to calculate this is:

Annual Salary of $40000 / 26 weeks = $1,538 biweekly.

Get your biweekly budget template.

How Much Is $40K Salary Per Day

This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.

8 hours x 52 weeks = 260 working days

Annual Salary of $40000 / 260 working days = $154 per day

If you work a 10 hour day on 208 days throughout the year, you make $192 per day.

$40000 Salary is…

$40000 – Full Time Total Income
Yearly Salary(52 weeks) $40,000
Monthly Wage $3,333
Weekly Salary(40 Hours) $769
Bi-Weekly Wage (80 Hours) $1,538
Daily Wage (8 Hours) $154
Daily Wage (10 Hours) $192
Hourly Wage $19.23
Net Estimated Monthly Income $2545
Net Estimated Hourly Income $14.68
**These are assumptions based on simple scenarios.

40k a year is how much an hour after taxes

Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with an all salary range up to $142,800.

When you make below the average household income, the amount of taxes taken out hurts your hourly wage.

Every single tax situation is different.

On the basic level, let’s assume a 12% federal tax rate and 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.

So, how much an hour is 40000 a year after taxes?

Gross Annual Salary: $40,000

  • Federal Taxes of 12%: $4,800
  • State Taxes of 4%: $1,600
  • Social Security and Medicare of 7.65%: $3,060

$40k Per Year After Taxes is $30,540.

This would be your net annual salary after taxes.

Hourly Rate After Taxes

To turn that back into an hourly wage, the assumption is working 2,080 hours.

$30,540 ÷ 2,080 hours = $14.68 per hour

After estimated taxes and FICA, you are netting $30,540 per year, which is $9,460 per year less than what you expect.

***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***

In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody who lives in a no-tax state like Texas or Florida. This is the debate of HCOL vs LCOL.

Thus, your yearly gross $40000 income can range from $27,840 to $32,140 depending on your state income taxes.

That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously, you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $40,000 income.

how much is 40k a year hourly Salary Calculator

More than likely, your salary is not a flat 40k, here is a tool to convert your salary to hourly calculator.

Many teachers start at this range, which may make you wonder do teachers get paid in the summer? And the best summer jobs for teachers!

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40k salary lifestyle

Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person? And there’s no wrong or right, it is what works best for you.

One of the biggest factors to consider is your cost of living.

In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $40,000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.

To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.

As we noted earlier in the post, $40,000 a year is below the average income that you would find in the United States. Thus, you have to be wise with how you spend your money.

What a $40,000 lifestyle will buy you:

If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.

  • You are able to rent in a decent neighborhood in LCOL and maybe even MCOL city.
  • Focus on becoming financially sound.
  • You should be able to meet your expenses each and every month.
  • Ability to make sure that saving money is a priority, and very possibly save $3000 in 52 weeks.

When A $40,000 Salary Will Hold you Back:

However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 40k a year is going to be pretty darn difficult.

There are two factors that will keep holding you back:

  • You must pay off debt and cut all fun spending and extra expenses.
  • Break the paycheck to paycheck cycle.

It is possible to get ahead with money!

It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.

$40K a year Budget – Example

As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money is left for fun spending.

This is how zero based budgeting works.

If you want to know how to manage 40k salary the best, then this is a prime example for you to compare your spending.

You can compare your budget to the ideal household budget percentages.

recommended budget percentages based on $40000 a year salary:

Category Ideal Percentages Sample Monthly Budget
Giving 10% $200
Savings 15-25% $600
Housing 20-30% $800
Utilities 4-7% $133
Groceries 5-12% $233
Clothing 1-4% $33
Transportation 4-10% $167
Medical 5-12% $167
Life Insurance 1% $17
Education 1-4% $33
Personal 2-7% $62
Recreation / Entertainment 3-8% $100
Debts 0% – Goal $0
Government Tax (including Income Taxes, Social Security & Medicare) 15-25% $788
Total Gross Monthly Income $3,333
**In this budget, prioritization was given to basic expenses and no debt.

Is $40,000 a year a Good Salary?

As we stated earlier if you are able to make $40,000 a year, that is a decent salary. You are making more money than the minimum wage and close to double in many cities.

While 40000 is a good salary starting out in your working years. It is a salary that you want to increase before your expenses go up or the people you provide for increase.

However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.

This $40k salary would be considered a lower middle class salary. This salary is something that you can live on if you are wise with money.

Check: Are you in the middle class?

In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).

The question you need to ask yourself with your 40k salary is:

  • Am I maxed at the top of my career?
  • Is there more income potential?
  • What obstacles do I face if I want to try to increase my income?

In the future years and with possible inflation, in many modest cities, 40000 a year will not be a good salary because the cost of living is so high, whereas these are some of the cities where you can make a comfortable living at 40,000 per year.

If you are looking for a career change, you want to find jobs paying at least $55000 a year.

Is 40k a good salary for a Single Person?

Simply put, yes.

You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.

Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $40000 per year.

And… most of us probably regret how much money wasted when we were single. Oh well, lesson learned.

Is 40k a good salary for a family?

Many of the same principles apply above on whether $40000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.

The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child.

That means that amount of money is coming out of the income that you earned.

So, the question really remains… Can you provide a good life for your family making $50,000 a year? This is the hardest part because each family has different choices, priorities, and values.

More or less, it comes down to two things:

  1. The location where you live in.
  2. Your lifestyle choices.

You can live comfortably as a family on this salary, but you will not be able to afford everything.

Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 40,000 per year, then the combined income for the household would be $80,000. Thus making your combined salary a very good income.

Learn how much money a family of 4 needs in each state.

Can you Live on $40000 Per Year?

As we outlined earlier in the post, $40,000 a year:

  • $19.23 Per Hour
  • $154-192 Per Day (depending on the length of day worked)
  • $769 Per Week
  • $1,538 Per Biweekly
  • $3,333 Per Month

Next up is making $43000 a year.

Like anything else in life, you get to decide how to spend, save and give your money.

That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than Oklahoma or even Texas.

In addition, if you are early in your career, starting out around 39,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 20 years and still making $40K, then you probably need to look at asking for pay increases, picking up a second job, or finding a different career path.

Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.

But one of the things that can help you the most is to stick to learning to budget by paycheckto make sure you stay on track.

Learn exactly how much do I make per year…

One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.

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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

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Source: moneybliss.org

Apache is functioning normally

A banker’s acceptance (or BA) is a financial instrument used to guarantee large future transactions, often in the import/export markets. As a debt instrument, it can function as an investment, commonly traded between large banks and institutional investors on the secondary market. It can trade at a discount to par like U.S. Treasury bills in money markets.

BAs play a key role in facilitating international trade and in broader fixed-income markets. While you may not own an individual banker’s acceptance in your checking account, these instruments help promote sound and liquid markets.

What Is Banker’s Acceptance?

A banker’s acceptance (which you may see written as bankers acceptance) is a short-term form of payment guaranteed by a bank; it is often used for international trade transactions.

Banks often make money on the spread between the buy and sell price on a fixed-income asset or through fees and commissions. BAs commonly have a maturity of between 30 and 180 days and trade at a discount to par. Functioning like a post-dated check, they are seen as a relatively safe method of payment for large transactions. BAs are considered short-term debt instruments.

Here are some more details about banker’s acceptance and how these instruments work.

•   The BA is issued and priced based on the creditworthiness of the issuing bank. An investment banker earns a commission for making the transaction.

•   Only customers with a strong credit history can access the BA market. These entities are often corporations involved in international trading (import/export) markets.

•   A banker’s acceptance can also be highly marketable and liquid, allowing money to transfer from one bank to another.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

How Banker’s Acceptance Works

A banker’s acceptance is considered a time draft. A business can request one from a bank as a way of gaining enhanced security while conducting a deal. The bank essentially promises to pay the firm that is exporting goods a particular amount of money on a certain date. When it does this, it takes funds out of the importer’s bank account.

Typically, the term of a banker’s acceptance is between 30 and 180 days.

Who Issues Banker’s Acceptance?

Not all banks offer BAs. Businesses with a good relationship with a large bank can obtain a banker’s acceptance. It can be an appealing product for an institution entering a large-value transaction. Like signing a check over to someone, the account holder must have enough cash to execute the transaction.

More than a simple checking account transaction, though, obtaining a BA typically requires an amount of credit to be detailed. There are usually fees involved in obtaining a BA, too.

Who Buys Banker’s Acceptances?

Banker’s acceptances are traded by banks and securities dealers on a secondary market, similar to how debt instruments are traded. They are available for a discount on its face value. The exact value may vary with the rating of the bank that has promised payment on the banker’s acceptance.

How Banker’s Acceptance Is Used

Here’s more detail on how banker’s acceptances can be used.

Checks

Think of a banker’s acceptance as a certified check. It’s a relatively safe way to do a transaction. The money owed is guaranteed on a specific date listed on the BA bill. Credit analysis is usually done to verify the creditworthiness of the issuer, so it’s a bit different than how a bank will verify a check before you deposit it.

BAs are frequently used to facilitate the international trading of goods. A buyer of imported products can issue a BA with a payment date after a shipment is scheduled to be delivered. The seller exporting can then take payment before finalizing the shipment. The exporter in this case can hold the BA to maturity or sell it on the secondary market. Unlike a check, the BA is backed by the guarantee of the bank, not an individual.

Investments

Aside from the import/export market, bankers’ acceptances are used commonly in the investment world. Buyers might purchase a BA and hold it to maturity to effectively earn a rate of return on short-term money. Since BAs are seen as very low-risk products, they are used as a cash-like security.

Still, retail consumers usually won’t be able to purchase a BA in an online or traditional retail bank. The purchase is, as noted above, only available to certain financial entities.

Recommended: What Are Some Safe Types of Investments?

Pros and Cons of Banker’s Acceptance

There are a number of positive aspects of bankers’ acceptances to consider.

Pros

First, the upsides of BAs:

Provides Seller Assurances Against Default

Backed by the guarantee of a bank, a banker’s acceptance is regarded as a high-quality fixed-income security that is often liquid and highly marketable. For importers and exporters, financial transactions can be made to facilitate international trading of goods without the risk that one party goes bust.

Buyer Does Not Have to Prepay for Goods

A banker’s acceptance works like a promissory note so the buyer does not have to prepay. Liability can immediately transfer from the issuer of the banker’s acceptance to the bank. The payment is likely debited only on the due date.

Enhances Confidence in the Deal

Part of the process of issuing a banker’s acceptance is usually having a good credit standing and a relationship with a major bank. Since high-risk customers might not be considered, there is strong confidence in BAs traded. There would be no need for the exporting company to worry about default risk; that lies with the banker. While individual investors often do not engage in BA trading, there are important traditional banking alternatives that feature financial solutions to help facilitate transactions.

Cons

While there are many positive aspects of bankers’ acceptances, there are still some risks for those involved in the transaction and trading of BAs. Consider the following:

Bank May Require Buyer to Post Collateral to Hedge Risk

Collateral is sometimes required for a deal to happen. Collateral provides a backstop should the importer be unable to pay. It can reduce risks to the bank and expedite the deal. Think of it like seller concessions to get a deal done, though collateral is generally not used when buying and selling a home.

Buyer May Default

With a banker’s acceptance, the bank accepts default risk, which can be a downside. The issuing bank typically must honor the payment terms even if the account holder, perhaps an importing/exporting corporation, does not have the cash on the payment date. Not all banks choose to be in this market due to the risk that the buyer could default.

Potential Liquidity Risk

Liquidity risk means an individual or financial institution cannot meet its debt obligations in the short term. Investors may not encounter liquidity risk with a banker’s acceptance instrument, but the issuing bank could have liquidity risk from the importer who must pay. This may be a key consideration for a bank issuing a BA. The secondary market for banker’s acceptance products remains highly liquid.

Pros of BAs Cons of BAs
Provides assurance vs. default Bank may require collateral
Buyer doesn’t need to prepay for goods Buyer may default
Enhances confidence that deal will work Potential liquidity risk

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The Takeaway

A banker’s acceptance is a debt instrument that plays a key role in well-functioning capital markets. BAs help facilitate international trade through bank guarantees. Knowing about this important fixed-income product type can help individuals understand financial markets and institutions.

When it’s time to take a look at your personal banking partner, it can pay to shop around for the right fit.

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FAQ

What is the difference between a letter of credit and a banker’s acceptance?

A letter of credit is a financial instrument that a bank issues for a buyer (the bank client) guaranteeing that a seller will be paid. A banker’s acceptance, on the other hand, guarantees that the bank will pay for a future transaction, rather than the individual account holder.

What is a banker’s acceptance in a real-life example?

An example of a banker’s acceptance would be that, on April 1st, the Acme Bank sends a BA to Back-to-School Supplies, saying it will make funds available on June 1st for a shipment of goods for their client. On June 1st, the school supply company will be able to withdraw those funds.

How safe are banker’s acceptances?

Banker’s acceptances are a relatively safe transaction for all involved, but the exact degree will vary with the creditworthiness of the bank guaranteeing the funds.

Is a banker’s acceptance a short-term investment?

Banker’s acceptances are considered a short-term investment or debt instrument. They are usually traded at a discount, and they are seen as similar to Treasury bills.

Is a banker’s acceptance a loan?

A banker’s acceptance isn’t a loan. It’s a short-term debt instrument, typically with a maturity date of 30 to 180 days.

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LOS, Processing, Non-QM, IT Tools; Private Equity, Manufactured Homes, and Freddie/Fannie

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LOS, Processing, Non-QM, IT Tools; Private Equity, Manufactured Homes, and Freddie/Fannie

By:
Rob Chrisman

Fri, Jun 14 2024, 11:51 AM

“In Florida earlier this week we celebrated with a couple of adult beverages: Metamucil and Ensure.” Every state has its quirks, and every state is made fun of by those in other states. Human nature, right? Here in Chicago, the restaurant scene is on fire, but White Sox fans aren’t happy about the team having the worst record in the majors. While the nation’s fastest-growing cities continue to be in Sun Belt states, new population estimates show that some of the top gainers are now on the outskirts of metropolitan areas or in rural areas. For example, to the west of Chicago, Rockford has become one of the top real estate markets in the nation! And with a hot real estate market usually comes increased lending. What originator can’t learn from hearing another top producer, especially when they love what they do? Today The Mortgage Collaborative’s Rundown (noon PT) will feature Austin Lampson who was just highlighted as one of the top 5 female loan originators in the country in 2023 and have been in the top 1 percent of loan originators since 2014! (Today’s podcast is found here, and this week’s are sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, cybersecurity, technology, and other services to the mortgage industry. Hear an interview with Loan Atlas’ Craig Strent on building your origination business based on non-Realtor referral sources.)

Software, Products, and Services for Lenders and Brokers

Transform your mortgage operations with Dragon9 Partners, a leading IT solutions firm with years of hands-on experience in mortgage origination, sales, and servicing. Whether you are a small, medium, or large Lender/Broker, our expert team understands the intricacies of the mortgage industry and is dedicated to delivering innovative technology solutions tailored to your needs. Whether you are looking to streamline your origination process, boost sales efficiency, or enhance servicing operations, we offer comprehensive IT consulting services to drive your success. Partner with us to leverage cutting-edge technology, improve customer satisfaction, and achieve operational excellence. Let Dragon9 be your trusted technology partner in navigating the complexities of the mortgage landscape. Contact us today to learn how we can help you achieve your goals. The first 3 responses will receive a free cybersecurity readiness assessment.

Does your client’s debt-to-income ratio (DTI) hinder their financing options? Castor Financial’s Non-QM loan programs can help. Castor’s unique blended income approach considers various assets, including retirement funds, stocks, and even checking accounts, as qualifying income streams and can be combined with W2 or Bank Statement income streams. And there’s no minimum asset value required. Self-employed borrowers can leverage both personal and business bank statements. Additionally, non-occupying co-borrowers can be added to strengthen applications. Let Castor Financial empower you to unlock financing opportunities for your clients. Visit us for more information.

Registration for the 2024 Loan Vision Innovation Conference (previously the Loan Vision User Conference) is now open! With a focus on innovation, growth, and doing more with less, our new and improved annual conference is taking place in Chicago, Illinois from Monday, September 23rd – Wednesday, September 25th. This conference will deliver highly recognized names in mortgage banking as our speakers, enhanced social networking events, and a fresh agenda for both executives and users and will be aimed at redefining industry standards and setting a new benchmark for excellence. If you’re interested in sponsoring this event, please contact Haleigh Heilman. To learn more about this conference, register, and book your hotel, please visit here.

“Mortgage Brokers! Looking ahead, we are thrilled to present a myriad of exciting growth opportunities. Kind extends an invitation for you to participate in our monthly broker connect, where you will have the invaluable opportunity to gain insights from esteemed industry experts and leaders. This will encompass a comprehensive discussion of the latest market trends and developments within Kind and the mortgage industry at large. Mark your calendars for Wednesday, June 26th, at noon PST (3 PM EST), during which, you will have the privilege of hearing from our very own Kind Ambassadors, including Glenn Stearns – CEO & Founder of Kind Lending, Delfino Aguilar – Chief Production Officer of TPO, & Krish Dhokia – Chief Marketing Officer. The perspectives and knowledge they bring to the table are bound to be invaluable to you and your business. Take a moment to register here.”

Want to soak up some sun instead of being stuck in the office this summer? Make sure your pipeline keeps churning with wemlo® processing support. Processors at wemlo, who support a variety of loan products and lenders, hustle behind the scenes so your business never skips a beat. Plus, lining up wemlo processing support is a breeze. Simply book a 1:1 call, set up your profile, go over the processing agreement, meet your pod (1 manager and 2 processors), and start submitting loans. Ready to trade office hours for beach hours? Enjoy peace of mind knowing your business is in good hands: book your wemlo demo today!

What’s the real cost of your mortgage LOS? Your institution strives to provide a smooth, intuitive application journey that keeps borrowers engaged from start to finish, lowering abandonment rates and promoting portfolio growth. But behind the scenes, issues such as maintenance burdens, resource-intensive tasks, and escalating operational costs may be hindering your ability to effectively support borrowers. Not to mention legacy technology rife with latency issues and excessive vendor integrations, which cause further friction and stress. A holistic examination of your current system is essential to fully understand your total cost of ownership and increase efficiency, improve the borrower experience, and boost ROI. Take the MeridianLink® Mortgage LOS Impact Assessment to see how your mortgage LOS stacks up.

Private Equity Companies and What They Own

Manufactured housing makes up a noticeable portion of the stock in several states. (Yes, I realize that there are varying degrees of manufactured housing, some being very “high end” and some not.) Like doctor and veterinary practices, private equity funds are buying up communities. The Private Equity Stakeholder Project (PESP) and Manufactured Housing Action (MHAction) released the Private Equity Manufactured Housing Tracker, a first-of-its-kind tool monitoring private equity and hedge fund ownership of manufactured housing communities in the U.S.

“Manufactured housing is a vital source of affordable housing for the over 21 million Americans who live in them, many of whom are on fixed incomes. Since the early 2000s, institutional investors such as private equity firms have increased their presence in the manufactured housing market. In 2020 and 2021, they accounted for 23 percent of all manufactured home purchases, up from 13 percent between 2017 and 2019… Residents at corporate-owned communities have reported rent increases of as much as 60 percent after private equity-owned landlords took over their parks. Michigan has the second highest number of private equity-owned manufactured housing parks in the U.S., with 109 parks (33,115 lots). Other states in the top three are Florida and Texas.

Three of the four largest private equity firms in the U.S. own manufactured housing portfolios: Apollo Global Management (Inspire Communities), Blackstone (Treehouse Communities), and The Carlyle Group… Almost half (49 percent) of the private equity-owned parks identified for this tracker were financed by Fannie Mae or Freddie Mac. In contrast, Fannie Mae or Freddie Mac financed just 9 percent of all the manufactured home parks in the U.S.

The Private Equity Stakeholder Project (PESP) is a nonprofit organization with a vision to bring transparency and accountability to the private equity industry and empower impacted communities. Follow PESP at pestakeholder.org and on X/Twitter @PEstakeholder.

Freddie Mac’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-7 announces updates pertaining to: Builder forward commitments, Warranty of completion alternatives, First-generation homebuyer mortgages, Flood insurance premium used when calculating the housing expense-to-income and debt payment-to-income ratios. Custom and lender-paid mortgage insurance, and Community land trust mortgages.

As a follow up to Freddie Mac’s April 15 Industry Letter about the treatment of buyer agents’ commissions paid by property sellers or their agents, please read this FAQ .

To stay competitive in the current housing market, it’s vital for lenders to be open to new property types and the new borrowers they may attract. One market with high potential, especially in affordable areas, is properties with accessory dwelling units (ADUs). Freddie Mac allows borrowers to include rental income from an ADU in an amount up to 30 percent of the total stable monthly income used to qualify their mortgage application when the income is generated from a subject 1-unit primary residence. Learn more, view ADU Benefits.

In June, Fannie Mae’s Selling Guide has been updated to add Special Feature Code 887 for loans delivered using a standby commitment, updates the glossary definition of closing costs, expands timeframes for completion of counseling and eliminating Form 1017, retires the requirement for a completed Form 2200 at loan delivery, and other miscellaneous updates. View Fannie Mae Announcement SEL-2024-04 for more information.

Fannie Mae expanded the time allowed to complete housing counseling to qualify for the $500 LLPA credit for HomeReady® and HFA Preferred™ purchase loans. Starting June 5, borrowers can now complete housing counseling from a HUD-approved agency within 12 months prior to loan closing. Visit Fannie Mae’s housing counseling webpage to learn more.

Effective with applications on or after June 7, Pennymac aligned with Freddie Mac Bulletin 2024-6 regarding expanding eligibility for attorney opinion of title letters: Penny Mac Announcement 24-54.

Halcyon officially announced it is integrating with Fannie Mae’s Desktop Underwriter® (DU®) validation service. Learn more about how Halcyon is solving one of the biggest pain points in origination and post-closing. It’s time to switch from the 4506 to Halcyon’s Tax Transcript solution.

Capital Markets

The Fed doesn’t love you. Or maybe I should say that the Fed is “bond-supportive,” as bad news for the economy has become good news for the central bank. A day after Federal Open Market Committee officials voted unanimously to keep the benchmark federal funds rate range at a two-decade high range of 5.25 percent to 5.5 percent, first reached last July, those same officials were indubitably happy yesterday to see initial applications for U.S. unemployment benefits jump (+13k) to the highest level (242k) in nine months. A tight job market, highlighted again in May’s employment data, has been the main driver of caution amongst Fed members about cutting rates before inflation is consistently lower.

Policymakers signaled on Wednesday that they expect to cut rates only once this year, compared to the three reductions that were forecast in March. There is some chatter that price increases slowing in May are a sign that stubborn inflation numbers in the U.S. earlier this year may have been a blip rather than a trend.

Fortunately, for those who dislike volatility, the market is on board with the idea that the Fed will maintain interest rates at current levels. That is a departure from the recent hope-springs-eternal mindset investors had that the Fed would act in a more dovish fashion to tame inflation over the course of this tightening cycle. After we learned Wednesday that a key measure of consumer prices cooled in May to the slowest pace in more than three years (core CPI also slowed more than expected to 3.4 percent year-over-year), data released yesterday showed producer prices unexpectedly dropped in May (0.2 percent) by the most in seven months, a reading that should boost the Federal Reserve’s confidence that inflation continues to moderate. The report will factor favorably in the PCE Price Index, which is the Fed’s preferred inflation gauge.

In addition to the PPI news, a solid 30-year bond yield helped Treasury prices climb yesterday. We know that when prices rise, rates fall, and mortgage rates in the U.S. fell for a second straight week. The average for a 30-year fixed rate was 6.95 percent, down from 6.99 percent last week, Freddie Mac reported yesterday. For context, average 30-year conforming interest rates have only exceeded 7.02 percent on 120 market days in the past 20 years, per Optimal Blue.

May import and export prices led off today’s calendar. (Forecasts were for respective declines of 0.3 percent and 0.2 percent after increases of 0.9 percent and 0.5 percent in April.) Later today brings the first look at June Michigan sentiment (expected to increase), and two Fed speakers are currently scheduled: Chicago President Goolsbee and Governor Cook. We begin Friday with Agency MBS prices better by .125-.250 from Thursday’s close, the 10-year yielding 4.19 after closing yesterday at 4.24 percent on the pleasing news that lower inflation could provide a steppingstone for the Fed to lower rates, and the 2-year at 4.67.

Employment

“Evergreen Home Loans is proud to announce our recognition by Experience.com as a Top 10 Mortgage Company in the Medium Division category for the 2023 Top Performers in Customer Satisfaction! This prestigious honor underscores our commitment to delivering exceptional home loan experiences. Additionally, several of our outstanding loan officers have made the Top 1 percent list for Customer Satisfaction: Cathy Pizzini, Dylan Langei, Kendra Graybeal, Melissa Foster, Nicole Walker, and Siara Jay. These achievements highlight the dedication and excellence of our team. If you’re passionate about providing top-notch customer service and want to join a supportive, dynamic work environment, Evergreen Home Loans is the place for you. Explore current opportunities here. Join us and make a difference every day!”

Home lending leader Mark Allen has joined the eastern United States team of employee-owned USA Mortgage. Allen was recruited to USA by Jim Bromwell, who recently came on board as regional manager. Allen, active in the industry since 2000, will focus on growing the lender’s market share throughout the New England states. “As a 100 percent employee-owned company, USA Mortgage creates a true alignment internally where everyone is invested in its success. Joining Jim’s team also allows me to be part of a group that aligns with my values and reflects a shared passion for the industry,” commented Allen. “Additionally, USA leadership is committed to investing in future growth, specifically New England.” Founded in St. Louis in 2001, USA has offices in 34 states and is licensed in 49 states plus the District of Columbia. To initiate a confidential conversation about joining USA, contact us here.

On the heels of the MBA Secondary in NY and almost 100 client meetings, the AmeriHome team wants you to know that they are listening. Based on client feedback, AmeriHome will focus on developing the products and services that its clients need. To enable that, AmeriHome is hiring in several key areas, including underwriters and a Salesforce Admin! Check out the Careers page for details on all open jobs.

Are you a Retail production team or company looking to be acquired or interested in a “capital partnership” to help drive your organization’s scale across 50 states? A 49-state licensed mortgage lender with a large servicing and strong capital base, seeking to expand retail footprint by partnering with large production teams or regional mortgage banks interested in a capital partnership. The goal of the relationship is to leverage back-office mortgage functions (e.g., secondary, technology, compliance, operations, and licensing) to provide you with long-term production growth opportunities. If you are a strong retail loan origination team feeling limited by management, or an independent mortgage lender looking for new options for your team, we offer a compelling alternative to standard “branch” offerings. Confidential and serious, email Chrisman LLC’s Anjelica Nixt.

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

Source: mortgagenewsdaily.com

Apache is functioning normally

10-year yield and mortgage rates 

After the intense jobs week data, we ran straight into CPI and PPI inflation week, with a Fed meeting thrown in! I got one good crumb from the Fed meeting that made me smile: Powell finally admitted that the labor market isn’t tight anymore, which is a beneficial statement for rates down the line if the labor data gets weaker. I discuss this in this episode of the HousingWire Daily podcast.

Last week had softer inflation data, but I am much more focus needs to be put on the weekly jobless claims data and jobs week data.

The 10-year yield closed last week at 4.22%.

Mortgage spreads

The spread between the 30-year mortgage rate and the 10-year yield has been an issue since 2022 and things got worse after the March 2023 banking crisis. However, this year, spreads have improved despite being far from ordinary.

If we took the worst levels of the spreads from 2023 and incorporated those today, mortgage rates would be 0.52% higher. While we are far from being average with the spreads, the fact that we have seen this improvement is a plus this year.

Purchase application data

Last week, we had the second-best week-to-week purchase application data percentage print as mortgage rates have fallen recently. Now, I caution everyone that we are working from a shallow bar, so moving the needle doesn’t take much. However, you have something if we can string out a few weeks like this.  

Since November 2023, when mortgage rates started to fall, we have had 13 positive prints versus 13 negative prints and two flat prints week-to-week. Once mortgage rates began rising in 2024, some demand was removed. As shown below, the year-to-date data isn’t even positive for 2024: we’ve had seven positive prints, 13 negative prints, and two flat prints. We aren’t getting any real mortgage demand growth with rates this high and the bounces we see in the data are coming from depressed levels.

Weekly housing inventory data

As we head into the summer, I still can’t express enough gratitude for the growth in inventory this year. If mortgage rates keep falling and demand picks up, we will have a much better buffer with active inventory than in 2022 and 2023.

My rule of thumb has been that inventory should have some weekly prints between 11,000 -17,000 as long as rates are above 7.25%. We have hit that three times this year; last year was a whopping zero. Even though the weekly inventory growth rate didn’t hit that level, rates fell on Friday and inventory grew at a healthy clip of 8,943.

  • Weekly inventory change (June 7-June 14): Inventory rose from 611,596 to 620,539
  • The same week last year (June 9-June 16): Inventory rose from 443,749 to 451,808
  • The all-time inventory bottom was in 2022 at 240,194
  • This week is the inventory peak for 2024 at 620,539
  • For some context, active listings for this week in 2015 were 1,174 446

New listings data

Another positive story for 2024 has been that new listings data is growing from the record-low levels we saw in 2023. As most sellers are buyers, seeing more sellers listing their homes has been good. The only thing about 2024 was that I was 100% sure we would see a seasonal peak print at a minimum of 80,000 and it’s starting to look more and more like it won’t happen this year as the seasonal decline in new listings isn’t far away.

Here are the new listings for last week over the last several years:

  • 2024  71,457
  • 2023: 62,187
  • 2022: 87,996

Price-cut percentage

In an average year, one-third of all homes take a price cut — this is standard housing activity. When mortgage rates increase, demand falls and the price-cut percentage grows. When rates drop and demand improves, the price-cut percentage can fall. This data line is seasonal, and we have seen consistent year-over-year price-cut percentage growth since the end of March. 

As the old stale data trickles in, we should see a cooling down in year-over-year price growth. I recently discussed this in the HousingWire Daily podcast and explained why I believe this is the case. Here are the price-cut percentages for last week over the previous few years:

  • 2024: 36%
  • 2023: 31%
  • 2022: 27%

Pending sales

Below is our weekly pending contract data on a year-over-year basis to show demand in real time. With more sellers who are buyers, we have a tad more demand this year. If mortgage rates head lower and stay lower, this contract data will grow, but we don’t see that growth in mortgage demand yet. 

  • 2024: 395,960
  • 2023: 386,052
  • 2022: 452,003

Week ahead: Existing home sales, housing starts, retail sales and Fed speeches

This week, we will get some economic data; retail sales will be the essential data line for the Fed. We will also get housing starts and it will be interesting to see if we continue the down trend in single-family and multifamily permits. Existing home sales will be out on Friday and should still trend near recent lows. However, this week, the Fed speeches will engage with all the data we have gathered recently, so we’ll keep an eye on that.

Source: housingwire.com

Apache is functioning normally

Almost all mortgage rates have dropped. The 30-year fixed rate is 6.50%, and the 15-year fixed rate is 5.75%.

Mortgage rates have been ticking down for days — but you’re probably wondering when mortgage rates will go down enough to make a noticeable impact on your monthly payments. When will rates plummet?

The answer? Probably not in 2024 — but possibly in 2025. The Federal Reserve should only cut the federal funds rate once this year; however, it will likely slash the rate four times in 2025. When the federal funds rate falls, mortgage rates tend to follow suit.

Read more: Mortgage rates dip below 7%, but meaningful declines are still months away

Here are the current mortgage rates, according to the latest Zillow data:

  • 30-year fixed: 6.50%

  • 20-year fixed: 6.08%

  • 15-year fixed: 5.75%

  • 5/1 ARM: 6.66%

  • 7/1 ARM: 6.56%

  • 30-year FHA: 5.91%

  • 15-year FHA: 5.89%

  • 30-year VA: 5.84%

  • 15-year VA: 5.28%

  • 5/1 VA: 6.08%

Remember, these are the national averages and rounded to the nearest hundredth.

Learn more: Is it a good time to buy a house?

The average 30-year mortgage rate today is 6.50%. A 30-year term is the most popular type of mortgage because by spreading out your payments over 360 months, your monthly payment is lower than with a shorter-term loan.

The average 15-year mortgage rate is 5.75% today. When deciding between a 15-year and a 30-year mortgage, consider your short-term versus long-term goals.

A 15-year mortgage comes with a lower interest rate than a 30-year term. This is great in the long run because you’ll pay off your loan 15 years sooner, and that’s 15 fewer years for interest to accumulate. But the trade-off is that your monthly payment will be higher as you pay off the same amount in half the time.

Let’s say you get a $300,000 mortgage. With a 30-year term and a 6.50% rate, your monthly payment toward the principal and interest would be about $1,896 and you’d pay $382,633 in interest over the life of your loan — on top of that original $300,000.

If you get that same $300,000 mortgage but with a 15-year term and 5.75% rate, your monthly payment would jump up to $2,491 — but you’d only pay $148,421 in interest over the years.

With a fixed-rate mortgage, your rate is locked in for the entire life of your loan. You will get a new rate if you refinance your mortgage, though.

An adjustable-rate mortgage keeps your rate the same for a predetermined period of time. Then, the rate will go up or down depending on several factors, such as the economy and the maximum amount your rate can change according to your contract. For example, with a 7/1 ARM, your rate would be locked in for the first seven years, then change every year for the remaining 23 years of your term.

Adjustable rates typically start lower than fixed rates, but once the initial rate-lock period ends, it’s possible your rate will go up. Lately, though, fixed rates have been starting lower than adjustable rates.

Dig deeper: Adjustable-rate vs. fixed-rate mortgage

Mortgage lenders typically give the lowest mortgage rates to people with higher down payments, great or excellent credit scores, and low debt-to-income ratios. So if you want a lower rate, try saving more, improving your credit score, or paying down some debt before you start shopping for homes.

Waiting for rates to drop probably isn’t the best method to get the lowest mortgage rate right now unless you are truly in no rush and don’t mind waiting until the end of 2024 or into 2025. If you’re ready to buy, focusing on your personal finances is probably the best way to lower your rate.

Learn more: How to get the lowest mortgage rates

To find the best mortgage lender for your situation, apply for mortgage preapproval with three or four companies. Just be sure to apply to all of them within a short time frame — doing so will give you the most accurate comparisons and have less of an impact on your credit score.

Dig deeper: Best mortgage lenders for first-time buyers

When choosing a lender, don’t just compare interest rates. Look at the mortgage annual percentage rate (APR) — this factors in the interest rate, any discount points, and fees. The APR, which is also expressed as a percentage, reflects the true annual cost of borrowing money. This is probably the most important number to look at when comparing mortgage lenders.

Source: finance.yahoo.com

Apache is functioning normally

Consumer and industry advocacy organizations — including the American Land Title Association (ALTA), National Consumer Law Center (NCLC), National Association of Realtors (NAR) and AARP — are sounding the alarm over a rising trend of elder real estate fraud and financial exploitation in a new jointly created issue brief released on Friday.

The brief includes an overview of key actions that could be considered elder financial abuse, including but not limited to signature forging on legal or financial documents; coercing or “unduly influencing” the signing of such documents; failing to disclose “critical information;” “defrauding older adults out of money or property;” and “inappropriate utilization of authority under a power of attorney (POA).”

According to Federal Trade Commission (FTC) data cited in the brief, U.S. residents ages 60 and older lost more than $1.9 billion to these scams last year alone. Additional data from the FBI’s Internet Crime Complaint Center (IC3) 2023 report showed the cohort lost more than $65 million specifically tied to real estate scams, which impacted approximately 1,498 victims.

Based on the FBI data, this constitutes a 14% increase in elder financial exploitation from 2022 levels.

“Protecting property rights of all Americans is our top concern — and older adults are no exception,“ Elizabeth Blosser, vice president of government affairs at ALTA, said in a statement. “The stark increase in scams, fraud and financial exploitation targeting older adults is deeply concerning, and the private sector and policymakers must come together to combat these schemes, especially as the median age in this country continues to increase.”

NCLC senior attorney Andrea Bopp Stark added that the aging of the U.S. population necessitates additional action by policymakers at the state and federal levels to protect older adults from these kinds of scams.

“Lawmakers and advocates must take these abusive practices head on — strengthening consumer protections for the growing population of older adults and challenging emerging threats to their financial wellbeing,” she said.

Reverse mortgages are not explicitly mentioned in the brief itself, but they are mentioned by Bryan Greene, NAR’s vice president of policy advocacy, among a series of “exploitative tactics.”

“Addressing elder real estate fraud necessitates a collective effort,” Greene said. “NAR continues to advocate on behalf of seniors to shield them from exploitative tactics such as reverse mortgages, property investment and foreclosure-rescue offers. We are proud to work with ALTA, AARP and NCLC to offer these recommendations for states to prevent seniors from being targeted by these increasingly prevalent schemes and safeguard their financial security.”

While federal agencies have issued “fraud bulletins” related to reverse mortgages in the past, these primarily refer to bad actors who aim to manipulate an older victim into obtaining a loan. Reverse mortgages are legitimate products offered under the Federal Housing Administration (FHA)’s Home Equity Conversion Mortgage (HECM) program, but bad actors may seek to scam a senior out of money under the guise of offering a reverse mortgage on their home.

Jenn Jones, vice president of government affairs, financial security and livable communities at AARP, was more sensitive to such a distinction.

“While elder financial exploitation is often perpetrated by family members or trusted friends, older Americans are also common targets of unscrupulous professionals and strangers looking to commit fraud,” Jones said. “Financial exploitation of any kind wreaks havoc on the lives of older adults and their families, and we need stronger policies, enforcement and public education to combat this widespread crisis.”

Source: housingwire.com